In the Matter of the Complaint Against

UNITED STATES TESTING
AUTHORITY TELEVISION DIVISION
l68l Kennedy Causeway at North
Bay Village, FL 33l4l-9982

AMERICAN TESTING INSTITUTE
6660 Biscayne Boulevard at
Miami, FL 33l38-623l

and

GIFT REDEMPTION CENTER Suite #5
l3680 N.W. l9th Avenue at
Miami, FL 33054-42l4

P.S. Docket No. 14/77; P.S. Docket No. 14/114;

10/02/85

Cohen, James A.

APPEARANCES FOR COMPLAINANT:
Sandra C. McFeeley, Esq.
Kenneth N. Hollies, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, DC 20260-1112

APPEARANCE FOR RESPONDENT:
Edward J. Carnot, Esq.
25 West Middle Lane
Rockville, MD 20850-2214

POSTAL SERVICE DECISION ON

PETITIONS FOR SUPPLEMENTAL ORDERS

Prior proceedings in these matters led to the issuance of False Representation Order No. 83-16, dated January l7, l983, against United States Testing Authority, Television Division, l681 Kennedy Causeway, North Bay Village, Florida 33141-9982 (P.S. Docket No. l4/77) and False Representation Order No. 83-113, dated July 6, l983, against American Testing Institute, 6660 Biscayne Boulevard, Miami, Florida 33138-6231, and Gift Redemption Center, Suite #5, 13680 N.W. l9th Avenue, Miami, Florida 33054-4214 (P.S. Docket No. l4/114). The mail affected by both Orders related to a lottery, gift enterprise, or scheme for the distribution of money or of real or personal property, by lottery, chance or drawing of any kind in violation of 39 U.S.C. § 3005 with respect to the awarding of prizes in connection with a survey of television viewers.

Petitions for Supplemental Orders

Three Petitions for Supplemental Orders which are presently pending before the Judicial Officer are addressed in this Decision. The issue to be determined in connection with each Petition for Supple- mental Orders is whether Respondents are evading or attempting to evade the provisions of the Orders issued under 39 U.S.C. § 3005 by conducting the same or a similar enterprise under a different name or at a different address. ^1/ The first Petition for Supplemental Orders (hereinafter the First Petition), with attachments, was filed by Complainant on December l6, l983, alleging that Respondents W. Ed Herder and National Testing Authority, Inc., are evading or attempting to evade the provisions of False Representation Order Nos. 83-16 and 83-113 by conducting the same or a similar enterprise under the name National Testing Authority at Suite l000, ll00 l7th Street, N.W., Washington, DC 20036. In the First Petition, Complainant seeks the issuance of a False Representation Order pursuant to 39 U.S.C. § 3005(a)(l) and (2) and a Cease and Desist Order pursuant to § 3005(a)(3). The authority to issue a Cease and Desist Order was granted to the Postal Service by the Mail Order Consumer Protection Amendments of l983, P.L. 98-l86, 97 Stat. l315 (l983).

On March 21, 1984, Complainant filed a third Petition for Supplemental Orders ^2/ (hereinafter the Third Petition), with attachments, alleging that Respondents W. Ed Herder and Network Testing Authority, Inc., are evading or attempting to evade the provisions of False Representation Order Nos. 83-16 and 83-113 by conducting the same or a similar enterprise under the name Network Testing Authority at l750 Pennsylvania Avenue, N.W., Washington, DC 20006. In the Third Petition Complainant seeks both a False Representation Order and a Cease and Desist Order.

A fourth Petition for Supplemental Orders (hereinafter the Fourth Petition), with attachments, was filed by Complainant on July 26, l984, alleging that Respondents W. Ed. Herder and Federal Testing Authority, Inc., are evading or attempting to evade the provisions of False Representation Order Nos. 83-16 and 83-113 by conducting the same or a similar enterprise under the name Federal Testing Authority at l750 Pennsylvania Avenue, N.W., Washington, D.C. 20006 and Federal Testing Authority National Processing Center, l681 N.E. 79th Street, Miami, Florida 33141-4106. In connection with this Petition Complainant also seeks the issuance of both a False Repre sentation Order and a Cease and Desist Order.

