In the Matter of the Complaint                   )
Against                                                     )
                                                                 )
TOP CHOICE DISTRIBUTORS, INC.            )
3032 Genesee Street                                )
Buffalo, NY 14225-2641                           )
                                                                  )
     and                                                       )
                                                                  )
SALVATORE SCIANDRA                          )
253 Crestwood Avenue                           )
Buffalo, NY 14216-1811                           )
                                                                  )
     both d/b/a                                             )
                                                                  )
FULL OF CASH                                         )
P. O. Box 602                                            )
Cheektowaga, NY 14225-0602                )
                                                                  )
     and                                                       )
                                                                  )
DISBURSEMENTS CENTRAL CONTROL    )
PRIZE CASH DEPARTMENT                       )
    and                                                        )
CASH HEADQUARTERS                            )
CENTRAL VAULT                                       )
P. O. Box 602                                             )
Cheektowaga, NY 14225-0602                  )   P.S. Docket No. FR 94­25

APPEARANCES FOR COMPLAINANT:       Jeannine H. Walter, Esq.
                                                                   Peter J. Wheeler, Esq.
                                                                   Consumer Protection Law
                                                                   United States Postal Service
                                                                    Washington, DC 20260-1147

APPEARANCE FOR RESPONDENTS:           Charles B. Chernofsky, Esq.
                                                                     Chernofsky & deNoyelles
                                                                     220 Fifth Avenue
                                                                     New York, NY 10001-7708

     On April 13, 1995, the General Counsel of the United States Postal Service (Complainant) filed a Petition alleging that Respondents have breached the terms of an Agreement Containing Consent Order to Cease and Desist (Agreement), executed on June 7, 1994. According to Complainant, Respondents have resumed distributing solicitations for a sweepstakes promotion in which they seek remittances through the mail using representations which they agreed to permanently discontinue.

     On April 14, 1995, an Interim Detention Order as authorized by Paragraph 11 of the Agreement was issued directing the detention of mail to the names and addresses to which Respondents currently seek remittances. The Interim Detention Order granted Respondents ten days to file a reply to the Petition. On April 27, 1995, Respondents filed a timely Reply, in which they deny that their current promotional materials make the representations alleged in the Petition or that they have in any other way breached the terms of the Agreement. Respondents also contend that the Petition should be dismissed because it was not served on their attorneys as required by 39 C.F.R. §952.16(c).

FINDINGS OF FACTS

1. Complainant originally initiated this proceeding by filing a Complaint alleging that Respondents were engaged in a scheme or device to obtain money or property through the mail by means of materially false representations in violation of 39 U.S.C. §3005 (1988). Specifically, Complainant alleged that Respondents distributed direct mail circulars soliciting remittances in connection with various sweepstakes promotions which contained several false representations.

2. On June 7, 1994, Respondents entered into the Agreement which Complainant now contends Respondents have breached. In Paragraph 6 of the Agreement, Respondents agreed to permanently discontinue the use of the solicitations attached to the Complaint and "any other solicitations which contain the representations specified in the Cease and Desist Order appended to the

     Complaint. . ."

3. The Cease and Desist Order referred to in the Agreement was issued as Cease and Desist Order No. CD-3756 on June 17, 1994, and directed Respondents to discontinue falsely representing that "[a] consumer has won a prize." 4. A "prize" was defined in Paragraph IV(B) of the Cease and Desist Order as "anything of substantial value, e.g., cash, automobile, jewelry, vacation; however, 'prize' shall exclude a cash disbursement providing that the advertisement clearly and conspicuously informs consumers that no purchase is necessary in order to receive the disbursement."

5. Subsequent to the execution of the Agreement and the issuance of the Cease and Desist Order, Respondents began distributing solicitations seeking remittances through the mail in connection with new sweepstakes promotions. The names and addresses to which Respondents' current solicitations seek remittances and against which a false representation order is requested to be issued are PRIZE CLAIM DEPARTMENT, P.O. Box 602, Cheektowaga, NY 14225-0602, CORPORATE DISTRIBUTION OFFICE, P.O. Box 7921 Cheektowaga, NY 14225-7921, and UNITED RELEASE CENTER, P.O. Box 9100, Buffalo, NY 14207-9100.

