II

Calendar No. 191

106TH CONGRESS

1ST SESSION S. 335

[Report No. 106–102]

To amend chapter 30 of title 39, United States Code, to provide for the

nonmailability of certain deceptive matter relating to games of chance,

administrative procedures, orders, and civil penalties relating to such

matter, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 3, 1999

Ms. COLLINS (for herself, Mr. COCHRAN, Mr. LEVIN, Mr. DURBIN, Mr.

BURNS, MR. AKAKA, Mr. CAMPBELL, Mr. STEVENS, Mr. JEFFORDS, Mr.

EDWARDS, Mr. BIDEN, Ms. MIKULSKI, Mrs. LINCOLN, Mr. ENZI, Mrs.

MURRAY, Mr. CLELAND, Mr. LIEBERMAN, Mr. KOHL, Mr. CHAFEE, Mr.

SESSIONS, Mr. JOHNSON, Mr. THURMOND, Mr. HELMS, Mr. ROBB, Mr.

SPECTER, Mr. GRAHAM, Mr. DODD, Mr. ROCKEFELLER, Mr. BRYAN, Mr.

HATCH, Mr. ROTH, Mr. THOMPSON, Mr. REID, and Mr. SARBANES) introduced the following bill; which was read twice and referred to the Committee on Governmental Affairs

JULY 1, 1999

Reported by Mr. THOMPSON, with an amendment and an amendment to the

title

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To amend chapter 30 of title 39, United States Code, to

provide for the nonmailability of certain deceptive matter

relating to games of chance, administrative procedures,
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orders, and civil penalties relating to such matter, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Deceptive Mail Preven5 tion and Enforcement Act’’.

6 SEC. 2. RESTRICTIONS ON MAILINGS USING INFERENCES

7 TO THE UNITED STATES GOVERNMENT.

8 Section 3001 of title 39, United States Code, is

9 amended—

10 (1) in subsection (h) in the first sentence—

11 (A) by inserting after ‘‘service; and con12 tains’’ the following: ‘‘any reference to the Post13 master General of the United States or a cita14 tion to Federal statute,’’;

15 (B) by striking ‘‘connection, approval or

16 endorsement’’ and inserting ‘‘connection, ap17 proval, or endorsement, or that such matter is

18 afforded any special protections or status by the

19 Federal Government’’;

20 (C) in paragraph (2)—

21 (i) in subparagraph (A) by striking

22 ‘‘and’’ at the end;

23 (ii) in subparagraph (B) by striking

24 ‘‘or’’ at the end and inserting ‘‘and’’; and
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1 (iii) by inserting after subparagraph

2 (B) the following:

3 ‘‘(C) does not contain any statement that

4 implies that Federal Government benefits or

5 services will be affected by any purchase, non6 purchase, response, or non-response to such

7 matter; or’’;

8 (2) in subsection (i) in the first sentence—

9 (A) by inserting after ‘‘service; and con10 tains’’ the following: ‘‘any reference to the Post11 master General of the United States or a cita12 tion to Federal statute,’’;

13 (B) by striking ‘‘connection, approval or

14 endorsement’’ and inserting ‘‘connection, ap15 proval, or endorsement, or that such matter is

16 afforded any special protections or status by the

17 Federal Government’’; and

18 (C) in paragraph (2)—

19 (i) in subparagraph (A) by striking

20 ‘‘and’’ at the end;

21 (ii) in subparagraph (B) by striking

22 ‘‘or’’ at the end and inserting ‘‘and’’; and

23 (iii) by inserting after subparagraph

24 (B) the following:
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1 ‘‘(C) does not contain any statement that

2 implies that Federal Government benefits or

3 services will be affected by any purchase, non4 purchase, response, or non-response to such

5 matter; or’’;

6 (3) by redesignating subsections (j) and (k) as

7 subsections (m) and (n), respectively; and

8 (4) by inserting after subsection (i) the fol9 lowing:

10 ‘‘(j)(1) Matter otherwise legally acceptable in the

11 mails described under paragraph (2)—

12 ‘‘(A) is nonmailable matter;

13 ‘‘(B) shall not be carried or delivered by mail;

14 and

15 ‘‘(C) shall be disposed of as the Postal Service

16 directs.

17 ‘‘(2) Matter that is nonmailable matter referred to

18 under paragraph (1) is any matter that—

19 ‘‘(A) constitutes a solicitation for the purchase

20 of any product that—

21 ‘‘(i) is produced by the United States Gov22 ernment; and

23 ‘‘(ii) may be obtained without cost from

24 the United States Government; and
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1 ‘‘(B) does not contain a statement giving notice

2 of the information under subparagraph (A) (i) and

3 (ii).

4 ‘‘(3) The statement under paragraph (2)(B) shall be

5 clearly and prominently displayed in conspicuous and leg6 ible type in such size and manner as the Postal Service

7 shall prescribe by regulation.’’.

8 SEC. 3. RESTRICTIONS ON SWEEPSTAKES AND DECEPTIVE

9 MAILINGS.

10 Section 3001 of title 39, United States Code, is

11 amended by inserting after subsection (j) (as added by sec12 tion 2(4) of this Act) the following:

13 ‘‘(k)(1) Matter otherwise legally acceptable in the

14 mails that is nonmailable matter described under para15 graph (2) shall not be carried or delivered by mail and

16 may be disposed of as the Postal Service directs.

