PUBLIC DOCUMENT

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISIONERS: Edith Ramirez, Chairwoman 

Julie Brill 

Maureen K. Ohlhausen 

Joshua D. Wright 

Terrell McSweeny

____________________________________

)

In the Matter of )

)

ECM BioFilms, Inc., ) Docket No. 9358

a corporation, also d/b/a )

Enviroplastics International ) PUBLIC

)

 )

COMPLAINT COUNSEL’S ANSWERING BRIEF

Jessica L. Rich

Director

James Kohm

Associate Director

Frank Gorman

Assistant Director

Dated: March 31, 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

03 31 2015
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RECORD REFERENCES

CC App. Br. – Complaint Counsel’s Appeal 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 Appeal Brief

RX – Respondent’s Exhibit

Tr. – Trial Transcript 
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TABLE OF CONTENTS

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

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

A. ECM’s Claims Are Material............................................................................................ 1

1. ECM Applies the Wrong Evidentiary Standard.............................................................. 2

2. ECM Concedes that Biodegradable Claims Are Material. ............................................. 3

3. The ALJ Correctly Found the Rate Claim Material........................................................ 4

a) ECM’s Rate Claim Pervaded Its Advertising. ............................................................ 4

b) Customers Asked About Biodegradation Rate. .......................................................... 8

c) ECM Gave Customers the Tools To Pass On the Rate Claim.................................. 10

d) Customers Passed On the Rate Claim....................................................................... 10

4. ECM Offers No Meaningful Evidence that Time Was Not Material. .......................... 12

B. ECM’s Various Arguments Against Entry of the Order Are Meritless. ................... 16

1. ECM’s Due Process Arguments Are Groundless. ........................................................ 16

a) Complaint Counsel Did Not Engage in Unfair Litigation Tactics............................ 17

(1) Complaint Counsel Timely Produced the Ohio State Study........................ 18

(2) ECM Was Not Prejudiced.................................................................19

(3) Complaint Counsel’s Identification of Dr. Michel as Rebuttal Expert Witness Was 

Timely and Fair.............................................................................21

b) ECM’s Attempts to Discredit Dr. Michel Fail.......................................................... 21

c) ECM Was Not Denied Fair Rebuttal to Challenge the Credibility of Dr. McCarthy.

23

2. This Proceeding Is In the Public Interest. ..................................................................... 24

a) ECM’s Deceptive Claims Have the Potential to Injure the Public. .......................... 24

b) Effect on Environmental Issues is Not Relevant to Whether this Case or the Order is 

in the Public Interest. ........................................................................................................ 27

c) This Order is Not Ultra Vires.................................................................................... 28

III. CONCLUSION ............................................................................................................... 29
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TABLE OF AUTHORITIES

Cases

Aluminum Co. of Am. v. Preferred Metals Prods., 37 F.R.D. 218 (D.N.J. 1965) .......................... 5

Arnold Stone Co. v. FTC, 49 F.2d 1017 (5th Cir. 1941)............................................................... 28

Concrete Pipe & Prods. of California, Inc. v. Constr. Laborers Pension Trust, 508 U.S. 602 

(1993).......................................................................................................................................... 5

FTC v. Algoma Lumber Co., 291 U.S. 67 (1934)......................................................................... 31

FTC v. Pantron I Corp., 33 F.3d 1088 (9th Cir. 1994)................................................................. 29

In re Brake Guard Prods., Inc., 125 F.T.C 138 (1998) ................................................................ 28

In re Chrysler Corp., 87 F.T.C. 719 (1976).................................................................................. 16

Kraft, Inc., 114 F.T.C. 40 (1991).................................................................................................... 9

Novartis Corp., 127 F.T.C. 580 (1999).................................................................................. passim

POM Wonderful LLC, No. 9344, 2013 FTC LEXIS 6 (Jan. 10, 2013) ........................................ 29

Removatron Int’l Corp. v. FTC, 884 F.2d 1489 (1st Cir. 1989). .................................................. 16

S. Buchsbaum & Co. v. FTC, 160 F.2d 121 (7th Cir. 1947)......................................................... 28

Seganish v. District of Columbia Safeway Stores, Inc., 406 F.2d 653 (D.C. Cir. 1968)................ 6

Thompson Med. Co., 104 F.T.C. 648 (1984)................................................................................ 28

U.S. v. Klesner, 280 U.S. 19 (1929).............................................................................................. 29

