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