17 ‘‘(2) Matter that is nonmailable matter referred to

18 under paragraph (2) is any matter that—

19 ‘‘(A) relates to a sweepstakes, prize promotion,

20 or award; and

21 ‘‘(B)(i) does not contain a statement in the

22 mailing, including any rules or order form, that no

23 purchase is necessary to enter such sweepstakes,

24 prize promotion, or award;
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1 ‘‘(ii) indicates that individuals not purchasing

2 products may be disqualified from receiving future

3 mailings;

4 ‘‘(iii) requires that an entry be accompanied by

5 a payment for a product ordered;

6 ‘‘(iv) suggests that the odds of winning will be

7 increased by making a purchase;

8 ‘‘(v) represents that an individual is a winner

9 unless that individual has won a prize;

10 ‘‘(vi) does not state all terms and conditions of

11 a sweepstakes promotion, including the rules and

12 entry procedures for the sweepstakes, in language

13 that is easy to find, read, and understand;

14 ‘‘(vii) does not clearly and conspicuously dis15 close the name of the person mailing such matter

16 and the principal place of business of such person;

17 ‘‘(viii) contains any statement that contradicts

18 or is inconsistent with contest rules, including any

19 statement qualifying, limiting, or explaining such

20 rules in a manner inconsistent with such rules;

21 ‘‘(ix) does not contain contest rules that clearly

22 state the odds of winning all prizes, the quantity, es23 timated retail value, and nature of all prizes, and

24 the schedule of any payments made over time;
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1 ‘‘(x) suggests or requires that the purchase of

2 a product will allow an entry to receive priority, or

3 to be eligible to receive additional prizes or special

4 treatment for future contests;

5 ‘‘(xi) does not clearly and completely disclose

6 any fees, charges, and conditions to be met to re7 ceive the prize in any promotional mailing awarding

8 free prizes or awards;

9 ‘‘(xii) if any facsimile check is included, does

10 not contain a statement that such checks are not ne11 gotiable instruments and have no cash value; or

12 ‘‘(xiii) does not meet any other requirement the

13 Postal Service shall prescribe by regulation.

14 ‘‘(3) Any statement, notice, or disclaimer referred to

15 under paragraph (2) shall be clearly and prominently dis16 played in conspicuous and legible type in such size and

17 manner as the Postal Service shall prescribe by regula18 tions.

19 ‘‘(4) In the enforcement of paragraph (2), the Postal

20 Service shall consider the materials included in the mailing

21 and on the material and language visible through the enve22 lope.

23 ‘‘(5)(A) Any person who uses the mails for any mat24 ter that contains sweepstakes entry materials shall adopt

25 reasonable practices and procedures to prevent the mailing
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1 of such materials to any person at any address who sub2 mits a written request to the mailer of such materials that

3 such materials should not be mailed to such person at such

4 address.

5 ‘‘(B) Any person who mails such solicitation mate6 rials shall maintain or cause to be maintained a record

7 of all such requests. The records shall be maintained in

8 a form to permit the suppression of such name at such

9 address for a 5-year period beginning on the date the writ10 ten request under subparagraph (A) is submitted.’’.

11 SEC. 4. POSTAL SERVICE ORDERS TO PROHIBIT DECEPTIVE

12 MAILINGS.

13 Section 3005(a) of title 39, United States Code, is

14 amended—

15 (1) by striking ‘‘or’’ after ‘‘(h),’’ both places it

16 appears; and

17 (2) by inserting ‘‘, (j), (k), or (l)’’ after ‘‘(i)’’

18 in both such places.

19 SEC. 5. TEMPORARY RESTRAINING ORDER FOR DECEPTIVE

20 MAILINGS.

21 Section 3007 of title 39, United States Code, is

22 amended—

23 (1) by redesignating subsection (b) as sub24 section (c); and
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1 (2) by striking subsection (a) and inserting the

2 following:

3 ‘‘(a)(1) In preparation for or during the pendency of

4 proceedings under sections 3005 and 3006, the Postal

5 Service, in accordance with section 409(d), may apply to

6 the district court in any district in which mail is sent or

7 received as part of the alleged scheme, device, lottery, or

8 gift enterprise or in any district in which the defendant

9 is found, for a temporary restraining order and prelimi10 nary injunction under rule 65 of the Federal Rules of Civil

11 Procedure.

12 ‘‘(2) Upon a showing of probable cause and without

13 any further showing, the court shall enter an order which

14 shall—

15 ‘‘(A) remain in effect during pendency of the

16 statutory proceedings, any judicial review of such

17 proceedings, or any action to enforce orders issued

18 under the proceedings; and

19 ‘‘(B) direct the detention by the postmaster, in

20 any and all districts, of the defendant’s incoming

21 mail and outgoing mail, in furtherance of the

22 scheme which is in the postmaster’s custody for dis23 patch or delivery.

24 ‘‘(3) Mail detained under paragraph (2) shall—
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1 ‘‘(A) be made available at the post office of

2 mailing or delivery for examination by the defendant

3 in the presence of a postal employee; and

4 ‘‘(B) be delivered as addressed if such mail is

5 clearly not connected with the alleged unlawful activ6 ity.

7 ‘‘(4) No finding of the defendant’s intent to make a

8 false representation or to conduct a lottery is required to

9 support the issuance of an order under this section.

10 ‘‘(b) If any order is issued under subsection (a) and

11 the proceedings under section 3005 or 3006 are concluded

12 with the issuance of an order under that section, any judi13 cial review of the matter shall be in the district in which

14 the order under subsection (a) was issued.’’.

15 SEC. 6. CIVIL PENALTIES.

16 Section 3012 of title 39, United States Code, is

17 amended—

18 (1) in subsection (a) by striking ‘‘$10,000 for

19 each day that such person engages in conduct de20 scribed by paragraph (1), (2), or (3) of this sub21 section.’’ and inserting ‘‘twice the amount of the

22 civil penalty under subsection (b)(2) for the applica23 ble pieces mailed.’’;

24 (2) by redesignating subsections (b), (c), and

25 (d), as subsections (c), (d), and (e), respectively; and
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1 (3) by inserting after subsection (a) the fol2 lowing:

3 ‘‘(b)(1) Any person who, through use of the mail,

4 sends any matter which is nonmailable under sections

5 3001 (a) through (l), 3005(a), 3014, or 3015 of this title,

6 shall be liable to the United States for a civil penalty in

7 accordance with regulations the Postal Service shall pre8 scribe.

