In the Matter of 

ORIGl~JAL 

UNITED STATES OF AMERICA 

FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

ECM BioFilms, Inc., 

) 

) 

) 

) 

) 

) 

) 

DOCKET NO. 9358 

a corporation, also d/b/a 

Enviroplastics International, 

Respondent. · 

ORDE~ GRANTING IN PART AND DENYING IN PART 

RESPONDENT'S MOTION FOR SANCTIONS 

PUBLIC 

On February 28, 2014, Respondent ECM BioFilms, Inc. ("Respondent" or "ECM") filed 

a Motion for Sanctions for the asserted failure of Federal Trade Commission ("FTC") Complaint 

Counsel to supplement its document production "in a timely manner," pursua:ntto FTC Rule 

3.3l(e)(2) ("Motion"). 16 C.P.R.§ 3.31(e)(2). Complaint Counsel filed an opposition to the 

Motion on March 10, 2014 ('•Opposition"), and a Clarification Regarding Respondenfs Motion 

for Sanctions on March 13,2014. 

On March 12,2014, Respondent filed a Motion for Leave to Supplement its Motion for 

Sanctions by submitting a complete transcript of the ECM deposition, in lieu of d,epositjon 

excerpts as originally filed as RX-A to the Metion~ As ofthe date of this Order, no opposition to 

that motion has been filed. Respondent's Motion for ~ave is GRANTED, and citations to the 

deposition transcript shall refer to RX-A as supplementeo by Respondent. 

Having fully reviewed and considered the Motion, Opposition, and Clarification, and the 

exbibits thereto, the Motion is. GRANTED IN PART AND DENIED IN PART, as more fully 

explained below. 

I. Background 

The Motion is based upon Complaint Counsel's use of a document at the deposition of 

ECM, via its designee, ECM's Chief Executive Officer Robert Sinclair, which took place on 

February l8 and 19,2014. Motion RX-A (TranscriptofDeposition(hereafter"Tr.")). The 

document, marked as Deposition Exhibit 23, is a published article titled, "Biodegradability of 

Conventional and Bio-Based Plastics and Natural Fiber Composites During Composting, 

Anaerobic Digestion anci Long-Term Soil Incubation," by Eddie F. Gomez and Frederick C. 

Michel, Jr., who are associated with Ohio State Agricultural Research and Development Center 

(the "Ohio State Article" or "Article"). Tr. 366. The Ohio State Article was published on 

October l, 2013, in a journal entitled Polymer Degradation and Stability, 98 (2013) 2583-2591. 
!d.; Opposition CCX-A~ 5, Attachment 1. 

Based on the parties' representations and the exhibits offered in support thereof, on 

Friday, February 14,2014, at approximately 8:00p.m., Complaint Counsel received a copy of 

the Ohio State Article. Declaration of Jonathan Cohen, Opposition CCX-A (hereafter, "Cohen 

Decl.") ~ 6. Although Mr. Cohen states that the article was received "unsolicited," Jd ~ 6, he 

does not disclose how, or from whom, the Ohio State Article was received. The Declaration 

further states that Complaint Counsel had not "communicated in any way" with any of the 

authors of the Ohio State Article, or anyone at Ohio State. Cohen Decl. ~ 7. 

Complaint Counsel's March 13, 2014 "Clarification" regarding the Motion states that on 

the previous day, Complaint Counsel learned that "two FTC attorneys (not representing 

Complaint Counsel)," one of whom worked on the investigative phase of the case but who has 

since left the FTC, had, in fact, received a draft of the Ohio State Article. The Clarification does 

not state when the draft was received. 1 According to the Clarification, the two attorneys had 

been working with Mr. Michel "as a consulting expert on unrelated matters involving 

biodegradability claims other companies asserted" and received the Article in connection with 

that work. Clarification at 1 and n.1. 

On the afternoon ofFebruary 15,2014, the day after Complaint Counsel received the 

Ohio State Article, Complaint Counsel Johnson packed for her travel to ECM's offices, where 

the deposition was scheduled to take place, taking the Ohio State Article with her. Tr. 374-375. 

February 17,2014 was President's Day, a federal holiday. The deposition commenced on 

Tuesday morning, February 18,2014. Tr. 1. After recessing for the night, the deposition 

reconvened the following morning, on Wednesday, February 19, 2014. Tr. 223. At 

approximately 1 :24 p.m., after the lunch break, Complaint Counsel produced the Ohio State 

Article, marked it as an exhibit to the deposition, and proceeded to question Mr. Sinclair 

concerning the Article, including regarding the findings and conclusions of the study. Tr. 366-

378. It is undisputed that this was the first time Complaint Counsel had disclosed the document 

to Respondent. 

In response to the objections of Respondent's counsel, Complaint Counsel stated that it 

received the Ohio State Article the previous Friday; that Complaint Counsel "might have" had 

the opportunity to send a copy of it to Respondent's counsel at that time; and that someone on 

Complaint Counsel's staff also "possibly" could have provided a copy to Respondent's counsel. 

