In the Matter of the Complaint Against

INTERNATIONAL OFFICE CENTER LIMITED
1319 Second Avenue,
Suite 172
at New York, NY 10021-5404

P.S. Docket No. 18/31;

Bernstein, Edwin S.

APPEARANCES FOR COMPLAINANT:
H. Ric hard Hefner, Esq.
Brendan J. O'Brien, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, DC 20260-1100

APPEARANCE FOR RESPONDENT:
Herbert Monte Levy, Esquire
60 East 42nd Street Suite 4210
New York, NY 10165-0015

BEFORE: Judge Edwin S. Bernstein

INITIAL DECISION

Complainant alleged and Respondent denied that Respondent is mailing solicitations in the guise of bills or invoices in violation of 39 U.S. Code § 3001(d) and that Respondent is engaged in a scheme to obtain money through the mails by false representations in violation of 39 U. S. Code § 3005. A hearing was held in New York City on January 4, 1984, and in Washington, D.C. on January 25, 1984. Mr. David Leonard testified for Respondent and seven witnesses testified for Complainant. On February 17 and March 29, 1984, the parties filed proposed findings of fact, proposed conclusions of law and memoranda. All of these have been considered. To the extent indicated, they have been adopted. Otherwise, they have been rejected as irrelevant or not supported by the evidence.

FINDINGS OF FACT

The parties stipulated and I find that Respondent employs the United States mail in its business. Respondent sends unsolicited mailings to various persons throughout the United States. (Tr. 4) These mailings solicit recipients to purchase typewriter ribbons and lift-off tapes for IBM Selectric II typewriters. (JX 1-6, CX 1-14)

The average person reading Respondent's solicitations would interpret them substantially as characterized in Paragraph 3, subparagraphs (a) and (b) of the Complaint, namely that:

(a) the amount of money set forth on the invoice adjacent to "TOTAL" is owing and due to Respondent by the addressee; and

(b) the products identified on the invoice, namely HI YIELD CORRECTION RIBBONS FOR IBM SELEC II;of lift-OFF TAPES FOR IBM SELEC II were previously ordered and requested by the addressee.

These representations are false. It is undisputed that the document is a solicitation. The amount set forth adjacent to "TOTAL" is not owing and due to Respondent by the addressees, and the products identified on the invoice were not previously ordered and requested by the addressees.

39 United States Code § 3001(d) reads:

(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.

I further find that Respondent's solicitations are in the form of, and reasonably could be interpreted or construed as, bills, invoices, or statements of account due.

First, the solicitations have a layout usually found in invoices. This layout is associated with that of an invoice in the minds of average business recipients. The layout contains sections headed by the words, "Quantity", "Description", "Price", and "Amount." The "Price" and "Amount" sections list prices. Prices are also listed opposite the words, "Sub Total," "Handling" and "Total."

Next, the solicitations label themselves as "invoice" four times. At the upper left, they state "Invoice Typewriter Ribbon Account". A date is listed opposite the words "Invoice Date" and a number is listed opposite the words "Invoice No." As the exhibits and Mr. Leonard's testimony show (Tr. 46), the same number, "01256", was used on each of the 10,000 solicitations that were sent. Although Mr. Leonard stated that he listed this identical number on all solicitations "for bookkeeping purposes," I find that more likely the otherwise unnecessary invoice number section was used to reenforce the impression that the document was an invoice. Finally, at the bottom the words "ORIGINAL INVOICE CUSTOMER COPY" appear in conspicuous red letters which contrast with the color of the nearby type.

Additionally, the words "Please Remit" and the use of a window envelope reenforce the impression that the document is a bill or invoice.

The next question is whether the solicitation contains a sufficiently conspicuous notice that it is not a bill or invoice. The solicitation does not use the statutory notice specified in 39 U.S.C. § 3001(d)(A). However, in accordance with subsection (B) of 39 U.S.C. § 3001(d), the notice uses alternative language permitted by the applicable regulation - Domestic Mail Manual (DMM) 123.41a.

DMM 123.41 also specifies other requirements. Subparagraph (a) requires the use of contrasting color for the notice and subparagraph (d) requires that the notice or disclaimer not be rendered unintelligible or less prominent by any other device.

The Postal Service learned that seven copies of the 10,000 copy mailing of solicitations had non-contrasting disclaimers. (Tr. 54) Respondent conceded this (Tr. 58) but of repetition. Additionally, the letters in all three lines are compressed. This makes it even more difficult to read the words in the middle disclaimer line. Thus, the devices of (1) sandwiching the disclaimer between the similar lines of monotonous name repetition, and (2) compressing the letters of the words make the disclaimer less prominent and cause the disclaimer to violate the notice requirements of 39 U.S.C. § 3001(d) as interpreted by DMM 123.41d, even where the disclaimer was in contrasting color.

Complainant presented seven witnesses who testified that they also found it difficult to notice the disclaimer and were at first fooles to believe the document was an invoice. These witnesses included two attorneys and five experienced law secretaries. Three of the five, Ms. Frey, Ms. Saur and Mr. De Deo stated that on the copies they received the disclaimer was not in red ink but in non-contrasting black ink.

At first, none of the witnesses noticed the disclaimer. All of them initially thought the document was an invoice. Mr. De Deo testified that all 14 people who looked at it in his office, five law partners and nine secretaries, were misled until a week and a half later, a secretary who carefully scrutinized the solicitation noticed the disclaimer (Tr. 116). Ms. Collover, a legal secretary for five years, stated that she was fooled because the disclaimer "was buried so well" even though it was in contrasting red ink on the copy she received (Tr. 90). Mr. Frederick, an attorney, stated that the document appeared to be "a very clever optical illusion" (Tr. 76). These reactions are consistent with my evaluation of the document.

CONCLUSIONS OF LAW

1. The meaning of an advertising representation is to be judged from a consideration of the advertisement in its totality and the impression it would most probably create in ordinary minds. Donaldson v. Read Magazine, 333 U. S. 178 (1948); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957); Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746 (S.D.N.Y. 1959).

2. An advertisement as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because the advertisement is composed or purposefully printed in such a way as to mislead. Donaldson v. Read Magazine, supra.

3. A mild, ineffective disclaimer will not outweigh false representations. Vibra-Brush Corp. v. Schaffer, suprait

4. Respondent's solicitations make the representations alleged in Paragraph 3 of the Complaint as incorporated in Counts I and II and the representations are materially false.

5. Respondent's solicitations are in the form of and reasonably could be interpreted as bills, invoices or statements of account due.

6. Respondent's solicitations contain a disclaimer notice that is rendered unintelligible and less prominent and does not comply with the disclaimer requirements of DMM 123.41.

Therefore, Respondent has violated both 39 U.S.C. §§3001(d) and 3005 and a False Representation Order, in the form attached, should be issued.