In The Matter of the Complainant                   )
Against                                                          )
                                                                      )
DIRECTORY PUBLISHING SERVICES, et al.   )
1326 S.E. 17th Street, Suite 285                   )
                                                                      )
                           at                                        )
                                                                      )
Ft. Lauderdale, FL 33316-6112, etc.             )  P. S. Docket No. 38/122

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

APPEARANCE FOR RESPONDENT:                Frank J. Shannon, III, Esq.
                                                                       422 Candler Building
                                                                       127 Peachtree Street, N.E.
                                                                       Atlanta, GA 30303-1827

Respondents have filed an appeal from the Initial Decision of an Administrative Law Judge which holds that Respondents are engaged in conducting a scheme or device for obtaining money or property through the mail by means of materially false representations in violation of 39 U.S.C. §3005. Complainant opposes Respondents' appeal.

The General Counsel of the United States Postal Service (Complainant) initiated this proceeding by filing a Complaint which as amended(1) (Complaint) alleged that Respondents Directory Publishing Services, Inc., Howard Allen Cohen, David John Glenn, and Ralph Lawrence Divine, doing business as Yellow Pages of [state or area](2), are engaged in conducting a scheme or device for obtaining money or property through the mail by means of materially false representations in violation of 39 U.S.C. §3005. Specifically, Complainant alleged in Paragraph 8 of the Complaint that Respondents distribute solicitations through the mail which falsely represent that:

(a) the addressee has previously authorized a business listing in Respondents' telephone

(b) the amount set forth on the face of the solicitation is due and owed to Respondents;

(c) Respondents are the publishers of the phone directory or "yellow pages" customarily supplied to business telephone subscribers in the recipient's area;

(d) the area of distribution of Respondents' directory is the same as the one in which the recipient presently has a listing;

(e) publication and distribution of Respondents' directory will take place in accordance with time frames customary to the authorized "yellow page" industry publication and distribution standards;

(f) Respondents also provide a free white-page listing;

(g) Respondents have previously published a telephone directory.

Complainant also alleged in Paragraphs 6 and 10 of the Complaint that Respondents distribute solicitations in the guise of bills, invoices or statements of account due which fail to contain the notice required by 39 U.S.C. §3001(d) or Domestic Mail Manual (DMM) §123.4.

Respondents filed an Answer in which they denied that their solicitations make the false representations alleged in the Complaint or are nonmailable under 39 U.S.C. §3001(d). As affirmative defenses, Respondents asserted that the Administrative Law Judge lacked jurisdiction to consider the allegations of the Complaint, the Rules of Practice prescribed in 39 C.F.R. Part 952 violate their due process rights, and Complainant's theory of the case is barred by United States trademark law.(3)

At a hearing before the Administrative Law Judge, both parties presented witness testimony and introduced documentary evidence. Following the hearing and the parties' submission of proposed findings of fact and conclusions of law, the Administrative Law Judge issued an Initial Decision in which he concluded that Respondents make the representations alleged in Paragraphs 8(a), (c), (d), (f) and (g) of the Complaint and that those representations are materially false. The Administrative Law Judge also concluded that Respondents do not distribute solicitations in the guise of bills, invoices or statements of account due in violation of 39 U.S.C. §3001(d), do not make the representation alleged in Paragraph 8(b) of the Complaint, and although they make the representation alleged in Paragraph 8(e) of the Complaint, Complainant did not prove that this representation was false. Based on his conclusion that Respondents make the materially false representations alleged in Paragraphs 8(a), (c), (d), (f) and (g) of the Complaint, the Administrative Law Judge found that Respondents are engaged in a scheme or device for obtaining money or property through the mail by means of materially false representations in violation of 39 U.S.C. §3005.

Respondents filed a timely appeal from the Initial Decision and Complainant filed a reply opposing Respondents' appeal. Respondents' exceptions and Complainant's reply have been considered and are addressed hereafter.