6. Respondents currently distribute 12 sweepstakes circulars using the above names and addresses. All of Respondents' current solicitations are similar in format and text. The solicitations are typically 8 ½ x 14" circulars addressed to individual consumers and personalized throughout. The circulars use varying sized print interspersed with bold face type notifying the recipient that he or she will receive "Guaranteed Award Money," "a Cash Award," "a Cash Award Check," or a "Cashable Check." The words "sweepstakes" and "prize" appear at various places on the solicitations and assist in conveying the overall impression that the recipient has won a prize of up to $10,000.

7. At the bottom of each solicitation is a detachable return form labeled "Entitlement and Activation Form," "Prize Claim Department Cash Award Receipt Form," "Recipient's Claim Form," "Cash Acceptance Form" or "Cash Award and Sweepstakes Entry Form." Each form requests recipients to remit nine to fourteen dollars in order to receive a "Multi-Thousand Dollar Payout Privilege Presentation," "Bonus," "Payout Privilege Entitlement," or "Payout Privilege Package."

8. The reverse of each of Respondents' solicitations contains fine print rules and conditions which are titled in bold face type, either with or without the name of the promotion, "Sweepstakes Rules and Conditions. No Purchase Necessary," or "Sweepstakes Rules and Conditions. No Purchase Required." The rules explain the eligibility requirements, the odds of receiving a prize and the alternative procedures to receive the cash award and participate in the sweepstakes without making a purchase. The Rules and Conditions inform consumers that everyone who responds in accordance with the Rules and Conditions, regardless of whether they purchase the entitlement option, will receive at least 50 cents.

9. The "no purchase necessary" or "no purchase required" language also appears on the front of all of Respondents' current solicitations. On the solicitations seeking remittances to the trade names United Release Center, Corporate Distribution Office and two of the six solicitations seeking remittances to Prize Claim Department, this notation is contained in the middle of various paragraphs, without underlining and not in either bold or capitalized print or a contrasting color.

10. However, four of the solicitations seeking remittances to the trade name Prize Claim Department include the "No Purchase Required" language on the front of the solicitation, in underlined, bold face type and in upper and lowercase letters.

     Complainant contends that Respondents' current sweepstakes solicitations represent that a consumer has won a prize, a representation that Respondents agreed to permanently discontinue and were ordered to cease and desist from falsely making. Additionally, Complainant contends that Respondents' solicitations do not clearly and conspicuously inform consumers that no purchase is necessary in order to receive the prize, and therefore, are not excluded from the Cease and Desist Order's coverage by virtue of its definition of "prize." Finally, Complainant argues that the Petition was properly served on Respondents, not their attorneys, because their attorneys had not filed a notice of appearance in this proceeding.

     Respondents contend that they do not represent that a consumer has won a prize because there is no language to that effect in any of their current solicitations. Respondents also argue that their current solicitations do not violate the terms of the Cease and Desist Order because Respondents provide a cash disbursement of 50 cents to all responding consumers and their solicitations clearly and conspicuously inform consumers that no purchase is necessary in order to receive this disbursement. Finally, Respondents contend that the Petition should be dismissed because it was not served on their attorneys as required by 39 C.F.R. §952.16.

A. Representations

     Respondents' current solicitations are the best evidence of their contents. Neither lay nor expert testimony is necessary to establish whether the solicitations

make the representations alleged in the Petition or the effect of those representations on the ordinary reader. An examination of Respondents' solicitations establishes that they do represent that the recipient has won a prize.

     Although Respondents' may have modified their previous solicitations by deleting the words "win" or "won," and made additional changes in order to comply with the terms of the Agreement and the Cease and Desist Order's prohibitions, the substituted words and the format continue to convey the overall impression that a consumer has won a prize. Respondents' current solicitations de-emphasize their promotion of discount vouchers and are instead replete with language of awards, cash awards, guaranteed award money, and cash award checks. These factors coupled with the sweepstakes format and use of the word "prize" would most probably lead the ordinary recipient to believe that he or she has won a prize.

