In the Matter of the Complaint                )
Against                                                  )
                                                              )
SCOTT P. CULLINANE, et al.                  )
6009 Beltline Road, Suite 210                )
                                                               )
            at                                                )
                                                               )
Dallas, TX 75240-7875, etc.                   )  P.S. Docket No. 39/32

APPEARANCES FOR COMPLAINANT:   Jerry Belenker, Esq.
                                                               Leonard Aron, Esq.
                                                               Consumer Protection Law
                                                               Law Department
                                                               United States Postal Service
                                                               Washington, DC 20260-1112

APPEARANCE FOR RESPONDENTS:     G. Richard Poehner, Esq.
                                                               Falk, Vestal & Fish, l.l.p.
                                                               700 North Pearl
                                                               Suite 970, L.B. 366
                                                               Dallas, TX 75201-2838

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 (Complaint) alleges that Scott P. Cullinane, Michael F. Cullinane, Richard L. Renzi and CRC Publications, Inc. (Respondents), doing business as Yellow Pages of [state or area]⁽¹⁾ 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 alleges in paragraph 6 of the Complaint that Respondents distribute solicitations for listings in yellow page directories which falsely represent:

(a) The addressee has previously authorized a business listing in Respondents' telephone directory;

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

(c) Respondents are a part of or affiliated with a company which distributes telephone directories to the recipients of the solicitation;

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

(e) Respondents' directory will be distributed to all telephone subscribers who appear in the directory in which the recipient of the solicitations is currently listed;

(f) Publication and distribution of Respondents' directory will take place in accordance with time frames customary to the "yellow pages" directory in which the recipient of the solicitation is currently listed.

In paragraph 8 of the Complaint, Complainant also alleges that Respondents' mailings are solicitations in the guise of bills, invoices or statements of account due which do not comply with the notice requirements of 39 U.S.C. §3001(d) and Domestic Mail Manual (DMM) §123.4.⁽²⁾

Respondents filed an Answer in which they deny that they make the false representations alleged in the Complaint or that their mailings are solicitations in the guise of invoices which are nonmailable under 39 U.S.C. §3001(d). Following an evidentiary hearing and the 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 6(a) and (c) - (e) of the Complaint and that those representations are materially false in violation of 39 U.S.C. §3005. The Administrative Law Judge further concluded that Respondents' mailings are not solicitations in the guise of bills, invoices or statements of account due in violation of 39 U.S.C. §3001(d), Respondents do not make the representation alleged in paragraph 6(b) of the Complaint, and although Respondents make the representation alleged in paragraph 6(f) of the Complaint, Complainant had not proven that this representation is materially false.

Respondents contend that the Administrative Law Judge's findings that they make the representations alleged in paragraphs 6(a) and (c) - (e) of the Complaint are contrary to public policy and not supported by substantial evidence. Respondents also argue that the Administrative Law Judge applied erroneous legal standards in interpreting their solicitations and therefore, improperly concluded that their solicitations violate 39 U.S.C. §3005.

Complainant disagrees with Respondents and asserts that the Initial Decision is based on a firm evidentiary foundation and well-established precedent. As a result, Complainant contends the Initial Decision should be affirmed.

Respondents first contend that the Administrative Law Judge's Initial Decision should be reversed because it is contrary to the policy of fostering competition in the telecommunications industry as established by the consent decree issued in United States v. American Telephone & Telegraph Company.⁽³⁾ According to Respondents, the consent decree was intended to promote competition among telecommunications companies, including yellow page publishers, and the Initial Decision restricts such competition.

The Administrative Law Judge's interpretation and application of the Postal False Representation Statute⁽⁴⁾ do not restrict competition among yellow page publishers. Respondents, like other yellow page publishers, are free to market their yellow page directories through direct mail solicitations. The only restriction imposed by the Postal False Representation Statute and the Initial Decision in this case, is that Respondents may not misrepresent their product. This restriction does not place any unreasonable limitations on Respondents nor does it otherwise inhibit competition in the marketing of yellow page directories. Thus, the Administrative Law Judge's Initial Decision does not conflict with the policy established in United States v. AT&T.

