In the Matter of the Complaint Against

AMERICAN TESTING INSTITUTE
6660 Biscayne Boulevard
at Miami, FL 33138-6231

and

GIFT REDEMPTION CENTER
Suite #5 13680 N.W. 19th Avenue
at Miami, FL 33054-4214

P.S. Docket No. 14/114;

07/06/83

Cohen, James A.

APPEARANCES FOR COMPLAINANT:
Thomas A. Ziebarth, Esq.
Clark C. Evans, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, DC 20260-1112

APPEARANCE FOR RESPONDENT:
Edmond W. Frank, Esq.
Suite 700 14 N.E. First Avenue
Miami, FL 33132-2404

POSTAL SERVICE DECISION

Respondent has appealed from an Initial Decision which holds that by means of direct mail circulars offering an opportunity to win a prize, Respondent is engaged in a lottery or scheme for the distribution of money or property by chance within the meaning of 39 U.S.C. § 3005.

Background

The Complaint initiating this proceeding alleged that Respondent is engaged in the conduct of a lottery enterprise in violation of 39 U.S.C. § 3005 through the use of direct mail solicitations urging recipients to complete and return a test response form with the sum of $14.80 in order to win a valuable prize. In a timely filed Answer, Respondent denied any violation of the statute. At a hearing before an Administrative Law Judge, an employee of Respondent, Lee M. Small, testified with respect to the enterprise which is the subject of the Complaint. Both parties introduced documentary evidence (Tr. 5-7; Comp. Ex. C-1; Resp. Ex. R-1). Following the submission of proposed findings of fact and conclusions of law, the Administrative Law Judge issued his Initial Decision in which he concluded that Respondent was engaged in a lottery enterprise in violation of 39 U.S.C. § 3005.

Exceptions and Argument of Respondent

Respondent has taken exception to six findings of fact of the Initial Decision. With respect to those findings Respondent argues that: (1) Complainant has not carried its burden of proof, (2) the record is not sufficient for the Administrative Law Judge to conclude what effect its mailings have on ordinary minds, and (3) the program it is conducting is a television survey and not a lottery scheme, since no consideration is required in order to win a prize.

Respondent argues that Complainant has the burden of proof which it has not sustained because it has presented no evidence through lay or expert witnesses. According to Respondent the two exhibits and the testimony of Mr. Small are insufficient to meet Complainant's burden.

Respondent is correct that Complainant has the burden of proving the allegations of the Complaint. See e.g., Fort Morgan Vapor Jet, P.S. Docket No. 12/64 (P.S.D. Sept. 29, 1982);

Contemporary Mission, P.S. Docket No. 8/159 (P.S.D. June 30, 1981); Standard Research Labs., P.S. Docket Nos. 9/63 & 9/64 (P.S.D. Aug. 31, 1981); Telestar, Inc., P.S. Docket No. 7/141 (P.S.D. Jan. 15, 1981). However, it need not present lay or expert testimony in order to sustain its burden of establishing the effect of an advertisement on the ordinary mind. See Body Persuasion Systems, Inc. v. United States Postal Service, Case No. CV 75-1996-JC (C.D. Ca. 1976), aff'd 9th Cir. (Dec. 13, 1978); Vibra Brush Corp. v. Schaffer, 152 F.Supp. 461 (S.D.N.Y. 1957); Standard Research Labs., P.S. Docket No. 7/48 (P.S.D. April 4, 1980); Davinol Products, P.S. Docket No. 7/22 (P.S.D. Nov. 14, 1979). Whether an advertisement makes an alleged representation may be determined by an Administrative Law Judge, and on appeal by the Judicial Officer, from the advertisement alone. Fort Morgan Vapor Jet, supra; Athena Products, Ltd., P.S. Docket No. 7/99 (P.S.D. June 26, 1981); Standard Research Labs., P.S. Docket No. 7/48, supra, and cases cited therein at p. 13.

The Administrative Law Judge in the Initial Decision in this case concluded that the ordinary participant reading Respondent's advertisements in their entirety would conclude that they required a remittance of $14.80 for the participant to be eligible to win the prizes offered by Respondent. The Administrative Law Judge's conclusion is supported by the language of the advertisements and the approximately 60% response rate which included the remittances sought in Respondent's solicitations (see I.D., F.O.F. 6-8). Thus, Complainant did sustain its burden of proof and the Administrative Law Judge properly concluded that the ordinary reader would understand

Respondent's advertisements to require the remittance of $14.80 to be eligible to win a prize.

Respondent next contends that it is engaged in a television survey and not a lottery enterprise or scheme ^*/ under 39 U.S.C. § 3005. According to Respondent it does not require the payment of $14.80 in order for a participant to win a prize and therefore one of the three essential elements of a lottery, consideration, is not present in its program.

As previously stated, the Administrative Law Judge properly found that the ordinary reader would reasonably conclude that the amount of $14.80 was required to be remitted for the chance to win one of Respondent's prizes. Since the amount of $14.80 would be understood by the ordinary reader to be required in order to have a chance to win a prize, the Administrative Law Judge concluded that this amount constitutes the element of consideration for the lottery enterprise conducted by Respondent. The Administrative Law Judge's conclusion in this regard is correct and Respondent's argument to the contrary is without merit. Inasmuch as Respondent does not dispute the existence of the other two elements of a lottery, prize and chance, it is concluded that all three elements of a lottery, prize and chance, it is concluded that all three elements are present in its promotion and that it is engaged in the conduct of a "lottery, gift enterprise, or scheme for the distribution of money . . . or personal property, by lottery, chance or drawing of any kind," as proscribed by 39 U.S.C. § 3005.

Accordingly, Respondent's appeal is denied and a remedial order is issued herewith.

*/ The term "scheme" is defined as a "plan, design, or program of action to be followed." Random House Dictionary of the English Language (Unabridged Ed., 1967). It is used in this sense in 39 U.S.C. § 3005. See Standard Research Labs., P.S. Docket No. 7/48 (P.S.D. April 4, 1980), and cases cited therein at p. 12.