UNITED STATES OF AMERICA 

FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

In the Matter of 

ECM BioFilms, Inc., 

a corporation, also d/b/a 

Enviroplastics International, 

Respondent. 

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DOCKET NO. 9358 

ORDER DENYING RESPONDENT'S MOTION FOR PROTECTIVE ORDER AND 

GRANTING COMPLAINT COUNSEL CROSS-MOTION TO COMPEL 

On December 16, 2013, Respondent ECM BioFilms, Inc. ("Respondent" or "ECM") filed 

a Motion for a Protective Order ("Motion for Protective Order"). On December 24, 2013, 

Complaint Counsel filed an opposition to Respondent's Motion for Protective Order, combined 

with a Cross-Motion to Compel Respondent to Disclose Customer and Distributor Names. 

(''Cross-Motion to Compel"). Respondent filed an opposition to Complaint Counsel's CrossMotion to Compel on January 2, 2014. 

Further, on January 7, 2014, Complaint Counsel filed a Motion for Leave to File a Reply 

in Support of its Opposition to the Motion for Protective Order and Cross-Motion to Compel 

("Motion for Leave"), along with a conditionally filed Reply Brief, pursuant to Commission 

Rule 3.22(d) ("Reply"). As of the date of this Order, ECM has not responded to the Motion for 

Leave. The Motion for Leave to file the Reply is GRANTED. 

Having fully considered all the submissions of the parties, and all the contentions and 

arguments therein, and as more fully explained below, the Motion for Protective Order is 

DENIED and Complaint Counsel's Cross-Motion to Compel is GRANTED. 

I. Introduction 

The Complaint in this case charges that ECM engaged in deceptive trade practices in 

violation of Section 5 of the FTC Act by making false or unsubstantiated representations 

regarding the biodegradability of plastics treated with an additive manufactured by FCM ("FCM 

Additive"). The Complaint alleges, among other things, that Respondent distributes ECM 

Additives to its customers -- independent distributors and plastic products manufacturers 

(collectively, "customers") -- located throughout the United States who, in tum, treat plastics 

with ECM Additives and thereafter advertise and sell the treated plastic products to end-users as 

biodegradable. Complaint~ 2. The Complaint further alleges that ECM's representations to its 

customers were passed on to plastics end-users, and ~herefore, ECM provided its customers with 

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the "means and instrumentalities" to deceive the end-users. Complaint ,-r,-r 4, 14, 15. 

At issue in Respondent's Motion for a Protective Order are Complaint Counsel's 

Interrogatories 1, 2, and 6, and Complaint Counsel's Document Request 13, set forth verbatim 

below: 

Interrogatory 1 :Identify, by business name, individual contact, address, 

and telephone number, all customers who have purchased any ECM Additive, 

including customers who purchased anyECM Additive from distributors, in 

which case, also provide the name, address, and telephone number of the 

distributor from whom the customer purchased the ECM Additive. 

Interrogatory 2: For each customer or distributor identified in 

Interrogatory 1, list ECM's revenue per customer or distributor per year. 

Interrogatory 6: Identify, by name, title, and business name, ... the 

customers, distributors, or potential customers involved in any communications 

described in Interrogatory 5 (requesting verbal communications regarding the 

rate and extent of the Biodegradability of the ECM Additive or ECM Plastics, 

or regarding the ability of ECM Additives to initiate, cause, enable, promote, or 

enhance the Biodegradation of ECM Plastics). 

Document Request 13: Provide all communications with customers, 

distributors, potential customers, or potential distributors regarding ECM 

Additives. 

Respondent objects to the foregoing discovery and seeks an order limiting Complaint 

Counsel to the following: (1) ECM will produce the names, addresses, and contact information 

for fifty (50) of its customers who do not have orders pending (exclusive of its top 10 revenue 

generating companies) to Complaint Counsel; (2) Complaint Counsel may not contact more than 

ten (10) ofECM's customers, through informal or formal process; and (3) discovery requests 

concerning ECM's customers, including requests for revenue per customer, shall be limited to 

the ten (1 0) customers chosen by Complaint Counsel, presumably from the list of 50 customers 

ECM would provide. 