Respondents next contend that in applying the Postal False Representation Statute, the Administrative Law Judge and the Judicial Officer should engage in a balancing of public interest analysis similar to that performed in trademark and tradedress cases. According to Respondents, such an analysis would permit their use of the color yellow, the term yellow pages, and the walking fingers logo in solicitations for their directories. Respondents in addition contend that the walking fingers logo and the title Yellow Pages are generic terms available for public use under trademark and tradedress principles and should not be considered in determining whether a false representation has been made in a §3005 proceeding.

Respondents' reliance on trademark and tradedress principles is misplaced. Regardless of the analysis performed or the principles applied, neither Respondents nor other yellow page publishers are permitted to misrepresent their yellow page directories. While trademark and tradedress principles may not prohibit the use of certain colors, terms or symbols, they do not authorize the use of false representations. The Postal False Representation Statute only prohibits the use of the color yellow, the term yellow pages and the walking fingers logo when they create an overall false impression. Because Respondents do not clearly differentiate themselves and their directory from the directory expected by consumers,⁽⁵⁾ their use of a yellow paper solicitation with the name yellow pages and the walking fingers logo, when considered in the context and format with the remainder of their solicitation, would likely be understood by ordinary recipients as making the representations alleged in paragraphs 6(a) and (c) - (e) of the Complaint. Since, as discussed hereafter, these representations are false, Respondents' solicitations are prohibited by 39 U.S.C. §3005. Nonetheless, Respondents are free to compete in the yellow pages market, to title their directory as a yellow pages directory and to use the walking fingers logo and color yellow. As stated previously, the only restriction imposed by the Postal False Representation Statute is that Respondents may not misrepresent the source or nature of their directory.

Respondents next contend that the Administrative Law Judge's findings are not supported by substantial evidence.⁽⁶⁾ Respondents argue that qualified expert or reliable consumer testimony is required to establish the existence of the false representations alleged in the Complaint and that no such testimony was presented in this proceeding. Respondents further contend that the solicitations themselves do not support the Administrative Law Judge's findings.

Contrary to Respondents' contention, neither lay nor expert testimony is necessary to support a finding that a solicitation makes a materially false representation.⁽⁷⁾ The existence of a representation may be determined by an Administrative Law Judge from the solicitation itself⁽⁸⁾ since the solicitation is the best evidence of its contents.⁽⁹⁾ The solicitations distributed by Respondents were introduced into evidence and by themselves establish that Respondents make the representations alleged in paragraphs 6(a) and (c) - (e) of the Complaint. Therefore, Respondents' contention that each finding must be supported by expert or consumer testimony is without merit.

Although not required, Complainant presented expert testimony which supported the Administrative Law Judge's findings. Respondents, however, contend that Complainant's expert was not qualified to testify about the reactions of a "normally prudent businessman" to a direct mail solicitation for a yellow pages listing, because she had not been involved with, nor conducted, any attitude surveys concerning such advertising.

Complainant's witness, a tenured university professor since 1978, with a Ph.D. in consumer economics/consumer behavior, specializes in consumer behavior and teaches both undergraduate and graduate classes, spending 20% of her class time on consumer evaluation of product advertising (Tr. 11-12; Complainant's Exhibit 10). With this background, it was proper for the Administrative Law Judge to allow the expert to testify about consumer perceptions and to rely on her testimony even though she had not been personally involved in the marketing of yellow page directories nor conducted any attitude surveys regarding such advertising.⁽¹⁰⁾ Nevertheless, the Administrative Law Judge did not base his findings on the expert's testimony (I.D. COL 1(f)), but merely used her testimony to support the findings made from the solicitations themselves (I.D. FOF  11, 19, 21). Thus, the Administrative Law Judge did not err in permitting the witness to testify as an expert or in relying on her testimony as corroboration for his findings.