Answer to Petitions and Formulation of Issues

Respondents filed an Answer to each Petition in the form of a general denial. In their Answers, Respondents contended that Complainant's pleading style precluded them from admitting, denying or even identifying disputed issues of fact. Respondents were offered several opportunities to specifically identify the allegations of the Petitions with which they took issue. Despite such offers, Respondents refused to assist in identifying the disputed issues of fact. A review of the filings of the parties established no genuine issue of fact regarding the relationship of W. Ed Herder to the different corporations ^3/ used to distribute prizes by chance ^4/ by means of solicitations similar to those which were previously found to violate 39 U.S.C. § 3005. However, it was determined that there were some differences in wording in the solicitations which raised a genuine factual issue regarding the understanding of the ordinary reader with respect to the requirement for the payment of money in order to be eligible to win a prize. As a consequence it was determined that a hearing would be held on this disputed issue (see Order dated June 8, l984).

With respect to the Fourth Petition, Respondents also entered a general denial to the allegations of the Petition. Because Respondents had refused to specify the matters of fact they disputed in connection with the prior Petitions, a stipulation process was ordered to assist in identifying the matters which were genuinely disputed by Respondents. The stipulation process resulted in the identification of two factual issues. These issues were (l) the understanding of the ordinary reader with respect to the requirement for payment of money in order to be eligible to win a prize and (2) the relationship between W. Ed Herder and Federal Testing Authority. Since the former issue was virtually the same as the issue on which a hearing had been held in connection with the First and Third Petitions, no further hearing on this issue was ordered. However, discovery and a hearing on the issue of Mr. Herder's relationship to Federal Testing Authority was ordered (see Order dated January 8, l985). Subsequently, Respondents admitted the allegations concerning the relationship between Mr. Herder and Federal Testing Authority, and outstanding orders pertaining to discovery and/or a hearing on this issue were vacated (see Order dated March l9, l985).

Preliminary Motions & Jurisdictional Issues

Both in their Answers and in separate Motions, Respondents asserted that the Judicial Officer lacked jurisdiction to consider the Petitions because Respondents were entitled to a full adversarial hearing before an Administrative Law Judge with right of appeal to the Judicial Officer. Respondents' arguments were based on the legislative history of the Mail Order Consumer Protection Amendments of l983, the Administrative Procedure Act (hereinafter APA), and case law relating to supplemental order proceedings under 39 C.F.R. § 952.30. By decision dated March 21, l984, and two decisions dated May l, l984, Respondents' Motions were denied. These decisions held that Respondents had already had an opportunity for full discovery and an adversarial hearing before an Administrative Law Judge with right of appeal to the Judicial Officer in the original proceedings, that neither the Mail Order Consumer Protection Amendments of l983, nor its legislative history provides any cogent reason for believing that a party is entitled to relitigate essentially the same issues litigated in the original proceedings, that the supplemental order provision of 39 C.F.R. as interpreted by the Judicial Officer entitled Respondents to discovery and a full hearing on any genuinely disputed issues of material fact and that the Judicial Officer serving as the "agency" ^5/ for the purpose of making final Postal Service Decisions under the APA ^6/ is authorized to preside at a hearing on a Petition for Supplemental Orders. ^7/

In their brief on appeal, Respondents re-argue these issues. The arguments presented by Respondents in their post-hearing brief and reply brief are no more persuasive than the arguments presented in their previously filed motions which were found to be without merit. Accordingly, the denial of Respondents' previously filed motions is affirmed. For purposes of clarity and to respond to additional arguments presented by Respondents it is reiterated and further concluded that:

1) Respondents were allowed full discovery and a full ad versarial hearing before an Administrative Law Judge in the originally filed proceedings in these cases.

2) The ultimate issue to be decided in a supplemental order proceeding is clearly spelled out in 39 C.F.R. § 952.30. As previously stated this issue is whether a person is evading or attempting to evade the provisions of an Order issued under 39 U.S.C. § 3005 by conducting the same or a similar enterprise under a different name or at a different address.

3) The Petitions for Supplemental Orders filed by Com plainant adequately notified Respondents of the charges against them and the Petitions were properly served on Respondents.

4) Neither the Constitution, the Postal Service statute, nor the APA requires a further hearing on undisputed facts.

5) The Judicial Officer has uniformly and consistently interpreted 39 C.F.R. § 952.30, to require a hearing if there are matters of fact in dispute.

6) Supplemental order proceedings have been a part of the Postal Service procedures since at least l964 ^8/ and have never been held invalid by the Courts or disapproved by Congress.

7) Respondents were given full opportunity to identify the factual issues in dispute but refused to do so. A hearing on undisputed matters is a waste of time at either the administrative or judicial level. Supplemental order proceedings are similar to summary judgment proceedings except that in the former an opportunity for full discovery and hearing has previously been allowed.