Other Authorities

FTC Policy Statement on Deception, 103 F.T.C. 174 (1984)............................................... 4, 6, 15

Regulations

16 C.F.R. § 260.8 (Oct. 11, 1996)................................................................................................. 19

61 Fed. Reg. 53,312 (Oct. 11, 1996)............................................................................................. 30

75 Fed. Reg. 63,555 (Oct. 15, 2010)............................................................................................. 30

Guides for the Use of Environmental Marketing Claims, 16 C.F.R. Part 260 ............................. 10
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I. INTRODUCTION

On appeal, Respondent ECM BioFilms, Inc. (“ECM”) argues that Complaint Counsel did 

not prove that ECM’s express claim, that plastic treated with its additive (“Additive”) would 

completely biodegrade in nine months to five years (“Rate Claim”), was material to ECM’s 

customers or end-use consumers. ECM’s argument fails for four reasons. First, ECM applies

the wrong evidentiary standard. Second, by conceding that its unqualified biodegradable claims 

were material, ECM effectively concedes the materiality of the Rate Claim. Third, as the ALJ 

correctly found, four lines of evidence provide abundant support for the conclusion that ECM’s 

Rate Claim is material. Finally, each of ECM’s arguments that the Rate Claim was immaterial

utterly fails to undermine the substantial evidence of materiality.

Unable to meaningfully dispute the overwhelming evidence that it made false and 

unsubstantiated material claims, ECM uses its appeal brief as a bully pulpit for irrelevant (and 

often nonsensical) policy arguments and conspiracy theories. Each of these arguments—like its 

materiality argument—is entirely meritless.

II. ARGUMENT

A. ECM’s Claims Are Material.

A claim is material if it is “likely to affect the consumer’s choice of or conduct regarding 

a product.” FTC Policy Statement on Deception, 103 F.T.C. 174, 182 (1984) (“Deception 

Statement”). Three types of claims are presumed material: (1) express claims; (2) implied 

claims the seller intended to make; and (3) claims involving the product’s “central 

characteristics,” such as its purpose or efficacy. Id. at 182. To rebut the presumption, a 

respondent must supply “sufficient evidence to support a finding that the claim at issue is not 
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material.” Novartis Corp., 127 F.T.C. 580, 686 (1999). If a respondent rebuts the presumption, 

the fact-finder should weigh all evidence of materiality. Id.

ECM’s Rate Claim is presumptively material because it is an express claim ECM 

intended to make that pertains to the Additive’s central—indeed, only—characteristic.1

 Even if 

it could rebut the presumption (which it cannot), the ALJ correctly found that overwhelming 

evidence proves the Rate Claim is material. Specifically, ECM’s appeal fails for the four reasons 

discussed below.

1. ECM Applies the Wrong Evidentiary Standard.

First, ECM argues that without proof of actual consumer injury, Complaint Counsel did

not satisfy the preponderance standard. (Resp. App. Br. at 21, quoting Aluminum Co. of Am. v. 

Preferred Metals Prods., 37 F.R.D. 218, 221 (D.N.J. 1965).) This argument rests on two

incorrect legal propositions. First, Respondent argued that Complaint Counsel never proved 

materiality in the first place. (Resp. App. Br. at 18.) However, Respondent’s Rate Claim is 

presumptively material. Even if ECM rebutted this presumption (which it did not), the 

preponderance standard does not require conclusive proof of injury, as Respondent suggests—or 

conclusive proof of anything else. To the contrary, the preponderance standard simply requires 

proof that “the existence of a fact is more probable than its nonexistence.” Concrete Pipe & 

Prods. of California, Inc. v. Constr. Laborers Pension Trust, 508 U.S. 602, 622 (1993). As the 

ALJ correctly found, and the evidence overwhelmingly shows, Complaint Counsel has proven 

that it is more likely than not that the Rate Claim influenced ECM customers’ purchasing 

 1 ECM argues that the Additive has other characteristics, such as cost, compatibility with 

manufacturing processes, ability to preserve shelf durability of plastic, safety for food, etc. 

(Resp. App. Br. at 30-31.) However, these are merely secondary characteristics: if the Additive 

did not allegedly make plastic biodegrade far faster than untreated plastic, no purchaser would 

care about these secondary characteristics. 
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decisions. That ECM can concoct far-fetched, alternative explanations for individual pieces of 

evidence does not undercut the substantial evidence of materiality. Cf. Seganish v. District of 

Columbia Safeway Stores, Inc., 406 F.2d 653, 657 n.21 (D.C. Cir. 1968) (quotations omitted) 

(“From the mere fact that the evidence permits two or more possible inferences, it does not 

necessarily follow that the evidence is not substantial.”).