Respondents also contend the testimony of Complainant's consumer witness does not support the Administrative Law Judge's findings because the witness' perception of Respondents' solicitation was tainted by a prior telephone solicitation for yellow pages advertising (Tr. 82). We agree with Respondents that the witness' testimony concerning his understanding of Respondents' solicitations is of little value because of the prior telephone solicitation. However, the Administrative Law Judge did not rely on that testimony in arriving at his findings concerning the existence of the representations alleged in the Complaint (I.D. COL 1(f)). Rather he noted that his findings were corroborated by the witness' testimony (I.D. FOF 11, 19, 21). Since the Administrative Law Judge's findings regarding the existence of the representations were based on the solicitations themselves (I.D. COL 1(f)), the references to the witness' testimony do not constitute reversible error.

Respondents take exception to the finding that they "sent two mailings to businesses which typically advertise in the local yellow pages telephone directory for their area" (I.D. FOF 4). According to Respondents, there is no evidence in the record to support the finding that recipients of their solicitations typically advertise in the local area yellow pages directory. The record, however, reflects that Respondents purchase mailing lists of businesses in a particular area (Tr. 115-17) and it is reasonable to infer that many businesses on that list typically advertise in the yellow pages directory in their area. Moreover, the one consumer witness who testified at the hearing, received Respondents' solicitation and advertised in the yellow pages directory distributed in his area (Tr. 69-71).

Respondents next take exception to the findings supporting the Administrative Law Judge's conclusion that they make the representations alleged in paragraphs 6(a) and (c) - (e) of the Complaint. In connection with each alleged representation, Respondents contend the Administrative Law Judge based his conclusion that the representation is made on specific findings of fact⁽¹¹⁾ which they argue are either not supported by any evidence or supported only by Complainant's expert witness who they contend was not qualified to testify in this proceeding.

As previously discussed, the expert witness' testimony was properly admitted into evidence and served as corroboration for the Administrative Law Judge's conclusions which were based on his reading of Respondents' solicitations. The language of Respondents' solicitations on which the Administrative Law Judge relied (I.D. FOF 7-25 ), when considered as a whole,⁽¹²⁾ would most likely lead ordinary recipients to believe that Respondents' solicitations make the representations alleged in paragraphs 6(a) and (c) - (e) of the Complaint.

Respondents' use of the walking fingers logo, the words "yellow pages", the yellow paper format, the SIC code, the reference to "next edition" and the reference to what appears to be a current yellow pages business listing which includes the recipient's business name, address, telephone number, and classification number, all contribute to the impression that "the addressee has previously authorized a business listing in Respondents' directory" (Complaint  6(a)). These same words, symbols and yellow paper format would be likely to lead ordinary readers to believe that "Respondents are a part of or affiliated with a company which distributes telephone directories to the recipients of the solicitation" (Complaint  6(c)). They would also be likely to lead ordinary readers to believe that "Respondents are the publishers of a 'yellow pages' telephone directory customarily supplied to business telephone subscribers in the recipient's area" (Complaint  6(d)). At the very least, they create an uncertainty as to Respondents' identity and product, and contribute to the overall impression⁽¹³⁾ that the alleged representations are made.⁽¹⁴⁾

Since Respondents' solicitations create the impression that they are for the renewal of the listing the addressee has previously authorized in the telephone directory customarily supplied to all business telephone subscribers in the area by a company that distributes telephone directories to the recipients, it follows that the ordinary reader would also believe that Respondents' directory would be "distributed to all telephone subscribers who appear in the directory in which the recipient of the solicitations is currently listed" (Complaint 6(e)).⁽¹⁵⁾ Accordingly, the Administrative Law Judge properly concluded that Respondents' solicitations make the representations alleged in paragraphs 6(a) and (c) - (e) of the Complaint.

