I 

UNITED STATES OF AMERICA 

OFFICE OF THE ADMINISTRATIVE LAW JUDGES 

BEFORE THE FEDERAL TRADE COMMISSION ORIGINAL

Washington, D.C.
 

In the Matter of	 PUBLIC 

Docket No. 9358
 SECREARY 'i	 ECM BioFilms, Inc., 

a corporation, also d/b/a 

Enviroplastics International
 

ANSWER AND AFFIRMATIVE DEFENSES OF 

RESPONDENT ECM BIOFILMS, INC. 

Pursuant to 16 C.F.R. § 3.12, Respondent ECM BioFilms, Inc. ("ECM") hereby answers 

the Federal Trade Commission's Complaint ("Complaint"). Except as otherwise stated herein, 

ECM denies every allegation contained in the Complaint, including each allegation and assertion 

not specifically contained in an enumerated paragraph. Specifically, ECM denies that it violated 

any laws, regulations, or guidelines of 
 the Federal Trade Commission ("FTC"), including 

Section 5 of 
 the Federal Trade Commission Act ("FTCA"), the "Green Guides," and the 

"Revised Green Guides." The Complaint disserves the public interest because it is based on an 

anachronistic and inapplicable scientific model, on flawed consumer surveys, and on policy that 

is contradicted by generally accepted industry standards reflective of current science. Moreover, 

the Complaint disserves the public interest because in its first and principal ordering paragraph it 

demands relief that violates the First Amendment to the United States Constitution. If adopted, 

the Complaint's first ordering paragraph wil violate the First Amendment by enjoining ECM 

from communicating truthful and non-misleading commercial speech and by imposing a blanket 

ban on ECM's prospective speech concerning biodegradation of 
 plastics when there are obvious, 

less speech-restrictive alternatives in the form of reasonable claim qualifications. See Pearson v. 
PUBLIC DOCUMENT (Docket No. 9358) 

! 

Shalala, 164 F.3d 650,652-58 (D.C. Cir. 1999); Peel v. Attorney Registration & Disciplinary 

Comm'n of Illnois, 496 U.S. 91, 110 (1990); In re R. M J., 455 U.S. 191,206 n.20 (1982); 

Shapero v. Kentucky Bar Assn., 486 U.S. 466, 478 (1988); Whitaker v. Thompson, 248 F.Supp. 

2d 1 (D.D.C. 2002); Allancefor Natural Health Us. v. Sebelius, 714 F.Supp. 2d 48, D.D.C. 

2010); Allancefor Natural Health Us., 786 F.Supp. 2d 1 (D.D.C. 2011). Moreover, the
 

Complaint disserves the public interest because its excessive restrictions on speech concerning 

biodegradation of plastics stifles a technology essential to reduce harm to the environment 

caused by plastics contrary to federal environmental law and policy. For those reasons, and the 

additional reasons set forth below, ECM respectfully responds as follows: 

1. ECM admits the allegation contained in Paragraph 1 of the èomplaint. 

2. ECM admits in part and denies in part the allegations contained in Paragraph 2 of 

the Complaint. ECM admits that it manufactures, offers for sale, sells, and distributes an 

additive ("ECM Product") to be included in plastics. ECM admits that it advertises and 

promotes the ECM Product through its website at www.ecmbiofims.com to manufacturers that 

produce plastics which include the ECM Product and to distributors that sell the ECM Product 

for inclusion in plastics. ECM denies that it advertises or promotes the ECM Product for 

purchase by the general public, as its customers are exclusively limited to manufacturers that 

make plastics containing the ECM Product and to distributors that sell the ECM Product for 

inclusion in plastics. ECM is without suffcient knowledge and/or information either to admit or 

deny the allegation that manufacturers that make plastics containing the ECM Product and that 

distributors that sell the ECM Product for inclusion in plastics make any representation on or in 

association with the plastics so produced to customers and end-use consumers, including 

representations that the products are "biodegradable;" therefore ECM denies that allegation. 

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PUBLIC DOCUMENT (Docket No. 9358) 

3. ECM denies the allegation contained in Paragraph 3 of 
 the Complaint insofar as 

Paragraph 3 calls for a legal conclusion to which no response is required. 

4. ECM admits in part and denies in part the allegations in Complaint Paragraph 4. 

ECM admits that it disseminates advertising material concerning its product to independent 

distributors that sell the ECM Product for inclusion in plastics. ECM disseminates that material 

to educate those distributors and plastics manufacturers about the additive's uses and 

characteristics. ECM denies that it disseminates that material to the general public and "end-use 

consumers" because it only sells the ECM Product to manufacturers that make plastics and 

distributors that sell the ECM Product for inclusion in plastics. ECM denies any conclusion, 

inference, characterization, classification, implication, suggestion, and legal argument 

concerning the FTC's exhibits and materials created through selective or partial excerpting or 

quotation, and particularly as to any comment added by the FTC. The exhibits should be read as 

a whole and considered within context, cognizant of the fact that ECM's actual customer base 

(which consists of plastics manufacturers and those distributors that sell the ECM Product to 

plastics manufacturers) is highly sophisticated and does not include the general public or "enduse consumers." The vast majority ofECM's interactions with its manufacturer and distributor 

customers are verbaL. ECM has not, and indeed does not, rely on its website and selected 

excerpts provided by the FTC as its only or even its primary source of promotion or information 

dissemination to its customer base. The FTC is obliged to consider the net impression of ECM' s 

promotions as a whole, and that includes the direct discussions and sales presentations with its 

customers, which are not encompassed in the FTC's Complaint. 

5. ECM admits in part and denies in part the allegations in Complaint Paragraph 5. 

ECM admits that it made the statements and depictions contained in Complaint Paragraph 5. 