Complaint Counsel argues that Respondent's proposed limitations are unsupported and 

insufficient under the discovery rules. Complaint Counsel's Cross-Motion to Compel seeks an 

order compelling Respondent to produce a complete list ofECM's customers and distributors, 

and to supplement ECM's mandatory initial disclosures under Rule 3.31 (b)(1). 1 Complaint 

Counsel's Cross-Motion to Compel does not seek any reliefbeyond obtaining Respondent's 

complete customer list, as encompassed by Intenogatory 1, above. Thus, it does not appear that 

Complaint Counsel's Cross-Motion to Compel is uir~dtxl at Interrogatories 2 or 6, or Document 

Request 13. 

1 Mandatory initial disclosures under Rule 3.31 (h) include "(1) The name, and, if known, the address and telephone 

number of each individual likely to have discoverable information relevant to the allegations of the Commission's 

complaint, to the proposed relief, or to the defenses of the respondent .... " 16 C.F.R. * 3.31(b). 

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II. Applicable Law 

Pursuant to Commission Rule 3.31 (c)( 1 ), "[ u ]nless otherwise limited by order of the 

Administrative Law Judge, ... [p ]arties may obtain discovery to the extent that it may be 

reasonably expected to yield information relevant to the allegations of the complaint, to the 

proposed relief, or to the defenses of any respondent." 16 C.F.R. § 3.31(c)(l). However, even if 

proposed discovery meets the foregoing relevance test: 

[t]he frequency or extent of use of the discovery methods ... shall be limited by 

the Administrative Law Judge ifhe or she determines that: 

(i) The discovery sought from a party or third party is unreasonably cumulative or 

duplicative, or is obtainable from some other source that is more convenient, less 

burdensome, or less expensive; 

(ii) The party seeking discovery has had ample opportunity by discovery in the 

action to obtain the information sought; or 

(iii) The burden and expense of the proposed discovery on a party or third party 

outweigh its likely benefit. 

16 C.F.R. § 3.31(c)(2). 

Even if requested discovery is otherwise permissible under the rules, Commission Rule 

3.31 (d) permits the Administrative Law Judge "to deny discovery or make any other order which 

justice requires to protect a party or other person from annoyance, embarrassment, oppression, or 

undue burden or expense, or to prevent undue delay in the proceeding." 16 C.F.R. § 3.31(d). 

The burden of demonstrating that the challenged discovery should not proceed is on Respondent, 

as the proponent of the requested protective order. In re Polypore Int'l, 2008 FTC LEXIS 155, 

at *14-16 (Nov. 14, 2008); In re Schering-Plough Corp., 2001 FTCLEXIS 105, at *5 (July 6, 

2001). In re Phoebe Putney Health Sys., 2013 FTC LEXIS 84, at *13 (May 28, 2013) (quoting 

Jn re Polypore, 2008 FTC LEXIS 155, at * 16). 

If a party fails to comply with any discovery obligation under the rules, Rule 3.38 

authorizes the opposing party to seek an order compelling such compliance. "Unless the 

Administrative Law Judge determines that the objection is justified, the Administrative Law 

Judge shall order that an initial disclosure or ... documents, depositions, or [answers to] 

interrogatories be served or disclosure otherwise be made." 16 C.l•'.R. § 3.38(a). 

