American Genealogies, Inc. v. US Postal Service

• Decision Date: 17 July 1989
• Docket Number: Civ. A. No. 88-1612.
• Citation: 717 F. Supp. 895
• Parties: AMERICAN GENEALOGIES, INC., et al., Plaintiffs, v. UNITED STATES POSTAL SERVICE, Defendant.
• Court: U.S. District Court — District of Columbia

717 F. Supp. 895

AMERICAN GENEALOGIES, INC., et al., Plaintiffs, v. UNITED STATES POSTAL SERVICE, Defendant.

Civ. A. No. 88-1612.

United States District Court, District of Columbia.

July 17, 1989.

Edward L. Norwind of Paulson, Nace & Norwind, Washington, D.C., for plaintiffs.

Jay B. Stephens, U.S. Atty., Dist. of Columbia, John D. Bates, Asst. U.S. Atty., and A. Patricia Frohman, Washington, D.C., for defendant.

CHARLES R. RICHEY, District Judge.

Plaintiffs American Genealogies, Inc., Spring Hill Employment, Inc., Spring Hill Data Processing, Inc. and Michael Caputo, the President of these three corporations, filed this suit to challenge the United States Postal Service's decision finding them to have used the mails to further a scheme involving false representations in order to obtain money in violation of 39 U.S.C. § 3005. The Court now has before it plaintiffs' motion to set aside and vacate the Postal Service's decision and orders, and defendant's motion for summary judgment. Upon consideration of both of these motions, the supporting and opposing legal memoranda, the administrative record, and the underlying law, the Court will deny plaintiffs' motion, and will grant the motion of defendant.

BACKGROUND

Plaintiffs mailed postcard solicitations to various customers inviting them to purchase a book entitled The (Addressee's Surname) Family Album. These books contain general information on searching for one's ancestors, ethnic origins, heraldry, and origins of names. Each book concludes with a section providing a listing of persons in the United States having the same surname as the addressee of the solicitation. At bottom, the dispute in this case is over whether the postcard solicitations for these books accurately reflect the actual contents of these books.

On May 7, 1987, the Postal Service filed a complaint against plaintiffs alleging that these postcards contained false representations in violation of 39 U.S.C. § 3005. More specifically, the Postal Service alleged that one group of these postcards made false representations with respect to the following: that addressee's of these postcards would receive a book principally about their ancestry and family name; the book would include the names and locations of almost every member of the addressee's family in the United States and information about the origin's of the addressee's family; and the majority of the book's contents would be substantially different from a book pertaining to a family with a surname different from that of the addressee.¹ In addition, the Postal Service alleged that another group of these postcards made false representations by suggesting the following: the addressee of the solicitation is related to the person who signed the solicitation; the person who signed the solicitation performed genealogical research specifically leading to the addressee; addressees responding to the solicitation would receive a book principally about their family name and ancestry; the majority of the contents of the addressee's book would be substantially different from the contents of a book pertaining to an addressee of a different surname; and some of the family names used in The (name of family) Album were rare.²

A hearing was held before an Administrative Law Judge ("ALJ") on June 24, 1987. At this hearing, the Postal Service called three consumer witnesses and the Postal Inspector; plaintiffs called no witnesses, and introduced no exhibits. Following this hearing, the ALJ issued an Initial Decision in which he found that plaintiffs made the materially false representations alleged by the Postal Service in its Complaint. Based on his findings, the ALJ recommended the issuance of a false representation order and a cease and desist order. Thereafter, plaintiffs filed an appeal with a Judicial Officer of the United States Postal Service wherein they took exception with the ALJ's Findings of Fact and Conclusions of Law and the recordkeeping requirements of paragraph 8 of the proposed cease and desist order.³ Plaintiffs claimed, inter alia, that the recordkeeping requirements imposed by the cease and desist order exceeded the Postal Service's jurisdiction and, even assuming the recordkeeping requirements were within the Postal Service's jurisdiction, they were not reasonably related to the conduct alleged in the Postal Service's complaint. Plaintiff also challenged the breadth of the recordkeeping requirement. The Judicial Officer disagreed with all of plaintiffs' exceptions to the ALJ's decision, and affirmed that decision in all respects with the exception of an evidentiary ruling made by the ALJ. Contrary to the ALJ's evidentiary ruling, the Judicial Officer found plaintiff Michael Caputo's admission that he and his three companies were involved in a scheme substantially similar scheme to the one involved in this case relevant to the validity of paragraph 8 of the cease and desist order.

