In the Matter of the Complaint Against

SAM McVICKER d/b/a REV. SAM McVICKER
203 Pine Street
at Johnstown, PA 15902-1933

P.S. Docket No. 19/48;

Duvall, William A.

APPEARANCES FOR COMPLAINANT:
Anne G allant, Esq.
Roderick P. Sullivan, Esq.
Law Department
U.S. Postal Service
Washington, DC 20260-1112

APPEARANCE FOR RESPONDENT:
Rev. Sam McVicker, Pro se
203 Pine Street
Johnstown, PA 15902-1933

INITIAL DECISION

On April 19, 1984, the Consumer Protection Office, Law Department, United States Postal Service (Complainant) filed a Complaint in which it charged that Sam McVicker d/b/a Rev. Sam McVicker, 203 Pine Street, Johnstown, PA, is engaged in conducting a scheme to obtain money through the mail by means of false representations in violation of 39 U. S. Code § 3005.

Respondent filed the Answer to the Complaint on May 2, which Answer served, also, as the Answer to the Amended Complaint filed by Complainant on May 8, 1984.

The hearing was held in Pittsburgh, PA, on June 6, 1984.

Complainant's Proposed Findings of Fact and Conclusions of Law were filed on July 3, 1984.

Respondent inserted an advertisement in the March 5, 1984, issue of the Catholic Register, a bi-weekly publication which is the official publication of the Diocese of Altoona-Johnstown, PA. (App. A to this decision). In the advertisement there is offered for sale a copy of a photographic reproduction of the painting "The Last Supper".

Complainant alleges that by advertising as indicated above Respondent makes the following representations which Complainant charges are materially false as a matter of fact:

"a. Reproductions of the painting 'The Last Supper' are available for sale from Respondent; and

"b. Upon receipt of the appropriate monetary amount, Respondent provides a reproduction of the painting 'The Last Supper.'"

Complainant requests the issuance of a mail-stop order and a cease and desist order, suggested forms of both of which are attached to the Complaint.

In his Answer, Respondent states, in part:

"I haven't done anything illegal. I feel there is no basis for a cease and desist order, that's why I am opposing it."

FINDINGS OF FACT

1. Respondent inserted in the March 5, 1984, issue of the Catholic Register an advertisement in which a reproduction of the painting "The Last Supper" is offered for sale. (Tr. 20; App. A)

2. In Respondent's advertisement in the March 5, 1984, Catholic Register, Respondent solicits remittances of money to himself through the mail. (App. A)

3. As modified herein, the representations set forth in paragraph 3 of the Complaint, and which are quoted above, are made by implication in Respondent's advertisement.

"Express representations are not required. It is the net impression which the advertisement 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 representation, if it is artfully designed to mislead those responding to it the mail fraud statutes are applicable. G. J. Howard v. Cassidy, 162 F. Supp. 568. See, also, Virginia State Board of Pharmacy v. Virginia Citizens Council, 425 U.S. 748 (1976)."

(In the Matter of the Complaint Against The Columbia Mint, P.S. Docket Nos. 15/98 and 15/99, I.D. May 27, 1983; no appeal taken, matter subsequently disposed of by consent agreement.)

4. The resolution of the final issue. i.e., the truth or falsity of the representations found to have been made by Respondent, is more difficult because of certain facts and circumstances brought out at the hearing. These facts will now be summarized and discussed.

In December 1983 Respondent ordered, and apparently received from Anna Elizabeth Wade Company, of Lynchburg, Virginia, two photographic copies of the painting "The Last Supper," for which a remittance in the amount of $2.40 was made by check to the seller. (Tr. 21, RX-1 and 2; CX-1) At some later time Respondent arranged for the insertion of the advertisement which is Appendix A hereto in the Catholic Register (The Register), where the advertisement appeared in the issue of Monday, March 5, 1984. (CX-2)

Respondent said that it was his plan either to order pictures from the Wade Company and mail them to persons who ordered them or he would "drop ship" them. (Tr. 7, 9, 10) Inspector Randolph, whose participation in the investigation will be described later, was not familiar with the "drop ship" method of selling. (Tr. 10) The term later was defined by Inspector Conroy, mentioned later also, as the situation in which an individual, acting as a salesman, takes orders for goods sold by a company by which he is not employed. When the individual receives an order, he forwards it to the company together with the purchase price and the name and address of the purchaser to whom the merchandise is to be sent by the company. (Tr. 17) For reasons, some of which will be suggested later, Respondent never entered into an agreement with the Wade Company to engage in this kind of business for or with Wade. In fact, it is by no means certain that a formal agreement between the parties to such an arrangement is required. Complainant made no claim, and offered no proof of this type of requirement of law, regulation or custom and none has been found. There seem to be similarities between the "drop ship" method of selling and the situation in which a person sends a check to a shop or store and asks that a particular item be sent as a gift to someone in another location. In the latter situation, it is probable that the donor and donee are known to each other, and there are other differences, but insofar as the use of the mails is concerned the procedures appear to be indistinguishable or nearly so.

