United States v. Alpine Indust Inc

• Court: Court of Appeals for the Sixth Circuit
• Decided: December 19, 2003
• Docket: 01-5759
• Status: Published

Opinion

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products removed * over 60 separately titled but in many cases overlapping This decision was originally issued as an “unpublished decision” filed on September 26, 2003.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.