In the Matter of the Complaint Against:

BARBARA ANN MOORE AND ANY AND ALL OF VARIOUS NAMES,
Rt 4, Box 205A,
Clarksburg, WV 26301-9439
and
1301 Oakmound,
Clarksburg, WV 26301-9467
and
Rt 1, Box 503
Clarksburg, WV 26301-9765
and
Rt 4, Box 2Am
Clarksburg, WV 26301-9422
and
Rt 4, Box 206,
Clarksburg, WV 26301-9439
and
513 Kentucky Ave.,
Nutter Fort, WV 26301-4432
and
512 Water Street,
Clarksburg, WV 26301-3714
and
P. O. Box 641,
Bridgeport, WV 26330-0641,
and
P. O. Box 933,
Bridgeport, WV 26330-0933
and
P. O. Box 45,
Clarksburg, WV 26301-0045
and
P. O. Box 193,
Hepzibah, WV 26369-0193,
and
P. O. Box 86,
Meadowbrook, WV 26404-0086
and
P. O. Box 887,
Morgantown, WV 26505-0887
and
P. O. Box 148,
Reynoldsville, WV 26422-0148


P.S. Docket No. 36/164

03/19/91

Mason, Randolph D., Administrative Law Judge

APPEARANCES FOR COMPLAINANT: Nan K. McKenzie, Esq., Thomas V.
Sottile, Esq., Law Department, United States Postal Service,
Washington, DC 20260-1144

APPEARANCE FOR RESPONDENT: None

INITIAL DECISION

This proceeding was initiated on August 17, 1990, when the Postal Service filed a Complaint alleging that Respondent Barbara Ann Moore using various names is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations in violation of 39 U.S.C. § 3005. Specifically, the Complaint alleges in paragraph 4 that Respondents falsely represent, directly or indirectly, in substance and effect, whether by affirmative statement, implication or omission, that:

(a) Respondent has actually purchased the merchandise for the rebates or refunds which she requests;

(b) The information provided by Respondent in the rebate or refund requests is correct;

(c) The proofs of purchase reproduced by Respondent constitute evidence of bona fide purchases made by Respondent of the merchandise or services specified in the request.

In a timely filed Answer, Respondent denies that she makes the false representations alleged in the Complaint or that she has otherwise violated the statute.

A hearing was held by the Administrative Law Judge on November 13, 1990, in Washington, DC. Only the Complainant appeared at the hearing. Complainant was represented by counsel and afforded full opportunity to be heard, adduce relevant evidence, and examine and cross-examine witnesses. Complainant presented the testimony of Postal Inspector Joseph Brandt and Postal Inspection Service Technician Sarah Myers. Complainant also presented documentary evidence.

On December 21, 1990, Complainant filed proposed findings of fact and conclusions of law but Respondent failed to do so. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise, they have been rejected as irrelevant or contrary to the evidence. The findings of fact and conclusions of law set forth below are based on the entire record herein, including observation by the Administrative Law Judge of the witnesses and their demeanor, the brief, exhibits, pleadings, and other relevant evidence adduced at the hearing:

FINDINGS OF FACT

1. Respondent Barbara Ann Moore is an individual who resides at Route 4, Box 205A, Clarksburg, WV 26301 (Tr. 38). Using the surnames Moore, Flanagan (Respondent's maiden name), and Marino, Respondent seeks the remittance through the mail of product rebates from various businesses to the 14 addresses set forth in the caption (Tr. 10-11, 16-17, 22-24, 26-29, 31-33, 35-38; CX 2, CX 4-6, CX 8-10).

2. All of the captioned addresses are tied to Respondent and her scheme. In this regard, rebates were requested to each of the captioned addresses from the Welcome Industrial Corporation using identical proof of purchase receipts (same amount, time, date, etc.) and the same handwriting (CX-2; Tr. 12-13). With one exception, the Post Office Boxes were opened by Respondent or her husband, and rebates were also solicited to Respondent's home address (Tr. 37-38).

3. (a) As alleged in paragraph 4(a) of the Complaint, Respondent falsely represents that she has actually purchased the merchandise for the rebates or refunds which she requests. First, Respondent certified "I purchased the following products checked below" on the Vidal Sassoon rebate certificate (CX-4). In fact, she did not purchase the merchandise because she submitted either false cash register receipts which she fabricated on her home computer or fraudulent proofs of purchase from an Ames store (Tr. 18-20, 42).

(b) On the Welcome Industrial Corporation rebate certificate, Respondent represented that she was attaching an original sales receipt and UPC Symbol as proof of purchase. She obviously did not purchase the merchandise for each request since she submitted at least 18 rebate requests with identical cash register receipts (CX-2; Tr. 12-13). Similarly, she submitted identical receipts and fake UPC codes for the multiple rebate requests sent to Rayovac Holiday Rebate Offer (CX-5, 6; Tr. 16, 22-23, 25). The other 30 Rayovac rebate requests also attached fabricated UPCs and cash register receipts (Tr. 21, 26-27, 30; CX-7, 8).

4. Similarly, as alleged in paragraph 4(c) of the Complaint, Respondent falsely represents that the proofs of purchase reproduced by Respondent constitute evidence of bona fide purchases made by Respondent of the merchandise or services specified in the request. This conclusion follows from the findings with respect to paragraph 4(a) of the Complaint.

5. As alleged in paragraph 4(b) of the Complaint, Respondent falsely represents that the information provided by Respondent in the rebate or refund requests is correct. As set forth above, Respondent either expressly or implicitly represents that she has purchased the merchandise and that her proof of purchase and receipt is valid. These representations are false, so the information provided in incorrect. Also, only one rebate is allowed per customer, and Respondent expressly or implicitly certified that she complied with the terms of the offer (CX-2, 4, 6, 8). Since she submitted multiple rebate requests, the representation is false.