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PUBLIC DOCUMENT (Docket No. 9358) 

ECM issued the statements and depictions in Complaint Paragraph 5(A) before the FTC revised 

the Green Guides, but denies that it made all the claims contained in Complaint Paragraph 5 for 

the use of consumers in the United States after FTC revised the Green Guides. As well, ECM 

denies any and all implications arising from the FTC's excerpting of such claims from the 

publication as a whole, apart from the net impression ofECM's advertising as a complete, 

uniform body of information, to its actual customers as opposed to the general public or end-use 

consumers. Thus, ECM denies any conclusion, inference, characterization, classification, 

implication, suggestion, and legal argument concerning the FTC's exhibits and materials created 

through selective or partial excerpting or quotation, and particularly as to any comment added by 

the FTC. The exhibits should be read as a whole and considered within conte)ìt, cognizant of the 

fact that ECM's actual customer base (which consists of 
 plastics manufacturers and those 

distributors that sell the ECM Product to plastics manufacturers) is highly sophisticated and does 

not include the general public or "end-use consumers." Finally, ECM amended its qualified 

claims found on its website and print materials in response to the Revised Green Guides to 

ensure ECM remained in compliance with the FTCA and the Revised Green Guides. ECM 

revised its material in good faith to avoid potential conflict with the FTC's new policies, albeit 

its prior claims were at all times truthfuL. 

6. ECM is without sufficient knowledge and/or information either to admit or deny 

the allegation in the first sentence of Complaint Paragraph 6, and therefore denies same. ECM 

denies the allegation in the second sentence of Complaint Paragraph 6. The FTC relies on an 

archaic, scientifically invalid conception of conditions in municipal landfills to assert that plastic 

products manufactured to include the ECM Product wil not biodegrade as stated in ECM's 

qualified advertising claims. ECM plainly reveals that biodegradation occurs at varying rates 

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PUBLIC DOCUMENT (Docket No. 9358) 

depending on environmental conditions in landfills, but all landfills exhibit the general anaerobic 

conditions necessary for biodegradation. ECM truthfully explains that its products wil fully 

biodegrade under those varying landfill conditions within a reasonably short period of time; that 

"reasonable" period of 
 time wil vary depending on the unique conditions of each landfill site 

and in context with plastics science generally. That is the plain meaning of 
 the following ECM 

web content qualification omitted in the FTC's excerpted Complaint content: 

The basic concept is that biodegradation is a natural process that 

occurs around the world but at various speeds due to various
 

conditions. Plastics with our anditives behave like sticks, branches 

or trunks of trees. Due to this fact, we do not guarantee' any
 

particular time because the time depends on the same factors that 

the biodegradation of woods and most other organic mater.ials on 

earth depend - ambient biota and other environmental conditions ­

but the time frame of between nine months to five years wil give a 

good general idea for most conditions. 

See ECM Ex. No.1, Attachment A (ECM webpage).1 

The plastic products made with our additives will break down in 

approximately 9 month (sic) to 5 years in nearly all landfills or 

wherever else they may end up. All sorts of factors determine the 

amount of microbes available in the soil and the soil conditions 

determine the rate of degradation. The plastic products made with 

ECM technology basically rely on the microbes in the soil to react 

with the additives and form communities, biofims... 

See ECM Ex. No.3, Attachment A (ECM Webpage, "ECM Technology for the 

Biodegradation of Plastic Products,,).2 ECM .conveys information concerning the 

1 Available at http://www.ecmbiofilms.com/product-info/life-expectancy-of-productsmanufactured-with-ecm-masterbatch-pellets/ (last visited November 6,2013); see also ECM Ex. 

No.2, Attachment A ("Reprint of a Letter to an Interested Party" January 16, 2007) (fied 

"Confidential" and subject to Protective Order). 2 Available at http://ww.ecmbiofims.com/product-info/ecm-technology-for-thebiodegradation-of-plastic-products/ (last visited November 6,2013); see also ECM Ex. No.5, 

Attachment A ("Reprint of a Letter to an Interested Party" December 3, 2008) (fied 

"Confidential" and subject to Protective Order); ECM Ex. No.4, Attachment A ("Reprint of a 

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PUBLIC DOCUMENT (Docket No. 9358) 

ECM Product to trade customers mostly through verbal communication, including 

sales presentations, on-site visits, telephone conversations, and other in-person 

meetings, which representations must be taken as a whole and within context to 

portray accurately and completely ECM promotion to its manufacturer and 

distributor customers. 

7. ECM denies the allegations in Complaint Paragraph 7 in their entirety. 

8. ECM denies the allegations in Complaint Paragraph 8 in their entirety. 

VIOLATIONS OF SECTION 5 OF THE FTC ACT
 

FALSE OR MISLEADING REPRESENTATIONS
 

9. ECM hereby responds to the enumerated allegations as follows. To the extent 

such allegations reference ECM marketing or FTC exhibits, ECM denies any conclusion, 

inference, characterization, classification, implication, suggestions, and legal arguments 

concerning the FTC's exhibits and materials created through selective or partial excerpting or 

quotation, and particularly as to any comment added by the FTC. The exhibits should be 

read as a whole and considered within context, cognizant of the fact that ECM's actual customer 

base (which consists of 
 plastics manufacturers and those distributors that sell the ECM Product 

to plastics manufacturers) is highly sophisticated and does not include the general public or "enduse consumers." 

A. ECM denies the allegations contained in Complaint Paragraph 9(A). ECM 

admits that it made representations in advertising concerning the ECM Product to its customers, 

but denies that its advertising contains unqualified claims. ECM has consistently qualified its 

Letter to an Interested Party" October 28, 2005) (fied "Confidential" and subject to Protective 

Order). 

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PUBLIC DOCUMENT (Docket No. 9358) 

advertising claims to provide its customers accurate and non-misleading information concerning 

the nature and characteristics of 
 the ECM Product. For example, the following web content,
 

omitted from the FTC Complaint, is reflective ofECM's actual advertising claims in context:
 

The basic concept is that biodegradation is a natural process that
 

occurs around the world but at various speeds due to various
 

conditions. Plastics with our additives behave like sticks, branches 

or trunks of trees. Due to this fact, we do not guarantee any
 

particular time because the time depends on the same factors that 

the biodegradation of woods and most other organic materials on 

earth depend-ambient biota and other environmental
 

conditions-but the time frame of between nine months to five 

years wil give a good general idea for most conditions.
 

See ECM Ex. No. 1 (Attachment A). 

The plastic products made with our additives wil break down in 

approximately 9 month (sic) to 5 years in nearly all landfills or 

wherever else they may end up. All sorts of factors determine the 

amount of microbes available in the soil and the soil conditions 

determine the rate of degradation. The plastic products made with 

ECM technology basically rely on the microbes in the soil to react 

with the additives and form communities, biofilms... 

