In the Matter of the Complaint Against

GILLES J.BITBOL KATHERINE BITBOL

and

A.MICHAEL D.NAUJOKATH d/b/a ION PUBLISHING INC
WORLD TELEX EDITION and INTER AMERICAN PUBLISHERS, INC. (IPI)
Post Office Box 01-5569
at Miami, FL 33101

and

ATLAS PUBLISHING, INC.

and

THE WORLD WIDE TELEX DIRECTOR
Post Office Box 34420
at Coral Gables, FL 33114-4320

P.S. Docket No. 12/158;

02/04/82

Duvall, William A.

APPEARANCES FOR COMPLAINANT:

H. Richard Hefner, Esq.
Law Department
United States Postal Service
Washington, DC 20260

Ben A. Kilgrow, Esq.
Postal Inspection Service
P. O. Box 2308
Knoxville, TN 37901

APPEARANCE FOR RESPONDENT:
Andrew C. Hall, Esq.
Hall & Hauser, P. A.
1401 Brickell Ave., Suite 200
Miami, FL 33131

INITIAL DECISION ^1/

This proceeding was initiated on November 13, l981, when the Consumer Protection Division of the Law Department of the United States Postal Service, the Complainant, filed a Complaint in which it is alleged that Gilles J. Bitbol, Katherine Bitbol and A. Michael D. Naujokath doing business as ION Publishing, Inc., World Telex Edition and Inter American Publishers, Inc. (IPI) at Miami, Florida, and Atlas Publishing, Inc. and The World Wide Telex Directory at Coral Gables, Florida, are engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations in violation of Section 3005 of Title 39, United States Code, and that they are distributing matter which is nonmail able under 39 U. S. Code 3001(d).

In connection with the conduct of the said scheme, it is alleged that attention is attracted to the scheme by means of unsolicited direct-mail circulars which are in the form of, and reasonably could be interpreted or construed as, bills, invoices or statements of account due; but which constitute, in fact, solicitations for orders by the addressees of goods or services, or both.

Complainant alleges that by means of the materials which Respondents circulate, the Respondents, expressly or impliedly, represent to the public, directly or indirectly, in substance or effect, whether by direct statement, omission or implication that:

(a) the amount set forth on the face of the solicitation is owing an due to Respondent.

(b) the goods or services set forth on the face of the solicitation were previously ordered by the addressee.

It is alleged by the Complainant that the aforesaid representa tions are materially false as a matter of a fact.

Finally, it is alleged that the solicitations constitute non mailable matter under 39 U. S. Code 3001(d), and that the mailing by Respondents of the matter which is so nonmailable constitutes prima facie evidence that they are engaged in conducting a scheme or device within the purview of 39 U. S. Code 3005.

This matter came on for hearing in a proceeding held commencing January 22nd and concluding on January 23, l982.

At the proceeding, counsel for both parties examined and cross-examined witnesses, and at the conclusion of the introduction of the testimony, they presented oral proposed findings of fact and conclusions of law.

During the course of the concluding arguments by both counsel, the Complaint was dismissed as to the following Respondents whose names appear in the caption: Gilles J. Bitbol, Katherine Bitbol, A. Michael D. Naujokath and Inter American Publishers, Inc. (IPI).

There remain, therefore, in the Complaint the following Respon dents: ION Publishing, Inc., World Telex Edition, Atlas Publishing, Inc. and The World Wide Directory.

The Postal regulation governing the appearance and the content of solicitations in the guise of bills, invoices or statements of account is found at Section 123.41 of the Domestic Mail Manual (DMM), and the portion which is of particular interest is Subsection a. of that Section. This provision of the regulation reads as follows:

"a. The solicitation must bear on its face the disclaimer prescribed by 39 U.S.C. 3001(d)(2)(A) or, alternatively, the notice: THIS NOT A BILL. THIS IS A SOLICITATION, YOU ARE UNDER NO OBLIGATION TO PAY UNLESS YOU ACCEPT THIS OFFER. The statutory disclaimer or the alternative notice must be displayed in conspicuous boldface capital letters of a color prominently contrasting (see .41g below) with the background against which it appears, including all other print on the face of the solicitation and at least as large, bold and conspicuous as any other print on the face of the solicitation but not smaller than 30-point type."

