PUBLIC DOCUMENT 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

COMMISSIONERS: 

In the Matter of 

ECM BioFilms, Inc., 

a corporation, also d/b/a 

Enviroplastics International 

Edith Ramirez, Chairwoman 

Julie Brill 

Maureen K. Ohlhausen 

Joshua D. Wright 

Terrell McSweeny 

) 

) 

) 

) 

) 

) 

) 

Docket No. 9358 

PUBLIC 

COMPLAINT COUNSEL'S REPLY BRIEF 

TO RESPONDENT'S ANSWERING BRIEF 

Jessica L. Rich 

Director 

JamesKohm 

Associate Director 

Frank Gorman 

Assistant Director 

. Dated: April9, 2015 

Katherine Johnson 

Elisa Jillson 

Federal Trade Commission 

Bureau of Consumer Protection 

Division of Enforcement 

600 Pennsylvania Ave., N.W., CC-9528 

Washington, D.C. 20580 

Telephone: (202) 326-2185; -3001 

Facsimile: (202) 326;.3259 

Counsel Supporting the Complaint 
RECORD REFERENCES 

CC App. Br. - Complaint Counsel's Opening Appeal Brief 

CC Ans. Br.- Complaint Counsel's Answering Brief 

CCFF - Complaint Counsel's Proposed Findings of Fact 

CCX- Complaint Counsel's Exhibit 

CCPTB - Complaint Counsel's Post-Trial Brief 

CCPTRB- Complaint Counsel's Post-Trial Reply Brief 

Dep. - Deposition transcript 

ID - Initial Decision 

IDFF - Initial Decision Findings of Facts 

Resp. App. Br.- Respondent's Opening Appeal Brief 

Resp. Ans. Br.- Respondent's Answering Brief 

RPTRB- Respondent's Post-Trial Reply Brief 

RX- Respondent's Exhibit 

Tr. - Trial Transcript 

PUBLIC DOCUMENT 
PUBLIC DOCUMENT 

TABLE OF CONTENTS 

I. INTRODUCTION .......... ........ .................... .......... ............................ ....................... ...... ..... 1 

II. ARGUMENT ........................................... ........ ..... ............................... ............... ... ~ ..... ... 1 

A. The Standard of Review Is De Novo . ............................................................................... 1 

B. Abundant Evidence Demonstrates That ECM Made The Implied Claim .............. .......... 5 

c. ECM's Express And Implied Biodegradable Claims Are False And Unsubstantiated .... 8 

D. The Claim ECM Asserts It Made Is False And Unsubstantiated ..................................... 9 

1. The NEL And ERL Tests Are Methodologically Flawed . ......................................... 10 

2. The NEL And ERL Test Data Is Unreliable .......................................... ........... .......... 13 

E. A Strong Remedy Is Necessary ...................................................................................... 17 

III. CONCLUSION ................ ....................... ... ............................... ............ ..... ................... 19 

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TABLE OF AUTHORITIES 

Cases 

Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60 (1983) ........................................................... 17 

Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S. 557 (1980) ........................ 18 

Cinderella Career & Finishing Schools, Inc. v. F.T.C., 425 F.2d 583 (D.C. Cir. 1970) ............... 1 

In re Kirchner, 63 F.T.C. 1282 (1963) .................................................................. .... .......... ... .... 5, 6 

In re Telebrands Corp., 140 F.T.C. 278 (2005) .................................................. ............................ 5 

Pearson v. Shalala, 164 F.3d 650 (D.C. Cir. 1999) ............................................................... ....... 18 

POM Wonderful LLC, No. 9344,2013 FTC LEXIS 6 (Jan. 10, 2013) ...... ...................... 2, 5, 7, 18 

Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976) .. 17 

Other Authorities 

FTC Policy Statement on Deception, 103 F.T.C. 174 (1984) ......................................................... 5 

Regulations 

16 C.P.R.§ 3.52(c) ............................................................................................................... ........... 2 

16 C.P.R.§ 3.54 ......................... ........................................... .......... ................................................ 2 

6 C.P.R. § 3.43(i) ............................................................................................................................ 3 

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I. INTRODUCTION 

Beneath its purple prose, there is little substance in ECM BioFilms Inc.'s ("ECM") 

answering brief. For the most part, it rehashes the conspiracy theories spun in ECM's opening 

brief, reiterates the ALI's flawed conclusions, and lobs baseless attacks at Complaint Counsel 

and its experts. 

Peeling away the oratory, Respondent's arguments fail for five reasons. First, ECM 

misstates the standard of review regarding expert testimony and record evidence. Second, ECM 

fails to rebut overwhelming proof that it made the implied claim that plastics treated with its 

Additive would completely break down in a landfill in a reasonably short time. Third, ECM fails 

to rebut abundant evidence that its claims are false and unsubstantiated, and instead deflects by 

focusing on substantiation for unchallenged claims. Fourth, even the claims ECM asserts it 

made lack evidentiary support. Finally, its meritless arguments about the First Amendment, 

environmental benefits, and notice fail to undercut Complaint Counsel's arguments for a strong 

remedy. 

II. ARGUMENT 

A. The Standard of Review Is De Novo. 

ECM makes three faulty arguments about the standard of review. (Resp. Ans. Br. at 11-

12.) First, ECM argues that the ALI's evaluations of the testimony ofECM and Complaint 

Counsel's expert witnesses are entitled to "great weight" and "special deference." (Id. at 11 

(internal quotations and citations omitted).) This misstates the standard of review. Certainly, in 

considering the record as a whole, the Commission may not '"ignore"' the ALI's findings. (Id. 