9 ‘‘(2) The civil penalty under this subsection shall not

10 exceed $50,000 for each mailing of less than 50,000

11 pieces; $100,000 for each mailing of 50,000 to 100,000

12 pieces; with an additional $10,000 for each additional

13 10,000 pieces above 100,000, not to exceed $2,000,000.’’;

14 (4) in subsection (c)(1) and (2), as redesig15 nated, by inserting after ‘‘of subsection (a)’’ the fol16 lowing: ‘‘or (b),’’; and

17 (5) in subsection (d), as redesignated, by strik18 ing ‘‘Treasury of the United States’’ and inserting

19 ‘‘Postal Service Fund established by section 2003’’.

20 SEC. 7. ADDITIONAL AUTHORITY FOR THE POSTAL INSPEC21 TION SERVICE.

22 (a) IN GENERAL.—Chapter 30 of title 39, United

23 States Code, is amended by adding at the end the fol24 lowing:
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1 ‘‘§ 3016. Administrative subpoenas

2 ‘‘(a) AUTHORIZATION OF USE OF SUBPOENAS BY

3 POSTMASTER GENERAL.—In any investigation conducted

4 under this chapter, the Postmaster General may require

5 by subpoena the production of any records (including

6 books, papers, documents, and other tangible things which

7 constitute or contain evidence) which the Postmaster Gen8 eral finds relevant or material to the investigation.

9 ‘‘(b) SERVICE.—

10 ‘‘(1) SERVICE WITHIN THE UNITED STATES.—

11 A subpoena issued under this section may be served

12 by a person designated under section 3061 of title

13 18 at any place within the territorial jurisdiction of

14 any court of the United States.

15 ‘‘(2) FOREIGN SERVICE.—Any such subpoena

16 may be served upon any person who is not to be

17 found within the territorial jurisdiction of any court

18 of the United States, in such manner as the Federal

19 Rules of Civil Procedure prescribe for service in a

20 foreign country. To the extent that the courts of the

21 United States may assert jurisdiction over such per22 son consistent with due process, the United States

23 District Court for the District of Columbia shall

24 have the same jurisdiction to take any action re25 specting compliance with this section by such person
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1 that such court would have if such person were per2 sonally within the jurisdiction of such court.

3 ‘‘(3) SERVICE ON BUSINESS PERSONS.—Service

4 of any such subpoena may be made by a Postal In5 spector upon a partnership, corporation, association,

6 or other legal entity by—

7 ‘‘(A) delivering a duly executed copy there8 of to any partner, executive officer, managing

9 agent, or general agent thereof, or to any agent

10 thereof authorized by appointment or by law to

11 receive service of process on behalf of such

12 partnership, corporation, association, or entity;

13 ‘‘(B) delivering a duly executed copy there14 of to the principal office or place of business of

15 the partnership, corporation, association, or en16 tity; or

17 ‘‘(C) depositing such copy in the United

18 States mails, by registered or certified mail, re19 turn receipt requested, duly addressed to such

20 partnership, corporation, association, or entity

21 at its principal office or place of business.

22 ‘‘(4) SERVICE ON NATURAL PERSONS.—Service

23 of any subpoena may be made upon any natural per24 son by—
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1 ‘‘(A) delivering a duly executed copy to the

2 person to be served; or

3 ‘‘(B) depositing such copy in the United

4 States mails by registered or certified mail, re5 turn receipt requested, duly addressed to such

6 person at his residence or principal office or

7 place of business.

8 ‘‘(5) VERIFIED RETURN.—A verified return by

9 the individual serving any such subpoena setting

10 forth the matter of such service shall be proof of

11 such service. In the case of service by registered or

12 certified mail, such return shall be accompanied by

13 the return post office receipt of delivery of such sub14 poena.

15 ‘‘(c) ENFORCEMENT.—

16 ‘‘(1) IN GENERAL.—Whenever any person, part17 nership, corporation, association, or entity fails to

18 comply with any subpoena duly served upon him, the

19 Postmaster General may request that the Attorney

20 General seek enforcement of the subpoena in the dis21 trict court of the United States for any judicial dis22 trict in which such person resides, is found, or

23 transacts business, and serve upon such person a pe24 tition for an order of such court for the enforcement

25 of this section.
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1 ‘‘(2) JURISDICTION.—Whenever any petition is

2 filed in any district court of the United States under

3 this section, such court shall have jurisdiction to

4 hear and determine the matter so presented, and to

5 enter such order or orders as may be required to

6 carry into effect the provisions of this section. Any

7 final order entered shall be subject to appeal under

8 section 1291 of title 28. Any disobedience of any

9 final order entered under this section by any court

10 shall be punished as contempt.

11 ‘‘(d) DISCLOSURE.—Any documentary material pro12 vided pursuant to any subpoena issued under this section

13 shall be exempt from disclosure under section 552 of title

14 5.’’.

15 (b) REGULATIONS.—Not later than 180 days after

16 the date of enactment of this section, the Postal Service

17 shall promulgate regulations setting out the procedures

18 the Postal Service will use to implement this subsection.

19 (c) TECHNICAL AND CONFORMING AMENDMENT.—

20 The table of sections for chapter 30 of title 39, United

21 States Code, is amended by adding at the end the fol22 lowing:

‘‘3016. Administrative subpoenas.’’.

23 SEC. 8. STATE LAW NOT PREEMPTED.

24 Nothing in this Act shall be construed to preempt any

25 provision of State or local law.
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1 SEC. 9. EFFECTIVE DATE.

2 This Act shall take effect 60 days after the date of

3 enactment of this Act.