Between the time the Register reached its readers, and 9:00 o'clock on the morning of Thursday, March 8, 1984, Respondent had received nine orders for the picture. (Tr. 7; CX-1, § 2) In Respondent's words, he "got the first batch of orders on Wednesday ***." (Tr. 24) The maximum amount of time during which Respondent's advertisement could reasonably be expected to have been available to readers between delivery of the paper on Monday and 9 A.M. on Thursday would be approximately 2 1/2 days.

At nine o'clock Thursday morning, Respondent was visited and interviewed by Postal Inspector S. G. Randolph. (CX-1; Tr. 23) There is some dispute about the matter, but Respondent says that Inspector Randolph told him that he (the Inspector) was "going to get a court order against Respondent and stop you selling everything. I said, do you want me to return these pictures like I did them towel orders two years ago, and he said, yes, and continued to write." (Tr. 23; see, also, Tr. 8 and 9) Inspector Randolph denied making the threat to "get a court order ***," but he did state that he told Respondent, in effect, that when a person advertises to sell something, the proper procedure is for the seller to have the merchandise "available" when it is advertised. (Tr. 9, lines 19-22) That is my interpretation of the language set forth at the cited page and lines. I believe it is the correct interpretation and I believe the substance of the statement, itself, is correct. To have the merchandise on hand when it is advertised is proper procedure. The statement does not mean, however, that it is improper not to have the merchandise on hand when it is advertised. If this were so, then the whole of the "drop ship" segment of mail order business could be illegal. Again, no authority for Inspector Randolph's suggestion of impropriety or illegality was stated or cited, and none has been found.

Respondent repeatedly made statements indicating his belief that his activities were proper and in compliance with law, and that he wanted to sell the pictures of "The Last Supper." (Ans., § 1, Tr. 9, 10, 18, 22; CX-6)

At Inspector Conroy's direction, Postal Inspectors R. Britt and S. Sackner called upon Respondent on May 21, 1984. When Inspector Sackner asked Respondent to produce orders received and proof of orders filled, Respondent stated that the original orders "were in boxes with a lot of other junk," and that it would take him hours to find them. In response to the suggestion that the matter might be disposed of on the basis of a Consent Agreement, Respondent stated that he had done nothing wrong and that he did not want to sign any papers. (CX-6)

On May 29, 1984, Inspector Conroy interviewed by telephone Joe Hurd, Managing Editor of The Catholic Register. The most significant items in this interview were the statements by Mr. Hurd that (1) he received a telephone call from some unidentified woman who said that Respondent is not a "reverend"; and (2) he received a complaint of non-receipt of the "Last Supper" from John Orlosky of 427 Munster Road, Portage, PA 15946.

With respect to the first of the above comments, no weight or credence may be assigned to it, since it may have come from some grudge-bearer, or other disgruntled individual. As to the second item, Respondent stated that he never received an order from Mr. Orlosky (Tr. 13, 14). Inspector Conroy, when asked whether he attempted to contact Mr. Orlosky, said:

"Yes, I did. I attempted to locate a telephone number for the individual but he either has no telephone or it is unlisted. I wrote a letter explaining the nature of the inquiry and asked him to get back in contact with me by letter or telephone. He failed to do so."

On May 30, 1984, when interviewed by Inspector Conroy by telephone, Ms. Pam Ernst, Customer Service Supervisor, Anna Elizabeth Wade Company, Lynchburg, VA, said that her company is engaged in the business of providing promotional materials for fund raising organizations and sells only in case lots. Ms. Ernst said that a review of her company's records disclosed no indication of its ever having done business with Respondent at the address shown in the caption of this decision. Ms. Ernst said that the price list for the "Last Supper," in case lots, wholesale, is as follows:

1 - 49 copies $3.00 each

50 - 99 copies $2.75 each

100 copies or more $2.60 each (CX-4)

It is time now to try to place the pieces of this controversy in perspective.

Respondent is the appropriate person with whom to start. In December 1983, he ordered and received two copies of a photograph of "The Last Supper" by daVinci. At some time he decided to advertise and sell pictures like the ones he bought. He advertised them for sale at $1.00 each plus 75 cents for postage and handling. ^1/ His advertisement appeared in the Catholic Register issue of March 5, 1984. By the end of the second day after the date of the publication of the advertisement he had received nine orders. By 9 A.M. on the third day after the day on which the advertisement was published, a Postal Inspector knocked on his door, came in, and told him that he was not doing business in a proper way. The Inspector told him, in addition, (1) that a court order soon to be obtained by the Inspector would prohibit Respondent from selling anything; and (2) that Respondent should refund the money to any people whose payments for pictures he had received. Respondent had become acquainted with the Postal Inspection Service in somewhat similar, earlier situations so, after thinking it over for a while, he said to himself "*** well, I'll return them." (Tr. 24)

Based on this summary of the facts I believe that it would be accurate to state that at the time of Inspector Randolph's visit and conversation, Respondent understandably was quite fearful as to what might be the outcome of his situation.