In their appeal, Respondents include a "Statement of Facts" which is almost identical to their proposed findings of fact presented to the Administrative Law Judge (Initial Decision (I.D.), p.5). Respondents' Statement of Facts does not identify any specific finding of fact as erroneous nor show any error in making those findings. The findings of the Administrative Law Judge have been reviewed and except for the finding regarding the representation alleged in Paragraph 8(f) of the Complaint, are supported by the record. To the extent Respondents are taking exception to additional findings, Respondents' exceptions are denied.(4)

Respondents' principal contention on appeal is that the record lacks substantial evidence(5)

to support the Administrative Law Judge's conclusion that Respondents make the representations alleged in Paragraphs 8(a), (c), (d), (f) and (g) of the Complaint. According to Respondents, the testimony of Complainant's witnesses is unreliable and the Administrative Law Judge improperly relied on his own interpretation of Respondents' solicitations to determine that Respondents make the materially false representations alleged in the Complaint. Respondents contend that this reliance on the solicitations, without reliable supporting evidence, denied them due process of law because the Administrative Law Judge became a witness and based his decision on his personal perceptions and biases which could not be subjected to cross examination by Respondents.

Respondents' argument is unpersuasive. It is well established that the solicitations are the best evidence of their contents(6) and may be relied on by the Administrative Law Judge to determine if the alleged representations are made, their effect on the ordinary reader, and their materiality.(7) By relying on the language of the solicitations the Administrative Law Judge did not become a witness for the Postal Service but rather correctly performed his function as the trier-of-fact in this administrative proceeding. In addition, the Administrative Law Judge's reliance on the solicitations did not deprive Respondents of their due process rights,(8) since Respondents had a full opportunity to present rebuttal evidence.

Lay or expert testimony is not required to establish that representations are in fact made.(9) However, in this case, Complainant presented such testimony which was considered by the Administrative Law Judge in conjunction with Respondents' solicitations in determining whether Respondents make the representations alleged in the Complaint. Respondents' contention that the testimony is unreliable because the consumer witnesses failed to carefully read the disclaimers and fine print included on Respondents' solicitations is unfounded. The consumer witnesses' admission that they did not notice, or did not read certain parts of the solicitation does not affect the reliability of their testimony as to the overall impression created by Respondents' solicitations.(10)

The Administrative Law Judge did not err in relying on the solicitations and the supporting witness testimony(11) in reaching the conclusion that Respondents make the representations alleged in the Complaint. Accordingly, Respondents' contention that the evidence does not support the Administrative Law Judge's conclusion is denied.

Respondents contend that it was improper for the Administrative Law Judge to consider their use of the words "yellow pages" and the walking fingers logo in deciding whether the alleged representations are made. According to Respondents, the walking fingers logo and the words "yellow pages" may be used by Respondents in their solicitations for business yellow page listings because neither is a registered trademark of any other yellow page directory.

The issue in a 39 U.S.C. §3005 proceeding is not whether Respondents have the right to use any particular words or logo, but whether materially false representations are being made.(12) Although the walking fingers logo is a generic symbol and the words "yellow pages" a generic term commonly used by many telephone directory publishers, they may nevertheless contribute to the overall impression created by a solicitation,(13) and thus, mislead consumers as to the telephone directory listing being solicited.(14) Accordingly, the Administrative Law Judge did not err in considering Respondents' use of the term "yellow pages" and the walking fingers logo in interpreting Respondents' solicitations.

The Administrative Law Judge properly found that Respondents make the representations alleged in Paragraphs 8(a), (c), (d) and (g) of the Complaint (I.D., FOF 8,10,14). Respondents' use of a solicitation which includes the recipient's name and address,(15) a business heading, a multi-digit "record no.", and the direction to check a box either indicating required corrections or "print listing as shown in next edition",(16) convey the impression that the recipients of the solicitations had previously authorized a listing in Respondents' yellow page directory as alleged in Paragraph 8(a) of the Complaint, and that Respondents had previously published a directory as alleged in Paragraph 8(g).