Respondents also take exception to the Administrative Law Judge's finding that the ordinary reader would not notice or understand the significance of much of the language used in their solicitations to distinguish their directory from the directory distributed by the local telephone service provider.⁽¹⁶⁾ According to Respondents, the ordinary businessman would understand that he was signing a legally binding contract and would therefore, carefully read every word of the solicitation including the terms and conditions which appear on the reverse side.⁽¹⁷⁾ While it may be true that many recipients of Respondents' solicitations would carefully read both the front and back of the solicitation to determine the product offered, it is equally true that many would not. This is especially true if they thought they had previously authorized a listing in Respondents' directory and that Respondents are the publishers of a yellow pages directory customarily supplied to business telephone subscribers in the recipient's area (Tr. 84). Further, the disclaimers themselves tend to confuse the solicitation recipient as to Respondents' identity and product, and even if carefully read, would not be likely to place many recipients on notice that they were not purchasing a listing in their local yellow pages directory.

Respondents also contend that the Administrative Law Judge's conclusion that recipients of their solicitation would not read the fine print terms and conditions is inconsistent with regulations promulgated by the Food and Drug Administration and the U.S. Department of Agriculture which require disclaimers on medicines and pesticide labels which often appear in fine print. We see no inconsistency. Absent evidence to the contrary, we would expect a significant difference in the level of care exercised when purchasing a business advertisement (particularly one previously authorized) from that associated with the use of potentially lethal medications and pesticides. We are not persuaded that the fine print disclaimers on Respondents' solicitations would alert recipients to the true nature of the directory being advertised. While it would be easy for Respondents to accurately describe their directory and thus not mislead ordinary consumers⁽¹⁸⁾ they have not done so with the solicitations which are the subject of this proceeding. Accordingly, it is concluded that Respondents' arguments concerning the effect of their disclaimers have no merit.

Respondents contend that the representation alleged in paragraph 6(c) of the Complaint is not false. Although Respondents have not challenged the falsity of any of the other representations found to have been made, all have been considered on appeal. The record clearly supports the conclusion that the representations alleged in paragraphs 6(a) and (c) - (e) of the Complaint are materially false. The evidence presented by Respondents themselves establishes the falsity of the representations alleged in paragraphs 6(a) and (d). Respondents testified that their mailing list was not generated internally from any previous business activity with the recipients (Tr. 120), and that they had not previously published a directory prior to mailing the solicitations to the recipients (Tr. 121-22). Therefore, the addressees of Respondents' solicitations could not previously have authorized a listing in Respondents' telephone directory (Complaint  6(a)) and Respondents could not be the "publisher of a yellow pages telephone directory customarily supplied to telephone subscribers in the recipient's area" (Complaint  6(d)).

The representation alleged in paragraph 6(e) of the Complaint, "that Respondents' directory will be distributed to all telephone subscribers who appear in the directory in which the recipient of the solicitations is currently listed" is also contradicted by Respondents' testimony. According to Respondents, their directory is distributed primarily to subscribers who pay to be listed in their directory, not to subscribers who appear in the directory in which the recipient is currently listed (Tr. 184). Additionally, Respondents stipulated that the distribution of their directory was considerably less than that of any yellow pages directory published by a provider of telephone services (Tr. 193-94). Thus, it was proper for the Administrative Law Judge to conclude that representation 6(e) is false.⁽¹⁹⁾

Paragraph 6(c) of the Complaint alleges that "Respondents are a part of or affiliated with a company which distributes telephone directories to the recipients of the solicitation." While Respondents contend that this statement is literally true, they distribute directories only to those recipients who reply to their solicitations (Tr. 134, 157, 184). Since the response rate to their solicitations is only 1.8% (Tr. 91) they distribute directories to only a very small percentage of the solicitation recipients. Moreover, inasmuch as recipients of the directory are likely to believe that Respondents' solicitation comes from the publisher of their local yellow pages telephone directory who distributes a directory to all telephone subscribers, it is reasonable to conclude that recipients of the solicitations would expect that all recipients would receive a directory. Since all recipients of the solicitation do not receive a copy of the directory, this representation is also false.