4 SECTION 1. SHORT TITLE.

5 This Act may be cited as the ‘‘Deceptive Mail Preven6 tion and Enforcement Act’’.

7 SEC. 2. RESTRICTIONS ON MAILINGS USING MISLEADING

8 REFERENCES TO THE UNITED STATES GOV9 ERNMENT.

10 Section 3001 of title 39, United States Code, is

11 amended—

12 (1) in subsection (h)—

13 (A) in the first sentence by striking ‘‘con14 tains a seal, insignia, trade or brand name, or

15 any other term or symbol that reasonably could

16 be interpreted or construed as implying any

17 Federal Government connection, approval or en18 dorsement’’ and inserting the following: ‘‘which

19 reasonably could be interpreted or construed as

20 implying any Federal Government connection,

21 approval, or endorsement through the use of a

22 seal, insignia, reference to the Postmaster Gen23 eral, citation to a Federal statute, name of a

24 Federal agency, department, commission, or pro25 gram, trade or brand name, or any other term

26 or symbol; or contains any reference to the Post-
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1 master General or a citation to a Federal statute

2 that misrepresents either the identity of the mail3 er or the protection or status afforded such mat4 ter by the Federal Government’’; and

5 (B) in paragraph (2)—

6 (i) in subparagraph (A) by striking

7 ‘‘and’’ at the end;

8 (ii) in subparagraph (B) by striking

9 ‘‘or’’ at the end and inserting ‘‘and’’; and

10 (iii) by inserting after subparagraph

11 (B) the following:

12 ‘‘(C) does not contain a false representation

13 implying that Federal Government benefits or

14 services will be affected by any purchase or non15 purchase; or’’;

16 (2) in subsection (i) in the first sentence—

17 (A) in the first sentence by striking ‘‘con18 tains a seal, insignia, trade or brand name, or

19 any other term or symbol that reasonably could

20 be interpreted or construed as implying any

21 Federal Government connection, approval or en22 dorsement’’ and inserting the following: ‘‘which

23 reasonably could be interpreted or construed as

24 implying any Federal Government connection,

25 approval, or endorsement through the use of a
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1 seal, insignia, reference to the Postmaster Gen2 eral, citation to a Federal statute, name of a

3 Federal agency, department, commission, or pro4 gram, trade or brand name, or any other term

5 or symbol; or contains any reference to the Post6 master General or a citation to a Federal statute

7 that misrepresents either the identity of the mail8 er or the protection or status afforded such mat9 ter by the Federal Government’’; and

10 (B) in paragraph (2)—

11 (i) in subparagraph (A) by striking

12 ‘‘and’’ at the end;

13 (ii) in subparagraph (B) by striking

14 ‘‘or’’ at the end and inserting ‘‘and’’; and

15 (iii) by inserting after subparagraph

16 (B) the following:

17 ‘‘(C) does not contain a false representation

18 implying that Federal Government benefits or

19 services will be affected by any purchase or non20 purchase; or’’;

21 (3) by redesignating subsections (j) and (k) as

22 subsections (m) and (o), respectively; and

23 (4) by inserting after subsection (i) the following:

24 ‘‘(j)(1) Matter otherwise legally acceptable in the mails

25 described under paragraph (2)—
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1 ‘‘(A) is nonmailable matter;

2 ‘‘(B) shall not be carried or delivered by mail;

3 and

4 ‘‘(C) shall be disposed of as the Postal Service di5 rects.

6 ‘‘(2) Matter that is nonmailable matter referred to

7 under paragraph (1) is any matter that—

8 ‘‘(A) constitutes a solicitation for the purchase of

9 any product or service that—

10 ‘‘(i) is provided by the Federal Government;

11 and

12 ‘‘(ii) may be obtained without cost from the

13 Federal Government; and

14 ‘‘(B) does not contain a clear and conspicuous

15 statement giving notice of the information under sub16 paragraph (A) (i) and (ii).’’.

17 SEC. 3. RESTRICTIONS ON SWEEPSTAKES AND DECEPTIVE

18 MAILINGS.

19 Section 3001 of title 39, United States Code, is amend20 ed by inserting after subsection (j) (as added by section 2(4)

21 of this Act) the following:

22 ‘‘(k)(1) In this subsection, the term—

23 ‘‘(A) ‘facsimile check’ means any matter designed

24 to resemble a check or other negotiable instrument

25 that is not negotiable;
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1 ‘‘(B) ‘skill contest’ means a puzzle, game, com2 petition, or other contest in which—

3 ‘‘(i) a prize is awarded or offered;

4 ‘‘(ii) the outcome depends predominately on

5 the skill of the contestant; and

6 ‘‘(iii) a purchase, payment, or donation is

7 required or implied to be required to enter the

8 contest; and

9 ‘‘(C) ‘sweepstakes’ means a game of chance for

10 which no consideration is required to enter.

11 ‘‘(2) Matter otherwise legally acceptable in the mails

12 that is nonmailable matter described under paragraph (3)

13 shall not be carried or delivered by mail and may be dis14 posed of as the Postal Service directs.

15 ‘‘(3) Matter that is nonmailable matter referred to

16 under paragraph (2) is any matter (except matter as pro17 vided under paragraph (4)) that—

18 ‘‘(A)(i) includes entry materials for a sweep19 stakes or a promotion that purports to be a sweep20 stakes; and

21 ‘‘(ii)(I) does not contain a statement that dis22 closes in the mailing, in the rules, and on the order

23 or entry form, that no purchase is necessary to enter

24 such sweepstakes;
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1 ‘‘(II) does not contain a statement that discloses

2 in the mailing, in the rules, and on the order or entry

3 form, that a purchase will not improve an individ4 ual’s chances of winning with an entry from such

5 materials;

6 ‘‘(III) does not state all terms and conditions of

7 the sweepstakes promotion, including the rules and

8 entry procedures for the sweepstakes, in language that

9 is easy to find, read, and understand;

10 ‘‘(IV) does not disclose the sponsor or mailer of

11 such matter and the principal place of business or an

12 address at which the sponsor or mailer may be con13 tacted;