Second, contrary to ECM’s repeated argument, (Resp. App. Br. at 5, 17, 21, 25, 29, 31), 

“proof of actual consumer injury is not required” to prove materiality. Novartis, 127 F.T.C. at 

685. Indeed, it is well-established that Section 5 does not require proof of actual injury, only 

proof that a claim is misleading to reasonable consumers and likely to affect their choice or 

conduct. See Deception Statement, 103 F.T.C. at 182; see also ID 291 (collecting cases

affirming that no proof of actual injury is required). 

2. ECM Concedes that Biodegradable Claims Are Material.

Second, ECM repeatedly argues that its Rate Claim was not material because its 

customers simply cared that the Additive purportedly made plastic “biodegradable.” (Resp. App. 

Br. at 4, 16, 30-31.) ECM’s concession—that its unqualified biodegradable claims were

material—effectively determines all materiality inquiries in this case. As explained in Complaint 

Counsel’s appeal brief, there is overwhelming evidence that at least a significant minority (and 

likely a majority) of consumers understand “biodegradable” to mean complete landfill 

breakdown in a reasonably short period of one to five years. (CC App. Br. at 6-30.) In other 

words, the concept of rate—i.e., complete breakdown in one to five years—is embedded in 

“biodegradable” claims. If unqualified biodegradable claims are material to ECM’s customers 

and end-use consumers (which ECM concedes and the record clearly establishes), then a rate

claim of nine months to five years is necessarily material.
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Indeed, ECM’s desperate attempt to disentangle its unqualified biodegradable claim from

the rate of biodegradation leads to an absurd argument: that businesses and consumers who 

purchase “biodegradable” plastic do not care if the product takes several millennia to biodegrade

because they “abandon [] interest” in it upon disposal. (Resp. App. Br. at 36.) If this were true, 

no one would pay for the ECM Additive or pay more for plastic containing it in the first place. 

3. The ALJ Correctly Found the Rate Claim Material.

The presumption that ECM’s express claims are material, combined with ECM’s 

concession about the materiality of its biodegradable claims, should end the materiality inquiry. 

But, even setting this aside, the ALJ correctly found that ECM’s Rate Claim was material to its 

customers and downstream customers.

2

 (ID 288.) Specifically, the ALJ properly found that four 

lines of evidence—each of which ECM grossly mischaracterizes in its appeal—support a finding 

of the Rate Claim’s materiality. (ID 288-91.)

a) ECM’s Rate Claim Pervaded Its Advertising.

The ALJ correctly observed that “‘predicate facts that g[i]ve rise to the presumption [of 

materiality]’” are “‘evidence from which materiality can be inferred.’” (ID 287-88; quoting 

Novartis, 127 F.T.C. at 686.) Specifically, the fact that ECM made the Rate Claim expressly, 

prominently and repeatedly; that the claim pertains to the Additive’s central, and only,

characteristic; and that ECM intended to make the claim are powerful evidence of the claim’s 

materiality. (See ID 288; see also Novartis, 127 F.T.C. at 687-89.) Indeed, the only logical 

conclusion from ECM’s constant repetition of the highly conspicuous Rate Claim was that it

thought the claim was likely to affect customers’ purchasing decisions. (See ID 288; see also 

 2 The ALJ correctly observed that because ECM’s deceptive claims were material to 

ECM’s customers and their downstream customers, it was unnecessary to address whether the 

claims were material to end-use consumers. (ID 291 n.55.)
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Novartis, 127 F.T.C. at 688-87 (record “replete” with evidence of claim being made is “strong 

evidence” of materiality).) 

ECM now suggests that the Rate Claim was a minor part of its minimal advertising. 