The false representations found to be made in Respondents' solicitations (Complaint  6(a) and (c) - (e)) either alone or together, are likely to induce a recipient to order a business listing in Respondents' yellow pages directory. Therefore, these representations are materially false in violation of 39 U.S.C. §3005(a).⁽²⁰⁾

Respondents' final contention is that the Administrative Law Judge applied incorrect legal standards in evaluating their solicitations. According to Respondents, the Administrative Law Judge misapplied the ordinary reader test, incorrectly concluded that he could determine whether representations are made, and erroneously relied on a prior Postal Service Decision concerning the impressions created by the walking fingers logo.

None of Respondents' arguments establish that the Administrative Law Judge applied erroneous legal standards in evaluating Respondents' solicitation. Respondents' first contention, that §3005 is designed to protect the ordinary reader within the class to whom the solicitation is directed, not the gullible, naive or less critical reader, is not persuasive. While it is true that solicitations are to be interpreted in the manner in which they would be understood by the ordinary readers to whom they are directed,⁽²¹⁾ the ordinary readers of Respondents' solicitations are owners and employees of small, as well as large businesses (Tr. 67) and include not only highly educated and sophisticated readers, but also gullible, naive, and less critical readers (Tr. 27, 35). Nothing in the record establishes that ordinary businessmen are any more adept at understanding the subtle aspects of the solicitation than other readers (Id.). Moreover, the protection of 39 U.S.C. §3005 is not limited to those who are sophisticated enough to ascertain the true nature and source of a product from a confusing solicitation,⁽²²⁾ nor does it impose a duty on any consumer to critically scrutinize the fine print contained on a product advertisement.⁽²³⁾ Because the Administrative Law Judge correctly evaluated Respondents' solicitations in light of the probable effect on the ordinary readers to whom the solicitations were directed, Respondents' contrary contention has no merit.

Respondents next argue that the Administrative Law Judge incorrectly relied on his own judgment in determining whether the representations alleged in the Complaint are made and their effect on ordinary readers. Respondents contend that the Administrative Law Judge misinterpreted Vibra-Brush v. Schaffer,⁽²⁴⁾ in reaching this result. However, Vibra-Brush clearly holds that the presiding Administrative Law Judge (then a Hearing Examiner) could conclude from a solicitation itself whether a representation was in fact made.⁽²⁵⁾ Thus, as previously discussed, it was not erroneous for the Administrative Law Judge, as both the finder of fact and law, to rely on the solicitations themselves in determining whether the representations alleged in the Complaint were made and their effect on the ordinary reader.⁽²⁶⁾

Respondents' final argument is that the Administrative Law Judge erroneously relied on Mid-American Marketing, Inc.,⁽²⁷⁾ in arriving at the conclusion that the walking fingers logo, as a matter of law, will always create the impression that a mailing is from the local telephone company. According to Respondents, even if that were an accurate assessment of consumer perceptions in 1987, it is not necessarily true five years later when this proceeding was initiated.

Respondents misunderstand the Initial Decision. Contrary to their argument, the Initial Decision makes no such holding, but merely points out that the walking fingers logo contributes to the overall impression that a mailing is from the yellow pages directory published by the local telephone company (I.D. COL 1(g)). Moreover, while it is certainly true that consumer perceptions may change over time, the testimony in this case (Tr. 47) and the holdings in other recent Postal Service and Court decisions establish that consumers still associate the walking fingers logo with the local telephone company.⁽²⁸⁾ Although that perception may change in the future, neither the Administrative Law Judge's finding, nor his failure to cite more recent decisions was erroneous. Accordingly, there is no merit to Respondents' contention.