This impression is enhanced by the use of yellow paper for the solicitation, and the prominent and repeated use of the term "yellow pages" and the walking fingers logo, both of which are associated in the minds of many recipients with the yellow page directory customarily supplied to all telephone subscribers in the recipient's area (I.D., FOF 10; Tr. 42, 134, 214, 225, 227, 262-64). Thus, recipients would also be likely to believe that Respondents are the publishers of the yellow page directory customarily supplied to business telephone subscribers in the recipients area, as alleged in Paragraph 8(c) of the Complaint.

The Administrative Law Judge found that the representations alleged in Paragraphs 8(d)(17) and (g) of the Complaint are made as corollaries to the representations alleged in Paragraphs 8(a) and (c) of the Complaint (I.D., FOF 11). Respondents object to the Administrative Law Judge's finding of these "implied" representations on the grounds that they are not supported by the evidence.

Implied representations may be equally as misleading as any express representations included in a solicitation.(18) In the present case, recipients who are under the impression that Respondents are the publishers of the directory customarily supplied to business telephone subscribers in their area, and that they have previously authorized a listing in Respondents' directory would believe Respondents have previously published a directory (Complaint 8(g)) and the area of distribution of Respondents' directory is the same as the area of distribution of the directory in which they currently have a listing (Complaint 8(d)). Thus, the Administrative Law Judge did not err in concluding that the representations alleged in Paragraphs 8(d) and (g) may be implied from the representations alleged in Paragraphs 8(a) and (c) of the Complaint.

At the very least, the artful use of words, phrases, color, symbols, organization and form,(19) produces a solicitation that is ambiguous and confusing to the ordinary reader and therefore, misleading as to the source and nature of the yellow page listing being solicited.(20) Such confusion alone would be a basis for finding that Respondents make the representations alleged in Paragraph 8(a), (c), (d) and (g) of the Complaint.(21) Accordingly, Respondents' exceptions pertaining to the existence of these representations are denied.

Respondents contend the Administrative Law Judge incorrectly found they falsely represent that they provide a free white page listing as alleged in Paragraph 8(f) of the Complaint. According to Respondents, the Administrative Law Judge's finding is based on an inaccurate reading of the allegation in the Complaint and the white page listing Respondents provide is indeed free. Complainant contends that Respondents' white page listing is not free because it is only given to a purchaser of a listing in Respondents' yellow page directory.

Respondents' solicitations state "[A] free white page listing will be included for each listing published at annual rate of $117.00." By this language, the solicitations explicitly state that the white page listing is provided free only with the purchase of a yellow page listing. Therefore, the representation alleged in Paragraph 8(f) of the Complaint is not made.(22) Accordingly, Respondents' exception to the Administrative Law Judge's conclusion that Respondents make this representation is sustained.

Respondents contend that their solicitations include disclaimers which adequately inform recipients of the true nature and source of their yellow page directory. Respondents further contend that any misunderstanding about their directory is caused by the recipient's failure to carefully read the entire solicitation, not by Respondents' failure to prominently display accurate information on the solicitations. According to Respondents, recipients of their solicitations are businessmen, who are more discerning than ordinary readers and therefore, should not be protected from their own carelessness.

Although the solicitations include disclaimers, they are not sufficiently conspicuous to overcome the overall impression that Respondents make the representations alleged in Paragraphs 8(a), (c), (d) and (g) of the Complaint.(23) Neither the statement, "Directory Publishing Services is not affiliated with AT&T or any local telephone company," nor the reference to "your statewide yellow pages" is likely to place recipients on notice that the solicitation is not from the publisher of their local yellow page telephone directory. Both are located in the middle of paragraphs, making it unlikely that they would be noticed by ordinary recipients. Moreover, even if noticed, it is doubtful that they would counteract the overall impression that Respondents make the representations alleged in the Complaint. At best, Respondents' disclaimers create additional confusion as to Respondents' true identity and the nature of Respondents' directory.(24)

Respondents' argument that ordinary businessmen are more discerning and therefore not protected by the Postal false representation statute is equally unpersuasive.(25) The recipients of Respondents' solicitations are owners or employees of both large and small businesses and include gullible, naive and less critical readers, as well as sophisticated and knowledgeable readers. While some recipients may carefully read the entire solicitation and determine Respondents' identity and the nature of their product, the testimony presented indicates that others were misled or confused by Respondents' solicitations (Tr. 22-42, 213-15, 246-50). The false representation statute is intended to protect all readers and its protection cannot be limited to sophisticated business recipients at the expense of the more naive or gullible recipient. Moreover, consumers are not required to suspect the honesty of advertisers who solicit their business.(26) Recipients of solicitations, whether careful or careless, have no obligation to critically scrutinize every sentence to determine the nature and source of the yellow page listing being offered.

