United States v. Alpine Indust Inc ( 2003 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 United States v. Alpine Industries, et al. No. 01-5759
ELECTRONIC CITATION: 2003 FED App. 0449P (6th Cir.)File Name: 03a0449p.06 _________________
COUNSEL
UNITED STATES COURT OF APPEALS
ARGUED: J. Ronnie Greer, Greeneville, Tennessee, for
FOR THE SIXTH CIRCUIT Appellants. Peter R. Maier, UNITED STATES
_________________ DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellee. ON BRIEF: J. Ronnie Greer, Greeneville,
UNITED STATES OF AMERICA , X Tennessee, William A. Erhart, Gregory B. Davis, ERHART
Plaintiff-Appellee, - & ASSOCIATES, Anoka, Minnesota, for Appellants. Peter
- R. Maier, Douglas N. Letter, UNITED STATES
- No. 01-5759 DEPARTMENT OF JUSTICE, Washington, D.C., for
v. - Appellee.
>
, _________________
ALPINE INDUSTRIES, INC. and -
WILLIAM J. CONVERSE , - OPINION
Defendants-Appellants. - _________________
-
N BOGGS, Chief Judge. Alpine Industries, Inc. and William
Appeal from the United States District Court J. Converse, Alpine’s President and Chief Executive Officer,
for the Eastern District of Tennessee at Greeneville. (collectively referred to as Alpine) appeal a judgment against
No. 97-00509—Dennis H. Inman, Magistrate Judge. the company in an enforcement action brought by the
government for violating a Federal Trade Commission
Argued: December 4, 2002 Consent Order (the Consent Order). The Consent Order
forbade the company, an organization engaged in marketing
Decided and Filed: September 26, 2003* and distributing air-cleaning devices, from making product
claims without the support of competent and reliable
Before: BOGGS, Chief Judge; GUY, Circuit Judge; and scientific evidence. The case was bifurcated into a liability
EDMUNDS, District Judge.** phase, which was tried in front of a jury in the fall of 1999,
and a remedy phase, which was tried by the court in January
2001. In November 1999, the jury found that Alpine had
violated the Consent Order. In particular, the jury found that
Alpine had advertised that its air cleaning products removed
* over 60 separately titled but in many cases overlapping
This decision was originally issued as an “unpublished decision”
filed on September 26, 2003. On December 4, 2003, the court designated
the opinion as one recommended for full-text publication.
**
The Honorable Nancy G. Edmunds, United States District Judge for
the Eastern District of Michigan, sitting by designation.
1
No. 01-5759 United States v. Alpine Industries, et al. 3 4 United States v. Alpine Industries, et al. No. 01-5759
categories of indoor air pollutants,1 controlled ambient ozone Order. Finally, Alpine argues that the injunctive relief
levels, and produced various health benefits, without embodied in the Permanent Injunction issued by the district
competent and reliable scientific evidence to support these court, intended to prevent further representations by Alpine
claims. However, the jury also found that Alpine’s product regarding the efficacy of its air-cleaning machines without
claims regarding the ability of its air cleaning products to competent and reliable scientific evidence, does not
remove smoke, tobacco smoke, and cigarette smoke, were accurately reflect the jury’s verdict and that furthermore, the
supported by competent and reliable scientific evidence. The penalty imposed by the district court against Alpine is
district court’s final judgment against Alpine was entered in excessive. For the reasons that follow, we affirm the district
April 2001 and included, in addition to injunctive relief, an court’s judgment.
award of $1,490,000 in civil penalties.
I
Following the district court’s final judgment, Alpine filed
motions to amend the district court’s judgment, for JNOV, or In the early 1990's, the FTC conducted an investigation of
for a new trial. The district court denied these motions. claims made by Alpine in promoting, advertising, and selling
Alpine appeals the district court’s denials of its motions to its air-cleaning machines. The investigation concluded when
amend the judgment and for JNOV, arguing that the Alpine agreed to an FTC Consent Order, effective October 2,
government did not present sufficient evidence to support the 1995, which reads in relevant part:
jury’s findings. Alpine also appeals the district court’s denial
of its motion for a new trial, arguing that the jury’s verdict is For the purposes of this Order, the following definitions
internally inconsistent and that the special verdict form was shall apply:
worded in such a way as to place the burden of proof
improperly on Alpine instead of the government. Alpine A. The term “air cleaning product” shall mean any
additionally argues that it was entitled to seek judicial product, equipment, or appliance designed or advertised
reformation of the underlying Consent Order on the grounds to remove, treat, or reduce the level of any pollutant(s) in
of mutual mistake and that it was prejudiced by the district the air.