As in their appeal before the Judicial Officer, plaintiffs once again are challenging the ALJ's findings of fact and conclusions of law, and the jurisdiction of the Postal Service to issue paragraph 8 of the cease and desist order as well as the order's breadth. In addition, plaintiffs now claim that the Judicial Officer considered irrelevant evidence in evaluating the validity of paragraph 8 of the cease and desist order, that paragraph 8 of the cease and desist order is vague, and that the Postal Service had an obligation to outline for plaintiffs the information that should have been included in their books.

THE POSTAL SERVICE'S FINDINGS OF FACT ARE SUPPORTED BY SUBSTANTIAL EVIDENCE, AND THE POSTAL SERVICE HAS COMMITTED NO ERRORS OF LAW.

The Administrative Procedure Act vests this Court with power to review decisions of the Postal Service, 5 U.S.C. § 706; the Court's power to review these decisions, however, is limited. "It is plain that `the power ... vested in the Postal Service by 39 U.S.C. § 3005 may not be interfered with by the courts unless it has exceeded its authority or is palpably wrong.'" American Testing Institute v. United States Postal Service, 579 F.Supp. 1345, 1348 (D.D.C.1984) (quoting N. Van Dyne Advertising Agency, Inc. v. United States Postal Service, 371 F.Supp. 1373, 1375 (S.D.N.Y.1974)). More precisely, the Court's task in reviewing the Postal Service's findings is to determine whether, upon review of the record as a whole, the findings are supported by substantial evidence. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 490, 71 S.Ct. 456, 465, 95 L.Ed. 456 (1951).

"Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. of New York v. National Labor Relations Board, 305 U.S. 197, 229 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938).... This is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence. National Labor Relations Board v. Nevada Consolidated Copper Corp., 316 U.S. 105, 106 62 S.Ct. 960, 961, 86 L.Ed. 1305 (1942).

Consolo v. Federal Maritime Commission, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966).

Plaintiffs maintain that there is not substantial evidence in the record to support the Postal Service's conclusion that plaintiffs' postcard solicitations would lead the ordinary person to believe that he or she would be receiving a book primarily about his or her own family name and genealogy and, therefore, contained fraudulent misrepresentations.⁴ The Court disagrees with plaintiffs.

Whether representations in advertisements are fraudulent is determined "in the light of the effect advertisements would most probably produce on ordinary minds." Donaldson v. Read Magazine, 333 U.S. 178, 189, 68 S.Ct. 591, 597, 92 L.Ed. 628 (1948). Moreover, "advertisements as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because advertisements are composed or purposefully printed in such way as to mislead." Id. at 188-89, 68 S.Ct. at 596-97.

The Court's review of the postcard solicitations, perhaps the most telling evidence in this case, along with the testimony of the three consumer witnesses called by the Postal Service refutes plaintiffs' contention that the ordinary person receiving a postcard solicitation from plaintiffs would not believe that he or she was being invited to purchase a book principally about his or her family name and ancestry. Mr. Peter Greenhill, when asked if The Greenhill Family Album was what he thought it would be, responded that it was not, and that "he was led to believe, by the way the solicitation read, that it was going to trace for him his family ancestry."⁵ The other two consumer witnesses similarly testified that the books did not measure up to their expectations. Mr. John Devney testified that he expected the book to contain a full genealogical workup of the Devney family,⁶ and Mr. John R. Malloy testified that "I was anticipating something more in the Malloy line and I feel I was deceived."⁷ In addition, Mr. Malloy testified that "I got a book that, I think, to me was made for just anyone and it's just a form book that could be used for any particular type of name or individual."⁸ Accordingly, the Court concludes that the ALJ's findings of fact and conclusions of law, which were adopted by the Judicial Officer, are supported by substantial evidence in the record, and the Court will decline plaintiffs' request to set aside those findings of fact and conclusions of law.

THE POSTAL SERVICE DID NOT EXCEED ITS JURISDICTION IN ISSUING PARAGRAPH 8 OF THE CEASE AND DESIST ORDER, AND THAT ORDER IS REASONABLY TAILORED TO PREVENTING PLAINTIFFS FROM ENGAGING IN SIMILAR MISCONDUCT IN THE FUTURE.

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