See ECM Ex. NO.3 (ECM Webpage, "ECM Technology for the Biodegradation of 

Plastic Products,,).3 ECM conveys informatioh concerning the ECM Product to its trade 

customers mostly through verbal communication, including sales presentations, on-site visits, 

telephone conversations, and other in-person meetings, which representations must be taken as a 

whole and within context to portray accurately and completely ECM promotion to its 

manufacturer and distributor customers. 

3 Also available at http://ww.ecmbiofilms.com/product-info/ecm-technology-for-thebiodegradation-of-plastic-products/ (last visited November 6, 2013); see also ECM Ex. No.5, 

Attachment A ("Reprint of a Letter to an Interested Party" December 3, 2008) (fied 

"Confidential" and subject to Protective Order); ECM Ex. No.4, Attachment A (fied 

"Confidential" and subject to Protective Order). 

, 7
 
PUBLIC DOCUMENT (Docket No. 9358) 

B. ECM admits in part and denies in part the allegations contained in Complaint 

Paragraph 9(B). ECM admits that it has claimed that the ECM Product causes plastics to 

degrade through biological means. ECM denies that it has made unqualified plastic elimination 

claims in advertising concerning the ECM Product in landfills; rather, ECM's advertising plainly 

explains that the rate of 
 plastic degradation is dependent on ambient environmental conditions. 

See Ex. No.'s 1-5. ECM denies that its biodegradable claim is deceptive, false, or misleading in 

any particular. ECM has proven through competent and reliable testing that plastics 

manufactured with the ECM Product wil fully biodegrade through biological means when 

exposed to micro-organisms commonly present in the outdoor environment, including in 

landfills. 

C. ECM denies the allegations contained in Complaint Paragraph 9(C) because 

they depend on a definition of 
 the term "biodegradable" in conflict with the meaning of that term 

understood by the actual customers of 
 the ECM Product. To the extent the FTC compels 

adherence to a definition of 
 "biodegradable" in conflct with the meaning understood by the 

actual customers of the ECM Product, it act of compulsion arbitrarily and capriciously effects 

speech suppression predicated on an offcial speech orthodoxy in violation of 
 the Administrative 

Procedure Act and the First Amendment to the United States Constitution. 

D. ECM denies the allegations contained in Complaint Paragraph 9(D) insofar as 

those allegations depend on the definition of "biodegradable" presented in Complaint Paragraph 

9(A), particularly to the extent the FTC erroneously suggests that all plastic products must 

completely biodegrade within one calendar year after customary disposal before manufacturers 

can label such products "biodegradable," and to the extent the FTC claims that ECM made 

unqualified "biodegradable" claims. Per the plain language of 
 the FTC's own regulations, only 

8 
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PUBLIC DOCUMENT (Docket No. 9358) 

unqualified claims must meet the standard of 
 "a reasonably short period of time." Qualified
 

claims that provide an alternative timeframe are not subject to the "reasonable, time" standard. 

.j 

10. ECM hereby responds to the enumerated allegations in Complaint Paragraph 10 

seriatim as follows:
 

A. ECM denies the FTC's allegations in Complaint Paragraph 10(A) because they 

rely on an unworkable definition of 
 "biodegradable," subject to standards not generally accepted 

in the scientific community, and they depend upon a falsehood, to wit, that ECM made an 

unqualified claim in advertising its Product. 

B. ECM denies the FTC's allegations in Complaint Paragraph 10(B) because they 

rely on an unworkable definition of 
 "biodegradable," subject to standards not generally accepted 

in the scientific community, and they depend upon a falsehood, to wit, that ECM made an 

unqualified claim in advertising its Product. . 

C. ECM denies the FTC's allegations in Complaint Paragrapll lO(C) because they 

rely on an unworkable definition of 
 "biodegradable," subject to standards not generally accepted 

in the scientific community, and they depend upon a falsehood, to wit, that ECM made an 

unqualified claim in advertising its Product. 

D. ECM denies the FTC's allegations in Complaint Paragraph lO(D) because they 

rely on an unworkable definition of 
 "biodegradable," subject to standards not generally accepted 

in the scientific community, and they depend upon a falsehood, to wit, that ECM made an 

unqualified claim in advertising its Product. 

11. ECM denies the allegations in Complaint Paragraph 11 because the actual claims 

made by ECM in advertising and those reasonably implied therefrom are in context, taken as a 

whole, and as understood by ECM's customers, truthful and non-misleadin~. ECM's advertising 

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PUBLIC DOCUMENT (Docket No. 9358) 

representations are protected commercial speech within the meaning of the First Amendment to 

the United States Constitution. 

UNSUBSTANTIATED REPRESENTATIONS
 

12. Incorporating its objections and denials described in this Answer, ECM denies the
 

allegations in Complaint Paragraph 12. ECM has at all times possessed a "reasonable basis" for 

its advertising representations. Its advertising representations are protected commercial speech 

within the meaning of the First Amendment to the United States Constitution. 

13. ECM denies the allegations in Complaint Paragraph 13 because it has possessed 

and currently possesses a reasonable basis that substantiates its advertising representations. Its 

advertising representations are protected comf!ercial speech within the meaning of the First 

Amendment to the United States Constitution. 

MEANS AND INSTRUMENTALITIES 

14. Complaint Paragraph 14 contains legal argument and conclusions to which no
 

response is required. ECM nevertheless denies the allegations contained in Complaint Paragraph 

14, including, but not limited to, every implication that ECM's advertising is unfair, misleading, 

deceptive, or false or has caused or induced those in receipt of 
 the advertising to commit 

deceptive acts or practices. 

15. Complaint Paragraph 15 contains legal argument and conclusions to which no 

response is required. ECM nevertheless denies the allegations contained in Complaint Paragraph 

15, including, but not limited to, every implication that ECM's advertising is unfair, misleading, 

deceptive, or false or constitutes a deceptive act or practice. 

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PUBLIC DOCUMENT (Docket No. 9358) 

ECM hereby denies all allegations that are contained in the Complaint which were not 

specifically admitted or denied above. 

NOTICE SECTION
 

The Complaint provides "Notice" to ECM of procedural matters. That Notice contains
 

statements and conclusions of law to which no response is required. To the extent any response 

is required expressly or by implication, ECM hereby denies that it has violated any laws or 

regulations which warrant compliance with the Notice requested. ECM denies that this 

proceeding by the FTC is in the public interest, that this proceeding is lawful under the U.S. 