Since the overall impression created by Respondents' solicitation is as alleged in Paragraphs 8(a), (c), (d) and (g) of the Complaint, there is no merit to Respondents' contention that recipients of their solicitations should not have been misled.

Respondents appear to contend that there is no evidence to support the Administrative Law Judge's determination that the representations alleged in Paragraphs 8(a), (c), (d) and (g) of the Complaint are false. According to Respondents, neither the solicitations nor the witness testimony establishes the falsity of these representations.

The Administrative Law Judge properly determined that the representations found to be made are indeed false. The solicitations themselves establish that Respondents' directory is not the directory customarily supplied in the recipients area (Complaint 8(c)) and the distribution of Respondents' directory is not the same as the distribution of the directory in which the recipients currently had listings (Complaint 8(d)).(27)

The solicitation statements are confirmed by the testimony of Respondent Ralph Lawrence Divine. Mr. Divine testified that at the time the solicitations were mailed Respondents had not published a single directory (Tr. 364). Therefore, the representations that the recipients of the solicitations had previously authorized a listing in Respondents' directory as alleged in Complaint Paragraph 8(a), that Respondents' directory was customarily supplied to businesses in the recipient's area as alleged in Paragraph 8(c) and that Respondents had previously published a directory as alleged in Paragraph 8(g), are false. Mr. Divine also testified that Respondent's directory would only be supplied to businesses who purchased a listing, as well as hotels, libraries, and chambers of commerce (Tr. 404-05). Since this distribution is not the same as the distribution of the directory in which the recipients of the solicitations currently had listings (Tr. 88-89, 166-67), the representation alleged in Paragraph 8(d) is also false.

Both the witness testimony and the solicitation language establish that the representations alleged in Paragraphs 8(a), (c), (d) and (g) of the Complaint are false. Therefore, there is no merit to Respondents' contention that the evidence does not support the Administrative Law Judge's findings and conclusions. Accordingly, Respondents' contention regarding the falsity of these representations is denied.

Respondents' representations are material because either together or individually, they are likely to induce a recipient to order a business listing in Respondents' yellow page directory. Recipients of Respondents' solicitations would not have ordered a listing in Respondents' directory had the false representations not been made(28) (Tr. 39, 250-55). Therefore, the representations are materially false in violation of 39 U.S.C. §3005(a).

Respondents contend the Administrative Law Judge erred in allowing Complainant to orally amend the Complaint at the beginning of the hearing. According to Respondents, the amendment was not served in accordance with the requirements of the Rules of Practice and as a result they were deprived of their due process rights to a fair hearing. In support of their contention, Respondents refer to 39 C.F.R. §952.12 which they contend requires amendments to be filed with the Recorder and served on Respondents, who must then be given an opportunity to file a written reply.

Under the Rules of Practice, 39 C.F.R. §952.12, amendments proposed after the commencement of the hearing are to be filed with the presiding officer who may either allow the amendment of the pleading or grant a continuance to enable the opposing party to present rebuttal evidence. In the present case, the request to amend was filed with the presiding officer at the beginning of the hearing and Respondents were given an opportunity to review the amendment and obtain a continuance of the hearing to present additional evidence (Tr. 413-16). Respondents did not request a continuance of the hearing nor did they seek to present additional evidence. Moreover, the amendment related only to the names and addresses used by Respondents in conducting their promotion and did not affect the substantive allegations of the Complaint (Tr. 14-15). Respondents have not denied doing business under the names or at any of the addresses added to the Complaint, nor have they otherwise shown that they were prejudiced by the Administrative Law Judge's ruling allowing these names and addresses to be added to the Complaint.(29) Thus, the procedure followed by the Administrative Law Judge at the hearing was in full compliance with the Rules of Practice. Accordingly, Respondents' exception is denied.