(quoting Cinderella Career & Finishing Schools, Inc. v. F.T.C., 425 F.2d 583, 589 (D.C. Cir. 

1970).) But the Commission's Rules do not require it to provide any special deference to the 

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ALJ's evaluation of experts' opinions and experience. The Commission is equally well 

positioned to evaluate that testimony. 1 See POM Wonderful LLC, No. 9344, 2013 FTC LEXIS 

6, at *17 (Jan. 10, 2013) (quoting 16 C.P.R.§ 3.54 ("The Commission reviews the record de 

novo by ... exercis[ing] all the powers which [the Commission] could have exercised if it had 

made the initial decision.")). (See also CC App. Br. at 9 n.8 (citing POM, No. 9344, 2013 FTC 

LEXIS 6, at * 100 n.23 (noting that the Commission may reach different conclusions than the 

ALJ about the consistency and rationality of expert testimony)). 

Second, ECM argues that Complaint Counsel "improperly" relied on its proposed 

findings of fact rather than citing the ALl's Initial Decision. (Resp. Ans. Br. at 12.) According 

to ECM, this "violation" of Rule 3.52(c) was so egregious that it warrants "summary denial of 

[Complaint Counsel's] appeal." (Resp. Ans. Br. at 8.) This absurd argument fails for two 

reasons. First, Rule 3.52(c) states that the parties' appeal briefs shall provide "specific page 

references to the record and the legal or other material relied upon." 16 C.P.R.§ 3.52(c)(iv). 

Nowhere does this rule limit the parties to citing the ALJ's Initial Decision to the exclusion of 

other evidence. Indeed, it would be nonsensical for the Rules to permit citation only to the Initial 

Decision, when the Commission has de novo review over the ALJ' s determinations on the 

admissibility of evidence. See 16 C.P.R. § 3 .43(i) ("Rejected exhibits . . . shall be retained in 

the record so as to be available for consideration by any reviewing authority."). Moreover, 

contrary to ECM' s assertion, Complaint Counsel did not merely rely on its own proposed 

1 As noted in Complaint Counsel's opening brief, the ALJ's "credibility" findings were 

not based on demeanor, tone, or any other factor requiring direct observation of the witnesses. 

(CC App. Br. at 8 n.9.) 

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findings of fact. In fact, Complaint Counsel's opening brief cited the Initial Decision forty times. 

See generally CC App. Br. 2 

Finally, ECM falsely accuses Complaint Counsel of"misrepresent[ing] the evidence of 

record" in two ways. (Resp. Ans. Br. at 12.) First, ECM claims that Complaint Counsel 

improperly "charge[d]" ECM with having hidden Dr. Michel's peer-reviewed article 

(demonstrating that ECM's Additive does nothing) from its customers. (Resp. Ans. Br. at 12 

(citing CC App. Br. at 4).) 3 ECM misstates Complaint Counsel's brief. The opening brief stated 

that Respondent was aware of negative results (not Dr. Michel's study specifically) and "hid 

them [negative results] from prospective customers, by steering them away from labs that 

provided negative results and towards labs whose dubious testing protocols provided the 

semblance of positive results." (CC App. Br. at 4 (emphasis added).) 

As uncomfortable as it may be for Respondent, the evidence demonstrates that ECM 

concealed bad results in precisely this way. For example, in January 2012, customer Shields Bag 

and Printing Company ("Shields") reported to ECM that the testing lab O.W.S. observed no 

biodegradation of plastic containing the ECM Additive. (CCX-422 at 55.) At this time, ECM 

was already on notice of adverse foreign and National Advertising Division ("NAD") decisions,4 

2 ECM also argues that Complaint Counsel "ignored" the record because it did not give 

specific responses to 2,776 ofECM's proposed findings of fact. (Resp. Ans. Br. at 7.) 

Complaint Counsel had "'no specific response"' because it had already carried its burden of 

proof in making and responding to hundreds of other proposed findings of fact. There was no 

need to indulge Respondent's penchant for prolixity. 

3 ECM then accuses Complaint Counsel of having hidden the study from ECM. (Resp. 

Ans. Br. at 12.) Complaint Counsel's answering brief already debunked this baseless accusation. 

(CC Ans. Br. at 17-22). 

4 ECM attempts to characterize the NAD decisions regarding plastic products treated with 

the ECM Additive ("ECM Plastic") as not truly challenging the plastic's biodegradability. 

(Resp. Ans. Br. at 10). This is nonsense. See CCX-26 at 9 (NAD decision regarding Dispoz-o, 

concluding that there was no "competent and reliable scientific evidence" that ECM Plastic will 

"completely break down and return to nature within a reasonable [sic] short period of time after 

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as well as other negative test results as well as academic and industry criticism. (See CC App. 

Br. at 5 (collecting examples); CC Ans. Br. at 19 n.18 (additional examples).) Rather than admit 

to Shields that such doubts were the norm, ECM CEO Robert Sinclair accused the testing lab of 

being a biased outlier: "We knew this lab was against us but we didn't think they would skew 

the testing such that the results are so different than any other lab around the world .... " (CCX422 at 55.) Mr. Sinclair then directed Shields to a different lab, Eden, (id. at 57), whose flawed 

test methods occasionally produced the appearance of positive results. (CCFF ~ 173.) Similarly, 

when another customer, Kleertech, informed ECM of negative test results the very next month, 

Mr. Sinclair blamed "fundamental problems" in the testing, did not mention any doubts or other 

negative results, and re-directed Kleertech to friendly labs. (CCX-325 at 2-3.) 