Constitution or the Administrative Procedures' Act, or that the FTC has satisfied the statutory, 

regulatory and constitutional requisites for issuance and prosecution of a Complaint against 

ECM. 

ADDITIONAL DEFENSES
 

ECM hereby reserves the right to present additional defenses as this matter proceeds, 

particularly with respect to those defenses presently unknown to ECM. ECM hereby asserts the 

following additional defenses, without assuming any burden of proof on any issue or relieving 

the Commission of its burden to establish each element of its alleged claims. 

FIRST DEFENSE 

(Failure to State a Claim) 

The Complaint fails to state a claim upon which relief can be granted under Section 5 of 

the FTC Act, 15 U.S.C. § 45. The FTC has not demonstrated that ECM's well-qualified claims 

are false, have a tendency to deceive, or that Part 3 adjudication is in the public interest. 

11 
PUBLIC DOCUMENT (Docket No. 9358) 

SECOND DEFENSE 

(Complaint Not in Public Interest) 

The requested relief, if granted, would not be in the public interest. 

! 

THIRD DEFENSE 

(Third-Party Causation)
 

The FTC alleges that it can seek restitution and other forms of redress. However, any 

relief the FTC impliedly may seek was legally and proximately caused by other persons, entities, 

or forces, over which ECM exerted no control and for which it had no responsibility. 

Specifically, ECM marketed and explained its product's qualities with attendant qualifying 

language, and through suffcient scientific explanation to give its sophisticated plastics 

manufacturer and ECM Product distributor customers a complete understanding of 
 the scientific 

limitations of 
 the ECM Product. ECM did not, does not, and cannot control how third-parties 

market and sell finished plastics products containing the ECM Product as one ingredient. 

Accordingly, ECM cannot be liable for actions taken by third-parties beyond ECM's dominion 

and control. 

FOURTH DEFENSE
 

(Goòd Faith) 

ECM has acted in good faith in all of its marketing practices, including qualified claims 

in support of 
 biodegradability. ECM took affirmative steps to comply with the FTCA after the 

FTC revised its Green Guides effective October 20 i 2, including the implementation of 

additional qualifying language. ECM amended claims to follow closely the letter of those 

Guides. Evidence of good faith prohibits the FTC from applying in its Order a permanent 

injunction. 

12 
PUBLIC DOCUMENT (Docket No. 9358) 

FIFTH DEFENSE 

(No Reasonable Basis for Requested Relief) 

There is no danger of recurrence of alleged similar violations, and the FTC's requested 

relief is not reasonably related to ECM's alleged violations. The FTC must demonstrate that a 

"cognizable danger of current violation" exists before an injunction may issue, and there is 

insuffcient evidence that such danger exists. Further, ECM has demonstrated, that it 

affrmatively takes steps to ensure that it does not violate the FTCA or the Revised Green 

Guides. When determining the likelihood of recurrence, courts consider the deliberate nature of 

the presently alleged violation and the defendant's past record concerning unfair advertising 

practices. See F.TC. v. Hang-Ups Art Enterprises, Inc., CV 95-0027 RMT(JGX), 1995 WL 

914179 (C.D. CaL. Sept. 27, 1995). The lack of any deliberate conduct in violation oflaw and 

that ECM has no past record of law violation precludes the FTC from relying on injunctive 

relief. 

SIXTH DEFENSE 

(Materiality) 

The advertising claims excerpted by the FTC in its Complaint include ones not material 

to the purchasing decisions of ECM customers. 

SEVENTH DEFENSE 

(Violation of First Amendment Right to Free Speech) 

The Complaint ordering paragraphs, if adopted, violate ECM's First Amendment right to 

communicate truthful commercial speech. The FTC thus lacks authority to impose its requested 

relief. ECM's claims are truthful and, to the extent the FTC perceives any implication arising 

from the claims to be misleading, are fully correctible through use of reasonable qualifications, 

which qualifications are less speech restrictive alternatives and are commanded by the First 

13 
PUBLIC DOCUMENT (Docket No. 9358) 

Amendment. By requiring complete elimination of plastic within one year as a condition 

precedent to use of 
 the term "biodegradable," the FTC precludes truthful disclosure of scientific 

evidence that supports the degradation of plastics through biological means which can occur at a 

slower rate depending on ambient environmental conditions, thus censoring truthful speech 

through an overbroad injunction, reducing public awareness of a product that diminishes har to
 

the environment, and creating a conflct with national environmental policy in the Environmental 

Protection Agency's enabling act.4 The FTC also creates an official speech orthodoxy, 

antithetical to the First Amendment, governing the term "biodegradable" when an obvious, less 

speech restrictive alternative, in the form of reasonable claim qualification, exists. See Pearson, 

164 F.3d at 658 ("It is clear '" that when governent chooses a policy of suppression over 

disclosure-at least where there is a showing that disclosure would not suffce .to cure 

misleadingness-governent disregards a 'far less restrictive' means"). 

EIGHTH DEFENSE
 

(APA Arbitrary and Capricious Agency Action)
 

The FTC's allegations are predicated on arbitrary and capricious regulatory policies that 

are not based on substantial evidence. The FTC has no legitimate basis to conclude that the term 

"biodegradable" begets a single meaning for consumers of the ECM Product, to wit: complete 

4 Title I of 
 the National Environmental Policy Act of 1970 states: 

The puroses of this chapter are: To declare a national policy which wil 

encourage productive and enjoyable harmony between man and his 

environment; to promote efforts which wil prevent or eliminate damage to 

the environment and biosphere and stimulate the health and welfRle of man; 

to enrich the understanding of the ecological systems and natural resources 

important to the Nation; and to establish a Council on Environmental
 

Quality. 

42 U.S.C.A. § 4321 (West). 

14
 
PUBLIC DOCUMßNT (Docket No. 9358) 

plastic elimination within one calendar year after disposaL. Furthel1ore, the FTC has no 

legitimate basis to conclude that the "reasonably short period of time" standard, as applied 

through the One Year Rule, is material to consumer impression of "degradable claims."
 