Respondents next contend that the Administrative Law Judge erred in refusing to grant their motion to bind Complainant to its answers to Respondents' request for admissions. Respondents contend that Complainant either expressly or by its inadequate responses admitted each and every request for admissions proposed by Respondents.

An admission by a party relieves the opposing party from the necessity of proving any matter admitted.(30) In addition, a failure to respond to a request for admissions or an inadequate response may result in the matter being deemed admitted.(31) However, in this proceeding, Respondents have not established that the evidence contradicts Complainant's responses to Respondents' request for admissions, or that Complainant's responses were inadequate. Therefore, it was not error for the Administrative Law Judge to deny Respondents' motion.

Respondents' final contention is that the Administrative Law Judge erred by refusing to strike the testimony of Complainant's two expert witnesses. According to Respondents, one of the experts admitted a portion of her testimony was based on her personal perceptions as a consumer (Tr. 79); the other expert witness's testimony was hearsay, nonrelevant, and unreliable; and both expert witnesses were interested parties to this proceeding.

While one of the expert witnesses did admit that a few of her answers were based on her perception as an ordinary consumer, nothing in the record or Initial Decision indicates that the Administrative Law Judge improperly regarded that testimony as expert or that the testimony was otherwise objectionable and not admissible in this proceeding.

Respondents' argument that the testimony of the other expert witness was hearsay,(32) nonrelevant, and unreliable is equally unpersuasive. The witness's position as Vice-President of the Yellow Page Publishing Association, and his prior experience in the yellow page directory publishing industry qualified him to testify concerning general industry practices that were relevant to this proceeding. In the absence of any persuasive contradictory evidence, the record supports the Administrative Law Judge's determination that the witness's testimony was both relevant and reliable and therefore, admissible.

Respondents' final claim, that neither witness was disinterested in the proceeding because one was employed by a competitor, and the other by an organization whose members were competitors of Respondents, is also without merit. Although given a full opportunity to cross examine both witnesses, Respondents have not shown that either of the witnesses were actually biased against Respondents. Moreover, a showing of witness bias goes only to the weight of the testimony, not its admissibility.(33) Therefore, the Administrative Law Judge did not err in refusing to strike the testimony of the two expert witnesses. Accordingly, Respondents' exception is denied.

Conclusion

After consideration of the entire record and Respondents' exceptions to the Initial Decision, it is concluded that Respondents are engaged in conducting a scheme or device for obtaining money or property through the mail by means of materially false representations in violation of 39 U.S.C. §3005. Respondents' appeal regarding the representations alleged in Paragraphs 8(a), (c), (d) and (g) of the Complaint is denied. Respondents' appeal from the Administrative Law Judge's conclusion regarding Paragraph 8(f) of the Complaint is sustained. Accordingly, the Initial Decision is reversed to the extent indicated, and otherwise affirmed. The Orders authorized by 39 U.S.C. §3005 are issued with this decision.

James A. Cohen
Judicial Officer

1. The Complaint was amended on three occasions to add one party and several addresses.

2. The amended Complaint alleged that Respondents are doing business at twenty-nine (29) different addresses in twenty-seven (27) states, soliciting the purchase of business listings in one of Respondents' twenty-five (25) statewide or two (2) regional telephone yellow page directories.

3. The Lanham Act, 15 U.S.C. §§1051-1127.

4. See Charles Smith, P.S. Docket No. 37/180 at 6 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 5-6 (P.S.D. Dec. 9, 1993); Great American Giveaway, P.S. Docket No. 36/102 at 2-3 (P.S.D. Feb. 5, 1993); Finderhood, Inc., P.S. Docket No. 34/102 at 4 (P.S.D. March 20, 1992), aff'd (July 24, 1992); Northeast Enterprises, P.S. Docket No. 7/4 at 3 (P.S.D. April 13, 1979).