ECM also claims that Complaint Counsel "misrepresent[ed]" Dr. Frederick's testimony. 

(Resp. Ans. Br. at 12.) Specifically, ECM argues that Dr. Frederick did not opine that each of 

the four studies in the record-including ECM's own study-supports Complaint Counsel's 

position regarding consumer perception of unqualified biodegradable claims. (Resp. Ans. Br. at 

12, 22 n.17.) ECM is simply wrong. Each study-including Respondent's--does indeed 

support Complaint Counsel's position, and Dr. Frederick explained that fact both in his rebuttal 

expert report and at trial. (CCX-865 at 8-9; Tr. 1177, 1366-67, 1369.) The ALJ and Respondent 

misstated this straightforward evidence. (Resp. Ans. Br. at 12 (citing ALJID at 208 n.34).) 

customary disposal in landfills"); CCX-27 at 9 (NAD decision regarding Mastemet Ltd., finding 

"insufficient" evidence "to substantiate that [ECM Plastic] products were biodegradable through 

customary disposal within a reasonably short period oftime"); CCX-28 at 18 (NAD decision 

regarding FP International, concluding that "there was insufficient evidence to support an 

unqualified biodegradable claim or the advertiser's more limited claim that Super 8 Loosefill 

would biodegrade in a landfill within 9 to 60 months."). In addition, by the time of this 

exchange with Shields in 2012, an Italian consumer protection authority had already found 

"biodegradable" claims for ECM Plastic misleading. See CCX-186 at 27 (English translation). 

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B. Abundant Evidence Demonstrates That ECM Made The Implied Claim. 

Next, ECM attempts to refute the overwhelming evidence that its unqualified 

biodegradable claim and claim of biodegradation in "some period greater than a year" implied 

complete landfill breakdown in a reasonably short period. As described below, each of ECM' s 

arguments fails. 

First, ECM argues that Complaint Counsel improperly raises a new argument on 

appeal-that a "reasonably short period" entails breakdown within five years or less. (Resp. 

Ans. Br. at 7 n.9, 13-14l In fact, Complaint Counsel has consistently argued that ECM made 

implied claims ofbiodeg~adability in a reasonably short time of one or five years. See, e.g., 

CCPTB at 26-28; Tr. 20-21, 48, 51) (pre-trial and trial argument regarding implied claim of five 

years or less). Complaint Counsel's appeal brief does no more than reiterate these arguments. 

Second, ECM argues that reasonable consumers do not perceive any timeframe, much 

less a short timeframe, for biodegradation because biodegradation is a long and variable process. 

(Resp. Ans. Br. at 15-16.) This is wrong. As explained in Complaint Counsel's appeal brief(CC 

App. Br. at 6), an interpretation is reasonable if shared by a significant minority of consumers. 

FTC Policy Statement on Deception, 103 F.T.C. 174, 177 n.20 (1984) ("Deception Statement") 

(citing In re Kirchner, 63 F.T.C. 1282 (1963)); see also POM, 2013 FTC LEXIS 6, at *20; In re 

Telebrands Corp., 140 F.T.C. 278, 291 (2005). Here, significant minorities (at least 25%), and 

in some cases majorities, of consumers understand the claims "biodegradable" and 

"biodegradable in some period greater than a year" to mean complete breakdown in about a year 

or, at most, in five years. (CC App. Br. at 7-8.) As the consumer perception evidence shows, 

5 ECM's argument is complicated by the fact that ECM appears to misunderstand what 

constitutes an implied claim. For example, ECM argues that "[a]n implied '5 year' claim would 

have required end-use consumers who purchased plastics to have actually seen the [express] '5 

year' claim." (Resp. Ans. Br. at 14.) 

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many consumers share this view. This interpretation is not an example of an "'outlandish"' 

belief held by '" a few misguided souls,"' as ECM suggests. (Resp. Ans. Br. at 16 (quoting 

Kirchner, 63 F.T.C. 1282, at *6).) In short, Respondent cannot evade responsibility for its 

implied claims simply by arguing that it believes that informed consumers should not hold this 

view. 

Next, ECM argues that Dr. Stewart's testimony and survey establish that ECM did not 

make any implied rate claims. (Resp. Ans. Br. at 17-18.) Then, after chastising Complaint 

Counsel for misdeeds ranging from "misrepresent[ing]," "opining," and "data manipulation" to 

"wishful thinking" (Resp. Ans. Br. at 19-21), ECM reiterates the ALJ's unsound criticisms of Dr. 

Frederick's opinions and study. (Resp. Ans. Br. at 21-34.) Complaint Counsel already 

debunked each point in its opening brief. (CC App. Br. at 7-26.) Only the few points below 

warrant additional response. 

First, ECM, like the ALJ, misunderstands convergent validity, construing it to mean that 

"serendipitous similarity of results from three flawed studies ... validate[s] those results." (Resp. 

Ans. Br. at 21.) This is incorrect. Dr. Frederick explained that each of the four studies in the 

record, though containing varying degrees of imperfection, was reasonably reliable and valid. 

(See CC App. Br. at 9.) Because of this baseline reliability and validity, each study is a useful 

data point, and the convergence of their conclusions is a strong indication of the results' 

accuracy. (/d.) 

Second, ECM faults Dr. Frederick for not designing his study with the Manual for 

Complex Litigation in mind. (Resp. Ans. Br. at 23-25.) The fact that Dr. Frederick, a prominent 

academic and first-time witness, is unfamiliar with a litigation treatise or legal standard is 

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irrelevant to whether his research did in fact conform with the legal standard (which it did). 6 

Indeed, in its opening brief, Complaint Counsel explained at length why Dr. Frederick's study is 

methodologically sound (the standard the Commission applies to survey evidence). See CC App. 

