In the Matter of the Complaint Against

NEW GENERATION CALIFORNIA
PACIFIC RESEARCH, INC.,
P. O. Box 22759 at
Sacramento, CA 95822-0759

and
P. O. Box 2570 at
Sparks, NV 89431-2570

P.S. Docket No. 11/152

James A. Cohen Judicial Officer

APPEARANCES FOR COMPLAINANT:
Sandra C. McFeeley, Esq.
Jerry Belenker, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, DC 20260-1144

APPEARANCE FOR RESPONDENT:
Jay H. Geller, Esq.
Stilz & Boyd Westside Towers,
Suite 1000
11845 West Olympic Boulevard
Los Angeles, CA 90064-5024

POSTAL SERVICE DECISION ON MOTION TO PLACE FALSE REPRESENTATION ORDERS
INTO EFFECT AND MOTION TO DISMISS

On conclusion of judicial review upholding the Postal Service Decisions in this matter, Complainant filed a Motion to place False Representation Order Nos. 83-85 dated May 13, 1983, and 84-16, dated March 8, 1984, in full force and effect with respect to certain of the covered addresses. Respondent opposes Complainant's Motion and in addition has filed its own Motion to Dismiss this proceeding for lack of jurisdiction.

Background

On May 13, 1983, a Postal Service Decision (PSD) was issued finding Respondent in violation of 39 U.S.C. 3005 with respect to the advertising and sale of its hair growth products. Accompanying the PSD was False Representation Order (FRO) No. 83-85 which directed the detention of mail addressed to New Generation, California Pacific Research, Inc., P. O. Box 22759, Sacramento, California 95822-0759 and P. O. Box 2570, Sparks, Nevada 89431-2570. Thereafter the parties entered into a stipulation providing for the handling of mail "until such time as a final decision has been rendered in the case entitled California Pacific Research, Inc. v. United States Postal Service, Civil No. CV-R-83-172-BRT, including any judgment from the United States Court of Appeals for the Ninth Circuit or the United States Supreme Court if any such appeals are taken." In accordance with the stipulation, FRO No. 83-85 was vacated insofar as it pertained to the Sacramento, California, address and temporarily suspended as to the Sparks, Nevada, address.

A PSD on Petition for Supplemental Orders and FRO No. 84-16 were issued on March 8, 1984, finding that Respondent was conducting the same or a similar scheme using the name California Pacific Research, Inc. "New Generation" at P. O. Box 20160, Reno, Nevada 89515-0160 and 51 E. Freeport Blvd., Sparks, Nevada 89431-6380. Shortly after issuance of this PSD and accompanying FRO, the parties again entered into a stipulation providing for the handling of mail until such time "as a final decision has been rendered in the case California Pacific Research, Inc. v. United States Postal Service , Civil No. CF-R-83-172-BRT," including any judgment from an appellate court if an appeal is taken. As the result of this stipulation FRO No. 84-16 was temporarily suspended as to both addresses.

On January 7, 1985, the United States District Court for the District of Nevada in Civil Action R-83-172-BRT issued a decision on Motion for Summary Judgment which reversed the PSDs issued on May 13, 1983, and March 8, 1984, and vacated FRO Nos. 83-85 and 84-16. California Pacific Research, Inc. v. United States Postal Service, Civil No. R-83-172 BRT (D. Nev. 1985). The Court of Appeals for the Ninth Circuit reversed the District Court's decision in a memorandum opinion dated July 10, 1986. California Pacific Research, Inc. v. United States Postal Service, No. 85-1727, D.C. No. CV R-83-172 (BRT) (9th Cir. 1986). Respondent subsequently filed a petition for certiorari which was denied on December 1, 1986. California Pacific Research, Inc. v. United States Postal Service , 55 U.S.L.W. 3392 (Dec. 8, 1986). On February 2, 1987, Respondent closed P. O. Box 2570, Sparks, Nevada 89431 (Murphy Decl. Feb. 6, 1987).

Discussion and Conclusion

Respondent argues both in support of its Motion to Dismiss and in opposition to Complainant's Motion to have the FROs placed in effect that the Postal Service no longer has jurisdiction to consider this matter. According to Respondent, Postal Service jurisdiction is based on specific post office boxes or addresses and once it ceases to use those specific boxes or addresses, as it has the two post office boxes originally covered by FRO No. 83-85, jurisdiction is terminated. Respondent further argues that FRO No. 84-16 is based on the validity of FRO No. 83-85, and since the latter cannot be placed in effect and is null and void, FRO No. 84-16 also cannot be placed in effect. Respondent finally argues that Complainant's Motion is premature as to FRO No. 84-16 because that order has not been the subject of judicial review.

The Postal Service possesses jurisdiction over both the person and the address used to obtain remittances through the mail in a proceeding initiated under 39 U.S.C. 3005. This combined type of in rem and in personam jurisdiction exists in cases filed both before and after the passage of the 1983 amendments to 3005. Further, once jurisdiction has been established, it cannot be divested by means of a stipulation of the parties or the termination of the use of a particular address. Therefore, there is no merit to Respondent's contention that the Postal Service lacks jurisdiction to place FRO 83-85 into full force and effect. Since jurisdiction exists with respect to FRO No. 83-85, it also exists with respect to FRO No. 84-16.

Respondent's contention that any action with respect to FRO No. 84-16 is premature is also without merit. The stipulation of the parties which was the basis for suspension of FRO No. 84-16 specifically referred to the then pending civil suit involving the earlier Postal Service Decision. In addition, the record before the United States District Court reflects an understanding by the Court and the parties that both Postal Service Decisions were before the Court for review and the Court's decision granted relief from both PSDs and FROs. The decision of the Court of Appeals for the Ninth Circuit was based on the same record which was before the District Court and its reversal of the District Court's decision applied to both PSDs and FROs.

Accordingly, Respondent's Motion to Dismiss is denied. Complainant's Motion to Place False Representation Orders Into Effect is granted, and the suspension of a portion of FRO No. 83-85 and all of FRO No. 84-16 is vacated.

James A. Cohen

Judicial Officer

March 14, 1988

FALSE REPRESENTATION ORDER NO. 83-85 (Supplement C)

TO THE POSTMASTER AT: Sparks, NV 89431-9998

RE:    NEW GENERATION
         CALIFORNIA PACIFIC RESEARCH, INC.
         P.S. Docket No. 11/152

False Representation Order No. 83-85 dated May 13, 1983, was temporarily suspended by Supplement B to that Order dated June 2, 1983. The temporary suspension has been vacated. False Representation Order No. 83-85, copy attached, is now to be given full force and effect insofar as it pertains to mail addressed to New Generation, California Pacific Research, Inc., P. O. Box 2570, Sparks, NV 89431-2570.

James A. Cohen

Judicial Officer

March 14, 1988

FALSE REPRESENTATION ORDER NO. 84-16 (Supplement C)

TO THE POSTMASTERS AT:   Reno, NV 89510-9998
                                                Sparks, NV 89431-9998

RE:   NEW GENERATION
        CALIFORNIA PACIFIC RESEARCH, INC.
        P.S. Docket No. 11/152

False Representation Order No. 84-16 dated March 8, 1984, was temporarily suspended by Supplement B to that Order dated March 22, 1984. The temporary suspension has been vacated and False Representation Order No. 84-16, copy attached, is now to be given full force and effect.