III. Overview of Arguments of the Parties 

Respondent argues that Complaint Counsel's requested customer related discovery should 

be rejected in favor ofRespondent's proposed limited production. According to Respondent, the 

benefit to Complaint Counsel of its requested qiscovery is outweighed by economic harm that 

ECM claims would result from lost customer business, which, Respondent argues, would surely 

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occur if Complaint Counsel contacts and/or issues subpoenas to ECM's customers. In addition, 

Respondent asserts that the customer Communications requested by Complaint Counsel are 

available from ECM, which ECM asserts is less burdensome and less expensive than seeking 

such information from Respondent's customers. Moreover, Respondent contends that Complaint 

Counsel's requested discovery is cumulative and/or duplicative because the sales representations 

made by Respondent, which are at issue in this proceeding, do not vary by customer, and that 

therefore production of information regarding a sampling of Respondent's customers, should be 

sufficient. Respondent further asserts that Complaint Counsel's discovery requests are 

overbroad, and ECM's customer lists are privileged trade secrets protected from discovery. 

In response, Complaint Counsel argues that Respondent was required to provide a 

complete customer list as part of Respondent's mandatory initial disclosures under Commission 

Rule 3.31(b)(l), but that Respondent failed to do so, and that now, Respondent is required to 

disclose its complete customer list in response to Complaint Counsel's Interrogatories. 

Complaint Counsel asserts that: a complete customer list is relevant to Complaint Counsel's 

allegations and Respondent's defenses; ECM has failed to demonstrate that it will lose business 

from those customers contacted by Complaint Counsel; and that the Protective Order Governing 

Discovery Material, issued in this case on October 22, 2013, is sufficient to protect Respondent's 

customer information. 2 Although Complaint Counsel rejects the limitations outlined in 

Respondent's proposed protective order, Complaint Counsel nevertheless offers that "ifECM 

produces its customer list, Complaint Counsel will limit its contacts to a subset of customers; 

give Respondent advance notice of such contacts; and negotiate search terms to reduce ·the 

number of customer communications responsive to discovery requests." Cross-Motion at 7. 

Respondent's opposition to Complaint Counsel's Cross-Motion to Compel largely 

reiterates the arguments in support of Respondent's Motion for Protective Order, and further 

asserts that Complaint Counsel has failed to demonstrate that a complete customer list, or 

contacting every customer of Respondent, is necessary for Complaint Counsel's case, in light of 

the economic harm to, ECM that Respondent claims will result. 

In its Reply, Complaint Counsel states that Respondent has changed its position since 

Respondent filed its Opposition to the Cross-Motion to Compel concerning the number of 

customers it was willing to identify, and that documents recently produced by Respondent 

indicate that Respondent's customer communications do vary, contrary to Respondent's 

assertions, and therefore a complete customer list will not lead to redundant or duplicative 

discovery. 

Additional details of the parties' arguments are addressed in the context of the legal 

auuly~i~, bdow. 

IV. Analysis 

A. Confidentiality of customer information as a basis for limiting discovery 

2 Kulc :;.:.; J(d) provides in part: " In order t11 prntect the parties uud third p~rtics against improper use and disclosure 

of confidential information, the Administrative Law Judge shall issue a protective order as set forth in the appendix 

to this section." 

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Respondent asserts that its customer information, including customer names, 

communications with customers, and ECM's revenues by customer, constitutes "confidential 

information." Respondent maintains that such information is competitively sensitive and should 

be protected from discovery. "The fact that discovery might result in the disclosure of sensitive 

competitive information is not a basis for denying such discovery." In re Lab. Corp. of Am., 

2011 FTC LEXIS 22, at *5 (Feb. 17, 2011) (citing LeBaron v. Rohm and Hass Co., 441 F.2d 

575, 577 (9th Cir. 1971); In re North Tex. Specialty Physicians, 2004 FTC LEXIS 20, at *4 (Feb. 

5, 2004). In addition, e<;>urts interpreting discovery sought under the Federal Rules of Civil 

Procedure have held that there is no immunity protecting the disclosure of trade secrets. In re 

Hoechst Marion Roussel, Inc., 2000 FTC LEXIS 155, at *29 (Oct. 17, 2000) (citing FTC v. JE. 

