In the Matter of the Complaint Against

LAKELAND NURSERIES SALES at Hanover, PA 17331

P.S. Docket No. 9/28

William A. Duvall
Chief Administrative Law Judge

APPEARANCES FOR COMPLAINANT:
Kristin L. Malmberg, Esq.
James Harbin, Esq.
Hilda Rosenberg, Esq.
Law Department
United States Postal Service
Washington, D.C. 20260

APPEARANCES FOR RESPONDENT:
Ira Zuckerman, Esq.
Susan G. Kaufman, Esq.
Schupak, Rosenfeld, Fischbein,
Bernstein & Tannenhauser
555 Madison Avenue
New York, NY 10022

INITIAL DECISION

The Consumer Protection Division, Law Department, United States Postal Service (Complainant) filed a Complaint on August 6, 1980, in which it is charged that Lakeland Nurseries Sales, Hanover, PA, (Lakeland or Respondent) is engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations within the meaning of 39 U. S. Code 3005. It is alleged that attention is attracted to the scheme by means of advertisements which are calculated to induce readers thereof to remit money or property through the mails.

A copy of an advertisement used by Respondent and said to be typical of those referred to above was attached to the Complaint, and a copy of the advertisement is attached hereto as Appendix A. In paragraph III of the Complaint it is alleged that by means of such materials and others similar thereto, Respondent represents, directly or indirectly, in substance and effect, whether by affirmative statements, omissions or implication that the "Fruit Cup Tree":

(a) will grow successively, on a single tree, at least 2 to 3 kinds of fruits of superior quality --

(b) will produce at least the size, quality and the profusion of fruits that would be expected if the four fruit trees were each planted and cultivated separately.

Lastly, it is charged that the aforesaid representations are materially false as a matter of fact.

In its Answer, Respondent denied the allegations in paragraphs I, II, III and IV of the Complaint, but admitted (1) that Respondent advertises its products; and (2) that Exhibit 1 to the Complaint is a copy of a recent advertisement used by Respondent.

FINDINGS OF FACT

1. LAKELAND NURSERIES SALES is located at 340 Poplar Street, Hanover, Pennsylvania (Tr. 76)

2. Lakeland advertises and sells its nursery products primarily by means of advertisements appearing in its mail order catalogues which are published once each year (Tr. 77).

3. Respondent solicits remittances of money through the mail for its products. (CX 1 and 2)^1/

4. The representations alleged in paragraph III of the Complaint are made by Respondent, as shown below in the excerpts from the language of CX 1:

"4 DIFFERENT FRUITS are grafted on

ONE SINGLE TREE]"

"Grow A Whole Orchard In A Few Feet Of Space]"

"Your 'Fruit Cup Tree' will be the talk of your neighbors who will be astonished when they see a succession of different fruits ripening on a single tree]"

"Average gardeners have harvested 2 to 3 kinds of fruit from a single tree with just ordinary care."

(b) [The "Fruit Cup Tree"] will produce at least the size, quality and the profusion of fruits that would be expected if the four fruit trees were each planted and cultivated separately.

"About Aug. 1st, it;s loaded with various fruits..."

"Grow A Whole Orchard In A Few Feet Of Space]"

"FRUIT CUP TREE . Peaches .Nectarines .Plums .Apricots"

"All you need for luscious fresh eating and mouth- watering, jams, jellies, pies and canning and freezing. Your very first bushel pays off for itself-and you'll be rewarded many times over with good eating, garden beauty and satisfaction for years to come."

5. Dr. Howard J. Brooks, U. S. Department of Agriculture, National Program Staff, Science and Education Administration, Beltsville, Maryland, testified for Complainant. Dr. Brooks is a research scientist, presently in Research Administration with the Department of Agriculture. He received his B.S. degree in horti- culture from the University of New Hampshire in 1952; his M.S. degree in horticulture from Rutgers University in 1957; and his Ph.D. degree in plant genetics from the University of Connecticut in 1960. Dr. Brooks has written articles on a number of subjects, including research on peaches, pear breeding programs, and other related topics for publication in scientific journals. He is a fruit breeder by training and experience, and he has worked at the Department of Agriculture for 20 years. For the first eight of those years he was engaged in actual research and for the last 12 he was in research administration. As a member of the National Program Staff, Science and Education Administration of the Agricultural Research Unit, he develops and coordinates the national research program across the United States on fruits, nuts and specialty groups. He keeps current with the research and literature in his field and he consults with his colleagues on scientific research in horticulture.