(Resp. App. Br. at 12-13.) To the contrary, as the ALJ correctly found, the Rate Claim was 

integral to ECM’s marketing strategy, appearing prominently on almost every marketing 

document. (ID ¶¶ 245-46.) For example, the very first bullet point on both its widely-distributed 

marketing flyer3 and the “Our Product” page on the ECM website, stated that plastic treated with 

the ECM additive (“ECM Plastic”) would “[f]ully biodegrade in 9 months to 5 years.” (CCX-3; 

CCX-19 at 5.) The first sentence of ECM’s “Technology Explanation” on its “Our Technology” 

webpage featured the Rate Claim. (CCX-6.) The Rate Claim appeared in both ECM’s sole 

brochure and its form “Letter[s] to an Interested Party”—even though each document only 

briefly summarized the Additive’s technology. (CCX-7 at 6; CCX-10 at 2; CCX-11 at 2.) The 

Rate Claim even had its own devoted flyer, titled the “Life Expectancy of Products 

Manufactured with ECM Masterbatch Pellets.” (CCX-5.) It defies logic that ECM would devote 

so much of its precious marketing space to an immaterial claim. 

As the ALJ correctly found, the Rate Claim also held a prominent place in ECM’s oneon-one customer4 communications. (See ID ¶ 247; see also infra at 8 n.7.) For example, when a 

 3 Sale Director Tom Nealis explained that the flyer was part of the “standard packet” of 

marketing materials he sent to customers. (CCX-813, Nealis Dep. 144, 191.)

4 On appeal, ECM argues that its claims could only have been material to actual 

purchasers of its product, not other companies to whom ECM made deceptive claims. (Resp. 

App. Br. at 23-25.) This distinction, however, does not match ECM’s business model, which 

relies on persuasion (via deceptive claims) throughout the supply chain. As CEO Robert Sinclair 

explained, ECM frequently makes advertising claims to companies who, in turn, ask their plastic 

manufacturer to purchase and use the ECM additive. (CCX-818, Sinclair Dep. 205). For 

example, grocery store chain Down to Earth frequently communicated directly with ECM, asked 

ECM to review its ad copy, and used the Rate Claim on its grocery bags. (CCX-818, Sinclair 
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customer asked Sales Director Tom Nealis to “explain the process in say a few easy to 

understand lines,” Mr. Nealis responded with a short list: “1. Fully biodegradable in 9 months to 

five years.” (CCX-276.) Another customer asked CEO Robert Sinclair: “Your literature says 

nine months to five years, but our sales guys ask if we can be more specific.” (CCX-280 at 3.) 

Mr. Sinclair responded by explaining “the 9 month to 5 year window of biodegradation.” (CCX280 at 1.) A third customer asked ECM’s “Regulatory Specialist,” Alan Poje: “[S]o all this time 

your marketing materials say that our plastic would biodegrade in landfills specifically within 9 

months to 5 years. Are you now saying this is not so??” (CCX-275.) Mr. Poje replied: 

“[Biodegradation] normally occur[s] within the 9 to 60 month time frame.” (CCX-275.) When 

deposed, Mr. Nealis admitted that he routinely told customers that “the process will not normally 

take longer than five years,” (CCX-813, Nealis Dep. 249), and Mr. Poje agreed that during his 

tenure at ECM, “the general timeframe that ECM conveyed to customers” was “nine months to 

five years,” (CCX-816, Poje Dep. 71).

The persistence with which ECM made the claim bolsters the ALJ’s materiality finding. 

See Novartis, 127 F.T.C. at 689 (respondent’s continuing to make the claim during FTC

investigation is evidence that it believed the claim material); Kraft, Inc., 114 F.T.C. 40, 137

(1991) (noting that the persistence with which respondent made the claim is evidence that it 

thought the claim material). Specifically, ECM continued to make the Rate Claim for more than 

two years after Staff began its 2011 investigation. (CCFF ¶ 38.) ECM claimed to have finally 

removed the claim from its marketing materials at the end of 2012 to comply with the 

 

Dep. 205-06; ID ¶ 281, citing CCX-307; CCX-248; CCX-252; CCX-44.) However, it was 

Down To Earth’s supplier, Island Plastic Bags, which actually purchased the additive. (ID ¶ 36.) 

For brevity, Complaint Counsel refers to all companies to whom ECM made claims as 

“customers.”
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Commission’s revised Guides for the Use of Environmental Marketing Claims, 16 C.F.R. Part 

260 (“Green Guides”), but, in fact, ECM continued to make the claim until at least the end of 

2013. (CCFF ¶¶ 38-41, citing examples of Rate Claim on ECM’s website and in marketing 

materials and customer communications through 2013.)