Lanning, 539 F.2d 202, 209-10 (D.C. Cir. 1976) (other citations omitted)). Even ifECM's 

customer information is considered confidential information, Respondent's contention that such 

information is therefore protected from discovery is without merit. 

Respondent also states that ECM's customer information is protected against disclosure 

under Respondent's standard confidentiality agreement with its customers. That agreement, 

attached as Exhibit C to Respondent's Motion for Protective Order, clearly permits a party to 

disclose confidential information, when disclosure is required in judicial proceedings. Paragraph 

3 of the Confidentiality Agreement, which Respondent cites, states in pertinent part: 

The obligation of nondisclosure in this Agreement shall not be breached by 

disclosure required in a judicial proceeding or governmental investigation, 

provided Recipient gives Discloser prior notice of such requirement and affords 

Discloser an opportunity to oppose such disclosure or seek a protective order. 

The plain language ofECM's confidentiality agreement, set forth above, clearly contemplates, 

and does not bar, either party to the agreement from producing confidential information in 

litigation. 3 . 

The Protective Order Governing Discovery issued in this case on October 22, 2013 

("Protective Order") is designed to protect against competitive harm resulting from disclosure· of 

confidential business intomtation produced ill the: l:oursc: of (JiSl:uv~ry. For ~xampl~, Paragraph 

7 of the Protective Order strictly limits the disclosure of confidential information to outside 

counsel and adjudicative personnel, and their assistants and consultants, and to witnesses or 

deponents who authored or received such confidential information previously. Because adequate 

safeguards are in place to ensure sensitive information will not be misused, Respondent may not 

withhold the requested discovery even if such information is confidential and/or represents trade 

3 Respondent maintains that paragraph 3 of its standard confidentiality agreement will still require ECM to notify its 

customers that it is disclosing their infonnation ancl that, onr.~ so notified, the customers wiU cease doing business 

with bCM. Thi ~ argument tails. The term "Recipient" is defined by the confidentiality agreement as the "receiver 

of the confidential information," and the "Discloser" is the disclosing party. Motion for Protective Order Rxh. C a.t 

, 1. As applied to paragraph 3 of the confidentiality agreement, the "Recipient" of the asserted confidential 

customer information would be Complaint Counsel, and the "Discloser'' would be Respondent. There does not 

appear to be any requnement that the "Discloser" provide any notifications, as claimed by Respondent. In addition, 

as addressed further infra, Respondent fails to demonstrate that customers will cease doing business with 

Respondent upon learning that ECM's customer infonnation has been produced in this litigation. 

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secrets, as argued by Respondent. Respondent claims that the Protective Order is not sufficient 

to protect ECM' s competitive interest because it does not protect ECM from the economic harm 

of lost business that, according to Respondent, will result as soon as such customers learn that 

their information is being disclosed in this litigation. Respondent's assertions that customers will 

cease doing business with ECM once customers learn that their information has been disclosed, 

resulting in serious economic harm to ECM, are unsupported and rejected, as more fully 

explained below. 

B. Customer list 

Respondent does not, and cannot reasonably, argue that its customer list is not relevant 

under the discovery rules. The nature of Respondent's representations to its customers and 

distributors is a key issue in the case, and identification ofECM's customers and distributors 

would seem to be a gateway to developing evidence on that issue. Thus, discovery of a complete 

customer list is clearly calculated to "yield information relevant to" this case. 16 C.F.R. 

§ 3.31 ( c )(1 ). Respondent argues, however, that it should not be required to produce a complete 

customer list because the economic harm .likely to result from that disclosure outweighs the 

discovery benefit of a complete customer list. 