court’s exclusion of parol evidence surrounding the Consent
B. The terms “indoor air pollutant(s)” or “pollutant(s)”
shall mean one or more of the following: formaldehyde,
1 sulfur dioxide, ammonia, trichlorethylene, benzene,
Styrene, Benzene, Dust Mites, Bacteria, Allergens, Formaldehyde, chloroform, carbon tetrachloride, odors, nitrogen dioxide,
Dust, Pollens, M old S pores, Chemical Ga ses, Pa rticulates, M ildew,
Legio nella, Dry C leaning Chem icals, Skin Flakes, Dust Mite Fec es,
mold, mildew, bacteria, dust, cigarette smoke, pollen,
Yeast, Fungi, Gases, Chemical Fumes, Mold, Germs, Cleaning Product and hydrocarbons, or any other gaseous or particulate
Fumes, Dead Skin, M icrob iological Growth, Skin, H air, Chemicals, matter found in indoor air.
Dried-up Rat Urine, Microbiological Organisms, Dried-up Mouse Urine,
Streptoco ccus, Staphylococcus, Aspergillus Fungus, Salmonella, ...
Cockroach Eggs, Cat Dandruff, Asbestos, Rat Urine, Legionella, Solid
Particulate, Microorganisms, Microbials, Volatile Organic Chem icals,
Organic Ga ses, Cat Dander, Viruses, Dry Cleaning Fluids, Pieces of
Insects, Micro bes, Dirt, Da nder, E-co li, Gas Contaminants, Car Fu mes,
Candida Yeast, Disinfectant Fumes, Cockroach Pieces, Animal Dander,
Traffic Fum es, Smog, Cockro ach Feces, Pencillium, and Tub erculosis.
No. 01-5759 United States v. Alpine Industries, et al. 5 6 United States v. Alpine Industries, et al. No. 01-5759
I III
IT IS ORDERED that [Alpine] in connection with the IT IS FURTHER ORDERED that [Alpine] in connection
manufacturing, labelling, advertising, promotion, with the manufacturing, labelling, advertising,
offering for sale, sale, or distribution of any air cleaning promotion, offering for sale, sale, or distribution of any
product . . . do forthwith cease and desist from air cleaning product . . . do forthwith cease and desist
representing, in any manner, directly or by implication, from representing, in any manner, directly or by
implication, the efficacy, performance, or health-related
A. such product’s ability to eliminate, remove, clear, or benefit of any such product, unless, at the time of making
clean any indoor air pollutant from a user’s environment; such representation, respondents possess and rely upon
or competent and reliable evidence, which when appropriate
must be competent and reliable scientific evidence, that
B. such product’s ability to eliminate, remove, clear, or substantiates the representation.
clean any quantity of indoor air pollutants from a user’s ....
environment;
On December 30, 1997, the government initiated an action
II alleging violations of the Consent Order, requesting
IT IS FURTHER ORDERED that [Alpine] in connection injunctive relief, consumer redress, and civil penalties against
with the manufacturing, belling, advertising, promotion, Alpine. Alpine requested a jury trial, which the district court
offering for sale, sale, or distribution of any air cleaning granted with respect to the issue of liability for civil penalties.
product . . . do forthwith cease and desist from On November 1, 1999, after a fourteen-day trial, the jury
representing, in any manner, directly or by implication, filled out a special-verdict form containing over 900
that: questions. The jury found that in all cases but smoke, tobacco
smoke, and cigarette smoke, Alpine’s claims were not
A. The use of ozone is more effective in cleaning or supported by competent and reliable scientific evidence.
purifying indoor air than other air cleaning methods;
II
B. The product does not create harmful by-products; or
Directed Verdict / JNOV
C. When used as directed, the product prevents or
provides relief from any medical or health-related Alpine moved for a directed verdict at the conclusion of the
condition; government’s case in chief and again at the close of evidence,
and later moved for a judgment notwithstanding the verdict.
unless at the time of making such representation, We review the district court’s denial of Alpine’s motions for
respondents possess and rely upon competent and judgment as a matter of law (motions for a directed verdict)
reliable scientific evidence that substantiates the and renewed motion for judgment as a matter of law (motion
representation. for judgment notwithstanding the verdict) de novo. Moore v.