5

 

ECM’s belief in the importance of rate is also evident from the fact that the few 

marketing documents that do not contain the Rate Claim itself, almost without exception,

otherwise mention time or rate. For example, ECM required every customer to sign a 

“Certificate of Assurance of Minimum Loading Rate,” which stated that customers agreed to use 

1% Additive in their plastic because ECM’s reputation would be damaged if ECM Plastic did not 

biodegrade in a “reasonable period of time.” (CCX-832.) ECM’s “Mechanism” page on its 

website addressed a common time-related concern: “People often wonder whether significantly 

greater quantities of our additive will reduce the biodegradation times.” (CCX-4.) And ECM’s 

“Certificate of Biodegradability” certifies that ECM (allegedly) conducted testing to determine

the “rate and extent of biodegradation” of ECM Plastic (CCX-1)—a fact that ECM misstates on 

appeal. See Resp. App. Br. at 33 (claiming that the “certificate lacks any reference to rate of 

biodegradation”).

6

 The only logical conclusion from these nearly ubiquitous references to rate 

 5 Moreover, even when ECM stopped making the Rate Claim, it continued to deceptively 

claim a short biodegradation timeframe—i.e., that plastic with the ECM additive would 

biodegrade in “some period greater than a year.” (ID ¶ 253.) As explained in Complaint 

Counsel’s appeal brief, at least a significant minority of consumers understand this claim to 

imply biodegradation within a year, because, as anchoring expert Dr. Shane Frederick explained, 

the timeframe of one year functions as an “anchor” on which consumers heavily rely when 

interpreting the claim. (CC App. Br. at 8, 27-28.)

6 ECM argues that the absence of the Rate Claim from its “Comparison Chart” shows the 

claim’s immateriality. (Resp. App. Br. at 32, citing CCX-12.) But the claim’s absence from a 

single marketing document is insignificant compared to its presence on so many others. 

Moreover, its absence from the Comparison Chart makes sense because the chart compared 

products that all purport to biodegrade quickly (i.e., compostables and bioplastics). 
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generally, and the Rate Claim specifically, is that ECM knew that rate was highly material to its

customers.

b) Customers Asked About Biodegradation Rate.

The ALJ also correctly relied on abundant evidence demonstrating that ECM’s customers 

frequently asked about time. (ID 288.) ECM argues on appeal that the ALJ should not have 

considered this compelling evidence because, ECM inaccurately claims, “only four such party 

queries out of a universe of 300 [customers] proves the opposite, that the matter was not material 

. . . .” (Resp. App. Br. at 23.) This argument grossly misstates the evidence. The ALJ cited four 

examples of customer questions, (ID 288, citing ID ¶ 1502), but the record contains dozens of 

others.

7

 

 7 For example, ECM received the following questions, comments, and concerns about 

biodegradation rate from customers, prospective customers, and end-use consumers:

• CCX-269 at 1 (“What determines 9 months vs 5 years as it is such a variance?”);

• CCX-275 at 3 (“Do you have any literature explaining the time (5 years or less) 

process?? [sic] I know you told me 9 months – 5 years .... [W]e are trying to use the proper 

language in our company literature.”);

• CCX-277 at 5 (asking ECM to advise on what “claims can be made” such as 

“plastic breaking down in 5 years”);

• CCX-278 at 2 (“I noticed that the biodegrade [sic] life is anywhere from 9 months 

to five years.”);

• CCX-279 at 3 (expressing concern about “the ability to claim without exception 

the speeded up breakdown”);

• CCX-280 at 3 (“We do have some nagging concerns that we need to resolve. The 

first question is ‘how long does it take to degrade’.”);

• CCX-281 at 2 (asking about “decomposition during a certain time span (a couple 

years)”);

• CCX-282 at 2 (asking about “degradable timing”);

• CCX-283 at 2 (asking if ECM can provide a “statement of certainty” that ECM 

Plastic will “‘break down in approximately 9 months to 5 years...’”);

• CCX-296 at 6 (“When the product will [sic] start to breakdown?”);

• CCX-300 at 1 (asking about testing “end-users’ products to ensure that they 

biodegrade in less than 5 years”);
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• CCX-307 at 2 (asking ECM to review “a statement explaining the attributes of 

interest to consumers,” i.e., that ECM Plastic would “fully biodegrade in 9 months to 5 years”);

• CCX-326 (consumer who saw ECM website on grocery bag asking about time);