After consideration of the entire record and Respondents' exceptions to the Initial Decision, it is concluded that Respondents are conducting a scheme or device for obtaining money 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 6(a) and (c) - (e) of the Complaint is denied and the Orders authorized by 39 U.S.C. §3005 are issued with this decision.

James A. Cohen
Judicial Officer

1. The Complaint alleges that Respondents are using thirty-three (33) different addresses to solicit the purchase of listings in their yellow page directories.

2. DMM §123.4 was renumbered as CO31.1 in the 1993 revision of the Domestic Mail Manual, but the substance of the regulation was not changed.

3. 552 F. Supp. 131 (D.D.C. 1982), aff'd, 460 U.S. 1001 (1983).

4. The Postal False Representation Statute, 39 U.S.C. §3005, prohibits any person from engaging "in a scheme or device for obtaining money or property through the mail by means of materially false representations". The statute is intended to protect the public from the use of false representations in seeking remittances through the mail. See 1983 U.S. Code Cong. and Adm. News, p. 2014.

5. Respondents acknowledge their directory is materially different from the directory previous Postal Service and Court decisions have established consumers associate with the term yellow pages and the walking fingers logo. See Respondents Appeal Brief (A.B.), "[Respondents' directory] is a material departure from the local yellow page directories that are typically widely available" (A.B. 31); testimony of Respondent Scott P. Cullinane, "[the] directory is not even remotely similar to the phone company's publishing" (Transcript (Tr.) 184); and statement of Respondents' counsel, "the products as I see it really are not comparable" (Tr. 192). See also Directory Publishing Services, Inc. v. Runyon, No. 94-0640 slip op. at 12 (D.D.C. April 18, 1994); Directory Publishing Services, Inc., P.S. Docket No. 38/122 at 10 (P.S.D. Feb. 28, 1994); Charles Smith, P.S. Docket No. 36/129 at 11 & 17 (P.S.D. Dec. 9, 1993); Respondents A.B. 36; and Tr. 190-91.

6. While the substantial evidence test is used for court review of an administrative decision, the preponderance of the evidence standard applies in §3005 administrative proceedings. See A.C.L., P.S. Docket No. 36/90 at 12 (P.S.D. Dec. 28, 1990), aff'd, (May 15, 1991); Associated Telephone Directory Publishers, Inc., P.S. Docket No. 13/191 at 5 (P.S.D. Jan. 25, 1984), aff'd, (March 23, 1984); 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).

7. See Donaldson v. Read Magazine, Inc., 333 U.S. 178, 185-89 (1948); DynaQuest Corp. v. USPS, 12 F.3d 1144, 1149 (D.C. Cir. 1994); Sean Michaels Inc. v. USPS, 653 F.2d 591, 594 n.5 (D.C. Cir. 1981); 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); Directory Publishing Services, Inc., P.S. Docket No. 38/122 at 6 (P.S.D. Feb. 28, 1994); 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) & discussion therein.

8. The Administrative Law Judge, as the trier of fact, may determine whether representations are made. See DynaQuest, 12 F.3d at 1149; Sean Michaels, 653 F.2d at 594 n.5; Directory Publishing Services, Inc., v. Runyon, Civil Action No. 94-0640 slip op. at 8 (D.D.C. April 18, 1994); Directory Publishing Services, Inc., P.S. Docket No. 38/122 at 6 (P.S.D. Feb. 28, 1994); 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).

9. See Directory Publishing Services, Inc., P.S. Docket No. 38/122 at 6 (P.S.D. Feb. 28, 1994); 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).

10. See Athena Products, Ltd., P.S. Docket No. 11/77 at 6 (P.S.D. June 21, 1982); Leucadia Pharmacals, P.S. Docket No. 11/90 at 6-7 (P.S.D. May 27, 1982); Standard Research Labs, P.S. Docket Nos. 7/78 & 7/86 at 11 (P.S.D. Oct. 27, 1980)(quoting Michigan Bulb Company, P.S. Docket No. 7/43 at 3 (P.S.D. Oct. 30, 1979)); Midwest Health Research, P.S. Docket No. 6/80 at 4 (P.S.D. Nov. 21, 1978); Super Damiana III, P.S. Docket No. 6/56 at 2-3 (P.S.D. June 28, 1978).