14 ‘‘(V) does not contain sweepstakes rules that

15 clearly state—

16 ‘‘(aa) the estimated odds of winning each

17 prize;

18 ‘‘(bb) the quantity, estimated retail value,

19 and nature of each prize; and

20 ‘‘(cc) the schedule of any payments made

21 over time;

22 ‘‘(VI) represents that individuals not purchasing

23 products may be disqualified from receiving future

24 sweepstakes mailings;
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1 ‘‘(VII) requires that a sweepstakes entry be ac2 companied by an order or payment for a product pre3 viously ordered;

4 ‘‘(VIII) represents that an individual is a win5 ner of a prize unless that individual has won a prize;

6 ‘‘(IX) contains a representation that contradicts,

7 or is inconsistent with sweepstakes rules or any other

8 disclosure required to be made under this subsection,

9 including any statement qualifying, limiting, or ex10 plaining the rules or disclosures in a manner incon11 sistent with such rules or disclosures; or

12 ‘‘(X) represents that the purchase of a product

13 will allow a sweepstakes entry to receive an advan14 tage in the winner selection process, to be eligible for

15 additional prizes in that sweepstakes, or for an entry

16 submitted in a future sweepstakes to have a better

17 chance of winning;

18 ‘‘(B)(i) includes entry materials for a skill con19 test or a promotion that purports to be a skill contest;

20 and

21 ‘‘(ii)(I) does not state all terms and conditions

22 of the skill contest, including the rules and entry pro23 cedures for the skill contest, in language that is easy

24 to find, read and understand;
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1 ‘‘(II) does not clearly and conspicuously disclose

2 the sponsor or mailer of the skill contest and the prin3 cipal place of business or an address at which the

4 sponsor or mailer may be contacted; or

5 ‘‘(III) does not contain skill contest rules that

6 clearly state, as applicable—

7 ‘‘(aa) the number of rounds or levels of the

8 contest and the cost to enter each round or level;

9 ‘‘(bb) that subsequent rounds or levels will

10 be more difficult to solve;

11 ‘‘(cc) the maximum cost to enter all rounds

12 or levels;

13 ‘‘(dd) the estimated number or percentage of

14 entrants who may correctly solve the skill contest

15 or the approximate number or percentage of en16 trants correctly solving the past 3 skill contests

17 conducted by the sponsor;

18 ‘‘(ee) the identity or description of the

19 qualifications of the judges if the contest is

20 judged by other than the sponsor;

21 ‘‘(ff) the method used in judging;

22 ‘‘(gg) the date by which the winner or win23 ners will be determined and the date or process

24 by which prizes will be awarded;
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1 ‘‘(hh) the quantity, estimated retail value,

2 and nature of each prize; and

3 ‘‘(ii) the schedule of any payments made

4 over time; or

5 ‘‘(C) includes any facsimile check that does not

6 contain a statement on the check itself that such check

7 is not a negotiable instrument and has no cash value.

8 ‘‘(4) Matter that appears in a magazine, newspaper,

9 or other periodical and contains materials that are a fac10 simile check, skill contest, or sweepstakes is exempt from

11 paragraph (3), if the matter—

12 ‘‘(A) is not directed to a named individual; or

13 ‘‘(B) does not include an opportunity to make a

14 payment or order a product or service.

15 ‘‘(5) Any statement, notice, or disclaimer required

16 under paragraph (3) shall be clearly and conspicuously dis17 played.

18 ‘‘(6) In the enforcement of paragraph (3), the Postal

19 Service shall consider all of the materials included in the

20 mailing and the material and language on and visible

21 through the envelope.

22 ‘‘(l)(1) Any person who uses the mails for any matter

23 to which subsection (h), (i), (j), or (k) applies shall adopt

24 reasonable practices and procedures to prevent the mailing

25 of such matter to any person who, personally or through
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1 a conservator, guardian, individual with power of

2 attorney—

3 ‘‘(A) submits to the mailer of such matter a writ4 ten request that such matter should not be mailed to

5 such person; or

6 ‘‘(B)(i) submits such a written request to the at7 torney general of the appropriate State (or any State

8 government officer who transmits the request to that

9 attorney general); and

10 ‘‘(ii) that attorney general transmits such re11 quest to the mailer.

12 ‘‘(2) Any person who mails matter to which subsection

13 (h), (i), (j), or (k) applies shall maintain or cause to be

14 maintained a record of all requests made under paragraph

15 (1). The records shall be maintained in a form to permit

16 the suppression of an applicable name at the applicable ad17 dress for a 5-year period beginning on the date the written

18 request under paragraph (1) is submitted to the mailer.’’.

19 SEC. 4. POSTAL SERVICE ORDERS TO PROHIBIT DECEPTIVE

20 MAILINGS.

21 Section 3005(a) of title 39, United States Code, is

22 amended—

23 (1) by striking ‘‘or’’ after ‘‘(h),’’ both places it

24 appears; and
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1 (2) by inserting ‘‘, (j), or (k)’’ after ‘‘(i)’’ in both

2 such places.

3 SEC. 5. TEMPORARY RESTRAINING ORDER FOR DECEPTIVE

4 MAILINGS.

5 Section 3007 of title 39, United States Code, is

6 amended—

7 (1) by redesignating subsection (b) as subsection

8 (c); and

9 (2) by striking subsection (a) and inserting the

10 following:

11 ‘‘(a)(1) In preparation for or during the pendency of

12 proceedings under sections 3005 and 3006, the Postal Serv13 ice, in accordance with section 409(d), may apply to the

14 district court in any district in which mail is sent or re15 ceived as part of the alleged scheme, device, lottery, gift en16 terprise, sweepstakes, skill contest, or facsimile check or in

17 any district in which the defendant is found, for a tem18 porary restraining order and preliminary injunction under

19 the procedural requirements of rule 65 of the Federal Rules

20 of Civil Procedure.