6. Jack Eugene Christensen, Ontario, California, Director of Research for Armstrong Nurseries testified on behalf of Respondent. He has occupied that position with Armstrong for seven years and he has been involved in horticultural research and development for 10 years. Mr. Christensen belongs to the American Rose Society, the National Association of Plant Patent Owners and an international organization of plant breeders. He has received three All American awards for roses. He has plant patents on two roses and on one dwarf peach tree and he has other patents pending. Mr. Christensen is but two credits short of a B.S. degree in botany and he has written articles on peach breeding for popular national publications. In his present employment, he is responsible for developing, breeding and testing new rose and fruit varieties, particularly peaches and nectarines. The Armstrong Nurseries breed more than, but usually plant only, 2000 seedlings or new developments each year. After they are bred they are put through a period of testing that usually lasts in excess of ten years. (Tr. 81-84)

7. Also testifying for Respondent was Jack Young, Vice-President of Hanover House Industries and Manager, Lakeland Nurseries Sales, a division of Hanover House. Mr. Young has been in the nursery business for over 30 years, having been with Wayside Gardens Company in Menlo, Ohio, for 21 years, with Burpee Seed Company, Philadelphia, PA, for six years, and Hanover House/Lakeland Nurseries, 6 years. Lakeland has advertised and sold the Fruit Cup Tree for six years and about 3500 of them were sold in 1979. (Tr. 75-80)

8. The last witness called by Respondent was George Kemp, Princess Anne, Maryland. Mr. Kemp is a nurseryman and part-owner of Bountiful Ridge Nurseries, a Maryland Corporation located in Princess Anne. Mr. Kemp was born on the farm of which the nursery is a part, he worked there during vacations as a child and through high school and college. He attended the University of Maryland from which he was graduated in 1955 with a B.S. degree in horticulture. After graduation he went back to work full time at the nursery and he has worked there ever since.

9. The Fruit Cup Tree is prepared by Bountiful Ridge Nurseries, Princess Anne, Maryland, for sale by Lakeland. A Fruit Cup Tree starts in Bountiful Ridge's nurseries as a Siberian peach seed that is planted in October of each year. During the summer of the following year, when it is a seedling root stock, an Elberta peach stem is budded onto the Siberian peach root stock, and allowed to grow through that summer. In August, buds from peach, nectarine, plum and apricot trees are inserted into the trunk of the Elberta peach tree (Tr. 99). The trees with the inserted buds are dug up in December of that year and put into Bountiful Ridge's warehouse. At that point, when the trees are dug and stored, they are in a dormant state, and for the most part will be shipped to Lakeland customers the following spring. (Tr. 106) When planted in the ground in the spring, the buds will break dormancy and begin to grow. (Tr. 107)

10. The variety of the buds inserted in the Elberta peach are carefully selected varieties and are of recognized superior quality, to wit, Elberta peaches, Cherokee nectarines, Morepark apricots and Ozark Premier plums. (Tr. 101)

11. Each of these varieties, both individually and together on the Fruit Cup Tree, may, insofar as climate is concerned, be grown all over the United States. There are some disease problems, particularly in the South, that would limit the plum production. (Tr. 51)

12. No extraordinary care is required to grow each of these varieties on one tree, in that each of these varieties individually requires the same amount of care, i.e., the same amount of sunlight (Tr. 50-51); same amount and type of fertilizer (Tr. 52); and the same amount and type of spraying with insecticides. (Tr. 53) The plum and the apricot do not need to be pruned to the same extent as the peach. Selective pruning would have to be done on the plum and the apricot, but a good crop of good sized fruit can be had without pruning. (Tr. 52-53) In pruning, the peach growth would have to be cut back by about two thirds in order to get the desired fruit set and fruit size. Without such pruning, there would be an abundance of flowers and an abundance of fruit, but the fruit would be too small for home use. The same pruning techniques would be used on a nectarine tree. (Tr. 52-53)

13. Each of these varieties is carefully selected so as to be self-fruited (i.e., self-pollinating) and, therefore, does not require any cross-pollination. (Tr. 101)

14. Each Fruit Cup Tree is sent to the home grower with printed instructions for its care. (CX 6) Consumers are directed to mark the spots where the buds have been inserted with spray paint or by tying a string or ribbon between the bud union and the branch, to clearly mark the spot and prevent a home grower from pruning the bud off accidentally. Home growers are further instructed that some varieties develop more vigorously than others, and that by pruning back the dominant bud shoots, will grow in an even, balanced manner of all the budded varieties. (CX 6)

15. If a home grower follows these relatively simple instructions, the Fruit Cup Tree's chances of growing and developing are increased and improved. (Tr. 48)