• CCX-328 at 2 (expressing concern that “[i]n my view, and in the view of some 

leading scientists . . . there is no proof here of biodegradation and certainly nothing that 

quantifies the rate”);

• CCX-367 at 5 (asking for “the expected time” for biodegradation);

• CCX-375 (expressing concern that ECM Plastic netting did not biodegrade at all 

in three years);

• CCX-378 (expressing concern about evidence “to support a claim that the 

material will biodegrade in 9 months to 5 years”);

• CCX-397 (asking ECM to confirm accuracy of statement: “Full Circle bags will 

decompose anywhere that natural organic material will in nine months to five years”);

• CCX-399 at 2 (asking whether using more additive will “speed up the break down 

[sic] of the plastic”);

• CCX-400 at 4 (asking ECM precisely how much additive it needed to use in its 

products “to meet your stated degradation timeframe of 9 months to 5 years”);

• CCX-407 at 3 (“The only question now is how long [to biodegrade] in our 

application.”);

• CCX-423 at 9 (asking whether “the complete biodegradation can be stated to 

happ[e]n by the 5 years on the max end”);

• CCX-427 (recording customer query for information “to better understand the 

time frames [sic] of the biodegradation”);

• CCX-429 at 4 (“[H]ow long will take [sic] to bio degrade [sic] in landfill?”); 

• CCX-452 at 1 (“Where do you derive the 9 months to 5 years timeframe 

biodegradation??)

• RX-135 at 1 (“[I]n how much time a film should degrade [sic]...?”); 

• RX-135 at 6 (“How long in typical landfills does your plastic break down?”); 

• RX-135 at 15 (“Will the PE degrade eventually?”);

• RX-135 at 16 (“For what depend the time of biodegradation? You tell 9 months to 

5 years...”);

• RX-135 at 20 (“How quickly will film using the ECM additive full biodegrade? 

Your flyer states 9 months to 5 years. That seems pretty broad. Have you been able to narrow 

that down?”);

• RX-135 at 25 (“I understand that the plastics...do biodegrade varying 9 months to 

5 years...what conditions or factors do determine the biodegradation time.”); 

• RX-135 at 44 (“[O]ur customer is requesting...information regarding the actual 

timeline or lifeline of the biodegradable material.”); 

• RX-135 at 53 (“In your pamphlet, you’ve got biodegradation from 9 months to 5 

years, dependant [sic] on conditions. For polyethylene films, would it have a smaller 

window?”);

• RX-135 at 55 (“[W]hat time ... [for] the degradation?”); 
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Tellingly, in a candid moment, ECM’s own CEO, Robert Sinclair, summarized 

customers’ attitude toward rate: “Lots of people get hung up on how long.” (CCX-423 at 9 

(emphasis added) (advising client of nine-month-to-five-year timeframe in October 2013, a year 

after ECM allegedly stopped making the Rate Claim).) Other ECM employees concurred. For 

example, CFO Ken Sullivan testified that customers often asked how quickly ECM Plastic would 

biodegrade. (CCFF ¶ 35.) The only reasonable conclusion from so many examples of customer 

inquiries about time is that the Rate Claim was material to ECM’s customers. 

c) ECM Gave Customers the Tools To Pass On the Rate Claim.

The ALJ also correctly relied on abundant proof that ECM gave its customers the tools to 

pass its deceptive claims, including the Rate Claim, to their customers. (ID 288-89.) For 

example, ECM distributed its flyer, which prominently featured the Rate Claim in its very first 

bullet point, as a “sales tool” for customers to send to their customers. (See, e.g., ID ¶ 280

(collecting examples).) As the ALJ correctly observed, the fact that ECM provided such 

materials and encouraged customers to pass them on to their customers is further indication of 

the Rate Claim’s materiality. (ID 288-89.) Tellingly, in its appeal brief, ECM devotes no more 

than a single line to this evidence—and offers no alternative explanation for this conduct. (Resp. 

App. Br. at 22.)

d) Customers Passed On the Rate Claim. 

Finally, the ALJ relied on proof that ECM customers did in fact pass the Rate Claim to 

their customers and end-use consumers. (ID 288-91.) In its appeal brief, ECM argues that 

 

• RX-135 at 72 (“What Marcela was asking you is related to how these bags 

biodegrade and how much time it takes?”)