KUKA Welding Sys. & Robot Corp., 171 F.3d 1073, 1078
(6th Cir. 1999) (citing K & T Enters. v. Zurich Ins. Co., 97
F.3d 171, 175 (6th Cir. 1996) and Wehr v. Ryan’s Family
No. 01-5759 United States v. Alpine Industries, et al. 7 8 United States v. Alpine Industries, et al. No. 01-5759
Steak Houses, 49 F.3d 1150, 1152 (6th Cir. 1995)). In doing requirement, recognizing that the government was being
so, we use the same standard of review used by the district asked to prove a negative. The government’s lawyer stated
court. Phelps v. Yale Sec., 986 F.2d 1020, 1023 (6th Cir. that she understood the government’s burden as being met if
1993). In order to prevail, Alpine must demonstrate that “no expert testimony were offered for the proposition that such
reasonable juror could have found for the nonmoving party.” experts were unaware of scientific data supporting Alpine’s
Moore, 171 F.3d at 1078. In applying this standard, we claims (or, if testimony has been offered in support of Alpine,
cannot weigh the credibility of witnesses and cannot which explained that the information produced by Alpine
substitute our judgment for that of the jury. K & T Enters., 97 pursuant to the Consent Order in support of their claims was
F.3d at 175-76. Instead, we are to view the evidence in a light insufficient or incompetent). The court stated that it “was
most favorable to the government and give the government inclined to agree” with the government lawyer’s assessment
the benefit of all reasonable inferences. Ibid. and that upon receipt of such testimony, Alpine would be
expected to rebut the government’s proffer and the jury would
Alpine contends that the burden was on the government to determine whether or not Alpine had done so effectively.
establish a prima facie case and that the government did not Given that the Consent Order puts the onus on Alpine to
meet this initial burden, so that Alpine is entitled to a make available on request all information relied upon by
judgment as a matter of law, notwithstanding the jury’s Alpine in making representations regarding the efficacy of its
verdict. The government conceded in a pretrial hearing that air-cleaning devices, we agree that the government’s burden
it had the burden of proving at trial 1) that Alpine had made for making a prima facie case is satisfied if evidence was
claims or representations that fell within the terms of the offered at trial that the information provided pursuant to the
Consent Order, and 2) that Alpine did not possess and rely Consent Order was either insufficient or incompetant. The
upon competent and reliable scientific evidence at the time government certainly need not have proven that there was no
such claims or representations were made. Alpine takes issue competent or reliable basis upon which Alpine might have
with the second requirement in this appeal. Alpine contends rested its claim. If the experts knew of none and information
that the government did not present sufficient proof that received from Alpine was insufficient to provide such a basis
Alpine did not possess and rely upon competent and reliable or was deemed unreliable, it was up to Alpine to provide
scientific evidence at the time it made representations further information that would convince the jury.
regarding all of the indoor air pollutants listed on the jury
form (with the exception of smoke, cigarette smoke, and During the two-week long trial, the government produced
tobacco smoke), and regarding the health benefits bestowed experts in the fields of air pollution, ozone chemistry, and the
on users by the product. Alpine does not dispute the efficacy of air cleaners, all of whom testified that they were
sufficiency of the evidence presented by the government unaware of any competent and reliable evidence to support
regarding the product’s ability to maintain indoor ozone various claims made by Alpine. These experts also discussed
concentrations at a particular level. tests they had participated in, which further discredited
Alpine’s claims. Moreover, the FTC officer assigned to
Alpine, however, misconstrues the level of proof necessary Alpine’s case testified that the evidence submitted by Alpine
to establish a prima facie case under these circumstances. to the FTC in support of its claims regarding the efficacy of
During the hearing that led to the order establishing the its air-cleaning machines was evaluated by experts and
shifting burden of proof in this case, some explanation was deemed to be insufficient. In response, Alpine provided its
offered as to how the government would fulfill this own experts, who described in their testimony the various
No. 01-5759 United States v. Alpine Industries, et al. 9 10 United States v. Alpine Industries, et al. No. 01-5759
tests they had done on the air-cleaning machines, and the presented by the government in their prima facie case, but
evidence they had relied on in support of the claims made by rather to the consistency of the jury’s verdict.