5. Although Respondents contend that the record lacks "substantial evidence" to support the Administrative Law Judge's findings, the correct standard for an administrative proceeding under 39 U.S.C. §3005 is the preponderance of the evidence. See Steadman v. SEC, 450 U.S. 91, 95-96 (1981); Charles Smith, P.S. Docket No. 37/180 at 16 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 6 n.3 (P.S.D. Dec. 9, 1993); A.C.L., P.S. Docket No. 36/90 at 12 (P.S.D. Dec. 28, 1990), aff'd (May 15, 1991); Athena Products, Ltd., P.S. Docket No. 12/136 at 10-11 (P.S.D. May 6, 1983); Telex twx Directory, P.S. Docket No. 13/6 at 5-7 (P.S.D. April 1, 1983).

6. See Charles Smith, P.S. Docket No. 37/180 at 17 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 7 (P.S.D. Dec. 9, 1993); The Washington Mint, P.S. Docket No. 30/42 at 7 (P.S.D. Nov. 27, 1992); Scott David Wilcox, P.S. Docket No. 18/147 at 6-7 (P.S.D. April 20, 1988); United States Testing Authority, P.S. Docket No. 14/114 at 15-16 (P.S.D. Oct. 2, 1985).

7. Contrary to Respondents' contentions, this proposition is clearly supported by both Donaldson v. Read Magazine, Inc., 333 U.S. 178, 185-89 (1948), and Vibra Brush Corp. v. Schaffer, 152 F. Supp. 461, 468 (S.D.N.Y. 1957), rev'd on other grounds, 256 F.2d 681 (2d Cir. 1958). See, also DynaQuest Corp. et al. v. USPS, No. 92-5165 slip op. at 6 (D.C. Cir. Jan. 18, 1994); Sean Michaels Inc. v. USPS, 653 F.2d 591, 594 n.5 (D.C. Cir. 1981); Charles Smith, P.S. Docket No. 37/180 at 17 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 7 (P.S.D. Dec. 9, 1993); Health Care Products, Inc., P.S. Docket No. 28/90 at 5-7 (P.S.D. June 27, 1990).

8. See Morgan v. United States, 304 U.S. 1, 18-20 (1938); Harlan Bell Coal Co. v. Lemar, 904 F.2d 1042, 1048 (6th Cir. 1990); Ralpho v. Bell, 569 F.2d 607, 628 (D.C. Cir. 1977); Charles Smith, P.S. Docket No. 36/129 at 16 (P.S.D. Dec. 9, 1993); Great American Giveaway, P.S. Docket No. 36/102 at 10 (P.S.D. Feb. 5, 1993).

9. See Donaldson, 333 U.S. at 185-89; Vibra-Brush, 152 F. Supp. at 468; A.C.L., P.S. Docket No. 36/90 at 12 (P.S.D. Dec. 28, 1990), aff'd (May 15, 1991); National Scholastic Resources Administration, Inc., P.S. Docket No. 35/140 at 16 (P.S.D. Nov. 23, 1990).

10. Respondents' contention that the expert witnesses were interested parties and therefore, their testimony should be struck is discussed later in this decision.

11. See Hanratty v. DOT, 819 F.2d 286, 288 (Fed. Cir. 1987); Carosella v. USPS, 816 F.2d 638, 641 (Fed. Cir. 1987); Charles Smith, P.S. Docket No. 37/180 at 18-19 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 8 (P.S.D. Dec. 9, 1993); Sergio & Spiegel Television for Oncor, Inc., P.S. Docket No. 37/105 at 18 (P.S.D. March 12, 1993); Equisystems California, Inc., P.S. Docket No. 33/115 at 6 (P.S.D. July 10, 1991).

12. Charles Smith, P.S. Docket No. 36/129 at 9 (P.S.D. Dec. 9, 1993); Scott David Wilcox, P.S. Docket Nos. 18/147 & 22/111 at 4 (P.S.D. Aug. 31, 1989); Scott David Wilcox, P.S. Docket No. 18/147 at 8 (P.S.D. April 20, 1988); Telco Directories Inc., P.S. Docket No. 22/111 at 9-10 (P.S.D. Feb. 25, 1987).