• RX-135 at 73 (“We don’t mind that [biodegradation] takes 5 years....”);

• RX-135 at 77 (“Please provide your synopsis supporting the 9 month to 5 year 

claim for degradation ASAP.”)
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because, allegedly, only seven of its 300 customers placed the Rate Claim on their own 

advertising, the claim was not material to the remaining 293 customers. (Resp. App. Br. at 22, 

33.) 

Both the facts and logic upon which this argument rest are fatally flawed. First, ECM 

ignores the many examples in the record of customers’ passing on the Rate Claim8

—as well as 

an even greater number of examples of customers passing on unqualified biodegradable claims 

that imply a comparable rate.

9

 The most reasonable conclusion from these examples (from 

 8 For example, the following advertisements or products featured the Rate Claim:

• CCX-33 at 1 (repeating “nine months to five years” in marketing literature for air 

pillows); 

• CCX-34 at 1 (same in memorandum to its distributors for plastic film); 

• CCX-37 at 1, 2 (same on website advertising rigid cards like credit cards); 

• CCX-38 at 1, 2 (same on brochure for packaging);

• CCX-40 at 2 (claiming biodegradation “up to 5 years” for packaging);

• CCX-44 at 1 (same on grocery bag);

• CCX-53 at 2 (stating product would degrade in one to five years in brochure); 

• CCX-55 at 1 (same on “certification of biodegradability”);

• CCX-57 at 1 (repeating “9 months to 5 years” on marketing materials); 

• CCX-102 at 1 (stating on marketing card that product is biodegradable in 1-5 

years);

• CCX-105 at 1 (repeating “nine months to five years” in advertisement); 

• CCX-134 at 1 (repeating claim on bag);

• CCX-500 at 1 (repeating claim in press release for launch of ECM Plastic bags);

• CCX-501 at 1 (same on website);

• CCX-502 – CCX-505 (same in news articles about bag launch);

• CCX-563 at 1 (Rate Claim on ad for air cushions); 

• CCX-564 at 1 (same on ad for loosefill);

• CCX-565 at 1 (same); 

• CCX-627 at 1 (same on fact sheet for “Bio Ultra Blend Liners”) 

• CCX-961 at 1 (repeating “Fully biodegradable in 9 months to 5 years” on 

website’s “Going Green” advertisement for plastic shopping bags);

• RX-9 at 1 (claiming that ECM Plastic will “start biodegrading at 9 months”).

9 See CCFF ¶ 25 (describing unqualified biodegradable claims on products and packages 

as diverse as shampoo bottles, Frisbees, golf tees, highlighters, storage cases, shoe soles, mailers, 

zippers, plastic cutlery, straws, trash bins, bottles, and more).
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which the ALJ selected seven) is that ECM’s customers, their customers, and end-use consumers

all considered the Rate Claim important. Indeed, companies such as Down To Earth, a natural 

grocery store chain in Hawaii, thought the claim so important that Down To Earth included the 

Rate Claim (with ECM-approved ad copy) on bags that every grocery store customer received. 

(CCX-44; ID ¶ 1510.) Down To Earth was not alone. Its supplier, Island Plastic Bags, included 

the Rate Claim on bags for “50 to 100” different customers (i.e., producing over 10 million bags

with the Rate Claim). (ID ¶ 300.) As Island Plastic Bags explained, the Rate Claim was 

important because it helped to convey to customers that “this is an actual technology . . . it’s for 

real.” (CCX-811, IPB Dep. at 54-55.) 

4. ECM Offers No Meaningful Evidence that Time Was Not Material.

At trial, ECM made a number of flawed arguments about lack of materiality, each of 

which the ALJ properly rejected. On appeal, ECM renews these faulty arguments, none of 

which meaningfully challenges the Rate Claim’s materiality.

First, ECM argues that its consumer perception expert, Dr. Stewart, testified that 

consumers have varied understandings of biodegradability, which makes it “unlikely” that

ECM’s claims about biodegradability are material. (Resp. App. Br. at 26-27.) ECM further 

contends that Dr. Stewart’s telephone landline survey “reveals that End-Use Consumers have no 

universal benchmark for biodegradation rate from which they can assess [] any particular speed.” 

(Id. at 27.) According to ECM, this lack of “universal benchmark” means that consumers cannot 

be influenced by rate claims, much less ECM’s Rate Claim. (Id.) 