8) A hearing was properly held by the Judicial Officer as the "agency" under the APA and the Postal Service statute on one disputed factual issue. An opportunity was afforded Respondents for a hearing on a second factual issue, but Respondents subsequently admitted there was no genuine dispute with respect to this second issue.

9) The only issue Respondents have raised concerning the terms of the Cease and Desist Orders sought by Complainant in its Petitions relates to language which Complainant has agreed to delete from the Cease and Desist Order sought by the First Petition. (See P.S.D. on Motion for Recon. dated May l, l984).

This language was not included in the Cease and Desist Orders requested in the other Petitions.

10) While Complainant may seek civil penalties for evasion of an Order issued under 39 U.S.C. § 3005, there is no indication in the Mail Order Consumer Protection Amendments of l983 or its legislative history, that the Amendments were intended to bar agency supplemental order proceedings.

Findings of Fact Regarding the Understanding

of the Ordinary Reader

1. The promotional materials which gave rise to the Complaints leading to the issuance of False Representation Order Nos. 83-16 and 83-113, are described in the Initial Decision issued in P.S. Docket No. l4/77 on December 23, l982, the Initial Decision issued in P.S. Docket No. l4/114 on December 30, l982, and the Court Opinion in American Testing Institute v. United States Postal Service, 579 F. Supp. l345 (D.D.C. l984). The description of the promotional materials in these decisions is accurate and adopted for purposes of this decision.

2. A comparison of the promotional materials used by U.S. Testing, American Testing and Gift Redemption Center with those used by National, Network and Federal shows striking similarities in format, approach and content. The National solicitations are more similar than the solicitations of Network and Federal. All use a Dear Television Viewer letter and a Test Response Form. All refer to free gifts automatically awarded while all contain language inconsistent with the notion that the gifts are free, thus creating an ambiguity in the various solicitation packages.

3. The National solicitation package, like the others, consists essentially of a Dear Television Viewer letter advising the recipient that he/she has automatically been awarded one of twenty listed gifts and a Test Response Form containing a questionnaire on television viewing habits (Exhs. l-4 to Morris Affidavit attached to First Petition). ^9/

4. The letter congratulates the recipient for having been automatically awarded one of twenty gifts "worth between $260 and $2,000," lists the gifts, includes instructions "to receive your gift" and is signed by W. Ed Herder as president of National Testing Authority (Exh. 2 to Morris Aff.). The instruction portion of the letter reads as follows:

"FOLLOW THESE INSTRUCTIONS CAREFULLY TO RECEIVE YOUR GIFT:

A. Complete all instructions on Test Response Form.

B. Place the completed Test Response Form in the enclosed self-addressed envelope. Enclose your check or money order in the amount of $14.80 to help defray shipping, handling, postage and administrative cost of this test procedure.

C. You are required to mail the completed Test Response Form within TEN DAYS from the time you receive it.

NOTE: Absolutely no purchase of any product or request for payment is required of you to receive delivery of your free gift. However, the Test Response Form must be completed only by the addressee or family member of addressee. All gifts are distributed AUTOMATICALLY. Shipping is completely pre-paid. Allow 2-3 weeks for processing. Gift offer void where prohibited by law.

We thank you for your time in answering the TEST RESPONSE FORM and hope you will enjoy the gift you have been awarded." (Exh. 2 to Morris Aff)

5. On the instruction portion of the Test Response Form it is stated:

"If sending check or money order for $14.80 make payable to: NATIONAL TESTING

MAIL TO: NATIONAL TESTING AUTHORITY

1100 l7th STREET N.W., SUITE 1000

WASHINGTON, D.C. 20036

NOTE: Qualified participants automatically receive one of the

20 gifts shown in the enclosed letter." (Exh. 3 to Morris Aff)

6. Two consumer witnesses who had received the Network Testing Authority promotional materials in the mail and saw the National Testing Authority promotional materials for the first time on the day of the hearing testified that they did not interpret the National materials to require the payment of $14.80 in order to receive a prize (Tr. 31-35, 72-74). The witnesses relied on the portions of the letter which advised that the recipient had automatically received a free gift, the note which says no purchase is necessary and the language of the Test Response Form stating "If sending check or money order. . ." (Tr. 29-36, 72-74).