13. The Administrative Law Judge must consider this net impression of a solicitation in determining whether the alleged representations are made. See Aronberg v. FTC, 132 F.2d 165, 167 (7th Cir. 1942); G.J. Howard Co. v. Cassidy, 162 F. Supp. 568, 572 (E.D.N.Y. 1958); Mid-American Marketing, Inc., P.S. Docket No. 24/12 at 7 (P.S.D. Jan. 5, 1987), aff'd (May 7, 1987).

14. See Charles Smith, P.S. Docket No. 37/180 at 9 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 9 (P.S.D. Dec. 9, 1993).

15. In at least one case, the information was a duplicate of incorrect information that appeared in an authorized yellow page listing in the telephone directory customarily supplied in the recipient's area. This duplication of incorrect information, contributed to the recipient's belief that the solicitation was from the yellow page company with whom he had previously dealt (Tr. 214).

16. Examples of solicitations mailed to recipients in each area in which Respondents are doing business are included in the record. Some of those solicitations use the phrase "forthcoming edition" instead of "next edition". While the term "forthcoming" may not convey the impression that a previous edition existed as strongly as does the term "next", it does not in anyway dispel the impression that recipients were merely renewing a previous advertisement.

17. Paragraph 11 of the Initial Decision's Findings of Fact incorrectly identifies this representation as 8(c).

18. See Speigel, Inc. v. FTC, 411 F.2d 481, 483 (7th Cir. 1969); N. Van Dyne Advertising Agency, Inc. v. USPS, 371 F. Supp 1373, 1376 (S.D.N.Y. 1974); Baslee Products Corp. v. USPS, 356 F. Supp. 841, 846-47 (D.N.J. 1973); Charles Smith, P.S. Docket No. 37/180 at 22 n.36 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 13 n.11 (P.S.D. Dec. 9, 1993); National Scholastic Resources Administration, Inc., P.S. Docket No. 35/140 at 9 (P.S.D. Nov. 23, 1990).

19. See Aronberg, 132 F.2d at 167; G.J. Howard Co., 162 F. Supp. at 572 ; Charles Smith, P.S. Docket No. 37/180 at 15-16 (P.S.D. Jan. 31, 1994); The National Gold Mint, P.S. Docket No. 22/165 at 17 (P.S.D. May 1, 1987)

20. Since Respondents' solicitations are ambiguous and capable of more than one meaning, one of which is false, established precedent supports the Administrative Law Judge's finding that the solicitations are misleading. See Rhodes Pharmacal Co. Inc. v. FTC, 208 F.2d 382, 387 (7th Cir. 1953); Charles Smith, P.S. Docket No. 37/180 at 20 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 10 (P.S.D. Dec. 9, 1993); Finderhood Inc., P.S. Docket No. 34/102 at 8-9 (P.S.D. March 20, 1992), aff'd (July 24, 1992); The National Gold Mint, P.S.Docket No. 22/165 at 22 (P.S.D. May 1, 1987); Ralph J. Galliano, P.S. Docket No. 19/15 at 9 (P.S.D. May 2, 1985).

21. See United States v. 95 Barrels of Vinegar, 265 U.S. 438, 443 (1924); Charles Smith, P.S. Docket No. 37/180 at 20 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 10-11 (P.S.D. Dec. 9, 1993); Finderhood Inc., P.S. Docket No. 34/102 at 8 (P.S.D. March 20, 1992), aff'd (P.S.D. July 24, 1992); Paul, Marbin & Co., Inc., P.S. Docket No. 28/190 at 13-14 (P.S.D. Oct. 20, 1989); Card Redemption Center, P.S. Docket No. 30/37 at 10 (P.S.D. July 27, 1989).

22. See Charles Smith, P.S. Docket No. 37/180 at 24-25 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 20-21 (P.S.D. Dec. 9, 1993).

23. See Kurzon v. USPS, 539 F.2d 788, 794 (1st Cir. 1976); Gottlieb v. Schaffer, 141 F. Supp. 7, 17 (1956); Leo Daboub, P.S. Docket No. 19/185 at 16 (P.S.D. July 10, 1986).