21 ‘‘(2)(A) Upon a proper showing, the court shall enter

22 an order which shall—

23 ‘‘(i) remain in effect during pendency of the stat24 utory proceedings, any judicial review of such pro-
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1 ceedings, or any action to enforce orders issued under

2 the proceedings; and

3 ‘‘(ii) direct the detention by the postmaster, in

4 any and all districts, of the defendant’s incoming

5 mail and outgoing mail, which is the subject of the

6 proceedings under sections 3005 and 3006.

7 ‘‘(B) A proper showing under this paragraph shall re8 quire proof of a likelihood of success on the merits of the

9 proceedings under section 3005 or 3006.

10 ‘‘(3) Mail detained under paragraph (2) shall—

11 ‘‘(A) be made available at the post office of mail12 ing or delivery for examination by the defendant in

13 the presence of a postal employee; and

14 ‘‘(B) be delivered as addressed if such mail is

15 clearly shown not to be the subject of proceedings

16 under sections 3005 and 3006.

17 ‘‘(4) No finding of the defendant’s intent to make a

18 false representation or to conduct a lottery is required to

19 support the issuance of an order under this section.

20 ‘‘(b) If any order is issued under subsection (a) and

21 the proceedings under section 3005 or 3006 are concluded

22 with the issuance of an order under that section, any judi23 cial review of the matter shall be in the district in which

24 the order under subsection (a) was issued.’’.
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1 SEC. 6. CIVIL PENALTIES AND COSTS.

2 Section 3012 of title 39, United States Code, is

3 amended—

4 (1) in subsection (a) by striking ‘‘$10,000 for

5 each day that such person engages in conduct de6 scribed by paragraph (1), (2), or (3) of this sub7 section.’’ and inserting ‘‘$50,000 for each mailing of

8 less than 50,000 pieces; $100,000 for each mailing of

9 50,000 to 100,000 pieces; with an additional $10,000

10 for each additional 10,000 pieces above 100,000, not

11 to exceed $2,000,000.’’;

12 (2) in subsection (b) (1) and (2) by inserting

13 after ‘‘of subsection (a)’’ the following: ‘‘, (c), or (d)’’;

14 (3) by redesignating subsections (c) and (d), as

15 subsections (e) and (f), respectively;

16 (4) by inserting after subsection (b) the fol17 lowing:

18 ‘‘(c)(1) In any proceeding in which the Postal Service

19 may issue an order under section 3005(a), the Postal Serv20 ice may in lieu of that order or as part of that order assess

21 civil penalties in an amount not to exceed $25,000 for each

22 mailing of less than 50,000 pieces; $50,000 for each mailing

23 of 50,000 to 100,000 pieces; with an additional $5,000 for

24 each additional 10,000 pieces above 100,000, not to exceed

25 $1,000,000.
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1 ‘‘(2) In any proceeding in which the Postal Service

2 assesses penalties under this subsection the Postal Service

3 shall determine the civil penalty taking into account the

4 nature, circumstances, extent, and gravity of the violation

5 or violations of section 3005(a), and with respect to the vio6 lator, the ability to pay the penalty, the effect of the penalty

7 on the ability of the violator to conduct lawful business,

8 any history of prior violations of such section, the degree

9 of culpability and other such matters as justice may re10 quire.

11 ‘‘(d) Any person who violates section 3001(l) shall be

12 liable to the United States for a civil penalty not to exceed

13 $10,000 for each mailing to an individual.’’; and

14 (5) by amending subsection (e) (as redesignated

15 by paragraph (3) of this section) to read as follows:

16 ‘‘(e)(1) From all civil penalties collected in the admin17 istrative and judicial enforcement of this chapter, an

18 amount equal to the administrative and judicial costs in19 curred by the Postal Service in such enforcement, not to

20 equal or exceed $500,000 in each year, shall be—

21 ‘‘(A) deposited in the Postal Service Fund estab22 lished under section 2003; and

23 ‘‘(B) available for payment of such costs.

24 ‘‘(2) Except for amounts deposited in the Postal Serv25 ice Fund under paragraph (1), all civil penalties collected
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1 in the administrative and judicial enforcement of this chap2 ter shall be deposited in the General Fund of the Treasury.’’.

3 SEC. 7. ADDITIONAL AUTHORITY FOR THE POSTAL INSPEC4 TION SERVICE.

5 (a) IN GENERAL.—Chapter 30 of title 39, United

6 States Code, is amended by adding at the end the following:

7 ‘‘§ 3016. Administrative subpoenas

8 ‘‘(a) AUTHORIZATION OF USE OF SUBPOENAS BY

9 POSTMASTER GENERAL.—In any investigation conducted

10 under this chapter, the Postmaster General may require by

11 subpoena the production of any records (including books,

12 papers, documents, and other tangible things which con13 stitute or contain evidence) which the Postmaster General

14 finds relevant or material to the investigation.

15 ‘‘(b) SERVICE.—

16 ‘‘(1) SERVICE WITHIN THE UNITED STATES.—A

17 subpoena issued under this section may be served by

18 a person designated under section 3061 of title 18 at

19 any place within the territorial jurisdiction of any

20 court of the United States.

21 ‘‘(2) FOREIGN SERVICE.—Any such subpoena

22 may be served upon any person who is not to be

23 found within the territorial jurisdiction of any court

24 of the United States, in such manner as the Federal

25 Rules of Civil Procedure prescribe for service in a for-
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1 eign country. To the extent that the courts of the

2 United States may assert jurisdiction over such per3 son consistent with due process, the United States

4 District Court for the District of Columbia shall have

5 the same jurisdiction to take any action respecting

6 compliance with this section by such person that such

7 court would have if such person were personally with8 in the jurisdiction of such court.