Alpine.
Next, Alpine argues that the government did not address
In particular, Alpine points out that the government’s Alpine’s claims that its devices introduce ozone into the air,
experts focused on tests done on particles in tobacco smoke which kills microbes through ionization. However,
and states that there was no evidence presented regarding any government expert Eugene C. Cole testifed to the fact that
of the other particulates such as dust, animal dander, insect tests published by the American Industrial Hygiene
parts, and so on. On this basis, Alpine contends that a verdict Association demonstrated that exposure of a large variety of
must be directed in its favor with regard to all particulates and organisms, including microbes and fungi, to concentrations of
some microbe and allergen claims. However, the government gas-phase ozone at the same or at higher concentrations than
experts explained in their testimony that the results of these those claimed to be maintained by the Alpine air-cleaning
tests can be applied to other particulates, such as those at products, had an impact on some organisms but were not
issue in this case, since they are in the same size range as ultimately effective at removing any of them according to
those found in tobacco smoke.2 As it turns out, Alpine does industry standards.3 Furthermore, Cole testified that in his
not dispute this fact, but instead argues that because the expert opinion he was unaware of reliable scientific evidence
results garnered from the tests on tobacco smoke can be to support the claims made by Alpine with respect to the
extrapolated to all other particulates within the same size impact of ozone on microbes and fungi. This testimony is
range, including microbes, and because the jury found that sufficient evidence to support the jury’s findings of liability.
Alpine’s claims regarding the efficacy of its air-cleaning
devices with respect to tobacco smoke were supported by Alpine further contends that because none of the
reliable and competent scientific evidence, it is not possible government experts were medical doctors, toxicologists, or
for the evidence to support the jury’s findings against Alpine health officials, they were not qualified to opine on whether
on the other particulates and microbes in that size range. its air-cleaning machines provide medical and health-related
Although we will address this argument, it is not properly benefits and their testimony cannot, therefore, be considered
raised here, as it goes not to the sufficiency of the evidence sufficient evidence to support the jury’s finding of liability on
this question. This argument is unpersuasive. Alpine’s
experts and the government’s experts did not disagree on
which indoor pollutants cause health problems, the issue in
2 dispute between them was whether Alpine’s air-cleaning
For example, government expert R ichard Sextro noted in his
testimony that “we used environmental tobacco smoke, partly beca use it products were capable of removing the pollutants that cause
was representative of typical indoor particles, . . . if one looks at size health problems. Thus, the expertise needed under these
dependent remova l characteristics of any of the filters, those
characteristics will be the same whethe r . . . it’s a one micro meter particle
that’s environmental tobacco smoke or whether it’s a one micro meter dust 3
particle.” Government expert Richard Shaughnessy stated: “Tobacco Dr. Cole explained that within this “area of biocide efficacy or
smoke is, as I said, it is perfect dispersion, you know, looking at particles, effectiveness, the standard that’s been set for decades has been efficacy
to be looking at particle reduction within a space. It provides you [sic] the or effectiveness based upon achieving a three log reduction.” In sum,
range of particles that are of co ncern. . . . [I]t generates uniform dispersion although the tests did show that some organisms were killed, more than
and it is often used by investigators in the field to track the performance one in one thousand we re left alive, which is not co nsidered to be
of air cleaning d evices.” effective b y the indu stry.