Br. at 13 (citing POM, No. 9344, 2013 FTC LEXIS 6, at *45); see also id. at 13-26 (explaining 

that Dr. Frederick's study drew representative samples from the appropriate population, asked 

appropriate questions in ways that minimized bias, and correctly analyzed results). 

Finally, as in its opening brief, ECM resorts to an array of ad hominem attacks. Each 

misses its mark. Specifically, ECM accuses Dr. Frederick of"dissembl[ing] on crossexamination," "avoid[ing] quality research" so that he could "pocket[]" more money, and 

improperly asking survey respondents questions about hypothetical products that displayed 

ECM's claims. (Resp. Ans. Br. at 3, 26, 31.) Tellingly, Respondent neglects to mention how Dr. 

Frederick allegedly "dissembled," perhaps because ECM simply uses this epithet to describe 

Complaint Counsel's experts as a matter of course. See Resp. Ans. Br. at 37 (Dr. McCarthy 

allegedly "dissembling"); Resp. App. Br. at 10 (same); id. at 46 (Dr. Michel allegedly 

"dissembled"). Complaint Counsel's opening brief addresses the ridiculous argument about Dr. 

Frederick's compensation. (CC App. Br. at 15 n.l3.) Finally, Dr. Frederick openly explained in 

his expert report, and at trial, that he used "photoshopped" images of plastic products with the 

ECM logo so that he could ask respondents about generic plastic products like bags and 

containers (i.e., images untainted by other advertising). (CCX-865 at 13; Tr. 1265-66.) In short, 

there is no substance to Respondent's accusations. 

6 In fact, one might argue that this fact enhances his credibility, compared to a career 

litigation expert. 

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C. ECM's Express And Implied Biodegradable Claims Are False And 

Unsubstantiated. 

At least a significant minority, and likely a majority, of consumers and ECM customers 

understand ECM's unqualified biodegradable and "some period greater than a year" claim to 

mean that ECM Plastic will completely breakdown in one year (or less than five years) in a 

landfill. 7 ECM admits that these claims are false and unsubstantiated. 8 Thus, ECM does not 

(and could not) argue that any test in the record supports the challenged express and implied 

claims. Instead, ECM argues that Complaint Counsel "ignores" the AU's findings that "twenty 

(20) competent and reliable tests that prove the ECM additive causes plastics to biodegrade to a 

significant extent where untreated plastics do not." 9 (Resp. Ans. Br. at 35.) 

7 Supra, at 5-8. 

8 ECM concedes that nothing biodegrades completely in a landfill within five years, thus 

ECM's express and implied claims that ECM Plastics will completely biodegrade in less than 

five years in landfills are false. (CCPTB at 29-54, 86-88; see RPTB at 56-58 (admitting that it 

made the claim); CCFF ,-r 188 (Dr. Sahu stating it could take 30-100 years for ECM Plastic to 

completely biodegrade); see also CCPTB at 55-61).) In addition, well-documented anaerobic 

tests, including one study published in a peer-reviewed scientific journal (CCX-164), show no 

statistically significant biodegradation, further proving ECM's express and implied claims are 

false. (CCFF ,-r,-r 453; 454.) 

9 In fact, the ALJ only characterizes 17, not 20, tests as showing increased 

biodegradation. (ALJFF ,-r,-r 1043-1424.) ECM included two O.W.S. tests (Resp. Ans. Brief at 1, 

citing ALJFF ,-r,-r 1448-1465), which the ALJ discounted because the "OWS studies, with no 

supporting fact or expert testimony .. . are not given significant weight .. .. " (ALJID at 261.) 

Nonetheless, these two tests are irrelevant to ECM's asserted claims. One, RX-265 is a test of 

the ECM additive alone, and therefore does not reflect biodegradation of ECM Plastic and 

merely proves that the ECM Additive itself is biodegradable. The second test, RX-268, is 

likewise unavailing. The test reports 3. 9%± 1.1% biodegradation after 15 days. But the percent 

of ECM Additive is not reported; additionally, the test concludes that "no further biodegradation 

is expected. It seems that only a minor component or some minor residual chemicals 

(monomers) are degradable." (RX-268 .) ECM also included a weight loss test among the 

"positive" tests, but the ALJ appropriately found weight loss tests unreliable. (RX-399, Bio-Tec 

Environmental; ALJFF ,-r,-r 741-742.) 

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As explained below, these tests are either fatally flawed, show no biodegradation, or both. 

However, whether they showed some biodegradation (which they do not) is irrelevant. As we 

explained in our Post-Trial Reply Brief, "even if ECM' s advertisements also conveyed a 

different, truthful claim, Complaint Counsel need only prove one reasonable interpretation of the 

advertisement is false or unsubstantiated to establish liability for deception under the FTC Act." 

(CCPTRB at 8, citing cases.) While Complaint Counsel need not prove this comparative claim 

is untruthful or unsubstantiated to prevail, there is in fact no evidence to support it. 10 

D. The Claim ECM Asserts It Made Is False And Unsubstantiated. 

To reach his conclusion that ECM Plastic is biodegradable under some definition, the 

ALJ relied completely on tests run by two small labs: North East Labs ("NEL") and Eden 

Research Laboratories ("ERL") (ALJFF ~~ 1006-1425).11 (CC App. Br. at 30-47.) The tests 

conducted by these labs, however, are fatally flawed and wholly unreliable for two reasons. 