CONCLUSIONS OF LAW

1. (a) Each of Respondent's refund requests must be considered as a whole and the meaning is to be determined in light of the probable impact of this material on a person of ordinary mind. Donaldson v. Read Magazine, 333 U.S. 178, 189 (1948); Peak Laboratories, Inc. v. U.S. Postal Serv., 556 F.2d 1387, 1389 (5th Cir. 1977). The statute is intended to protect the gullible, naive, and less critical reader, as well as the more sophisticated, wary reader. Fields v. Hannegan, 162 F.2d 17 (D.C. Cir. 1947), cert. denied, 332 U.S. 773 (1947); M.K.S. Enterprises, Inc. v. United States Postal Service, 459 F. Supp. 1180, 1184 (E.D.N.Y. 1978); Gottlieb v. Schaffer, 141 F. Supp. 7 (S.D.N.Y. 1956); Leo Daboub, P.S. Docket No. 19/185 (P.S.D. July 10, 1986). Express misrepresentations are not required. It is the net impression which the mailing is likely to make upon individuals to whom it is directed which is important, and even if it is so worded as not to make an express representation, if it is artfully designed to mislead those responding to it, the false representation statute is applicable. G.J. Howard Co. v. Cassidy, 162 F. Supp. 568 (E.D.N.Y. 1958); See also, Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976).

(b) Where the mailing is ambiguous or capable of more than one meaning, if one of those meanings is false, the mailing will be held to be misleading. Rhodes Pharmacal Co. v. F.T.C., 208 F.2d 382, 387 (7th Cir. 1953); Ralph J. Galliano, P.S. Docket No. 19/15 (P.S.D. May 2, 1985 at p. 9). It is not difficult to select words that will not deceive. See, United States v. 95 Barrels of Vinegar, 265 U.S. 438 (1924).

(c) An inconspicuous disclaimer is not sufficient to dispel the effect of false representations. Leo Daboub, supra; Gottlieb v. Schaffer, supra.

(d) The Administrative Law Judge can determine whether the representations are made, their effect on the ordinary mind, and materiality without the assistance of lay or expert testimony. Standard Research Labs, P.S. Docket No. 7/78 (P.S.D. Oct. 27, 1980); The Robertson-Taylor Company, P.S. Docket Nos. 16/98-102, 16/120- 121, (P.S.D. March 31, 1986 at page 29); Vibra-Brush v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957), rev'd on other grounds, 256 F.2d 681 (2nd Cir. 1958).

2. Applying the foregoing standards, I find that Respondent's mailings make the representations alleged in #4(a)-(c) of the Complaint. The language contained in the refund requests, when read in context, which directly or impliedly makes these representations is set forth in the findings of fact.

3. As set forth in the findings of fact, the representations set forth in paragraph 4 of the Complaint are materially false.

4. Complainant has established its case by a preponderance of the reliable and probative evidence of record. S.E.C. v. Savoy Industries, Inc., 587 F.2d 1149, 1168 (D.C. Cir. 1978).

5. The representations made by Respondent are material because they have a tendency to persuade companies to pay refunds or rebates when they would not otherwise have done so.

Other Issues

6. Although Respondent did not file proposed findings of fact and conclusions of law, her prehearing filings contain a number of contentions which generally attack the validity of the instant proceeding. Some of those arguments are addressed below. The remaining contentions are groundless and need not be addressed.

7. Contrary to Respondent's contention, both 39 U.S.C.A. § 3005 (a) (West Supp. 1989) and the regulations of the Postal Service promulgated thereunder, 39 C.F.R. Part 952 (July 1, 1990), are currently in effect. Complainant's reference to earlier editions in the Complaint is not prejudicial to Respondent. Also, it is irrelevant that these sections do not specifically refer to the mailing of false refund requests; as concluded above, Respondent's mailings fall within the ambit of § 3005 because they seek the remittance of money through the mail by means of false representations.

8. Respondent contends that she was intimidated by the Postal Inspector and forced to sign an affidavit confessing to the submission of multiple false rebate requests using fictitious names. First, although he could have done so, the Administrative Law Judge has not relied upon the affidavit in reaching the decision herein. Second, the evidence presented at the hearing demonstrates that the Respondent was not coerced (Tr. 46, 53-54).

9. Respondent's contention that the Postal Service is required to make a test purchase in order to establish a case under § 3005 is rejected. Section 3005(e) merely states that such a purchase "may" be made during the investigation, and there is no requirement to do so.

10. Respondent contends that the last sentence of § 3005(a) provides that all actions under § 3005 must involve the mailing of matter which is nonmailable under § 3001(d), and she argues that her requests for refund do not fall within the latter section. This contention is rejected since the sentence does not restrict § 3005 proceedings to violations of § 3001(d). The sentence merely provides a special rule for a solicitation in the guise of an invoice.

11. Contrary to Respondent's contention, the constitutionality of § 3005 has been established. Original Cosmetics Products, Inc. v. John Strachan and United States Postal Service, 459 F. Supp. 496 (S.D.N.Y. 1978), aff'd mem. No. 78-6165 (2d Cir. April 30, 1979).

12. The Administrative Law Judge has jurisdiction over the instant proceeding since it is required to be conducted in accordance with the Administrative Procedure Act, 5 U.S.C. Chapter 5. 39 U.S.C. $S3001(f); United States Testing Authority, P.S. Docket No. 14/77 and 14/114 (P.S.D. on Mot. to Dismiss Pet. for Supplemental Orders, March 21, 1984).

Conclusion

13. Respondent is engaged in the conduct of a scheme for obtaining remittances of money through the mail by means of materially false representations in violation of 39 U.S.C. § 3005.

14. The attached False Representation Order and Cease and Desist Order should be issued.