No. 01-5759 United States v. Alpine Industries, et al. 11 12 United States v. Alpine Industries, et al. No. 01-5759
circumstances was not that of a medical doctor, toxicologist, jury’s separate finding that Alpine’s claim that “[t]he sensor
or health official, but rather an expert on the removal of in [its] air cleaning products maintains indoor ozone
indoor air pollutants. The jury simply determined that the concentrations at .05 parts per million or less” is not
government’s experts were more credible on this point and we supported by competent and reliable scientific evidence. It is
are compelled to defer to the jury’s judgment. K & T Enters., not unreasonable to assume that if the machine’s ability to
97 F.3d at 175-76. maintain a concentration of ozone is unsubstantiated, then its
ability to remove certain pollutants by way of a reaction with
Finally, Alpine contends that the government offered no ozone is also unsubstantiated.
proof that Alpine did not rely on competent and reliable
evidence for its claims with respect to its product’s ability to Second, we return to Dr. Weschler’s testimony. Although
remove certain chemical gases from indoor air: specifically Dr. Weschler did say that concentrations of ozone will
styrene, isoprene, d-limonene, and alpha-pinene. And generally react with compounds containing double bonds,
moreover, that Dr. Weschler’s testimony for the government such as the ones mentioned above, he particularly noted that
supported Alpine’s claims that hydrogen sulfide, 4- “it’s an important thing to remember when we speak about
ethenylcyclohaxene, 4-phenylcyclohaxene, double-bonded ozone reacting with compounds in the air because often you
volatile organic chemicals, odiferous chemicals, acrolein, might initially have one pollutant, and you’ll result [sic] in
body odor, indole, scatole, garlic odor, and thyocyanite could two pollutants.” In other words, rather than “cleaning” the
be reduced through the use of ozone. air, as suggested in Alpine’s literature, the ozone introduced
by Alpine’s air-cleaning devices may change a given
Dr. Weschler did in fact testify to the fact that even a molecule into two new compounds, which may be more
relatively small concentration of ozone tends to break down concerning than what existed previously. As an example of
styrene, hydrogen sulfide, 4-ethenylcyclohaxene, and 4- this phenomenon, Dr. Weschler described an experiment he
phenylcyclohaxene, which suggests that Alpine might prevail had conducted in which ozone had in fact lowered the amount
with respect to these compounds at least. Yet, if one views of styrene, 4-ethenylcyclohaxene, and 4-phenylcyclohaxene
the evidence in a light most favorable to the government and in a controlled environment, but had nevertheless increased
gives the government the benefit of all reasonable inferences the level of formaldehyde and acetaldehyde in the air. Given
as we must, one finds that there was other evidence presented this information, it is not unreasonable for a juror to
through Dr. Weschler’s testimony and Dr. Cole’s expert determine that a claim by Alpine that a user’s environment
report on gas-phase ozone that can explain the jury’s findings will be cleaned of a pollutant by its air-cleaning product is
on these chemical pollutants. It is Alpine’s contention that all unsupported by competent and reliable scientific evidence,
of these pollutants are broken down and thus “removed” from when in fact the pollutant may be broken down into other,
the environment by Alpine’s air-cleaning devices through even more noxious, pollutants. Thus, viewed in a light most
their reaction with ozone. However, there are two problems favorable to the government, there was sufficient evidence
with this theory. First, this process requires a certain presented at trial with respect to the jury’s findings.
concentration of ozone, and the evidence presented in Dr.
Cole’s report and through other expert testimony is that
Alpine has not provided reliable test results that demonstrate
the ability of its machines to maintain that level of ozone
concentration. In fact, Alpine does not contest on appeal the
No. 01-5759 United States v. Alpine Industries, et al. 13 14 United States v. Alpine Industries, et al. No. 01-5759
III microbes and allergens in particulate form and within the
relevant size range.
Motion for a New Trial
In Gallick v. Baltimore and O.R. Co., 372 U.S. 108, 119
A district court’s decision to deny a new trial on the basis (1963), the Supreme Court stated in relevant part:
of the weight of the evidence shall be reversed only upon
finding an abuse of discretion. See Bruner v. Dunaway, 684 [I]t is the duty of the courts to attempt to harmonize the
F.2d 422, 425 (6th Cir. 1982). Alpine contends that the jury answers, if it is possible under a fair reading of them . . . .
verdict was inconsistent and irreconcilable, that the district We therefore must attempt to reconcile the jury’s
court allowed for an improper shifting of the burden of proof findings, by exegesis if necessary, before we are free to
in the jury’s special verdict form and through a comment disregard the jury’s special verdict and remand the case
made to the jury, and that the district court improperly for a new trial.
excluded evidence relating to the negotiation history of the
Consent Order, consumer satisfaction surveys, and marketing The Sixth Circuit has also held that “[w]hen requested, a trial
information that Alpine believed would have allowed the jury court faced with an apparent inconsistency between a jury’s
to perceive Alpine’s marketing promotions in context. answers and the court’s instructions must attempt to reconcile
the two.” Holloway v. McIntyre, 1988 WL 7961, Nos. 86-
A. Inconsistent Verdict? 1001, 86-1898 at *3 (6th Cir. Feb. 4, 1988) (citing Waggoner
v. Mosti, 792 F.2d 595, 597 (6th Cir. 1986)).