First, both labs used hopelessly flawed, unreliable testing methods. 12 Second, even ignoring 

10 In an attempt to bolster its experts' opinions, ECM grossly mischaracterizes our 

experts' testimony. Much of this is addressed in our Opening and Answering Briefs, but a few 

additional points are noteworthy. ECM claims that Dr. Tolaymat concedes Dr. Barlaz as "the 

authority" in biodegradation research (Resp. Ans. Br. at 37.) Not so. Dr. Tolamat describes him 

as "an authority" and further clarifies that Dr. Barlaz consulted for him. (Tolaymat, Tr. at 233-

234.) ECM again tries to use Dr. Tolaymat to bolster Dr. Barlaz by claiming Dr. Tolaymat 

agreed with Dr. Barlaz's statistical analysis. (Resp. Ans. Br. at 45.) But the citation to ALJFF ~ 

723 has nothing to do with Dr. Barlaz's statistical analysis; it merely states that Dr. Tolaymat 

agrees that "accelerated testing to demonstrate biodegradation is possible." In fact, Dr. Tolaymat 

repeatedly stressed that one data point for a given specimen was insufficient from which to draw 

a conclusion one way or the other regarding the results. (Tolaymat, Tr. 306-313.) 

11 Interestingly, the ALJ did not rely on any of the actual substantiation materials ECM 

provided to Complaint Counsel during the pre-complaint investigation. 

12 Of course, the results from these labs are more suspect because they are the only labs 

whose anaerobic results purport to show any biodegradation. Nonetheless, their undocumented, 

unorthodox modifications to the test utilizing methods such as re-inoculation make their results 

unreliable (CCFF ~~ 142-143.) 

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these dramatic methodological problems, the data from each test suffered from additional severe 

flaws. 13 (CCPTB at 59-61; CCPTRB at 12-19; CC App. Br. at 46-47.) Therefore, the test results 

are not competent and reliable scientific evidence of increased anaerobic biodegradation of the 

conventional plastic component of ECM Plastic. Without such evidence, ECM cannot 

substantiate a claim that an ECM Plastic will biodegrade comparatively faster, or to a greater 

extent, than untreated plastic-let alone the stronger claims they actually made. 

1. The NEL And ERL Tests Are Methodologically Flawed. 

All seventeen (17) tests relied upon by the ALJ had fatal methodological flaws. The ALJ 

identified nine ASTM D5511 tests conducted by NEL that purport to show anaerobic 

biodegradation ofECM Plastic. (See ALJID at 136-151). During the trial, Alan Johnson, the 

current owner ofNEL (Johnson, Tr. 1554) testified that, for all nine tests: 14 

• NEL did not maintain anaerobic conditions throughout the duration of the 

extended anaerobic ASTM D551 1 tests (Johnson, Tr. 1574); 15 

• NEL conducted tests beyond the 30-day period permitted by ASTM 

D5511(Johnson, Tr. 1583); 

13 (CCX-891, ~~ 87-89); see also RPTRB at 97-98, stating that lack of information 

concerning the test plastic itself, the load rate, as well as other gas volume data renders a test 

severely methodologically flawed. Moreover, none of the statistical analyses takes into account 

the priming effect. (CCPTB at 75-76.) Thus, a detailed, point-by-point refutation of Dr. 

Barlaz's test is further misplaced. 

14 Although NEL produced Alyssa Ullman as the corporate representative most 

knowledgeable about the biodegradation studies lab, ECM called Alan Johnson as a witness. 

The ALJ refused to grant Complaint Counsel leave to depose him as a witness prior to his trial 

testimony. (Order Denying Complaint Counsel's Motion for Leave to Take Deposition of Alan 

Johnson, July 11 , 2014.) Alyssa Ullman testified that she is the project manager of the 

biodegradation studies lab and is responsible for conducting biodegradation tests (CCX-815, 

Ullman Dep. Tr. at 14.) 

15 (CCFF ~~ 142-143.) 

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• NEL uses an inverted cylinder and metal paint cans for gas monitoring. NEL had 

no way to identify a small leak in the system from gas generation. (Johnson, Tr. 

1584); 

• NEL waited for a paint can to rust before replacing it with a new one (Johnson, 

Tr. 1585 (when the paint can rusts during extension testing, replace it with a new 

one)); and only replaced the one that has been rusted (Johnson, Tr. 1592-1593), 

any of which could introduce oxygen or otherwise affect the results; 

• NEL did not consider whether the rusting test vessel affected results of 

biodegradation testing (Johnson, Tr. 1586); 

• The methane readings produced by the IR machine used to take them has a 

precision of plus or minus 20% for low volumes of methane readings, (Johnson, 

Tr. 1587), 16 placing several results within the margins of error of the test; 

• The protocol for extended ASTM testing was set up by Dr. Bill Ullman (now 

deceased) (Johnson, Tr. 1560) and has never been independently evaluated since 

that time (Johnson, Tr. 1583); and 

• NEL does not undergo any audits, does not hold any certifications, and has never 

been evaluated (Johnson Tr, 1580-1581). 

The ALJ also identified eight tests conducted by ERL that purport to demonstrate 

anaerobic biodegradability ofECM Plastic. (ALJID 121-136.) Thomas Poth, the owner ofERL, 

admitted to fatal flaws with ERL's methodology for these eight tests, specifically: 

16 Johnson concedes that methane readings in the single-digits are low. (See Johnson, Tr. 

1569.) 