It will be recalled that by the evening of Wednesday, March 7, he had received 9 orders for the photograph. In the course of his testimony at the hearing he exhibited refund checks he had sent to two people. After the hearing he supplied six additional checks which he identified as representing refunds to other purchasers. Copies of all eight checks are attached hereto. If a scheme contemplated by 39 U. S. Code § 3005 exists, the making of refunds provides no exculpation.

I am unable to conclude that the representations herein found to have been made have been shown to be false for reasons which will now be stated.

If the Respondent's activities were conducted to set into motion a scheme or device to obtain money or property through the mails by means of false representations, the measures for protection of the consumer were initiated so early by the Postal Service that they prevented the scheme from developing to a point at which its existence could be established by the evidence. For example, with respect to the charge in paragraph 3.(a) of the Complaint, there is no proof that Respondent would not within a reasonable time from the receipt of an order, obtain from the Wade Company or some other source, sufficient copies of the print to meet the demand. It is not unusual, improper or illegal for a seller to run "test ads" in order to determine their "pulling power." In such instances it is also a business practice to allow orders to accumulate for a few days to provide a basis for knowing whether an advertisement is successful as written or whether it must be changed.

Similarly, with respect to the charge in paragraph 3.(b) of the Complaint, this charge must be read to mean, as it would be understood by the average reader, that "Within a reasonable time after the receipt of the appropriate monetary amount, Respondent provides a reproduction of the painting 'The Last Supper.'" In ordering through the mail from any concern, it is a matter of common knowledge that the purchaser does not expect instantaneous delivery upon payment of the purchase price. Such matters as checking the customers' credit, wrapping, mailing and the shipping distance involved are other factors which purchasers know have a bearing upon the time required for delivery.

In the present situation, if it is assumed, without necessarily agreeing, that Respondent wanted to proceed with maximum speed, he was prevented from doing so by the instructions from the Postal Inspector who told him on the day after the orders arrived to refund the money to all purchasers. If there ever was a Mr. Orlosky who ordered the picture from Respondent, it is no wonder that he complained of non-delivery.

Complainant's Arguments

In Complainant's Proposed Finding of Fact 4, Complainant overlooks, or disregards, the fact that Respondent was told, on the third day after the advertisement was published and on the first day after the receipt of nine orders, to return the money to the remitters. Thus, the facts that no pictures were on hand and no "drop ship" arrangements had been made were completely understandable and appropriate for the reasons heretofore stated.

Proposed Finding of Fact 5 refers to "Respondent's own admissions" as being "the strongest evidence of the falsity of his advertising representations." Citations have been made to numerous places in this short record in which Respondent repeatedly and emphatically asserted that he had done nothing wrong or illegal. In addition, no place has been found in the transcript at which Respondent claimed to have ordered more photographs from the Wade Company. Rather, Inspector Randolph referred at Tr. 7 to his memorandum of the interview of Respondent in which the Inspector recorded that Respondent "stated he would order pictures from Elizabeth Wade Company, Lynchburg, VA." (Emphasis added; CX-1, p. 1, 3rd par.; Tr. 28; see, also, last sent. on p. 3 of Complainant's Prop. F. of F.) The testimony of Inspector Conroy and the statement by Ms. Ernst agree with Respondent's indication that he had no arrangement with Anna Elizabeth Wade Co. initially, but the evidence supplied by Inspector Conroy and Ms. Ernst do not in any way negate Respondent's statement that he would obtain photographs from that supplier. Complainant again relates the complaint by John Orlosky of non-receipt of Respondent's product, but (1) Respondent stated that he received no order from such a person, (2) there is doubt of the existence of such a complaint, and (3) it is not even certain that there is a John Orlosky, of 427 Munster Road, Portage, PA 15946. If there is, a thoroughly competent Postal Inspector was, and presumably remains, unable to locate him.

Proposed findings of fact and conclusions of law submitted by the Complainant 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 reasons that they are unsupported by or contrary to the evidence or because of their immateriality, or irrelevance.

In view of the foregoing facts and circumstances as revealed by the testimony and documents in this record, I find that there is insufficient evidence to establish the falsity of the representations herein found to have been made by this Respondent, when the advertisement is considered as a whole and when it is reasonably interpreted upon the basis of the impression it would create in ordinary minds. Without this proof of falsity, the Complainant can not prevail.

Accordingly, the Complaint in this proceeding must be, and the same hereby is, DISMISSED.

1/ In view of the discrepancy between the price Respondent pays ($2.60, each, at best) and the price he charges for the photograph ($1.75, the initially advertised price), the future of this business is not bright.