24. See Charles Smith, P.S. Docket No. 37/180 at 27 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 14-15 (P.S.D. Dec. 9, 1993); National Scholastic Resources Admin. Inc., P.S. Docket No. 35/140 at 10-11 (P.S.D. Nov. 23, 1990); Leo Daboub, P.S. Docket No. 19/185 at 16 (P.S.D. July 10, 1986).

25. Respondents erroneously rely on a case that is contrary to existing Postal Service and Federal Court precedent and was subsequently vacated. See United Commercial Insurance Services v. USPS, 650 F. Supp. 592 (D.D.C. 1986), vacated No. 87-5049 (D.C. Cir. filed Jan. 22, 1988).

26. See FTC v. Standard Education Society, 302 U.S. 112, 116 (1937); Fields v. Hannegan, 162 F.2d at 18 (D.C. Cir.), cert. denied, 332 U.S. 773 (1947); Gottlieb, 141 F. Supp. at 16; Leo Daboub, P.S. Docket No. 19/185 at 9 (P.S.D. July 10, 1986).

27. The statement "[Respondents] are not affiliated with AT&T or any local telephone company", establishes the falsity of the representation alleged in Paragraph 8(c), and the distribution information contained in the terms on the back of the solicitation establishes the falsity of the representation alleged in Paragraph 8(d).

28. A representation is material if it causes a person to do something he would not do if he knew the truth. See Chaachou v. American Central Insurance Co., 241 F.2d 889, 893 (5th Cir. 1957); Charles Smith, P.S. Docket No. 26/129 at 16 (P.S.D. Dec. 9, 1993); First National City Funding, Inc., P.S. Docket No. 17/61 at 34 (I.D. Dec. 9, 1983); Keystone Industries, et al, P.S. Docket No. 17/44-46 at 13 (I.D. Nov. 7, 1983); In Re Columbia Mint, P.S. Docket No. 15/98-99 at 39-40 (I.D. May 27, 1983).

29. See Athena Products, Ltd., P.S. Docket No. 12/136 at 7 (P.S.D. May 6, 1983); Athena Products, Ltd., P.S. Docket No. 11/107 at 6 (P.S.D. Aug. 31, 1982); American Publishing Services, P.S. Docket No. 34/191 at 3 (I.D. Nov. 30, 1989).

30. Marine Fuel Supply and Towing, Inc. v. M/V Kentucky, 859 F.2d 1405, 1408 (9th Cir. 1988); Fergurson v. Neighborhood Housing Services, 780 F.2d 549, 551 (6th Cir. 1986); Seven-Up Bottling Co. v. Seven-Up Co., 420 F. Supp. 1246, 1251 (E.D. Mo. 1976), aff'd 561 F.2d 1275 (8th Cir. 1977); Kosta v. Connolly, F. Supp. 592, 594 (E.D. Pa. 1989); Wigler v. Electronic Data Systems Corp., 108 F.R.D. 204, 205 (D. Md. 1985).

31. See Fed. R. Civ. P. 36(a).

32. Under 39 C.F.R. §952.18, the rules of evidence may be relaxed in the discretion of the presiding officer to insure a fair hearing, and hearsay may be admitted if deemed reliable and relevant. See Richardson v. Perales, 402 U.S. 389, 400 (1971); Brousseau v. United States, 640 F.2d 1235, 1241-42 (Ct. Cl. 1981); Reil v. United States, 456 F.2d 777, 780 (Ct. Cl. 1972); Jacobowitz v. United States, 424 F.2d 555, 559 (Ct. Cl. 1970); Charles Smith, P.S. Docket No. 37/180 at 12-13 (P.S.D. Jan. 31, 1994); Scott David Wilcox, P.S. Docket No. 18/147 at 5 (P.S.D. Oct. 27, 1988).

33. See United States v. Bear Killer, 534 F.2d 1253, 1261 (8th Cir.) cert. denied, 429 U.S. 846 (1976); United States v. Cooper, 662 F. Supp. 913, 920 (D.R.I. 1987); Postell v. Amana Refrigeration, Inc., 87 F.R.D. 706, 708 (N.D.Ga. 1980).