9 ‘‘(3) SERVICE ON BUSINESS PERSONS.—Service

10 of any such subpoena may be made by a Postal In11 spector upon a partnership, corporation, association,

12 or other legal entity by—

13 ‘‘(A) delivering a duly executed copy thereof

14 to any partner, executive officer, managing

15 agent, or general agent thereof, or to any agent

16 thereof authorized by appointment or by law to

17 receive service of process on behalf of such part18 nership, corporation, association, or entity;

19 ‘‘(B) delivering a duly executed copy thereof

20 to the principal office or place of business of the

21 partnership, corporation, association, or entity;

22 or

23 ‘‘(C) depositing such copy in the United

24 States mails, by registered or certified mail, re25 turn receipt requested, duly addressed to such
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1 partnership, corporation, association, or entity

2 at its principal office or place of business.

3 ‘‘(4) SERVICE ON NATURAL PERSONS.—Service of

4 any subpoena may be made upon any natural person

5 by—

6 ‘‘(A) delivering a duly executed copy to the

7 person to be served; or

8 ‘‘(B) depositing such copy in the United

9 States mails, by registered or certified mail, re10 turn receipt requested, duly addressed to such

11 person at his residence or principal office or

12 place of business.

13 ‘‘(5) VERIFIED RETURN.—A verified return by

14 the individual serving any such subpoena setting

15 forth the manner of such service shall be proof of such

16 service. In the case of service by registered or certified

17 mail, such return shall be accompanied by the return

18 post office receipt of delivery of such subpoena.

19 ‘‘(c) ENFORCEMENT.—

20 ‘‘(1) IN GENERAL.—Whenever any person, part21 nership, corporation, association, or entity fails to

22 comply with any subpoena duly served upon him, the

23 Postmaster General may request that the Attorney

24 General seek enforcement of the subpoena in the dis25 trict court of the United States for any judicial dis-
33

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1 trict in which such person resides, is found, or trans2 acts business, and serve upon such person a petition

3 for an order of such court for the enforcement of this

4 section.

5 ‘‘(2) JURISDICTION.—Whenever any petition is

6 filed in any district court of the United States under

7 this section, such court shall have jurisdiction to hear

8 and determine the matter so presented, and to enter

9 such order or orders as may be required to carry into

10 effect the provisions of this section. Any final order

11 entered shall be subject to appeal under section 1291

12 of title 28. Any disobedience of any final order en13 tered under this section by any court may be pun14 ished as contempt.

15 ‘‘(d) DISCLOSURE.—Any documentary material pro16 vided pursuant to any subpoena issued under this section

17 shall be exempt from disclosure under section 552 of title

18 5.’’.

19 (b) REGULATIONS.—Not later than 120 days after the

20 date of enactment of this section, the Postal Service shall

21 promulgate regulations setting out the procedures the Postal

22 Service will use to implement this section.

23 (c) TECHNICAL AND CONFORMING AMENDMENT.—The

24 table of sections for chapter 30 of title 39, United States

25 Code, is amended by adding at the end the following:

‘‘3016. Administrative subpoenas.’’.
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1 SEC. 8. REQUIREMENTS OF PROMOTERS OF SKILL CON2 TESTS OR SWEEPSTAKES MAILINGS.

3 (a) IN GENERAL.—Chapter 30 of title 39, United

4 States Code (as amended by section 7 of this Act) is amend5 ed by adding after section 3016 the following:

6 ‘‘§ 3017. Nonmailable skill contests or sweepstakes

7 matter; notification to prohibit mailings

8 ‘‘(a) DEFINITIONS.—In this section, the term—

9 ‘‘(1) ‘promoter’ means any person who originates

10 and causes to be mailed more than 500,000 mailings

11 in any calendar year of any skill contest or sweep12 stakes, except for mailings that do not include an op13 portunity to make a payment or order a product or

14 service;

15 ‘‘(2) ‘removal request’ means a written request

16 stating that an individual elects to have the name

17 and address of such individual excluded from any list

18 used by a promoter for mailing skill contests or

19 sweepstakes;

20 ‘‘(3) ‘skill contest’ means a puzzle, game, com21 petition, or other contest in which—

22 ‘‘(A) a prize is awarded or offered;

23 ‘‘(B the outcome depends predominately on

24 the skill of the contestant; and
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1 ‘‘(C) a purchase, payment, or donation is

2 required or implied to be required to enter the

3 contest; and

4 ‘‘(4) ‘sweepstakes’ means a game of chance for

5 which no consideration is required to enter.

6 ‘‘(b) NONMAILABLE MATTER.—

7 ‘‘(1) IN GENERAL.—Matter otherwise legally ac8 ceptable in the mails described under paragraph

9 (2)—

10 ‘‘(A) is nonmailable matter;

11 ‘‘(B) shall not be carried or delivered by

12 mail; and

13 ‘‘(C) shall be disposed of as the Postal Serv14 ice directs.

15 ‘‘(2) NONMAILABLE MATTER DESCRIBED.—Mat16 ter that is nonmailable matter referred to under para17 graph (1) is any matter that—

18 ‘‘(A) is a skill contest or sweepstakes; and

19 ‘‘(B)(i) is addressed to an individual who

20 made an election to be excluded from lists under

21 subsection (e); or

22 ‘‘(ii) does not comply with subsection (c)(1).

23 ‘‘(c) REQUIREMENTS OF PROMOTERS.—

24 ‘‘(1) NOTICE TO INDIVIDUALS.—Any promoter

25 who mails a skill contest or sweepstakes shall provide
36

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1 with each mailing a clear and conspicuous statement

2 that—

3 ‘‘(A) includes the address and toll-free tele4 phone number of the notification system estab5 lished under paragraph (2); and

6 ‘‘(B) states how the notification system may

7 be used to prohibit the mailing of any skill con8 test or sweepstakes to such individual.

