M.K.S. Enterprises, Inc. v. United States Postal Service

459 F. Supp. 1180, 1978 U.S. Dist. LEXIS 16441
CourtDistrict Court, E.D. New York
DecidedJuly 21, 1978
DocketNo. 77 C 1448
StatusPublished

This text of 459 F. Supp. 1180 (M.K.S. Enterprises, Inc. v. United States Postal Service) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
M.K.S. Enterprises, Inc. v. United States Postal Service, 459 F. Supp. 1180, 1978 U.S. Dist. LEXIS 16441 (E.D.N.Y. 1978).

Opinion

MEMORANDUM AND ORDER

NEAHER, District Judge.

This is an action brought to enjoin defendants from enforcing a “mail stop” order issued following an administrative determination that plaintiff was engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations, in violation [1181]*1181of 39 U.S.C. § 3005(a). Plaintiff now moves for summary judgment in its favor, pursuant to Rule 56, F.R.Civ.P., contending that the Postal Service determination is not supported by substantial evidence in the administrative record and that it is now as a matter of law entitled to a judgment permanently enjoining enforcement of the mail stop order. The parties agree that there is no issue as to any material fact.1

Plaintiff M.K.S. Enterprises, Inc. (“M.K. S.”) is the manufacturer of Growing Glory Lotion (“Growing Glory”) and Pro-Vitamin B 5 d-panthenol Lotion (“Pro-B-5”), two hair care preparations which it advertises in periodicals of general circulation and markets through the mails. The products are of identical composition and consist of perfume, germicidal agents, a coloring agent, a solubalizing agent, and two “active” ingredients, Wilson WSP-X250 protein (a commercially produced derived protein of relatively small molecular weight and size), and the vitamin d-panthenol (the alcohol analog of pantothenic acid, vitamin B5).

On January 14, 1977, the Postal Service filed an administrative complaint charging that plaintiff in its advertising had made materially false representations about its products Pro-B-5 and Growing Glory. Specifically, the Postal Service alleged that the advertisements falsely represent that Pro-B-5 and Growing Glory if correctly applied will (1) “cause the user to have thicker, stronger, and longer hair”; (2) cause “the hair to grow longer and become stronger because [the product] is absorbed into the individual hair strands and permanently affects their structure”; (3) “produce the promised results within one week”; (4) “repair hair damaged by ‘chemicals, brushing, teasing, bleaching . . . ’ and heal split ends”; and (5) “cause the user to have thick, long hair such as that of the model pictured in the advertisement^].” See USPS Complaint, Docket No. 5/121 (filed 1/14/77). ¶¶ 3-4. Plaintiff in its answer conceded that the advertisements in question had been published at its direction, but denied all other allegations of the complaint.

On March 1, 1977, an evidentiary hearing was conducted before an administrative law judge who, on April 20, 1977, rendered an initial decision in favor of the Postal Service. The administrative law judge concluded that plaintiff’s advertisements together make all of the representations alleged in the complaint and make materially false representations that Pro-B-5 and Growing Glory will (1) cause the user’s hair to grow longer; (2) heal split ends; and (3) cause the user to have long hair like that of the model pictured in the advertisements. He did, however, find that there was proof “that the products will help to bring split ends together,” Init.Dec. (4/20/77) at 11, and that there was in the record

“substantial evidence that the products will cause the user to have thicker and stronger hair; that it will permanently affect the structure of the hair; that the products will produce thickening and strengthening of the hair within one week; and that they will repair hair damaged by chemicals, brushing, teasing and bleaching.” Id. at 12.2

[1182]*1182■ On appeal, the initial decision was affirmed, with slight modification, by a Postal Service judicial officer. Specifically, the judicial officer affirmed all but one of the findings of the initial decision, reversing only the determination that the Pro-B-5 advertisement (in contrast to that for Growing Glory) represents that that product will “heal” split ends. Postal Service Decision (6/21/77). Accordingly, a mail stop order (United States Postal Service Order No. 77-30 (6/21/77)) was issued, directing the postmasters of Westbury, N.Y. and New York, N.Y. to withhold delivery to plaintiff of mail relating to sales of ProB-5 and Growing Glory and to return all such mail to the senders, and to stop payment of postal money orders payable to plaintiff for purchases of these products. In order to afford plaintiff an opportunity to seek judicial review, the Postal Service on June 24, 1977, temporarily stayed so much of the stop order as required return of mail to senders and advice to remitters of postal money orders concerning refunds.

On July 13,1977, this court granted plaintiff’s application for an order temporarily restraining the enforcement of the Postal Service mail stop order, and directed defendants to show cause why a preliminary injunction should not issue. After hearing counsel for the parties, the court on August 3, 1977, denied defendants’ motion for summary judgment and granted plaintiff’s application for a preliminary injunction. Defendants originally sought to appeal from so much of this order as granted preliminary injunctive relief; their appeal was, however, withdrawn by stipulation in November 1977.

Title 39 U.S.C. § 3005(a) authorizes the Postal Service to issue mail stop orders .“[ujpon evidence satisfactory to [it] that any person is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations . . . .” The scope of this court’s power to review such decisions of the Postal Service is governed by 5 U.S.C. § 705, and is confined “to determining whether there is, considering the record as a whole, substantial evidence to support [the Judicial Officer’s] findings of fact, and whether he has committed errors of law.” Baslee Products Corp. v. United States Postal Service, 356 F.Supp. 841, 844 (D.N.J.1973). See Vibra Brush Corp. v. Schaffer, 152 F.Supp. 461, 463-64 (S.D.N.Y. 1957), order vacated on other grounds, 256 F.2d 681 (2 Cir. 1958). Indeed, at least one court has formulated the standard of judicial review in terms recalling the test formulated by the Supreme Court nearly a half-century prior to the adoption of the Administrative Procedure Act, holding that “[t]he 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.” N. Van Dyne Advertising Agency, Inc. v. United States Postal Service, 371 F.Supp. 1373, 1375 (S.D.N.Y.1974) (citing Public Clearing House v. Coyne, 194 U.S. 497, 509, 24 S.Ct. 789, 48 L.Ed. 1092 (1904)), followed in Unique Ideas, Inc. v. United [1183]*1183States Postal Service, 416 F.Supp. 1142, 1144 (S.D.N.Y.1976). See Vibra Brush Corp. v. Schaffer, supra, 152 F.Supp. at 463-64; see also Bates & Guild Co. v. Payne, 194 U.S. 106, 24 S.Ct. 595, 48 L.Ed.

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Bluebook (online)
459 F. Supp. 1180, 1978 U.S. Dist. LEXIS 16441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mks-enterprises-inc-v-united-states-postal-service-nyed-1978.