11. Respondents take exception to the findings that, "many recipients have the impression that the solicitation is from the yellow pages telephone directory published by the local telephone company in which they regularly advertise" (I.D. FOF 8; A.B. 26); "a SIC Code suggests that the recipient has an existing account reflecting previous authorization" (I.D. FOF 8; A.B. 26-27); "the term listing implies that the recipient's name, address, and telephone number have appeared on a previous list of advertisers in respondents' previous yellow pages directory" (I.D. FOF 8; A.B. 27); "the words 'our records . . .' indicates the recipient was previously listed in respondents' directory" (I.D. FOF 8; A.B. 28); "and the use of a local business address enhances the conclusion that Respondents are the publishers of a yellow pages telephone directory customarily supplied to telephone subscribers in the recipient's area" (I.D. FOF 20; A.B. 40).

12. See Donaldson, 333 U.S. at 185-89; 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); Directory Publishing Services, Inc., P.S. Docket No. 38/122 at 13 (P.S.D. Feb. 28, 1994); Charles Smith, P.S. Docket No. 37/180 at 15-16 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 at 10 (P.S.D. Dec. 9, 1993); Scott David Wilcox, P.S. Docket Nos. 18/147 & 22/111 at 4-5 (P.S.D. Aug. 31, 1989); Mid-American Marketing, Inc., P.S. Docket No. 24/12 at 6-8 (P.S.D. Jan. 5, 1987), aff'd, (May 7, 1987); The National Gold Mint, P.S. Docket No. 22/165 at 25 (P.S.D. May 1, 1987); Telco Directories, Inc., P.S. Docket No. 22/111 at 9-10 (P.S.D. Feb. 25, 1987); IHS, P.S. Docket No. 22/155 at 25-26 (P.S.D. Sept. 22, 1986).

13. Id.

14. Solicitations which are ambiguous or capable of more than one meaning are misleading if one of those meanings is false. Rhodes Pharmacal Co. Inc. v. FTC, 208 F.2d 382, 387 (7th Cir. 1953); Directory Publishing Services, Inc., P.S. Docket No. 38/122 at 11 (P.S.D. Feb. 28, 1994); 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).

15. Reasonable beliefs that follow logically from express statements must also be considered in interpreting advertising claims. See Spiegel, 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).

16. Respondents take exception to the finding that, "the terms and conditions on the back of the solicitation are in small print and would not be read by many ordinary readers" (I.D. FOF 9; A.B. 29); "the solicitation makes no effort to distinguish Respondents' directory from the products that are offered by other directory publishers" (I.D. FOF 10; A.B. 30); "the reference to a statewide classification would not be noticed" (I.D. FOF 19; A.B. 35); "the phrase 'American Yellow pages is not affiliated with AT&T or any local telephone company' would not be noticed" (I.D. FOF 19; A.B. 39); and "references to 'out-of-town businesses' and 'businesses throughout your state' on the back of the solicitation would not be noticed" (I.D. FOF 19; A.B. 37).

17. Ironically, although Respondents argue that businessmen carefully read all documents before signing, all three of the individual respondents in this case, signed but apparently failed to read or to understand the answer to the Complaint which included an inaccurate description of Respondents' business practices. See testimony of Richard L. Renzi, ". . . assume I just read through this and made a mistake in signing it" (Tr. 101); testimony of Michael F. Cullinane, ". . . don't recall if I read before signing" (Tr. 152-53); and testimony of Scott P. Cullinane, ". . . you read through it, again with all the mass of paper and business dealing that we do . . ." (Tr. 178); and "I mean you have a mountain of information . . ." (Tr. 179).