The statute pursuant to which that regulation was issued, insofar as it is here pertinent, reads as follows, and this is found in Section 3001(d) of Title 39, United States Code:

"(d) Matter otherwise legally acceptable in the mails which--

(1) is in the form of, and reasonably could be interpreted or construed as, a bill, invoice, or statement of account due; but

(2) constitutes, in fact, a solicitation for the order by the addressee of goods or services, or both; is nonmailable matter, shall not be carried or delivered by mail, and shall be disposed of as the Postal Service directs, unless such matter bears on its face, in conspicuous and legible type in contrast by typography, layout, or color with other printing on its face, in accordance with regulations which the Postal Service shall prescribe--

(A) the following notice: 'This is a solicitation for the order of goods or services, or both, and not a bill, invoice, or statement of account due. You are under no obligation to make any payments on account of this offer unless you accept this offer."; or

(B) in lieu thereof, a notice to the same effect in words which the Postal Service may prescribe."

Among the witnesses who testified in the course of this pro ceeding was Gilles J. Bitbol who identified himself as the Chairman or the President of the Respondent organizations.

It is Mr. Bitbol's desire and purpose to publish a World Telex Directory in which directories published in various individual countries will be gathered together and placed in one publication. In connection with this purpose, he has caused to be transmitted certain documents, called proforma invoices, which are solicitations to insert advertisements in this World Telex Directory which is to be prepared and published.

There is no dispute that the language by which the addressee is advised that this is not a bill for services rendered, but it is a solicitation to perform the service which is intended by the publication of the World Telex Directory, is not in compliance with the requirements of either the statute or the regulations issued pur suant to that statute. (I may be overstating it to indicate that there is no dispute that the solicitation sent out, for example, under the name of ION Publishing, Inc. does not comply with the statute.) In any event, I find that the examples which have been introduced in evidence do not comply with Section 3001(d), United States Code of the statute in that the type in which the required notice appears is not conspicuously in contrast, either by typography, layout or color, with other printing on the face of the invoice.

Furthermore, it clearly is not in conformity with the provisions of the regulation which require that the notice, either in the language prescribed in the statute or in the language prescribed in the regula tion, be stated in 30-point type.

Regulations issued by the head of an executive department or agency of the Government which are in conformity with law are to be enforced and given the same force and effect as are provisions of law. Such regulations issued by the head of an executive agency are binding upon the officers and employees of that agency. A. N. Deringer v. U. S., 447 F. Supp. 451 (1978); Jeffries v. Olesen, 121 F. Supp. 463 (1954).

It may be argued that the Postal Service is not an executive department or agency of the Government, but, whatever it is, it is authorized by 39 U. S.C. § 401--

"to adopt, amend, and repeal such rules and regulations as it deems necessary to accomplish the objectives of this title;***

It scarcely will be questioned that among the objectives of the Postal Service are those of (1) determining what is nonmailable matter and (2) keeping such matter out of the mails.

The invoices issued by ION Publishing, Inc. which also bear the name, "World Telex Edition," on their face, and those which bear the names, "Atlas Publishing, Inc." and "The World Wide Telex Directory," on their faces are clearly not in conformity with either the statute or the regulation issued pursuant thereto. Therefore, they are to be treated as nonmailable matter as prescribed in 39 U. S. Code 3001 and under the appropriate regulations issued by the Postal Service for the disposition of nonmailable matter.

The second issue is, whether the invoices themselves create in the minds of the recipients the impression and the belief that the amount set forth on the face of the solicitation is due and owing to the Respondents, or that the goods or services set forth on the fact of the solicitations were previously ordered by the addressees.

The general rule with respect to the interpretation of sales literature used in advertising matter sent through the mail is that the statements made therein are to be judged from consideration of an advertisement in its totality and the impression that those representations will most probably create in ordinary minds. This is the holding in a number of cases including Donaldson v. Read Magazine, 333 U. S. 178 (1948); Vibra-Brush Corporation v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. l957); and Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746 (S.D.N.Y. 1959). Express represen tations are nor required. It is the net impression which the adver tisement is likely to make upon purchasers to whom it is directed which is important, and even if an advertisement is so worded as not to make an express misrepresentation, if it is artfully designed to mislead those responding to it, the mail fraud statute (in this instance the misrepresentation statute which is 39 U.S. Code 3005) is applicable. G. J. Howard v. Cassidy, 162 F. Supp. 568; Virginia State Board of Pharmacy v. Virginia Citizens Council, 425 U. S. 748 (1976).