Tr. 371-372. The dialogue continued: 

MR. EMORD: So we could have been given a copy of the document so we could 

confirm1 The Clarification also does not state, among other details, by whom the draft was received, where it was located, or 

whether or not the draft was relied upon in the investigation or prosecution of this case. See 16 C.F.R. § 33l(c)(2) 

(Complaint Counsel must search for responsive documents "that were collected or reviewed in the course of the 

investigation of the matter or prosecution of the case and that are in the possession, custody or control of the 

Bureaus or Offices of the Commission that investigated the matter, including the Bureau of Economics .... ). 

Respondent has submitted a Motion to Compel and for Sanctions with respect to the draft article and related 

correspondence. 

2 
Id 

MS. JOHNSON: Well, you have a copy now. So if you want to take some time and take 

a look at it, that's totally fine. 

MR. EMORD: ... You gave us no advanced notice ofthis document. None. You had it 

on Friday, you knew you were going to use it in a depositionMS. JOHNSON: I did not know I was going to use it. 

MR. EMORD: When did you decide you were going to use it? 

MS. JOHNSON: We packed up our stuff on Saturday afternoon. 

MR. EMORD: This is highlighted. Who did the highlighting on the document? 

MS. JOHNSON: I'm not going to reveal that. 

MR. EMORD: ... [I]n any event, you did not tum this document over to us when you 

had the opportunity to do it and -

MS. JOHNSON: This is your opportunity ... 

Tr. 374-375. 

MS. JOHNSON: I apologize for that. ... Would you like to take a few moments to read 

it, we can take a break? 

Tr. 375-376. 

II. Analysis 

A. Overview 

Respondent asserts, and Complaint Counsel does not deny, that the Ohio State Article is 

within the scope of Respondent's First Request for Production of Documents, specifically, 

Requests 1 and 3, which state: 

Document Request 1 : Provide all documents that concern whether plastics in general and 

ECM Plastics in particular will break down and decompose into elements found in nature 

after customary disposal or in a landfill. 

Document Request 3: Provide all documents that support or call into question your 

conclusion that ECM's biodegradable claims for degradation are false. 

3 
Motion RX-B at 7. 

Respondent argues that Complaint Counsel intentionally withheld the Ohio State Article 

from Respondent until the afternoon ofthe second day ofECM's deposition in order to gain an 

advantage of surprise, and that such conduct violated Complaint Counsel's duty to supplement in 

a timely manner under Rule 3.31 ( e )(2). FTC Rule 3.31 (e) provides in pertinent part: 

A party who has ... responded to a request for discovery with a disclosure or 

response is under a duty to supplement or correct the disclosure or response to 

include information thereafter acquired if ordered by the Administrative Law 

Judge or in the following circumstances: 

(2) A party is under a duty to amend in a timely manner a prior response to an 

interrogatory, request for production, or request for admission if the party learns that the 

response is in some material respect incomplete or incorrect. 

16 C.P.R.§ 3.3l(e)(2). 

Respondent further argues that Complaint Counsel's conduct in withholding the 

document was willful and unjustified, and that Complaint Counsel's questioning ofECM on the 

previously undisclosed document was prejudicial to Respondent. Thus, Respondent argues, 

Complaint Counsel should be barred from introducing into evidence at trial, or "otherwise 

relying on" the Ohio State Article, pursuant to Rule 3.38(b)(4). That Rule provides that if a party 

"fails to comply with any discovery obligation imposed by these rules, upon motion by the 

aggrieved party," the Administrative Law Judge "may take such action in regard thereto as is 

just," including a ruling "that the party may not introduce into evidence or otherwise rely" upon 

"improperly withheld or undisclosed materials, information, witnesses, or other discovery." 

16 C.F.R. § 3.38(b)(4). 

B. Timely Supplementation 

Complaint Counsel does not dispute that it was under an obligation to supplement its 

previous document production by providing the Ohio State Article to Respondent. The disputed 

issue is whether, under the circumstances presented, Complaint Counsel's conduct in delaying 

production of the Ohio State Article until five days after its receipt, during the middle of the 

second day of a previously scheduled deposition, violated Complaint Counsel's obligation to 

supplement "in a timely manner." As explained below, and based on the record presented, by 

delaying production of the Ohio State Article and presenting the Article to Respondent for the 

first time in the midst of the second day of the deposition, when Complaint Counsel had clearly 

determined the relevance and possible use of the Article before the start of the deposition, 

Complaint Counsel did not supplement in a timely manner. 

Complaint Counsel clearly recognized the relevance of the Ohio State Article, if not 

immediately upon receipt, then certainly no later than Saturday afternoon, February 15, 2014, 

4 
when Complaint Counsel packed the document in order to use it at ECM's deposition. See Tr. 

374-375. Yet Complaint Counsel declined numerous opportunities to provide the Article to 

Respondent and thereby fulfill its duty to supplement Complaint Counsel's prior document 

production. Putting aside whether, in the current age of instant communications, including via 

government issued Blackberry, Complaint Counsel had an obligation to transmit the Article to 

Respondent over the long holiday weekend, Complaint Counsel fails to explain or justify why it 

did not supplement its document production by providing the Ohio State Article to Respondent 

before the start of the ECM deposition, during the first day of the deposition, or at any other time 

prior to marking the Article as a deposition exhibit on the afternoon of the second day of the 

ECM deposition. 