As we noted in section II, the government’s experts in
addressing the viability of Alpine’s claims regarding The district court reconciled the apparent inconsistency in
particulates focused on testing the ability of various devices the jury’s verdict by determining that the jury had in fact been
in removing particles found in tobacco smoke, which the referring to “visible smoke” rather than the particulates in
experts testified to be representative of the particles at issue smoke, and we are persuaded that this is a reasonable
in this case and therefore a good surrogate for testing the conclusion. Alpine’s reasoning assumes that the jury’s
efficacy of a device in removing these other particles. Alpine favorable determination on the smoke removal claims
accepts this premise, but argues on appeal that if the reflected an implicit determination that Alpine’s air purifiers
government’s experts are right, the jury’s verdict must be effectively removed the particulate elements of smoke, when
considered inconsistent and irreconcilable, since the jury in fact smoke contains much more than particulate matter. In
found Alpine’s claims regarding the ability of its air-cleaning fact, Dr. Weschler noted in his testimony at trial that in
devices to remove smoke was supported by competent and addition to the particulates present in tobacco smoke, there
reliable scientific evidence, but that none of its other claims are “thousands of chemicals.”
made with respect to other particulates were supported by
such evidence. In sum, Alpine argues that if the results of Furthermore, the jury was presented at trial with evidence
smoke testing could be extrapolated to all other indoor air concerning the removal of “visible smoke.” Alpine had a
particulate at issue, then it would appear that the jury, because videotape demonstration, which showed its air-cleaning
it found for Alpine on smoke, had no basis for a finding machines removing visible smoke from a small transparent
against Alpine on all the other particulates listed on the jury chamber. The jury also heard from the government’s expert,
verdict form. This logic would also extend to the question of Dr. Sextro, who stated in doing his tests on particulates in
No. 01-5759 United States v. Alpine Industries, et al. 15 16 United States v. Alpine Industries, et al. No. 01-5759
smoke: “[W]e didn’t test [the effectiveness of the filter Alpine and or Mr. Converse, as the case may be, have in
against smoke] gases. We didn’t look at – I mean, I don’t their possession at that time and rely upon at that time on
know if there was any absorption by the HEPA filter of any competent and reliable scientific evidence. Let that be
of the environmental smoke gases or not; that wasn’t the burned into the back of your mind because that is the
purpose of our study.” Based on this information, the jury area of inquiry; that’s what you will be called upon
could have concluded that Alpine had adequate substantiation ultimately to decide.
to claim that its devices removed “visible smoke,” which
would be entirely consistent with the rest of the jury’s Alpine argues that the verdict form was ultimately
determinations with regard to particulate claims. prejudicial and that as a result, Alpine did not receive a fair
trial.
B. Burden of Proof
The district court responded to Alpine’s claims, noting that:
Alpine contends that the district court improperly shifted
the burden of proof during the course of the trial. Alpine The jury was instructed, on more than one occasion, that
maintains that the jury’s special verdict form is improperly the government had the burden of proving 1) that the
worded, with the second part of each question reflecting a defendants made a particular representation, 2) which
burden on Alpine to provide scientific evidence of the various was not supported by competent and reliable scientific
contaminants that it could remove. That part of the question evidence. The wording on the verdict form could not
states “was the claim [made by Alpine with regard to a reasonably be read as contradicting the Court’s explicit
particular contaminant] supported by competent and reliable instructions regarding the burden of proof.
scientific evidence at the time the claim was made?” Alpine
had requested instead that a different text be used: “Has A special verdict form will only provide grounds for reversal
Plaintiff proved that the Defendants did not possess and rely if it is confusing, misleading, or prejudicial when viewed as
upon competent and reliable scientific evidence for claims a whole. See Hostetler v. Consolidated Rail Corp., 123 F.3d
that their air purifiers eliminate, remove, clear or clean [a 387, 393 (6th Cir. 1997). In this case, the form should be
particular contaminant]? Yes_____ No_____” viewed along with the jury instructions, which clearly stated
where the burden of proof lay:
Alpine also points to a statement made by the district judge
near the end of trial in which he addressed the jury and stated The verdict form asks you a set of two questions as to
in relevant part: each alleged claim: First, has the government proven by
a preponderance of the evidence that Alpine and Mr.