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• ERL does not report statistical information, so it does not know if the test results 

are statistically significant (Poth, Tr. 1512-1513, 1538); 

• ERL provides primarily quick-and-dirty updates that are not given the same level 

of rigorous review as the reports (Poth, Tr. 1499-1500); and 17 

• ERL's reports do not reflect the composition of the test material, e.g., whether 

additive was added to conventional or a starch-based plastic. (CCX-805, Poth 

Dep. Tr. at 108-109.) 

Dr. McCarthy highlights these and other deficiencies and explains why they call into 

question the reliability of the test results. (CCX-891 ,-r,-r87-89; McCarthy, Tr. 453-455, 467-472.) 

For instance, Dr. McCarthy explains that replacing the inoculum would likely lead to 

overestimation ofbiodegradation, by exposing the inoculum to oxygen. (CCX-891 ,-r,-r87-89; see 

also infra at note 24.) Similarly, deviating from the method and going beyond the 30-day 

validation period makes the data unreliable because each test is designed to have a period of time 

in which results will be accurate. 18 (CCX-891 ,-r,-r87-89; Tr. 467-472.) 

Moreover, these labs did not report several categories of critical information required 

under the methodology, making it impossible to validate the data. (CCX-891 ,-r,-r87-89; Tr. 453-

455; see also Sahu, Tr. 1959, explaining the importance of having the underlying data.) For 

example, of the seventeen tests identified by the ALI, not one of them reported the results of the 

95% confidence limits, (CCX-83 at 4, ASTM D5511-11 Section 14.1.4) or information 

17 Moreover, Poth testified at his deposition that they refresh the inoculum during a test at 

a customer's request, but then denied doing this at trial. (Compare CCX-805, Poth Dep. Tr.at 

72-73 with Poth, Tr. 1474.) 

18 Some tests not only exceeded the validation period, but also went beyond the approved 

duration of the test by running even after the positive control and the sample showed zero 

biodegradation for five days. (See CCX-85, ASTM D5511-11 at Section 11.2.1.2.) 

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necessary to validate the test (CCX-83 at 3, ASTMD55 11-11 Section 13.2-13.4; and 11.2.1. 1-

11.2.2). Most ofERL's tests did not include load rate or triplicate data. 19 (CCX-546, CCX-548, 

CCX-534, CCX-547.) 'And neither lab determines the carbon content of the samples themselves, 

instead relying on information provided by the customer. (CCX-805, Poth Dep. Tr. at 77; 

Johnson, Tr. 1564.) Even Dr. Sahu acknowledged that information such as load rates, plastic 

types, and other critical information are necessary to understand and evaluate the data was 

missing. (Sahu, Tr. 1932-1933; 1940, 1961.) 

These tests stand in stark contrast to the well-documented studies conducted by such labs 

as Stevens Ecology (CCX-174 and CCX-176), O.W.S. (CCX-169-171), North Carolina State 

University (CCX-946-948), and Ohio State University (CCX-164) that show no statistically 

relevant biodegradation ofECM Plastics under a variety of conditions. Given the severe 

methodological flaws in how NEL and ERL conducted the tests, the results are exceedingly 

unreliable and cannot reliably demonstrate that any significant biodegradation of the plastic took 

place. In addition to their flawed methodology, the data reflected in the labs' summary reports 

are full of anomalies, inconsistencies, and impossibilities rendering it completely unreliable. 

2. The NEL And ERL Test Data Is Unreliable. 

None of the data shows complete biodegradation or biodegradation in landfills in relevant 

timeframes. (CCPTB 71-75.) Moreover, none ofthe statistical analyses takes into account the 

priming effect. (CCPTB at 75-76.) Thus, a detailed, point-by-point refutation of Dr. Barlaz's 

statistical analysis and the ALJ's findings is unnecessary. 20 Nonetheless, for each of the 

19 Under ASTM D5511, each ofthe positive controls, the test specimen, negative control, 

and inoculum blanks are required to have three replicates, or triplicate data, because such data is 

necessary to determine the statistical significance of the data. (CCX-83 at 3, ASTM D5511 

Section 11.) 

20 Notably, several tests for which Dr. Barlaz could have performed a statistical analysis, 

he did not. (See, e.g., RX-836, PPC data only analyzed through day 77, although 900 days of 

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seventeen studies on which the ALJ cites as showing increased levels of biodegradation, 21 there 

are numerous fatal flaws in the data. 

(a) NEL test data is flawed. 

Each of the nine NEL tests is so severely flawed it cannot substantiate ECM's alleged 

comparative claim. Seven produced biodegradation results within the margins of error for the 

test as identified in the precision and bias section of the ASTM D5511 standard and the 

equipment used to take the measurements. (RX-392; RX-393; RX-394; RX-395; RX-396; RX398; and RX-405.) Given NEL's significant deviations from the protocol and other severe 

testing flaws, its margin of error likely far exceeds that established by ECM based on data from 

sound testing. 22 

The data from the two NEL extension tests (which both exceeded the ASTM validation 

period) are also hopelessly flawed. The results for one test were barely outside the error rate of 

the test method with no observable biodegradation weeks before the conclusion. 23 In fact, less 

than halfway through the test period, the measurements of methane are so low that the margin of 

error for the equipment taking the readings would render any reading unreliable. (See Johnson, 

data reported; RX-396, triplicate data for Ecosmart Plastics II not analyzed; RX-392 Transilwrap 

data available in Excel spreadsheet RX-447-RX-449, but not analyzed; RX-394, Tycoplastic data 

only analyzed through first 15 days of testing although several months ofraw data was reported 

in RX-450.) 