Rule 3.31(e) does not define what constitutes a "timely manner" for purposes of the duty 

to supplement. Furthermore, the parties do not point to a case defining the phrase in the context 

of the type of delayed supplementation present in this case. However the phrase "timely 

manner" might be defined, it manifestly does not include a conscious withholding of a 

responsive document that was planned to be used as a deposition exhibit, as occurred in this case. 

Having determined that Complaint Counsel violated its obligation to supplement 

discovery in a timely manner, the analysis now turns to whether a sanction is appropriate, as 

requested by Respondent. 

C. Sanction 

Respondent argues that the appropriate sanction for Complaint Counsel's violation is to 

bar any use of the Ohio State Article for purposes of trial. Respondent contends that Complaint 

Counsel's conduct was willful and unjustified. In addition, Respondent asserts that Complaint 

Counsel's delay in producing the Article until the second day of the deposition prejudiced 

Respondent, because the delay put Mr. Sinclair in the position of answering questions about the 

Article without adequate preparation. According to Respondent, where a discoverable document 

is improperly withheld, the customary remedy is to exclude the document from any use at triaL 

Complaint Counsel responds that there has been no prejudice to Respondent because Mr. 

Sinclair "admitted essentially nothing" about the Ohio State Article; Mr. Sinclair is free to testify 

at trial that he believes the study was faulty;2 ECM's experts have until April30, 2014 to analyze 

the study; and providing the document earlier "would not have affected [ECM's experts'] ability 

to respond .... " Opposition at 6. 

"Rule 3.38 is designed both to prohibit a party from resting on its own concealment and 

to maintain the integrity ofthe administrative process." In re Grand Union Co., 102 F.T.C. 812, 

2 Indeed, Complaint Counsel contends that ECM has, is in fact, gained an advantage vis a vis Mr. Sinclair's potential 

trial testimony concerning the study. Complaint Counsel states: "[I]f Complaint Counsel had forwarded ECM the 

Ohio State Study early (in the middle of the night on Friday the 14th, or at the end ofthe day on Tuesday February 

18 (after one business day had elapsed)), Sinclair could not have testified that he had never seen the study before, 

which might have made it difficult for him to supplement any hastily-prepared deposition testimony at trial." 

Opposition at 6. Instead, according to Complaint Counsel, the fact that Sinclair had not seen the study before "gives 

ECM several months to figure out some sort of response." Id. 

5 
1983 FTC LEXIS 61 at * 594 (July 18, 1983). Sanctions may be imposed for failing to comply 

with a discovery obligation where the failure to comply was "unjustified and the sanction 

imposed 'is reasonable in.light ofthe material withheld and the purposes of Rule 3.38(b)., See 

Matter of International Telephone & Telegraph Corp., 1984 WL 565367 at **127 (July 25, 1984 

(quoting Grand Union, 1983FTGLEXIS 61 at *595)). 

Regardless ofwhether e:xclusion of the Ohlo State Article Would be an appropriate 

remedy had Complaint Counsel delayed production of the document until after the. discovery 

deadline or the start of trial ~ conduct present in the cases cited by Respondent - in the instant. 

case the extent of Complaint Counsel's delay does not warrant this sanction. The fact discovery 

deadline in this case is presently April 3, 2014, and the close ofexpert discovery is presently · 

Ma:y 16,2014. Trial is currently.scheduled to begin on June 18,20.14. Under these 

circumstances, exclusion of the Ohio State. Article is not necessary or appropriate to remedy the 

asserted prejudice. Accordingly, Respondent's request to exclude the Article, as a sanction for 

Complaint Counsel's delayed production of the Article, is DENIED. 

However, Respondent has detp.onstrated that Complaint Counsel violated its discovery 

obligation-to supplement in a timely manner with respect to the Ohio State Article, and based on 

the facts presented, a sanction is a,ppropriate. Accordingly, the Motion is GRANTED IN PART. 

Complaint Coimsel has failed to show that its conduct was justified, and a sanction under these 

circumstances will affirm the integrity of the administrative process. Moreover, Complaint 

Counsel should .not be. pel'nlitted to benefit from its conduct. in the instant case, a reasonable and 

just s.anction·under Rule 3.38(b) is an order prohibiting Complaint Counsel from using or in any 

way relying upon any of Mr. Sinclair's deposition testimony regarding the Article. Rule 3.38(b) 

(stating that AU may enter any sanction order that is ''just"); see also Rule 3.3-8(c) (stating that 

ALJ shall order telief"as may be sufficient to compensate for withheld testimony, documents, or 

other evidence1>). 

III. Conclusion and Order 

For aJI the foregoing reasons, Respondent's Motion for Sanctions is GRANTED IN 

PART, and it is hereby ORDERED, that Complaint Counsel may not introduce into evidence, or 

otherwise rely, for any purpose, including without limitation impeachment, upon testimony .given 

at the deposition ofECM on February 1.8 and 19,2014, regarding the Ohio State Article. The 

Motion is in all other respects DENIED. 

ORDERED: 

Date: March 21, 2014 

6