18. See United States v. 95 Barrels of Vinegar, 265 U.S. 438, 443 (1924); 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 (P.S.D. March 20, 1992), aff'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).

19. Respondents argue that the Administrative Law Judge, in making his findings of falsity with respect to Complaint paragraph 6(e) incorrectly concluded that Respondents had stipulated "that the local telephone company yellow pages is typically supplied to all telephone subscribers," (I.D. FOF 24; A.B. 44). According to Respondents, this was only a request for a stipulation that Respondents' counsel was unable to agree to because of a lack of knowledge. A fair reading of the transcript (Tr. 191-94) supports the Administrative Law Judge's conclusion that Respondents' counsel consented to this stipulation.

20. See Chaachou v. American Central Insurance Co., 241 F.2d 889, 893 (5th Cir. 1957); Directory Publishing Services, Inc., P.S. Docket No. 38/122 at 17 (P.S.D. Feb. 28, 1994); Charles Smith, P.S. Docket No. 37/180 at 30 (P.S.D. Jan. 31, 1994); Charles Smith, P.S. Docket No. 36/129 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 Nos. 17/44-46 at 13 (I.D. Nov. 7, 1983).

21. See Charles Smith, P.S. Docket No. 37/180 at 14 (P.S.D. Jan. 31, 1994); National Scholastic Resources Admin., Inc., P.S. Docket No. 35/140 at 9 (P.S.D. Nov. 23, 1990); Anderson Pharmacals, P.S. Docket No. 28/90 at 17 (P.S.D. March 3, 1989); Scott David Wilcox, P.S. Docket No. 23/70 at 5 (P.S.D. June 29, 1987); Mid-American Marketing, Inc., P.S. Docket No. 24/12 at 6 (P.S.D. Jan. 5, 1987).

22. See FTC v. Standard Education Society, 302 U.S. 112, 116 (1937); P. Lorillard Co. v. FTC, 186 F.2d 52, 58 (4th Cir. 1950); Fields v. Hannegan, 162 F.2d 17, 18 (D.C. Cir.), cert. denied, 332 U.S. 773 (1947); Directory Publishing Services, Inc. v. Runyon, Civil Action No. 94-0640 slip op. at 9 (D.D.C. April 18, 1994); Gottlieb v. Schaffer, 141 F. Supp. 7, 16 (S.D.N.Y. 1956); Charles Smith, P.S. Docket No. 38/180 at 15 (P.S.D. Jan. 31, 1994); Leo Daboub, P.S. Docket No. 19/185 at 9 (P.S.D. July 10, 1986).

23. See Standard Education, 302 U.S. at 116; Fields v. Hannegan, 162 F.2d at 18; Gottlieb, 141 F. Supp. at 16; Directory Publishing Services, Inc., P.S. Docket No. 38/122 at 14-15 (P.S.D. Feb. 28, 1994); Leo Daboub, P.S. Docket No. 19/185 at 9 (P.S.D. July 10, 1986).

24. 152 F.Supp. 461 (S.D.N.Y. 1957), rev'd on other grounds, 256 F.2d 681 (2nd Cir. 1958).

25. Id. at 465.

26. See Donaldson, 333 U.S. at 185-89; DynaQuest, 12 F.3d at 1149; Sean Michaels, 653 F.2d at 594 n.5; Vibra-Brush, 152 F. Supp. at 468; Directory Publishing Services, Inc., P.S. Docket No. 38/122 at 6 (P.S.D. Feb. 28, 1994); 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) & discussion therein.

27. P.S. Docket No. 24/12 (P.S.D. Jan. 5, 1987).

28. See Directory Publishing Services, Inc., v. Runyon, Civil Action No. 94-0640 slip op. at 10-12 (D.D.C. April 18, 1994); Directory Publishing Services, Inc., P.S. Docket No. 36/129 at 10 (P.S.D. Feb. 28, 1994); Charles Smith, P.S. Docket No. 36/129 at 11 (P.S.D. Dec. 9, 1993).