21 These include some, but not all, of the seventeen tests that Dr. Barlaz analyzed. The 

ALJ' s findings did not include the test for Dankso and Smithers Oasis, which were included in 

Dr. Barlaz's analysis, but did include EcoSmart Plastics and FP International, which were 

omitted by Dr. Barlaz. 

22 ASTM D5511 Section 15 precision and bias states that the within-laboratory 

repeatability of the test has a mean variance on the positive control of 5.1% and 95% confidence 

interval of ±1 0.2% for four runs. 

23 (RX-838, Minigrips test; Johnson, Tr. 1590.) 

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Tr. 1569, 1587, explaining that the machine responsible for taking methane readings has a 

precision of ±20% for low volumes of methane readings, i.e., methane readings in the single 

digits.) Moreover, Dr. Barlaz's statistical analysis of the triplicate data identified missing weeks 

of data with other data reported twice. (See RX-838, Minigrip test.) 

The other extension test, conducted for 900 days (which means the inoculum was 

"refreshed" multiple times during the test), shows biodegradation of the positive control in 

excess of 100%. 24 This impossible result is either an error or due to the priming effect-either 

invalidates the biodegradation results. 25 

(b) ERL test data is also flawed. 

Likewise, multiple discrepancies in the data from the eight ERL tests render it completely 

unreliable. (See, e.g., McCarthy, Tr. 454-455.) Importantly, all but two ofERL's tests are 

summary updates, with no rigorous data analysis. (Poth, Tr. 1499-1500.) But even the two full 

reports, whose data was supposedly more scrutinized for error, lack reliability. For each of the 

full reports, the data for weekly gas volumes for the inoculum and positive controls are 

inexplicably identical down to the decimal point for multiple entries. (RX-839 at 2, inoculum 

24 (RX-836; Tr. 424, 476-477 (Dr. McCarthy explaining biodegradation above 100% is 

due to priming effect); Tr. 194 (Dr. Tolaymat testified that it's not plausible to achieve more than 

100% biodegradation).) Dr. Tolaymat similarly testified that the way this test was conducted 

was not conducive to providing reliable results: 

We're talking about conducting a test in paint cans and pulling out samples and treating 

them under a hood and then putting them back in different paint cans for three years. I --

the uncertainties and the amount of error that would go into conducting this type of test 

over a period of 900 days outweighs any result that would come out of a test like that, in 

myopm10n. 

Tolaymat, Tr. 312. 

25 Notably, Dr. Barlaz only provided statistical information for data through day 77, the 

point in which the positive control exceeded 100% biodegradation. (Compare RX-968 with RX836 at 16.) 

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control IA and IB the same for weeks ending February 8, 15, 22, 29, March 7, March 14, and 

July 4, 2012. Positive control PB and PC the same for weeks ending February 15, 22, 29, March 

7, 14; RX-248, same for multiple entries.) One of these tests also shows another impossible 

result-a decrease in biodegradation as the study progresses. (RX-839, reporting 8% 

biodegradation of the treated sample at approximately 15 weeks and 7% biodegradation at week 

17.) There is simply no reasonable explanation for this anomalous data. 

The six summary test reports have significant additional flaws. Data from one of these, 

the Fellowes test (RX-403), is completely irrelevant because it tested an already biodegradable 

material amended with ECM Additive. (CCX-805, Poth Dep. Tr. at 103-102, 108.) This 

information is not included in the report, giving the misleading impression that ECM-treated 

conventional plastic achieved a high degree of biodegradation. Similarly, the ERL test for 

EcoLab (which includes three summaries of cumulative gas data reported for two samples 

containing unknown amounts ofECM Additive, in an unidentified plastic) is likely a 

biodegradable plastic amended with the ECM Additive. (Compare RX-547 with RX-403, which 

Poth identified as containing a biodegradable plastic; CCX-805, Poth Dep. Tr. at 108-109.) 

Of the remaining four tests, each has other significant flaws. One report does not indicate 

the test method at all (CCX-546), while two follow an undocumented, unapproved ASTM 

protocol, (RX-402, RX-548; Poth, Tr. 1537-1538), identified only as "ASTM DXXXX"-a 

method that Mr. Poth (who conducted the tests) testified at his deposition that he was not 

"comfortable with" and was still trying to "hone confidence in." (CCX-805 at 43, 144.) And, in 

one of the tests cited by the ALJ as demonstrating biodegradation, Poth testified at his deposition 

that the test was a "mess" and he should have "chuck[ ed] it." (CCX-805, Poth Dep. Tr. at 115, 

discussing the MicroTek test, RX-534.) 

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In addition to these issues, the tests across the board demonstrate sloppy, inattentive data 

recording inconsistent with good lab practices. 26 Based on these, and other, inconsistencies and 

anomalies in the data, Drs. McCarthy and Tolaymat concluded that the ERL and NEL test data is 

unreliable. (CCPTB at 59-61; CCPTRB at 12-19; CC App. Br. at 46-47.) Therefore, drawing 

conclusions about biodegradability of the test samples from this inconsistent, anomalous data is 

improper. 

E. A Strong Remedy Is Necessary. 

Finally, ECM argues that a stronger remedy is unjustified, arbitrary, and capricious, 

because it violates ECM's First Amendment rights, would "redound to the detriment of the 

environment," and ECM did not have notice of the falsity of its claims and technology. (Resp. 

Ans. Br. at 49-52.) Each argument is wrong. Complaint Counsel already addressed the specious 

environmental benefit argument in its answering brief, (CC Ans. Br. at 27-29), and the notice 

argument in each of its briefs (CC App. Br. at 5; CC. Ans. Br. at 19 n.l8; supra at 3). As 

discussed below, the First Amendment argument is equally without merit. 

