The opinion of the court was delivered by: WEINFELD
The plaintiff seeks a preliminary injunction to enjoin the Postmaster from enforcing a fraud order under which all mail, registered and unregistered, is returned to the sender marked 'Fraudulent' and postal money orders payable to plaintiff are returned to the remitter.
The case centers about an electrically operated mechanical brush called Vibra Brush which plaintiff advertised extensively, and which was sold through the mails. The brush was advertised as a new invention which 'Shows You How You May Save Your Hair and Grow Hair Again'. The Post Office Department filed a complaint which charged that the advertising claims were false and that the plaintiff was conducting a fraudulent scheme for obtaining moneys through the mails in violation of §§ 259 and 732 of Title 39 of the United States Code Annotated. After extensive hearings at which plaintiff was represented by counsel the hearing examiner sustained the charges. An administrative appeal by plaintiff failed and the fraud order was issued. The present action to enjoin enforcement of the order followed.
The Government cross moves for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A. dismissing the complaint on the ground that no genuine issue of fact exists and it is entitled to judgment as a matter of law. Its basic position is that the finding of the hearing examiner that plaintiff's representations with respect to the brush were false and fraudulent was based upon adequate and substantial evidence, that the hearing was fair and the administrative procedure proper, and hence such administrative findings cannot be disturbed by this Court. The Government concedes, conversely, if the administrative record is defective in any respect, plaintiff is entitled to relief as a matter of law. The parties are in agreement that there are no triable issues of fact and either one or the other is entitled to summary judgment as a matter of law.
The applicable principles of law are not in dispute. The power vested in the Postmaster General 'upon evidence satisfactory to him' to deny the use of the mails to those engaged in fraudulent claims
may not be interfered with by the courts unless the executive has exceeded his authority or is palpably wrong.
To sustain the issuance of a fraud order by the Postmaster two essential requisites must appear: (a) that the claims are unfounded;
and (b) intent to deceive.
And even though the court, as the original trier of the facts, might have reached a different conclusion, it may not substitute its own judgment if there is substantial evidence to support the findings of fact made by the Postmaster.
Thus the court's power to upset a finding by the Postmaster that the mails are being used in furtherance of a fraudulent scheme is restricted to those instances where there is no substantial evidence reasonably to support his conclusion.
Against the background of these principles we consider the plaintiff's contentions upon which it relies to enjoin enforcement of the fraud order.
The grounds of attack are both procedural and substantive. The plaintiff contends (1) there was no substantial evidence of fraud in fact; (2) there was no substantial evidence of an intent to deceive; (3) material error was committed in the refusal to permit testimony of an advertising expert as to the meaning of the advertisement.
The complaint, upon which the proceeding before the Post Office Department was initiated, was based upon a typical advertisement, the leading lines of which were prominently set forth in contrast to other portions thereof, and read 'AT LAST. NEW INVENTION SHOWS HOW YOU MAY SAVE YOUR HAIR AND GROW HAIR AGAIN.' The complaint charged:
'That by means of (the typical advertisement the plaintiff is) representing to the public in substance and effect:
'a. That for any user thereof, VIBRA BRUSH' * * * 'Shows You How You May SAVE YOUR HAIR and GROW HAIR AGAIN';
'b. That for any user of 'VIBRA BRUSH', '* * * if your roots still have lief in them, you CAN do something NOW about baldness, dandruff, and thinning and falling hair', i.e., the use of 'VIBRA BRUSH' as directed will prevent the occurrence of baldness for any user thereof;
'c. That 'Medical science recommends massage and brushing' to 'SAVE YOUR HAIR and GROW NEW HAIR AGAIN';
'd. That 'VIBRA BRUSH' will give any user thereof 'the proper amount of hair-saving massage and brushing' to 'SAVE YOUR HAIR and GROW HAIR AGAIN';
'e. That 'VIBRA BRUSH' will give any user thereof 'the proper amount of hair -saving massage and brushing' that 'Medical science recommends' to save hair and to grow new hair;
'f. That 'VIBRA BRUSH' does for you what no manual massage and brushing can do alone;
'g. That for any user thereof, 'VIBRA BRUSH' 'RELIEVES TENSION THAT MAY BE ...