9 ‘‘(2) NOTIFICATION SYSTEM.—Any promoter that

10 mails a skill contest or sweepstakes shall participate

11 in the establishment and maintenance of a single no12 tification system that provides for any individual (or

13 other duly authorized person) to notify the system of

14 the individual’s election to have the name and address

15 of the individual excluded from all lists of names and

16 addresses used by all promoters to mail any skill con17 test or sweepstakes.

18 ‘‘(d) NOTIFICATION SYSTEM.—If an individual con19 tacts the notification system through use of the toll-free tele20 phone number provided under subsection (c)(1)(A), the sys21 tem shall—

22 ‘‘(1) inform the individual of the information de23 scribed under subsection (c)(1)(B); and

24 ‘‘(2) inform the individual that the election to

25 prohibit mailings of skill contests or sweepstakes to
37

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1 that individual shall take effect 45 business days after

2 receipt by the system of the signed removal request by

3 the individual.

4 ‘‘(e) ELECTION TO BE EXCLUDED FROM LISTS.—

5 ‘‘(1) IN GENERAL.—An individual may elect to

6 exclude the name and address of such individual from

7 all mailing lists used by promoters of skill contests or

8 sweepstakes by mailing a removal request to the noti9 fication system established under subsection (c).

10 ‘‘(2) RESPONSE AFTER MAILING REMOVAL RE11 QUEST TO THE NOTIFICATION SYSTEM.—Not later

12 than 45 business days after receipt of a removal re13 quest, all promoters who maintain lists containing

14 the individual’s name or address for purposes of mail15 ing skill contests or sweepstakes shall exclude such in16 dividual’s name and address from all such lists.

17 ‘‘(3) EFFECTIVENESS OF ELECTION.—An election

18 under paragraph (1) shall—

19 ‘‘(A) be effective with respect to every pro20 moter; and

21 ‘‘(B) remain in effect, unless an individual

22 notifies the system in writing that such

23 individual—

24 ‘‘(i) has changed the election; and
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1 ‘‘(ii) elects to receive skill contest or

2 sweepstakes mailings.

3 ‘‘(f) PROMOTER NONLIABILITY.—A promoter, or any

4 other person maintaining the notification system estab5 lished under this section, shall not be subject to civil liabil6 ity for the exclusion of an individual’s name or address

7 from any mailing list maintained by a promoter for mail8 ing skill contests or sweepstakes, if—

9 ‘‘(1) a removal request is received by the notifi10 cation system; and

11 ‘‘(2) the promoter or person maintaining the sys12 tem has a good faith belief that the request is from—

13 ‘‘(A) the individual whose name and ad14 dress is to be excluded; or

15 ‘‘(B) another duly authorized person.

16 ‘‘(g) PROHIBITION ON COMMERCIAL USE OF LISTS.—

17 ‘‘(1) IN GENERAL.—

18 ‘‘(A) PROHIBITION.—No person may pro19 vide any information (including the sale or rent20 al of any name or address) in a list described

21 under subparagraph (B) to another person for

22 commercial use.

23 ‘‘(B) LISTS.—A list referred to under sub24 paragraph (A) is any list of names and address25 es (or other related information) used, main-
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1 tained, or created by the system established

2 under this section.

3 ‘‘(2) CIVIL PENALTY.—Any person who violates

4 paragraph (1) shall be assessed a civil penalty by the

5 Postal Service not to exceed $2,000,000 per violation.

6 ‘‘(h) CIVIL PENALTIES.—

7 ‘‘(1) IN GENERAL.—Any promoter—

8 ‘‘(A) who recklessly mails nonmailable mat9 ter in violation of subsection (b) shall be liable

10 to the United States in an amount of $10,000

11 per violation for each mailing of nonmailable

12 matter; or

13 ‘‘(B) who fails to substantially comply with

14 the requirements of subsection (c)(2) shall be lia15 ble to the United States.

16 ‘‘(2) ENFORCEMENT.—The Postal Service shall

17 assess civil penalties under this section.’’.

18 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

19 The table of sections for chapter 30 of title 39, United States

20 Code, is amended by adding after the item relating to sec21 tion 3016 the following:

‘‘3017. Nonmailable skill contests or sweepstakes matter; notification to prohibit

mailings.’’.

22 (c) EFFECTIVE DATE.—This section shall take effect

23 1 year after the date of enactment of this Act.
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1 SEC. 9. STATE LAW NOT PREEMPTED.

2 (a) IN GENERAL.—Nothing in the provisions of this

3 Act (including the amendments made by this Act) or in

4 the regulations promulgated under such provisions shall be

5 construed to preempt any provision of State or local law

6 that imposes more restrictive requirements, regulations,

7 damages, costs, or penalties. No determination by the Postal

8 Service that any particular piece of mail or class of mail

9 is in compliance with such provisions of this Act shall be

10 construed to preempt any provision of State or local law.

11 (b) EFFECT ON STATE COURT PROCEEDINGS.—Noth12 ing contained in this section shall be construed to prohibit

13 an authorized State official from proceeding in State court

14 on the basis of an alleged violation of any general civil or

15 criminal statute of such State or any specific civil or crimi16 nal statute of such State.

17 SEC. 10. EFFECTIVE DATE.

18 Except as provided in section 8, this Act shall take

19 effect 120 days after the date of enactment of this Act.

Amend the title so as to read: ‘‘A bill to amend

chapter 30 of title 39, United States Code, to provide for

the nonmailability of certain deceptive matter relating to

sweepstakes, skill contests, facsimile checks, administrative procedures, orders, and civil penalties relating to

such matter, and for other purposes.’’.
Calendar No. 191

106TH CONGRESS

1ST SESSION S. 335

[Report No. 106–102]

A BILL

To amend chapter 30 of title 39, United States

poses.alties relating to such matter, and for other purministrative procedures, orders, and civil pendeceptive matter relating to games of chance, adCode, to provide for the nonmailability of certain

JULY 1, 1999

Reported with an amendment and an amendment to the

title