Accordingly, the FTC acts arbitrarily and capriciously in reliance on its Green Guides in this 

case and in the creation of an official speech orthodoxy, antithetical to the First Amendment, 

governing the term "biodegradable." 

NINTH DEFENSE 

(APA Arbitrary and Capricious Retroactive Application of Green Guides) 

The FTC violates the AP A by arbitrarily and capriciously enforcing its 2012 revisions to 

the Green Guides to commercial speech that predated those same guides. To the extent the FTC 

seeks to hold ECM liable under the so-called One-Year Rule for speech that occured before the 

FTC implemented that rule, the FTC acts arbitrarily and capriciously. FTC's claims are 

therefore barred by the doctrine of Retroactive Application. Specifically, courts presume that
 

regulations or laws are not to be retroactively applied. The FTC's "one-year" rule under the 

revised Green Guides targets advertising by ECM that occured prior to the promulgation of the 

revised Guides. 

TENTH DEFENSE
 

(Violation of Due Process-Separation of Functions)
 

The Commission violates ECM's right. to Due Process under the Fifth Amendment to the 

United States Constitution by abrogating the Separation of 
 Functions Doctrine. Due Process 

requires "minimum standards" of protection and fundamental fairness lacking here. Dunmar v. 

Ailes, 348 F.2d 51,54 (D.C. Cir. 1965). To ensure fairness, the FTC must maintain separate 

prosecutorial and adjudicative functions. F.TC. v. At!. Richfeld Co., 567 F.2d 96, 102 (D.C. 

15 
.1 

PUBLIC DOCUMENT (Docket No. 9358) 

Cir. 1977). ECM is entitled to a fair proceeding that requires, at a minimum, a neutral weighing 

of the evidence and of the charges presented by the charging party; such a neutral weighing is 

impossible when the ultimate charging party, the Commission, also sits as the ultimate judge of 

its own charges. Marshall v. Jerrico, Inc., 446 U.S. 238, 242 (1980) (noting that, "The Due 

ì 

Process Clause entitles a person to an impartial and disinterested tribunal in both civil and 

criminal cases"). By combining the functions of investigator, prosecutor, judge, and appellate 

tribunal in one body, the Commission, to which final agency review is committed, is 

incontrovertibly biased, it being judge of the merits of its very own charges. 

PRAYER FOR RELIEF 

WHEREFOR, ECM respectfully prays for relief as follows: 

1. Deny all of 
 the FTC's claims and request for relief. 

2. Dismiss the Complaint in its entirety with prejudice.
 

3. Award ECM all awards, costs, and fees reasonably associated with this lawsuit 

pursuant to 3.81 of the FTC Rules of 
 Practice, to the extent applicable, including, but not limited 

to, attorney fees and expert fees. 

4. Award all forms of additional relief as the Administrative Law Judge may deem 

proper and just. 

Respectfully submitted,
 

ECM Biofims, Inc. 

16
 
PUBLIC DOCUMENT (Docket No. 9358) 

By: fà ~ Jonathan W. Emord \ 

Peter A. Arhangelsky 

Lou F. Caputo 

Bethany R. Kennedy 

Attorneys for Defendant-ECM Biofilms, Inc. 

DATED this 14th day of 
 November, 2013. 

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PUBLIC DOCUMENT (Docket No. 9358)
 

CERTIFICATE OF SERVICE
 

I hereby certify that on November 14,2013, a copy of 
 foregoing, ANSWER AND 

AFFIRMATIVE DEFENSES OF RESPONDENT ECM BIOFILMS, INC., was 

electronically filed using the FTC's Electronic Filing System and was sent by that system and by 

certified mail to the following: 

Donald S. Clark
 Elisa Jilson

Office of the Secretary Division of Enforcerrent


Bureau of Consumer Protection Federal Trade Commission 

RoomH-l13 Federal Trade Commission

600 Pennsylvania Avenue, NW
 600 Pennsylvania Avenue, NW

Washington, D.C. 20580
 Mail stop M-8102B


Washington, D.C. 20580
 

Katherine Johnson
 

Division of Enforcement
 

Bureau of Consumer Protection
 

Federal Trade Commission
 

600 Pennsylvania Avenue, NW
 

Mail stop M-8102B
 

Washington, D.C. 20580
 

g~Jonathan W. Emord '" 

18
 
UNITED STATES OF AMERICA 

FEDERAL TRAE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

. I
 

) In the Matter of ) 

) ECM BíoFilms, Inc., ) DOCKET NO. 9358 

a corporation, also d//a
 ) Enviroplastics International, ) Respondent. ) 

) 

PROTECTIVE ORDER GOVERNING DISCOVERY MATERIAL 

Commission Rule 3.31(d) states: "In order to protect the paries and third parties 

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." 16 C.F.R. 

§ 3.31(d). Pursuant to Commission Rule 3.31(d), the protective order set forth in the 

appendix to that section is attached verbatim as Attachment A and is hereby issued. 

ORDERED: cl Ú! c4~jL

D. Michael C ~ ~í 

Chief Administrative Law Judge 

Date: October 22,2013 
ATTACHMENT A
 

For the purpose of 
 protecting the interests of 
 the paries and third paries in the above-captioned matter against improper use and disclosure of confidential information 

submitted or produced in connection with this matter: 

IT is HEREBY ORDERED THAT this Protective Order Governing
 

Confidential Material ("Protective Order") shall govern the handling of all Discovery
 

Material, as hereafter defined.
 

i. As used in this Order, "confidential material" shall refer to any docun1ent or portion 

thereof that contains privileged, competitively sensitive information, or sensitive personal 

information. "Sensitive personal information" shall refer to, but shall not be limited to, 

an individual's Social Security number, taxpayer identitìcation number, financial account 

number, credit .card or debit card number, driver's license number, state-issued 

identification number, passport number, date of 
 birth (other than year), and any sensitive health information identifiable by individual, such as an individual's medical records. 

"Document" shall refer to any discoverable writing, recording, transcript of oral 

testimony, or electronically stored infOlmation in the possession of a party or a third 

party. "Commission" shall refer to the Federal Trade Commission ("FTC"), or any of its 

employees, agents, attorneys, and all other persons acting on its behalf, excluding persons 

retained as consultants or experts for purposes of ths proceeding. 