16. Dr. Brooks testified that it is possible to grow a fruit tree with branches producing peaches, nectarines, apricots and plums. (Tr. 8-9) It is possible to do this by putting one bud of each fruit on separate branches, (Tr. 9) then cutting the rest of the branch off above the inserted bud. This is the method Dr. Brooks would follow, and it is, in his opinion, the way it would have to be done. (Tr. 12) He testified that if the buds above the insert bud on the branch are not cut off, the insert bud probably would not grow. (Tr. 12) The reason Dr. Brooks would use this technique is to avoid the problems caused by apical dominance. (Tr. 17) Apical dominance is a property of plants which causes the highest placed bud to be the dominant bud. Buds below the top bud on a branch or on the main step probably will not develop. (Tr. 17)

17. Both Dr. Brooks and Mr. Kemp, supplier of the trees to Respondent, testified that the insert apricot, plum and nectarine buds placed on the Lakeland Fruit Cup trees were placed on the stem of a peach tree, not on branches. (Tr. 31-34, 99) This manner of budding makes it more than likely that only one bud will grow. This bud would be the top one on the stem whether it is a bud of the stem itself or an insert bud. (Tr. 43) There is only a slight possibility that buds below the top one would grow into branches. (Tr. 43) Dr. Brooks set the probability that the home gardener would get two types of fruit from a tree budded in this manner at 60%, the probability of getting three types of fruit at 10%, and the probability of getting four types of fruit are one in one thousand. (Tr. 64-65)

18. Mr. Christensen stated that by removing the tip buds, (i.e., by pruning them back) apical dominance is actually destroyed, because there is no more hormone being produced, and all of the other buds, including insert buds, on the stem are capable of breaking dormancy and growing. (Tr. 88)

19. Mr. Christensen stated that if a home grower followed the Fruit Cup Tree pruning instructions (Respondent's Exhibit 6) he or she would be able to control apical dominance. (Tr. 89)

20. Mr. Christensen said that his nursery grows Three-in-One fruit trees. (Tr. 86) Generally, his nursery buds the trees the way Dr. Brooks testified that the process would certainly work--with insert buds placed on branches. (Tr. 92-3) In 1980, implying that this was the first time, and they do not know what their experience will be, they placed insert buds on the main stalk. (Tr. 93) The nursery for which Mr. Christensen works waits until the buds are grown out into branches to sell them, thus obviating any question whether the customer will get a tree that will not grow the budded branches. (Tr. 94)

21. Regardless of what method is used to bud the additional fruits onto the peach tree, specialized pruning is needed to develop a tree which will produce fruit and continue to produce fruit for the life of the tree. (Tr. 17-22) One needs to prune carefully so that the understock does not take over and become the tree, thus producing only one type of fruit. (Tr. 18-19) If peach or nectarine branches are above plum or apricot branches, care must be exercised in pruning to allow the bottom branches to develop and come into bearing. The fruit yield would be smaller if the lower branches are not allowed to fully develop. (Tr. 17-18, 19-20) The pruning for the Fruit Cup Tree is different from usual pruning because the gardener must remember where the buds are, and know how to develop proper growth. (Tr. 20) The instructions accompanying the Fruit Cup Tree tell the gardener to mark the bud sites, but do not explain how to selectively prune or which varieties may cause the problems. (CX 6) Dr. Brooks testified that the instructions were not adequate or sufficiently explicit for the average homeowner. (Tr. 45-46)

22. A Fruit Cup Tree was ordered by a Postal Inspector under the name and at the address of and for testing by Dr. Brooks. (Tr. 47) When it arrived the package was in good condition (Tr. 61-62), indicating proper handling by the shipper, but the tree itself was not in good condition. Most of the top of the tree was desicated. (Tr. 38) Of five insert buds, one was missing and two appeared to be dead upon visual observation. (Tr. 30-34) The tree was potted and placed in a greenhouse under good water and sunlight conditions. (Tr. 36-37, 49) Other trees in the greenhouse grew normally. (Tr. 49) Fourteen days after the tree was planted it was inspected by Dr. Brooks. (Tr. 37) There was no growth from the top half of the tree, a little growth half way up the tree, and some growth from the base. (Tr. 37) Dr. Brooks testified that there was no growth from the buds on the upper part of the tree because of the desication noted earlier. (Tr. 38) Of the insert buds, one appeared alive and one had started to grow. (Tr. 34) After 32 days in the greenhouse none of the five insert buds was alive (Tr. 34), but several buds from the understock had grown. (Tr. 39) One of those was growing more rapidly and that bud "would assume apical dominance" and eventually be the tree. (Tr. 40) The only branch was from the understock. Therefore, only one fruit type would have been produced by this tree. (Tr. 41-42)

DISCUSSION OF THE EVIDENCE

Although Mr. Christensen said that implantation of buds on the stem of a seedling could be done and that such procedure could result in a multi-fruited tree, the practice of the nursery for which he works has been to place insert buds on branches, not the main stem. (Tr. 92-3) As noted above, 1980 was the first year they have budded directly on the stem. (Tr. 93) As of this time, however, the results are unknown.