Respondent asserts that if a complete customer list is provided, Complaint Counsel will 

proceed to seek discovery from at least 50, or even all, ofECM's customers, and that "every 

customer contacted by Complaint Counsel will cease doing business with ECM." Memorandum 

in Support of Motion for Protective Order at 2. According to the Declaration ofECM's Chief 

Executive Officer, Robert Sinclair, attached to the Motion for Protective Order, a loss of"more 

than 10 of [ECM's] existing customers" or the loss of even "one of its top 10 revenue generating 

companies," would place ECM in "imminent financial peril, either suffering severe financial 

losses for which recovery would be very difficult, if not impossible, or into financial 

insolvency." Sinclair Decl. ~ 22. Thus, through a protective order, ECM seeks to produce a 

limited list of 50 customers, selected by Respondent and exclusive of its top revenue generating 

customers, and to further limit to 10 the number of customers from such list that Complaint 

Counsel may contact directly for formal or informal discovery. Complaint Counsel responds that 

Respondent should not be permitted to dictate Complaint Counsel's discovery plan by providing 

a "cherry-picked," and potentially unrepresentative, universe of customers and that Respondent 

has failed to demonstrate that ECM will suffer the devastating economic harm claimed, if ECM 

is required to produce a complete customer list. 

Respondent's assertion that disclosure of ECM' s customer list will inevitably result in a 

devastating loss of business is not sufficiently supported by the facts presented. The Sinclair 

Declaration, upon whid1 Rt:spumlenL relies, slates: "Customer fear of associationalliability could 

create a mass flight if the FTC seeks information from any number of ECM customers. ECM 

believes that [the] FTC contacted at least three bCM customers during its pre-complaint 

investigation. None of the three have ordered ECM additives since July, 2012." Sinclair Decl. 

~ 15. The Declaration does not explain the basis for ECM' s "belief' regarding the customers 

previously contacted; but more important, ECM provides no factual basis for concluding that 

there is any causal connection between the asserted pre-Complaint customer contact and such 

customers' failure to order ECM addiLives since July 2012, or Lhat ECM's other customers would 

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withdraw their business if contacted by Complaint Counsel.4 To assume that the FTC's preComplaint contact with these previous customers caused these customers to "cease doing 

business" with Respondent, and to further assume that any and all other customers that are 

contacted will have the same response, resulting in "mass flight,;' would be speculation at best. 

In addition, Mr. Sinclair's statement that Complaint Counsel's contacting more than 10 

customers will result in "severe financial losses" or "financial insolvency," ld. at~ 22, does not 

cite financial records, or set forth any particular factual basis, and amounts to nothing more than 

unsupported opinion. See In re Lab. Corp. of Am., 2011 FTC LEXIS 31 (Feb. 28, 2011) 

(denying motion to quash subpoena where movant's assertion ofburden and expense was bare 

allegation without supporting facts). In any event, Complaint Counsel states that ifECM 

produces a complete customer list, it will choose a subset of those customers and limit its 

contacts to this subset. Thus, it cannot be assumed that producing a complete customer list will 

result in every customer becoming the target of further discovery from Complaint Counsel, as 

predicted by Respondent. Moreover, Complaint Counsel asserts, a complete customer list will 

enable Complaint Counsel to make a reasoned determination of which customers merit further 

discovery, and to thereby "limit [the discovery] in a manner that conserves both parties' 

resources." Reply at 4. 

For all the foregoing reasons, Respondent has failed to demonstrate that producing a 

complete customer list will cause ECM undue economic harm that outweighs the relevance of 

the discovery, or that Complaint Counsel's discovery of the customer list should be limited as 

requested in the Motion for Protective Order. 

C. ECM's revenues per customer 

~espondent contends that ECM's revenues per customer are not relevant because, 

according to Respondent, there is no association between the amount paid by a customer to ECM 

and the nature or extent of biodegradability representations made by ECM. This argument is 

unpersuasive. First, Respondent's proposed protective order appears to acknowledge the 

relevance of customer revenues for discovery, since its proposed order would provide the 

requested information, albeit for only 10 customers. In addition, even ifECM's sales 

representations do not vary by size of the customer, it does not follow that customer generated 

revenues have no bearing on any of the allegations, or defenses, or the potential remedy, in this 

case. At a minimum, revenues generated by an alleged deceptive practice may be relevant to the 

nature and extent of the permissible remedy in this case, should a violation be found. Thus, 

Respondent has failed to meet its burden of demonstrating that the requested discovery should be 

barred as not relevant. 