It is well-established that the government can regulate deceptive commercial speech 

through adjudication. Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 64 (1983). "Since 

advertising is the sine qua non of commercial profits, there is little likelihood of its being chilled 

by proper regulation and forgone entirely." Virginia State Bd. of Pharmacy v. Virginia Citizens 

Consumer Council, 425 U.S. 748, 772 n.24 (1976). Importantly, for commercial speech to 

26 For example, ERL produced two reports for the same samples on the same date, which 

showed two different biodegradation percentages and different additives. (Compare RX-248 

with CCX-1097; Poth, Tr. 1502, testifying to two different numbers for the same sample and 

same length of time; see also Poth Tr. 1504, Poth testified that another inconsistency between the 

two reports is that one identified EcoPure, not an ECM product.) ERL also reported data for the 

EcoLab test where the test sample identifiers were inconsistent between the numerical data and 

the graphical data. (CCX-547, identifying samples as 538A and 539A in the table, but as 538B 

and 539C in the graph.) 

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receive the protections of the First Amendment, the commercial speech "at least must concern 

lawful activity and not be misleading." Central Hudson Gas & Elec. Corp. v. Pub. Serv. 

Comm 'n, 447 U.S. 557,566 (1980). Here, ECM's ongoing marketing is deceptive, and will 

continue to mislead consumers without appropriate injunctive relief. Furthermore, unlike its 

customers and end-use consumers, who lack the ability to independently verify ECM's claims, 

ECM has "extensive knowledge of both the market and [its] products" and is thus "well situated 

to evaluate the accuracy of[its] messages and the lawfulness ofthe underlying activity." Central 

Hudson, 447 U.S. at 564 n.6. 

Similarly, ECM's reliance on Pearson v. Shalala, 164 F.3d 650 (D.C. Cir. 1999), is 

misplaced. (Resp. Ans. Br. at 51.) Pearson held that an FDA rule effectively banning specific 

health claims was an unduly restrictive means to regulate potential deceptive speech, and that the 

FDA needed to consider possible curative disclosures. 164 F.3d at 659-660. By contrast, this 

case involves adjudication of actual deceptive claims in commerce. The Commission recently 

rejected this argument in POM, reasoning that: 

[T]he Commission's approach to address misleading advertising, which is a caseby-case adjudication after ads have been disseminated, differs from regulatory 

efforts that prohibit categories of speech or rely on prior approval of the language 

to be used. The latter serve as illustrations of "bars" on commercial speech and 

are inapplicable to the detailed ex post analysis we engage in here, based on a full 

record about the ads in question. 

POM, No. 9344, 2013 FTC LEXIS 6, at *138-39. 

Complaint Counsel's proposed order is not a ban. IfECM could substantiate them, 

nothing would prevent ECM from making truthful, appropriately qualified claims. (CC Ans. Br. 

at 29.) 

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III. CONCLUSION 

For the reasons stated herein and in Complaint Counsel's other briefs, the Commission 

should set aside the erroneous portions of the Initial Decision and Order, reject Respondent's 

appeal, and enter an injunction consistent with the proposed Notice Order filed with Complaint 

Counsel's Appeal Brief. 

Dated: April9, 2015 

19 

Respectfully Submitted, 

/s/ Katherine Johnson 

Katherine Johnson 

Elisa Jillson 

Federal Trade Commission 

Bureau of Consumer Protection 

Division of Enforcement 

600 Pennsylvania Ave., N.W., CC-9528 

Washington, D.C. 20580 

Telephone: (202) 326-2185; -3001 

Facsimile: (202) 326-3259 

Counsel Supporting the Complaint 
PUBLIC DOCUMENT 

CERTIFICATE OF SERVICE 

I hereby certify that on April9, 2015, I caused a true and correct copy of the foregoing to 

be served as follows: 

One electronic copy, one copy through the FTC's e-filing system, and twelve hard copies to the 

Office of the Secretary: 

DonaldS. Clark, Secretary 

Federal Trade Commission 

600 Pennsylvania Ave., NW, Room H-159 

Washington, DC 20580 

Email: secretary@ftc.gov 

One electronic copy to the Office of the Administrative Law Judge: 

The Honorable D. Michael Chappell 

Administrative Law Judge 

600 Pennsylvania Ave., NW, Room H-110 

Washington, DC 20580 

One electronic copy to Counsel for the Respondent: 

Jonathan W. Emord 

Emord & Associates, P.C. 

11808 WolfRun Lane 

Clifton, VA 20124 

Email: jemord@emord.com 

Eric J. Awerbuch 

Emord & Associates, P.C. 

3210 S. Gilbert Road, Suite 4 

Chandler, AZ 85286 

Email: eawerbuch@emord.com 

Peter Arhangelsky 

Emord & Associates, P.C. 

3210 S. Gilbert Road, Suite 4 

Chandler, AZ 85286 

Email: parhangelsky@emord.com 

Bethany Kennedy 

Emord & Associates, P.C. 

3210 S. Gilbert Road, Suite 4 

Chandler, AZ 85286 

Email: bkennedy@emord.com 

I further certify that I possess a paper copy of the signed original of the foregoing 

document that is available for review by the parties and the adjudicator. 

Date: April 9, 2015 

20 

Is/ Katherine Johnson 

Katherine Johnson (kjohnson3@ftc.gov) 

Elisa Jillson ( ejillson@ftc.gov) 

Federal Trade Commission 

600 Pennsylvania Ave., N.W. CC-9528 

Washington, DC 20580 

Phone: 202-326-2185;-3001 

Fax: 202-326-3197