[Y]ou recall that your area of inquiry will be if Alpine Converse, individually and as an officer of Alpine, made
and Mr. Converse made certain representations as a claim covered by the terms of the consent order; and,
described in the Consent Order, and you will be given a second, if yes, did the government prove by a
copy of the Consent Order. . . . That will be the first preponderance of the evidence that the defendants at the
thing for you to decide, did Alpine after the date of that time such claim was made did not possess and rely upon
Consent Order make representations as, as described in competent and reliable scientific evidence to substantiate
the Consent Order, Question No. 1. Question No. 2, if it, that claim or representation?
they did, with regard to any particular representation, did
No. 01-5759 United States v. Alpine Industries, et al. 17 18 United States v. Alpine Industries, et al. No. 01-5759
These jury instructions reflect the proper placement of the refers to “representations” and does not specify to whom
burden of proof, which starts with the government and moves those representations will be made. Alpine argues that the
to Alpine, once the government offers enough evidence to Consent Order must be interpreted in light of its principal
make its prima facie case. purpose, which was to prevent unsubstantiated claims about
the efficacy of Alpine’s air purifiers from being made to
C. Parol Evidence consumers.
Alpine objects to the district court’s use of the parol The Consent Order is unambiguous on this point, stating
evidence rule to exclude evidence of the negotiations with the repeatedly that Alpine was not to make the relevant
FTC that led to the execution of the Consent Order, which representations “in any manner, directly or by implication,”
ultimately prevented Alpine from explaining that it “in connection with the manufacturing, labelling, advertising,
understood the Order to cover only assertions made by Alpine promotion, offering for sale, sale, or distribution of any air
with regard to reducing the level of a contaminant by a cleaning product in or affecting commerce.” The language of
specific percentage and not general statements made with the Order is plain and does not require further interpretation.
regard to reducing the level of contaminants. The district In addition, any representations made to distributors or other
court, however, properly concluded that the Consent Order salespeople are obviously intended to be passed on to
unambiguously covered claims that Alpine’s devices customers.
eliminated portions of contaminants whether or not such
claims were expressed as a numerical percentage. Furthermore, Alpine is not entitled to a new trial unless it
can show that its substantial rights were prejudiced. See
D. Exclusion of Consumer Reports and Marketing McGowan v. Cooper Indus., 863 F.2d 1266, 1271 (6th Cir.
Information 1988). Alpine must show that the exclusion was not only
erroneous, but also resulted in a substantial injustice. See
Alpine also appeals the district court’s decision to exclude Sutkiewicz v. Monroe County Sheriff, 110 F.3d 352, 357 (6th
testimony concerning consumer satisfaction surveys and Cir 1997). Alpine has not demonstrated how the exclusion
marketing information. Alpine argues that the district court of this evidence produced a substantial injustice.
abused its discretion in precluding the testimony that Alpine
wished to include relating to the context in which the various IV
representations at issue in this case were made by Alpine.
The government’s position, upheld by the district court, was The Permanent Injunction
that it was necessary only for the government to show
promotional brochures, videotapes, audio tapes, and training The permanent injunction is reviewable only for abuse of
tapes, in order to demonstrate that a claim had been made. discretion. See S. Cent. Power Co. v. Int’l Bhd. of Elec.