2. Any document or portion thereof submitted by a respondent or a third party during a 

Federal Trade Commission investigation or durng the course of 
 this proceeding that is entitled to confidentiality under the Federal Trade Commission Act, or any regulation,
 

interpretation, or precedent concerning documents in the possession of the Commission,
 

as well as any information taken from any portion of such document, shall be treated as
 

confidential material for puroses of 
 this Order. The identity of a third party submitting 

sueh confidential material shall also be treated as confidential material for the puroses of 

this Order where the submitter has requested such confidential treatment. 

3. The paries and any third pares, in complying with informal discovery requests,
 

disclosure requirements, or discovery demands in this proceeding may designate any 

responsive docun1ent or poition theæuf as confidential material, including documents 

obtained by them from third paries pursuant to discovery or as otherwise obtained. 

4. The parties, in conducting discovery from third parties, shall provide to each third 

party a copy of 
 this Order so as to inform each such third pary of 
 his, her, or its rights herein. 

5. A designation of confidentiality shall constitute a representation in good faith and after 

careful determination that the material is not reasonably believed to be already in the 

public domain and that counsel believes the material so designated constitutes 

confidential material as defined in Paragraph 1 of this Order. ' 

2
 
6. Material may be designated as confidential by placing on or affxing to the document 

containing such material (in such manner as will not interfere with the legibility thereof), 

or if an entire folder or box of documents is confidential by placing or affixing to that 

folder or box, the designation "CONFIDENTIAL - FTC Docket No. 9358" or any other 

appropriate notice that identifies this proceeding, together with an indication of 
 the portion or portions of the document considered to be confidential materiaL. Confidential 

information contained in electronic documents may also be designated as confidential by 

placing the designation "CONFIDENTIAL - FTC Docket No. 9358" or any other 

appropriate notice that identifies this proceeding, on the face of the CD or DVD or other 

medium on which the document is produced. Masked or otherwise redacted copies of 

documents may be produced where the portions deleted contain privileged matter, 

provided that the copy produced shall indicate at the appropriate point that portions have 

been deleted and the reasons therefor. 

7. Confidential material shall be disclosed only to: (a) the Administrative Law Judge 

presiding over this proceeding, personnel assisting the Administrative Law Judge, the 

Commission and its employees, and personnel retained by the Commission as expeiis or 

consultants for this proceeding; (b) judges and other cour personnel of any court having 

jurisdiction over any appellate proceedings involving this matter; (c) outside counsel of 

record for any respondent, their associated.attorneys and other employees oftheIr law 

firm(s), provided they are not employees of a respondent; (d) anyone retairied to assist 

outside counsel in the preparation or hearing of 
 this proceeding including consultants, 

provided they are not affiiated in any way with a respondent and have signed an 

agreement to abide by the terms of the protective order; and ( e) any witness or deponent 

who may have authored or received the information in question. 

8. Disclosure of confidential material to any person described in Paragraph 7 of 
 this Order shall be only for the puroses of 
 the preparation and hearing of 
 this proceeding, or any appeal therefrom, and for no other purpose whatsoever, provided, however, that the 

Commission may, subject to taking appropriate steps to preserve the confidentiality of 

such material, use or disclose confidential material as provided by its Rules of Practice; 

sections 6(f) and 21 of 
 the Federal Trade Commission Act; or any other legal obligation 

imposed upon the Commission. 

9. In the event that any confidential material is contained in any pleading, motion, exhibit 

or other paper filed or to be fied with the Secretar of the Commission, the Secretary 

shall be so informed by the Pary filing such papers, and such papers shall be fied in. 

camera. To the extent that such material was originally submitted by a third pary, the 

pary including the materials in its papers shall immediately notify the submitter of such 

inclusion. Confidential material contained in the papers shall continue to have in camera 

treatment until fÌ1her order of 
 the Administrative Law Judge, provided, however, that 

such papers may be fuished to persons or entities who may receive confidential 

material pursuant to Paragraphs 7 or 8. Upon or after fiing any paper containing 

confidential material, the filing pary shall file on the public record a duplicate copy of 

the paper that does not reveal confidential materiaL. Further, if the protection for any 

such material expires, a pary may fie on the public record a duplicate copy which also 

contains the fomierly protected materiaL. 

3 
10. If counsel plans to introduce into evidence at the hearing any document or transcript 

containing confidential material produced by another party or by a third party, they shall 

provide advance notice to the other pary or third party for purposes of allowing that 

pary to seek an order that the document or transcript be granted in camera treatment. If 

that pary wishes in camera treatment for the document or transcript, the party shall fie 

an appropriate motion with the Administrative Law Judge within 5 days after it receives 

such notice. Except where such an order is granted, all documents and transcripts shall 

be part of 
 the public record. Where in camera treatment is granted, a duplicate copy of
 

such document or transcript with the confidential material deleted therefrom may be
 

placed on the public record.
 

1 1. If any party receives a discovery request in any investigation or in any other 

proceeding or matter that may require the disclosure of confdential material submitted by 

another party or third pary, the recipient of 
 the discovery request shall promptly notify 

the submitter of receipt of such request. Unless a shorter time is mandated by an order of 

a cour, such notification shall be in writing and be received by the submitter at least 10 

business days before production, and shall include a copy of this Protective Order and a 

cover letter that will apprise the submitter of its rights hereunder. Nothing herein shall be 

construed as requiring the recipient of the discovery request or anyone else covered by 

this Order to challenge or appeal any order requiring production of confidential material, 

to subject itself 
 to any penalties for non-compliance with any such order, or to seek any 

relief from the Administrative Law Judge or the Commission. The recipient shall not 

oppose the submitter's efforts to challenge the disclosure of confidential materiaL. In 

addition, nothing herein shall limit the applicability of Rule 4.1 1 (e) of 
 the Commission's

Rules of Practice, 16 CFR 4.11 (e), to discovery requests in another proceeding that are 

directed to the Commission. 

12. At the time that any consultant or other person retained to assist counsel in the 

preparation of 
 this action concludes participation in the action, such person shall return to 

counsel all copies of documents or portions thereof designated confidential that are in the 

possession of such person, together with all 
 notes, memoranda or other papers containing confidential information. At the conclusion of 
 this proceeding, including the exhaustion of judicial review, the paries shall return documents obtained in this action to their 

submitters, provided, however, that the Commission's obligation to return docmnents 

shall be governed by the provisions of 
 Rule 4.12 of the Rules of 
 Practice, 16 CFR 4.12. 