Mr. Christensen said, also, that if the average home gardener followed Respondent's pruning instructions, the result would be a tree that produced peaches, nectarines, plums and apricots. The problem is that the instructions do not clearly convey to the average reader or home gardener what he should known about the dominance of the topmost bud, how to overcome this fact, or how properly to engage in selective pruning to obtain optimum results. In short, as Dr. Brooks said so clearly, the instructions are neither adequate nor sufficiently explicit for the average home gardener.

When consideration is given to the low probability that a gardener will be able to get two kinds of fruit (60%), three kinds of fruit (10%), and four kinds of fruit (1 in 1000) from a tree in which the buds had been implanted into the stem instead of the branches, it is inevitable that the customer who has been led to believe that he will have peaches, nectarines, plums and apricots of the size, quality and profusion that could be obtained if the four varieties of trees were each separately planted and cultivated will be greatly disappointed. (Tr. 64-65) In such a case, the purchaser has been induced to purchase a product "in the belief that its value far exceeds its true worth." Borg-Johnson Electronics v. Christenberry , post .

Dr. Brooks testified that his opinion was in accord with the consensus of informed scientific opinion (Tr. 46), Mr. Christensen made no such claim.

CONCLUSIONS OF LAW

1. Respondent solicits remittances of money through the mail to the name and address shown in the caption hereof for a product called the Fruit Cup Tree.

2. An advertisement is to be considered as a whole and the meaning is to be determined in light of the probable impact of the entire advertisement on the person of ordinary mind. Donaldson v. Read Magazine , 333 U.S. 178 (1948(; Peak Laboratories, Inc. v. United States Postal Service , 556 F.2d 1387, 1389 (5th Cir., 1977); Unique Ideas, Inc. v. United States Postal Service , 416 F. Supp. 1141, 1145 (S.D.N.Y., 1976). Based upon the foregoing criterion, Respondent makes the representations set forth in paragraph III of the Complaint.

3. Persons of ordinary mind reading Respondent's advertisements would interpret them substantially as characterized in paragraph III of the Complaint.

4. The representations found to have been made by Respondent are material representations because they are of the kind and character which would be calculated to persuade readers to order and pay for Respondent's product.

5. A difference of opinion concerning a product's worth does not preclude the issuance of an order under 39 U.S.C. 3005 where it is shown that the Respondent represents its product to have a far greater value than it would in fact have. Leach v. Carlile , 258 U.S. 138, 139 (1922); Original Cosmetic Products, Inc. v. Strachan , 459 F. Supp. 496 (S.D.N.Y., 1978), aff'd. w/o Op. 603 F.2d 214 (2nd Cir., 1979), cert. den. 444 U.S. 915 (1979).

6. A finding of falsity can be based on the testimony of expert witnesses whose testimony is in accord with the consensus of informed medical or scientific opinion where there is no contradictory evidence which is said to be in accord with such a consensus of opinion. Standard Research , P.S. Docket No. 7/48 (Initial Decision, August 31, 1979); Modern Age Products, Inc. , P.S. Docket No. 5/101 (P.S. Decision, June 29, 1977; Initial Decision April 6, 1977); Nutrient Laboratories , P.S. Docket No. 5/48 (Initial Decision, November 17, 1976).

7. The falsity of Respondent's representations has been established by the preponderance of the competent, credible evidence.

8. A promise to refund if a customer is dissatisfied will not dispel the effect of false advertisements. Farley v. Heininger , 105 F.2d 79 (D.C. Cir. 1939); Borg-Johnson Electronics, Inc. v. Christenberry , 169 F. Supp. 746 (S.D.N.Y., 1959).

9. Respondent is engaged in conducting a scheme or device for obtaining money or property through the maisl by means of false, material representations within the meaning of 39 U. S. Code 3005.

10. An order of the type authorized by Section 3005 of Title 39, United States Code, substantially in the form attached, should be issued against the Respondent.

Proposed findings of fact and conclusions of law submitted by the parties have been fully considered, and to the extent indicated herein, they have been adopted. Otherwise, such proposed findings of fact and conclusions of law are rejected for the reason that they are unsupported by or contrary to the evidence or because of their immateriality or irrelevance.

1/ The letters "CX" and "RX" are used, respectively, to designate exhibits of the Complainant and the Respondent.