7. Network Testing Authority, Inc., like U.S. Testing, American Testing and Network, sends through the mail a solicitation package consisting essentially of a Dear Television Viewer letter and a Test Response Form, but additionally includes a Selection Form and a brochure describing Dr. Ferdie Pacheco and his paintings of professional boxers and offering for sale six lithographs created from original Pacheco paintings (Exhs. 1A - 1H to Groome Affidavit attached to Third Petition). ^10/

8. The Federal Testing Authority solicitation is in all material respects identical to the Network Testing Authority, Inc. solicitation. (See attachments to Groome Affidavit attached to Fourth Petition). The Dear Television Viewer letter is the same except that the remittance sought is $19.80 rather than $16.80 and the letter is signed by Mark J. Howard as president of Federal Testing Authority whereas the Network letter is signed by W. Ed Herder as president. The Test Response Form and Selection Form differ somewhat as the Federal Testing Authority solicitation describes additional Pacheco prints. The language concerning the enclosure of money is identical in the Federal and Network solicitation packages.

9. The Network and Federal Dear Television Viewer letters inform the recipient that he/she has automatically been awarded one of twenty listed gifts ranging in value from $262.95 to $2,000.00 and provides instructions for receiving the free gifts. The instruction portion of the letter reads:

FOLLOW THESE INSTRUCTIONS CAREFULLY TO RECEIVE YOUR FREE GIFT:

A. Complete all Instructions on Test Response Form.

B. You are required to mail the completed Test Response Form within TEN DAYS from the time you receive it.

Place the completed Test Response Form in the enclosed self-addressed envelope. Enclose your check or money order in the amount of $16.80 for shipping, handling, postage and acquisition of your Pacheco print.

NOTE: Absolutely no purchase of any product or request for payment is required of you to receive delivery of your free gift. However, the Test Response Form must be completed only by the addressee or family member of the addressee. All gifts are distributed AUTOMATICALLY. Shipping is completely pre-paid. Allow 3-4 weeks for processing. Gift offer void where prohibited by law.

We thank you for your time in answering the TEST RESPONSE FORM and hope you will enjoy the gift you have been awarded." (Ex. 1-A to Groome Aff.)

10. The Network Selection Form contains the following:

"I have completed the TEST RESPONSE FORM.

Please send me the following full color l6" x 24" Pacheco Print:

check One:

__JACK DEMPSEY

__GENE TUNNEY

__JOE LOUIS

__ROCKY MARCIANO

__MUHAMMAD ALI

__LARRY HOLMES

Enclosed is my:

__Check __Money Order payable to:

NETWORK TESTING

For $16.80 for shipping, handling, postage, and acquisition of my Pacheco print selected above.

The Federal Selection Form is the same except for the name and address and number of prints offered.

11. On the back of the Network and Federal Test Response Forms there are the following instructions:

"You will find the survey questions located on the back of this computer card. If you elect NOT to participate in this testing procedure, please destroy this computer card so that it is rendered non-usable. To maintain the integrity of the survey, completed questionnaires are not acceptable from anyone other than addressee or a family member of addressee.

MAIL TO: NETWORK TESTING AUTHORITY

1750 Pennsylvania Avenue

Washington, D.C. 20006

NOTE: Qualified participants automatically receive one of the twenty gifts shown in the enclosed letter." (Ex. 1-D to Groome Aff.)

12. Respondents' two consumer witnesses testified they received the Network Testing Authority, Inc. solicitation and read it as requiring payment only if they desired to purchase a Pacheco print (Tr. 22-28, 65-72). Witness Sczymchak recognized some ambiguity in what the remittance was to be applied to, but did not believe a remittance was necessary in order to receive a prize (Tr. 54-58). This witness also believed he would have to purchase a Kodak camera in order to use the Kodak film he received as a prize (Tr. 60).

13. A consumer witness testified in a proceeding initiated under 39 U.S.C. § 3007, the transcript of which was introduced into evidence in this proceeding, that she read a Federal Testing solicitation which is identical to the Network solicitation and understood it to require the payment of $16.80 in order to receive one of the listed prizes (RX-7; Tr. l64-l66).

14. The testimony of two consumer witnesses does not provide a basis for reaching a conclusion as to the understanding of the ordinary recipient regarding the obligation to send money to Respondents in order to receive a gift (Tr. l49-50).

The issue to be decided in this Supplemental Order proceeding is whether Respondents are evading or attempting to evade the provisions of False Representation Order Nos. 83-16 and 83-113 by conducting the same or a similar enterprise under a different name or at a different address. It has not been seriously contested that all of the corporate respondents involved in these proceedings are owned or controlled by W. Ed Herder. In addition it has not been seriously disputed that the lottery elements of prize and chance which were conceded or essentially conceded in the original proceedings to be a part of the U. S. Testing and American Testing solicitations are also present in the solicitations distributed by National, Network and Federal.