13. The provisions of 
 this Protective Order, insofar as they restrict the communication 

and use of confidential discovery material, 'shall, without written permission of the 

submitter or further order of 
 the Commission, continue to be binding after the conclusion 

of this proceeding. 

'­

4
 
EXHIBIT i
 

In re ECM BioFilms, Inc. I Exhibit 1 (Public) 
Life Expectancy of Products Manufactured with ECM 

MasterBatch Pellets TM 

The lilè expectancy of plastic products that are manuJ.àctured with independent laboratories by independent scientists. We have had the 

at lea~t a one percent (1 %) load, by weight, of our EeM. various test data an.alyzed by independent scientists and their 

MasterBatch Pellets can be explained through 1:\'0 types of life conclusions and some of the data have been sent to you in the
 

expectancies. The first type of litè expectmicy is the life presentation package mid are what we base our certification on.
 

expectancy of the plastic when it is on the warehouse or store 

shelf, in regular usage as packaging or other normal plastic usage. The basic concept is that biodegradation is a natural process that occurs 

The second type of life expectancy has to do with the situation around the world but at varous speeds due to various conditions, 

when tIie same plastic has been put in conditions wherein it has Plastics with our additives behave like sticks, branches or trunks of 

constant contact with other materials that are biodegrading, trees, Due to this fact, we do not guarantee any paricular time because 

the time depends on the same factors t!at the biodegradation of woods 

Plastic products manufhctured with ECM MasterBatch Pellets wíl and most other organic materials on earh depend - ambient biota and 

have the same litè expectancy as the same plastic product other environmental conditions - but the time frame of 
 between nine 

manutàctured without our additives under all but the conditions months to five years vi,i11 give a good general idea for most conditions, 

mentioned above wherein they are placed in constant contact with Under specí1ìc composting conditions with additional accelerants 

other materials that are biodegrading (i.e, on or buried in the sprayed on them, some customers have reported biodegradation in as 

ground), 'Iliis is a maíor reason why our technology for having little as a couple of months. Under the more usual, commercial 

biodegradable* plastic products is so successfuL. composting conditions using high heat processes, a tine frame of
 

around one year is a reasonable expectation, 

The priciples concemed with the degradation* of 
 plastics that
 

make use of our additive technology are truly involved with Petrochemical plastics would normally take hundreds or thous,mds of
 

"bio"-degradation*. Our technology does not rely on the use of years or even longer to "biodegrade"; with our additives, these sanie 

photosensitivity or tIierm,u sensitivity to photo degrade or plastic fonnulas biodegrade in a hundredth of that time or less. 

thermally break down the plastics, For ths reason, a blow-molded 

HDPE shampoo bottle or motor oil bottle manufactured with one Do not be confused by the claims of some companies that say that their 

of our additives wil last in the warehouse and on the store shelf resins J.ì.lly biodegrade in 2 months or 3 months, They are speaking of 

as long as it wOlud without our additives. 11lere is a considerable biodegradation under very specific conditions. 11iis has lead to some 

amount of interest in our additives for the plastics for the confusion when the plastic products are in the end-consumers' hands, 

automotive and aviation industres for this reason. such as in the Kassel project in Gennany when the bags and other 

plastic products marked with a "compostable" label were found not to 

11lere is the real concern for the technologies that make use of be compostable by the town's citizens in their backyard compost heaps 

thermal or photodegradation t1lat they are simply leaving smaller (they were only "compostable" under t1~e very specific commercial 

paricles of plastic in the soil rather thmi having the material trly composting standads where there is high heat, oxygenation, moisture 

become the organic components of soiL. 11iis is especially of control and high levels ofniicroorganisms).Wlien i spoke at the 

concern in the agriciutil industr and for those needing erosion Biodegradable Plastics Conference in Frankfurt, Gennany a few year 

control products. Agricultunu films, erosion control nettings, and ago, 1 argued with the companies involved in that project that they 

other such products manufàctured with our additives will last long should be careful in not trying to conJ.scate generic terms for too 

enough to get the required use but wil completely biodegrade illtospecific conditions (i,e. they should label items as "Commercially 

the soil; such plastic products completely biodegrade in a period Compostable" rather than simply "Compostahle" when such conditions 

of from 9 months to 5 years or less, It is not a "poot; it's gone" are required). As the use of our technology continues to grow to 

system but sinply makes the plastic product biodegrade as if it become the world's leading technology for the production of
 

were a stick or a branch off a tree rather than "sticking around" biodegradable* plastics, our viewpoint wil continue to gain more and 

ïnreECMBi()Films, 'Inc. I Eiiïiibin tPubHc) 
for hundreds of years. more adherents. 

To summmize the concept, the key to our technology is that the Plastics manufactured with our additives wil fully biodegrade in home 

right conditions for biodegradation are not those found when the compost heaps, commercial composting operations (both high heat and 

plastic product is in use, is on the store shelves or is being low heat, or even in venniculture, processes), buried in the ground, 

warehoused somewhere. Just like a wood bowl or a piece of wood buried in landfills, tiled into the soil, having been littered, etc. Most 

furiture, which can be used for a lifetime or more, a plastic importantly, our process is by far the least expensive, most widely
 

product with our additives can be used for essentially the sanie applicable, proven technology for the biodegradation of pla~tics in the 

period of time a~ the same plastic product ""ithout our additives world. 

could be used, 

Agai, we certify the biodegradation* of poly ole fins (any of the 

Concerning the life expectancy of the plastic products polyethylenes mid polypropylenes), EVAs, PVCs, PETs, PSs, PUs and 

manufactured with our additives once they are placed in constat
 

any combination of these resins, manufactured with at least a 1% load 

contact with other biodegrading materials, we certifY thc ftùl of our additives. We base this certfication on more than ten years of biodegradation of most all plastic products manufactured with at 

testing world""idc by us, by universities, by customers, by prospects and least a one percent load of our additives, We can certify this 

by competitors. 

hundreds of thousands of dollars. Our additives have been tested 

in all of tlie types of polyolefis, EVAs, PVCs, PETs, PSs, PUs 

and combinations thereof; with much of the testing having been 

performed using the various world-standadized tests in 

situation due to the intemal and extemal studies that have cost us 

Share this: Share 

BIODEGRADABLE* PLASTICS QUALIFIER THIS SITE IS ABOUT.. 