Alpine argued that the context in which these materials were Workers, 186 F.3d 733, 737 (6th Cir. 1999). Alpine is
disseminated was an important factor to be considered when enjoined from making any claims or representations that its
determining whether the representations were directed to product can:
consumers or instead to dealers. The government argues that
whether the statement was made to a consumer or to a dealer [E]liminate, remove, clear, or clean from indoor air any
is immaterial for purposes of the Consent Order, which only pollutant, contaminant, microorganism (including
No. 01-5759 United States v. Alpine Industries, et al. 19 20 United States v. Alpine Industries, et al. No. 01-5759
bacteria, viruses, molds, and mildew), chemical or during trial, which conceded that “odors are not a part of this
particulate, or any specific quantity or amount of any of case. They never have been.” Alpine also points to the fact
the foregoing. Defendants may, however, represent that that experts agreed that the product could be effective on
their product can remove “visible” tobacco smoke and some odors, specific ones of which were identified. In sum,
some odors (without specifying what odor), providing, Alpine maintains that even if its request for JNOV or a new
however, defendants may not claim or represent, trial is not granted, the company should be allowed to make
expressly or impliedly, that the removal of visible claims for the reduction of smoke, tobacco smoke, cigarette
tobacco smoke or some odors necessarily implicates the smoke, all common indoor air particulates, general and
removal of any chemical, particulate, or microorganism. specific odors, and other chemical gases. Alpine, however,
They shall make no claim or representations in any goes too far. While it is possible that Alpine’s products may
form or by any means expressly or impliedly that be effective against some odors, none of the government’s
Alpine’s products prevent or provide, or may prevent or experts testified that there was competent and reliable
provide, relief from any health or medical condition of scientific evidence to support the claim that Alpine’s air-
any kind. cleaning devices will reduce all common indoor air
particulates, general and specific odors, and “other” chemical
Alpine contends that the scope of injunctive relief afforded by gases. Furthermore, the district court’s injunction does not
the permanent injunction conflicts with the jury’s findings prevent Alpine from claiming that it is able to remove “some
and the government’s concessions and is subsequently odors” and yet prevents it from making specific claims,
overinclusive. In particular, Alpine argues that the court which, for example, could be used in a misleading way to
should not have excepted only “visible” tobacco smoke since make indirect claims that Alpine’s devices also reduce the
the jury made no such explicit distinction in their verdict. particulates associated with those odors. Since the district
The judge’s reasoning for this language is revealed in the court did not abuse its discretion, we find no reason to amend
memorandum attached to the prior modified Interim the permanent injunction now in place.
Injunction, which states that:
V
The jury was asked a specific question about “smoke”;
they were not asked about the component parts of that Excessive Penalty
smoke. The jury likely interpreted the question literally,
viz, visable smoke. Most lay people would define Alpine contends that the penalty assessed was excessive in
“smoke” as something that can be seen or smelled. light of the fact that Alpine relied in good faith on experts and
should not be “harshly punished.” However, the district court
The court’s reasoning is consistent with its and our own did not pick the penalty it assessed, $1.49 million dollars, out
interpretation of the jury’s verdict, and does not reflect an of thin air. The court consulted the relevant statute, 15 U.S.C.
abuse of discretion. § 45(l), which provides that:
Next, Alpine contends that although the permanent Any person, partnership, or corporation who violates an
injunction allows claims for general odors, it prohibits claims order of the Commission after it has become final, and
for specific odors without any supporting rationale. Alpine while such order is in effect, shall forfeit and pay to the
points to a statement made by the government’s lawyer
No. 01-5759 United States v. Alpine Industries, et al. 21
United States a civil penalty of not more than $10,000 for
each violation . . . .
The statute additionally provides that “[I]n the case of a
violation through continuing failure to obey or neglect to
obey a final order of the Commission, each day of
continuance of such failure or neglect shall be deemed a
separate offense.” The district court, in considering the
statute quoted above, noted that if each of the exhibits shown
to the jury were to be “parsed for individual
misrepresentations, there would be thousands upon thousands
of violations.” The court, therefore, determined to take a
reasonable course, calculated that Alpine’s violations
continued over a total of one thousand four hundred ninety
days, took into account Alpine’s conduct, its financial
resources, and the need to vindicate the FTC’s authority in
order to provide deterrence, and decided that a civil penalty
in the amount of one thousand dollars per day over the period
in question would be acceptable.
Alpine contends that the court did not give proper
consideration to its good faith efforts to comply with the
FTC’s requirements. However, the court did so at length.
VI
For the reasons given above, we AFFIRM the district
court’s judgment in its entirety.