The only genuinely disputed issue is whether the National, Network and Federal solicitations, like the U.S. Testing and American Testing solicitations, would be understood by the ordinary reader to require the remittance of money in order to receive a prize. If so, the lottery element of consideration would be present in these enterprises as it was found to be in the earlier solicitations and the enterprises would be "similar" for purposes of issuance of supplemental orders.

In order to ascertain the understanding of the ordinary reader the solicitations are to be considered in their totality and the impression they would most likely create in the minds of those who received them. The ordinary person standard is to be applied with any eye to the overall effect of solicitations on the average reader and not with a lawyer's eye to fine spun distinctions. Donaldson v. Read Magazine, Inc., 333 U.S. l78, l85-189 (l948); American Testing Institute v. United States Postal Service, 579 F. Supp. l345 (D.D.C. l984). Whether an advertisement makes certain representations is a question of fact and may be determined from the advertisement itself. Rhodes Pharmacal Co. v. FTC, 208 F.2d 382 (7th Cir. l954); Vibra Brush Corp. v. Schaffer, l52 F. Supp. 461 (S.D.N.Y. l957); Ralph Galliano, P.S. Docket No. 19/15 (P.S.D. May 2, 1985). Lay or expert testimony is not necessary to establish whether representations are made, their effect on the ordinary mind, or their materiality. Baslee Products, Corp. v. United States Postal Service, 356 F. Supp. 841 (D.N.J. 1973); Vibra Brush Corp., supra; Kimberly Jewels, Inc., P.S. Docket No. 9/65 (P.S.D. July 23, l981). The presiding Officer, sitting as both trier of fact and law, can determine the effect of an advertisement on ordinary minds from the advertisement itself. Rhodes Pharmacal Co., supra; Standard Research, P.S. Docket No. 7/48 (P.S.D. April 4, l980). It is not necessary to find that all readers interpret an advertisement as making a representation. The issue is whether the language is liable to deceive, not whether it will deceive everyone. Donaldson v. Read Magazine, Inc., supra; United States v. 95 Barrels of Vinegar, 265 U.S. 438 (1924); Rhodes Pharmacal Co., supra; Gottlieb v. Schaffer, 141 F. Supp. 7 (S.D.N.Y. 1956); Oriental Nurseries, Inc., P.S. Docket No. 9/116 (l981). Furthermore, an advertisement capable of two meanings, one of which is false, is misleading. United States v. 95 Barrels of Vinegar, supra; Rhodes Pharmacal Co., supra. Advertisements 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 advertisements are composed or purposefully printed in such a way as to mislead. Donaldson v. Read Magazine, Inc., supra. It is not difficult to choose statements, designs and devices which will not deceive. United States v. 95 Barrels of Vinegar, supra.

Applying these principles it is concluded that the National, Network and Federal solicitations, are similar to the U. S. Testing and American Testing solicitations in that they contain ambiguities and inconsistencies in language which would lead some ordinary readers to believe that payment is required in order to receive a gift. It is recognized that the language used in the National, Network and Federal solicitations differs from that used in the U.S. Testing and American Testing solicitations. However, the solicitations are similar in format and approach and the ambiguities and inconsistencies in the payment language are common in import. Thus, the lottery element of consideration is present in the National, Network and Federal solicitations. These solicitations are sufficiently similar to those used by Mr. Herder operating under the names U.S. Testing and American Testing to be considered a similar enterprise.

Throughout their briefs Respondents argue that they were deprived of the opportunity to present survey evidence regarding the understanding of the ordinary consumer. The First Petition was filed in December, l983, a proposal for performing a survey was solicited by Respondents and received in January l984, (Tr. l07, 111, l46; RX 4). The hearing was not held until November 27, l984. The issue of the understanding of the ordinary consumer was specifically framed on June 8, l984, some five months before the hearing was held. Since the survey could have been performed in l2-15 weeks (Tr. l46-47) Respondents failure to obtain the survey evidence was of their own making. Respondents' explanation that they believed Complainant had made such a survey provides no reasonable basis for their delay in initiating a survey.

Respondents are responsible for the development of their own evidence and defenses and their voluntary delay in preparing their evidence does not provide good cause for extending the hearing date, particularly where a more than reasonable period for hearing preparation had already been allowed.