* Plastic products manufactured with ECM Biodegradable Bags Biodegradable Pelleis 

BioFilms' additives wil biodegrade in any Biodegradable Plastics biologically-active environment (including most Energy Landfills ¡mop Methane Gas Plastic Bags Plastic 

landfills) in some period greater than a year. Products Plastic Resins Renewable Natural Gas Sustainable 

Plastics 

;i 

In re ECM BioFilms, Inc. I Exhibit 1 (Public) 
PUBLIC VERSION REDACTED
 

Confidential Subject to Protective Order
 

EXHIBIT 2
 

I1 

In re ECM BioFilms, Inc. I Exhibit 2 (Confidential) 

EXHIBIT 3
 

In re ECM BioFilms, Inc. I Exhibit 3 (Public) 
ECM Technology for the Biodegradation of Plastic Products
 

The technology is an additive which, when combined in small 

quantities wiil any of ile popular plastic resins, renders the end 

products biodegradable* while maintaining ileir other desired 

characteristics. It is sold as ECM .MasterBatch Pellets and our 

Company has developed the technology to the point where most 

plastic products manufacturers can use the additive without having 

to modify their existing meilods of production any more than if 

they were changing the product's color. The resulting pla'itic 

products exhibit ile same desired mechanical properties, have 

effectively similar shelf-lives, and yet, when disposed of, are able 

to be metabolized into biomass by the communities of 

microorganisms commonly found almost everywhere on ilis 

planet. This biodegradation process can take place aerobically and 

anaerobically. It can take place with or without the presence of 

light. These IÌictors allow for biodegradation even in landfil 

conditions which are normally inconducive to any degradation of 

other technologies, Our technology differs significantly from other 

"degradable plastics" emerging in the market today because it 

does not attempt to replace the currently popular plastic resin 

tonnulizations but instead enhances them by renderig them 

biodegradable" .Recognzing the environment¡ù concems related to 

plastics and tiie market potential, the corporate and scientific 

communities have long sought to develop degradable plastics. 

However, the Company believes ilat degradable plastics 

introduced to date possess several weaknesses that have prevented 

wide-spread acceptance in the marketplace. Photo-degradable 

products, for exaniple, do not degrade in landfills due to the lack 

of sunlight (they are typically covered with another layer of trash 

before the degradation can occur). At the same time these photodegradable products preseiit difficult circumstances tor storage 

before use due to tlieir reactivity to light. Similarly, plastic 

products manufactured with PLA and such "renewable" 

replacement resins fail to biodegrade as litter or in a landtìl, are 

very expensive to manufacture, and often do not achieve the 

requisite physical propeities.ECM's technology is a process which 

enables the micToorgmùsms in the environment to metabolize the 

moleculirr structure of plastic products into humus that is 

.. ...... . beiiefjcialtot1ieen,:ironinelit.()\lyrocess utilizes several 

ECM engaged several reno\\1led testing laboratories to 

independently establish the biodegradability of plastic produds 

made with ECM's additives, TIie tests concluded that the products 

were biodegmdable* under both aerobic mid miaerobic conditions. 

In addition, the tests concluded that their biodegradation did not 

produce any toxic residue hanutìil to living organisms in land or 

water. 

Technology Explanation 

The plastic product'i made with oui additives wil break down in 

more than one year but less than a hundred plus years in nearly all 

landfills or wherever else iley may end up, All sorts of tàctors 

detennine the amount of microbes available in the soil and the 

soil conditions detemiine the rate of degradation. The plastic 

products made with ECM technology basically rely on the 

microbes in the soil to react with the additives and fOHn 

communities, biofims, which create the enzymes and acids that 

can attack the 10ngchain hydrocarbon molecules mid break them 

down to the point ilat the microbes' natural acids and enzymes 

are then effective and ile microbes can metabolize the simple 

hydroc¡rrbons with C02 imd water or methane being the waste 

products. This process continues unlí all the plastic product is 

Tìilly biodegraded. 

Material treated with ECM has been tested and proved as 

biodegradable* and safe for the environment by using the 

following:
 

. ASTM D5209 "Standard Test Method for Determining
 

the Aerobic Biodegradation of Pla~tíc Materials in the
 

Presence of Municipal Sewage Sludge";
 

. iso 14855 I ASTM D5338 "Standard Test Method for
 

Determining Aerobic Biodegradation of Plastic Materials 

under Controlled Composting Conditions"; and 

. ASTM 55 i i "Standard Test Meilod for Determinùig 

Anaerobic Biodegradation of Plastic Materials Under 

High-Solids Anaerobic Digestion Conditions", 

'v'bere wil it biodegrade*? 

. Home composting 

. Commercial composting 

. Landills 

. Buried in, or in contact with the soil 

. Erosion I AgriciùtUTaI nettng & fim 

ïrïreËCMB¡Oi=iims,frïc:IExhibifà(Púbiicj 
. Litter proprietary compounds that are combined into a masterbatch pellet 

Where won't it degrade? 

that is easily added to plastic resins using existing technology. . Warehouses 

. S tore she! ves 

. Offices & Home 

Share this: Share 

BIODEGRADABLE* PLASTICS QUALIFIER THIS SITE IS ABOUT.. 

* Plastic products mmiufactured with ECM Biodegradable Bags Biodegradable Pellets 

BioFilms' additives wil biodegrade in any Biodegradable Plastics biologically-active environment (including most Energy Landfills linop Methane Gas Plastic Bags Plastic 

Imidfil1s) in some period greater than a year. Products Plastic Resins Renewable Natural Gus Sustainable 

Plastics 

In re ECM BioFilms, Inc. I Exhibit 3 (Public) 
PUBLIC VERSION REDACTED
 

Confidential Subject to Protective Order
 

EXHIBIT 4 

In re ECM BioFilms, Inc. I Exhibit 4 (Confidential) 

PUBLIC VERSION REDACTED
 

Confidential Subject to Protective Order
 

EXHIBIT 5 

J 

In re ECM BioFilms, Inc. I Exhibit 5 (Confidential)