Respondent further asserts that revenues by customer are also protected from discovery 

by Respondent's confidentiality agreements with its customers. As noted above, the 

<.'.Onfidentiulity agreement is no har to disclosing customer inform~tion in the course of~ jucfici~l 

4 In this regard, Complaint Counsel states that the ECM customers that were contacted prior to the issuance of the 

Complaint in this case are distinguishable because these customers were themselves the subject of invcstigat.ion 

regarding suspected biodegradability misrepresentations, and entered into consent orders with the FfC. 

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proceeding, such as this. A~cordingly, for all the foregoing reasons, Respondent has failed to 

demonstrate that ECM's revenues by customer should not be disclosed in discovery. 

D. Communications with customers 

Respondent acknowledges that ECM' s communications with its customers regarding 

ECM Additives are discoverable, stating that it "accepts the need for a reasonable opportunity to 

probe" such communications with its customers. Respondent contends that there is no need to 

probe or produce such communications for every customer because, according to the Sinclair 

Declaration, "ECM does not alter its sales presentations or advertising claims based on the size 

of[its] clients, or the amount of revenue obtained per client." Sinclair Decl. ,-r 12. Thus, 

Respondent argues, any effort by Complaint Counsel to probe communications with a large 

number of customers will yield only cumulative and duplicative information, and such effort 

must, therefore, be limited. Complaint Counsel argues it is entitled to test ECM's assertion that 

sales presentations do not vary. Moreover, in its Reply, Complaint Counsel points to documents 

tending to dispute the notion that Respondent's sales presentations do not vary among customers. 

It cannot be concluded, based on the present record, that permitting discovery ofECM's 

communications with customers will result in cumulative or duplicative discovery. 

Respondent further argues that Complaint Counsel can obtain ECM' s communications 

with its customers from ECM itself, which Respondent asserts is a cheaper and less burdensome 

source for such information than ECM's customers. Therefore, Respondent argues, Complaint 

Counsel should be limited to obtaining such materials from ECM, and should not be permitted to 

contact ECM customers for the purpose of obtaining customers' communications with ECM. 

This argument is curious, given that ECM is presently opposing producing its records of 

customer communications. Moreover, it would be premature to determine whether obtaining 

discovery of communications directly from ECM' s customers is more burdensome or more 

expensive than obtaining such communications from ECM. The parties do not state that any 

such discovery has been issued to ECM's customers, and there is no pending motion to quash 

from any customer resisting discovery ofECM communications on the ground ofburden or 

expense. In addition, Complaint Counsel states that it will seek discovery from only a s·ubset of 

ECM customers, drawn from a complete ECM customer list, so it cannot be assumed that each 

customer will be the subject of further discovery. 

Finally, Respondent contends that tht: rt:quest for "all communications" with customers 

"regarding" ECM Additives is overbroad, and will result in production of "hundreds of 

thousands" of emails and documents that may not pertain to the case. Moreover, Respondent 

claims, such a large production would require 50-70 hours of counsel review, at an estimated 

cost of $25,000. Sinclair Decl. ,-r 21. It is noteworthy that Respondent has provided no 

documentation to support the foregoing opinions of Mr. Sinclair. Complaint Counsel responds 

that it is prepared to negotiate apprupriatt: search terms to reduce the number of responsive 

materials, provided that it first receives a complete customer list. Based on the foregoing, 

overbreadth is an insufficient basis for limiting Complaint Counsel's requested discovery. 

V. Conclusion 

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