     However, Respondents' contention that they have not violated the terms of the Cease and Desist Order because the Order's definition of "prize" excludes a cash disbursement if consumers are clearly and conspicuously informed that "No Purchase is Necessary" has some merit. A review of Respondents' solicitations demonstrates that certain of these solicitations clearly and conspicuously inform consumers that no purchase is necessary while others do not.

     All of Respondents' solicitations contain the "No Purchase Necessary" disclaimer and instructions on how to receive the disbursement with or without a purchase on the reverse of the solicitation, in the rules and conditions. However, many ordinary readers would be unlikely to look at the reverse side of the solicitations or read the terms and conditions. Thus, this "No Purchase Required" language does not clearly and conspicuously inform recipients that a purchase is unnecessary. Respondents' solicitations which also contain the phrase "No Purchase Necessary" on the front of the solicitations but buried in the text without bold print, underlining or other distinguishing features, would also be unlikely to place the ordinary reader on notice that no purchase is necessary in order to receive a prize. Accordingly, Respondents' use of the words "No Purchase Necessary" in these solicitations does not clearly and conspicuously inform consumers that they may obtain the cash disbursement in the absence of a purchase.

     Respondents' Prize Claim Department solicitations that contain the underlined "No Purchase Required" disclaimer in bold, initial capitalized printing, on the face of the solicitations, in addition to the disclaimer and instructions contained in the Rules and Conditions, clearly and conspicuously notify the ordinary reader that no purchase is necessary for the consumer to obtain a prize. Thus, these solicitations, because of the Cease and Desist Order definition of "prize" do not represent that the recipient has won a prize and therefore do not violate the Agreement or the Cease and Desist Order.

B. Service of Process

     Respondents contend that Complainant did not serve the Petition on Respondents' attorneys and, as a result, the Petition should be dismissed. It appears as Respondents contend, that Complainant was aware Respondents were represented by counsel and that Complainant did not serve the Petition on counsel or notify the Recorder that such service should be made. Although the Petition should have been served on Respondents' counsel, this failure of service does not constitute a basis for dismissal of the Petition. Respondents were notified of the charges against them and had a full opportunity to obtain counsel's advice and to defend against those charges. Thus, there was no prejudice as a result of the improper service. Accordingly, Respondents' request to dismiss the Petition is denied.

CONCLUSION

     The record establishes that Respondents have breached the terms of the Agreement in the manner alleged in the Petition using the trade names Corporate Distribution Office at P.O. Box 7921, Cheektowaga, NY 14225-7921 and United Release Center at P.O. Box 9100, Buffalo, NY 14207-9100. Accordingly, pursuant to Paragraph 11 of the Agreement a false representation order as described in 39 U.S.C. §3005(a) should be issued against these names and addresses.

     Respondents have not violated the terms of the Agreement with respect to mail addressed to Prize Claim Department at P.O. Box 602, Cheektowaga, NY 14225-0602 in response to those solicitations which clearly and conspicuously inform recipients that no purchase is necessary. However, Respondents have violated the terms of the Agreement by their use of the two additional Prize Claim Department solicitations which seek remittances to the same post office box and a false representation order should be issued to prevent Respondents from obtaining remittances in connection with these solicitations.

     Since there is insufficient information in the record for the Judicial Officer to establish a procedure to distinguish between mail addressed to Prize Claim Department in response to solicitations which violate the Cease and Desist Order and those which do not, the record will be held open for 30 days to either allow the parties to attempt to reach a mutually acceptable disposition of the mail to this name and address or for Respondents to establish some acceptable method for distinguishing between mail they are entitled to receive and that which should be returned to sender.

     Additionally, pursuant to Paragraph 11(c) of the Agreement, the Interim Detention Order will remain in effect for 30 days from the date of this Decision in order to allow Respondents to seek judicial review. If the Judicial Officer has not been advised within the 30 day period that judicial review has been sought, and/or that the parties have reached an agreement on the disposition of the Prize Claim Department mail, or Respondents have not filed an acceptable proposal for the disposition of this mail, the false representation order sought in the Petition will be issued.

James A. Cohen
Judicial Officer