Respondents also argue throughout their briefs that by identifying the understanding of the ordinary consumer as a factual issue, that issue cannot be decided against Respondents because Complainant presented no evidence other than the promotional materials themselves. According to Respondents greater weight should be given to its consumer witnesses than the promotional materials. As Respondents' expert testified, no conclusions could be drawn from the testimony of Respondents' two consumer witnesses (Tr. l49-50). Furthermore, having viewed the witnesses and listened to their testimony, I am not persuaded of their candor. Moreover, contrary consumer testimony was presented in an exhibit offered into evidence by Respondents (see RX 7). In addition, the most persuasive evidence of the interpretation of the solicitations involved in these proceedings is the solicitations themselves.

Respondents also allege that Complainant's failure to introduce evidence of response rates to Respondents' promotional materials, is a further example of its failure to sustain its burden of proof. Evidence of response rates is wholly within the possession of Respondents. Such evidence was presented in general testimony by Respondents' witnesses in one of the original hearings in these cases. If any inferences are to be drawn by the lack of response rate evidence in this proceeding, they would be against Respondents who are solely and uniquely in a position to offer such evidence at a hearing.

Finally, Respondents refer to proceedings filed under 39 U.S.C. § 3007 and the refusal of the Federal District Court Judges in those proceedings to issue the detention orders sought by the Postal Service. As stated in the statute "An action taken by a court hereunder § 3007 does not affect or determine any fact at issue in the statutory proceedings." Moreover, while two District Court Judges may view the solicitations differently than the Judicial Officer, such differing interpretations may be attributable to the ambiguities in the solicitations and thus account for some ordinary readers believing that payment of money is required in order to receive a prize, while others would have a contrary view.

By the solicitations distributed by National Testing Authority, Inc., Network Testing Authority, Inc., and Federal Testing Authority, Inc., Respondents are evading or attempting to evade the provisions of False Representation Order Nos. 83-16 and 83-113 by conducting a similar enterprise under a different name and at different addresses. Accordingly, the Orders sought in the Petitions as modified by the deletion of the "Yes-No" language of the Cease and Desist Order sought in the First Petition are issued herewith.

1/ Supplemental Order proceedings are provided for in 39 C.F.R. § 952.30 as follows:

"When the General Counsel or his designated representative shall have reason to believe that a person is evading or attempting to evade the provisions of any such orders by conducting the same or a similar enterprise under a different name or at a different address he may file a petition with accompanying evidence setting forth the alleged evasion or attempted evasion and requesting the issuance of a supplemental order or orders against the name or names allegedly used. Notice shall then be given by the Recorder to the person that the order has been requested and that an answer may be filed within l0 days of the notice. The Judicial Officer, for good cause shown, may hold a hearing to consider the issues in controversy, and shall, in any event, render a final decision granting or denying the supplemental order or orders."

2/ The Third Petition was erroneously denominated by Complainant as the Second Petition for Supplemental Orders. The actual Second Petition for Supplemental Orders was filed February 24, l984, dismissed in part on March 9, l984, and fully resolved by Postal Service Decision dated April l3, l984.

3/ Complainant alleges in its Petitions that W. Ed Herder is the principal operator of U.S. Testing Authority - Television Division (P.S. Docket No. l4/77), American Testing Institute and Gift Redemption Center (P.S. Docket No. l4/114) National Testing Authority (First Petition), Network Testing Authority, Inc. (Third Petition) and Federal Testing Authority, Inc. (Fourth Petition). Although entering a general denial and alleging that the promotional materials attached to each Petition were distributed under different corporate names, Respondents did not dispute the underlying facts supporting Complainant's allegations regarding the relation of Mr. Herder to the corporations. Respondents conceded the allegations regarding Mr. Herder's relation to Federal Testing Authority, Inc.

4/ In the original proceedings Respondents essentially conceded the elements of prize and chance in P.S. Docket No. l4/77 and did concede these elements in P.S. Docket No. l4/114. In their Answers to the Petitions, Respondents did not dispute the existence of these lottery elements in the promotional materials attached to the Petitions.

5/ See 39 U.S.C. § 204 and implementing regulations at 39 C.F.R. § 224.l(c)(4).

6/ 5 U.S.C. § 556(b).

7/ See 39 C.F.R. § 224.l(c)(4)(ii)(C).

8/ See Kirby v. Shaw, 358 F.2d 446 (9th Cir. l966)

9/ Hereafter referred to by Exhibit No. to the Morris Affidavit.

10/ Hereafter referred to only by Exhibit No. to Groome Aff.