That rule of interpretation is to be employed in all cases, but that rule of interpretation is not necessarily controlling in every case. If, for example, there is competent, probative evidence which would lead to a conclusion that is contrary to the conclusion to which those rules of interpretation might lead, then the evidence in a particular case should be, and must be, controlling. In substance, these cases are to be considered on an ad hoc basis. There cannot be an immutable, or an umbrella-type ruling which is, as counsel said, sort of an ipse dixit. Some interpretative rules lead to a particular conclusion. That conclusion is not necessarily binding, and it sought not to be binding when it is opposed by competent, relevant and material evidence to the contrary. I find such to be the situation in the present proceeding.

In most, if not all, countries in Africa and in many countries in Europe, including, but not limited to, Spain, Italy, Yugoslavia, Czechoslovakia and Hungary, there are the currency regulations setting forth the conditions under which money may be taken or sent out of the country. One of Respondents' witnesses testified, and the testimony is uncontroverted, that before a person in one of those countries can sent money out of his country, he must have some evidence of indebtedness to a person in another country, or some evidence that he wants to buy or order something from another country. Because of these requirements, it is common for people engaged in international business to use "proforma" invoices, both to advertise and sell goods and services and to provide a basis for for obtaining or sending payment from a person located in a country in which such currency restrictions are in force to a person or concern in another country. (Tr. 100-102; 113-114)

Introduced on behalf of the Respondents were numbers of letters received from persons and businessses to whom the invoices had been sent. Respondents' witnesses stated, without contradiction in this record, that these letters indicated that the writers of them either wanted, or did not want, the service that was being offered, and that they were willing, or unwilling, to pay the price for it. The witnesses stated, further, that in almost no instance did any of these of what appear to be hundreds of letters contain statements indicating that the writers did not understand the nature of the documents which they had received.

There is a total of approximately four letters, out of the entire group which have been received as exhibits from both sides, which indicate dissatisfaction with the system, but only one said that he found the invoices to be misleading. In any event, it obviously did not mislead the individual who made that statement. He had to know what he was reading in the solicitation or he would not have made the statement that it was "misleading." (Comp. Ex. K-2)

In another letter, the writer complained to the Better Business Bureau of Miami asking that organization to investigate the business methods of Respondents. (Comp. Ex. C-2) As a follow-up, however, the writer of the above letter wrote to Respondents indicating entire satisfaction with its dealings with Respondents. (Comp. Ex. C-2-A)

There remain the two complaints from businesses in Hong Kong obtained by the Detective Inspector in Hong Kong. The complaints indicate dissatisfaction with he receipt of "proforma invoices" requesting payment for services which had been neither ordered nor received. Despite the expression of dissatisfaction, there is no indication that the writers were misled by the mailings. (Comp. Exs. N-1 and P-1)

It must be remembered that the evidence includes six folders containing what appear to be hundreds of letters (Respondents' composite Ex. 7) from clients of the Respondents, 99 per cent of whom, so the testimony indicates, thanked the Respondents for the offer of the service. (Tr. 117) Against this impressive array, the four letters relied upon by Complainant are not persuasive.

The last sentence of 39 U.S. Code 3005(a) provides that the mailing of matter which is nonmailable under § 3001(d) is prima facie evidence that the mailing party is engaged in a scheme or device of the type proscribed by § 3005. It is hornbook law that a prima facie case is one which is sufficient until it is contradicted and over come by other evidence. The evidence presented by Complainant did not really contradict, and certainly did not overcome, that presented by Respondents.

In view of all of the foregoing facts and circumstances, I conclude as follows:

1. The invoices which are mailed by the Respondents whose names still remain in the Complaint (a) do not comply with the statute (39 U.S. Code 3001(d)), and (b) do not comply with the regulation of the Postal Service (DMM, § 123.41a).

2. The regulations of the Postal Service are binding upon the officers and employees of the Postal Service and they are binding upon the users of the Postal Service. Unless and until such regulations are found by appropriate authority to be unreasonable, or in excess of authority, or for some there reason not enforceable, they are to be given the force and effect of law.

3. The evidence in this case does not support the allegation that the recipients of the invoices mailed by these Respondents believed, or would be caused to believe, either that the amount set forth on the face of the solicitation was due and owing to Respondents or that the goods or services set forth on the face of the solicitation were previously ordered by the addressee.

4. With respect to the two allegations referred to in the preceding paragraph, the Complainant has not borne its burden of proof.

For the foregoing reasons there is not a sufficient basis for the issuance of an order of the type provided for in 39 U.S. Code § 3005, and to the extent the issuance of such an order is requested by Complainant, the Complaint is hereby dismissed.

1/ This decision was rendered orally at the close of the hearing. It has been edited and transcribed for formal issuance.