This argument has three fatal flaws. First, lack of consumer consensus about 

biodegradability is irrelevant. All that matters under Section 5 is that a “significant minority” of 

consumers perceived and were influenced by the deceptive rate claim. See Novartis, 127 F.T.C. 

at 693, citing Deception Statement, 27 F.T.C. at 177 n.20. Second, the argument ignores that 
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each of the four consumer perception studies in evidence (including Dr. Stewart’s) shows that a 

significant minority of consumers understand biodegradable claims to entail a one-to-five year 

timeframe for complete breakdown. (CC App. Br. at 7-29.) In other words, contrary to ECM’s 

argument, at least a significant minority (and probability a majority) of consumers do have a 

“benchmark” to assess rate claims. If, as ECM concedes, unqualified biodegradable claims

(which imply a one-to-five-year timeframe) are material, then the Rate Claim (with its express

nine-months-to-five-year timeframe) must be material.10 Third, even setting aside this evidence 

of materiality to end-use consumers, the overwhelming evidence of the deceptive Rate Claim’s 

materiality to ECM’s customers by itself establishes a Section 5 violation. (Cf. ID 291 n.55 

(properly reaching this conclusion).)

ECM also argues that during “lengthy negotiations” with its “sophisticated” customers, it

qualified the Rate Claim such that it could not have influenced customers’ purchasing decisions.

(Resp. App. Br. at 28-30.) Though styled as a materiality argument, this is a repackaged version 

of ECM’s specious argument that it did not make the Rate Claim at all.

11 This argument is not 

persuasive for two reasons. First, no matter the alleged length of “negotiations,” there is an 

enormous amount of evidence proving that ECM repeatedly and prominently made the Rate 

Claim and the claim was important to customers. (See supra Section II.A.3; ID 288-91.)

 10 Tellingly, Dr. Stewart himself acknowledged that if ECM Plastic will not biodegrade in 

landfills in less than five years, “prohibiting that specific claim would serve consumer welfare.” 

(CCFF ¶ 191.)

11 As explained in Complaint Counsel’s Post-Trial Brief, this “qualification defense” fails 

not only as a matter of fact (ECM very clearly made the claim) but also as a matter of law. 

(CCPTB at 90-92.) It is well-established that an advertiser cannot “cure the deception” in one 

advertisement with different statements in another. See, e.g., In re Chrysler Corp., 87 F.T.C. 

719, 751 (1976); Removatron Int’l Corp. v. FTC, 884 F.2d 1489, 1496-97 (1st Cir. 1989). 

Moreover, any “qualification” that the Rate Claim was an approximate timeframe fails because 

as ECM’s own expert, Dr. Sahu, admitted, the nine-month-to-five-year timeframe is off by 

decades or centuries. (CCFF ¶ 132.)
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Second, the evidence clearly shows that ECM’s customers, though sophisticated about

manufacturing plastic, were not sophisticated in biodegradation. (See ID 290 (citing testimony 

from multiple customers who relied on ECM because they lacked the facilities and expertise to 

evaluate biodegradability); CCPTB at 23-25; 88-91 (describing customers’ reliance on ECM to 

explain testing and contrasting them with sophisticated companies like 3M Company that tested 

the Additive, found no biodegradation, and declined to purchase).) Indeed, it is impossible to 

square ECM’s argument that customers were too sophisticated to be influenced by its express 

claim with evidence that: (1) ECM made the claim conspicuously and persistently; (2) many 

customers asked about the claim; (3) ECM repeatedly provided tools to pass the claim on; and

(4) customers did in fact pass on the claim to business customers and end-use consumers.

Next, ECM argues that because other features of the Additive were important to 

customers (e.g., cost, adaptability to manufacturing process), the Rate Claim was necessarily 

immaterial to them. (Resp. App. Br. 16, 30-32.) This argument is based on a misconception of 

both fact and law. First, complete breakdown in one to five years after disposal is the Additive’s 

primary purported attribute; characteristics like cost or ease-of-use only become relevant only if 

a customer initially determines that it wants a “biodegradable” plastic. Second, even if rate were 

just one of several characteristics, materiality does not require proof that the claim was “the only 

factor or the most important factor likely to affect a consumer’s purchase decision.” (ID 290, 

quoting Novartis, 127 F.T.C. at 695 (emphasis in original).) To be material, a claim simply has 

to be “an important factor’” in a customer’s purchase decision. Id. (emphasis in original). Thus, 

the Rate Claim is material even if cost, ease-of-use, general environmental benefit, or some other 

factor were also important to customers.
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As part of this flawed argument, ECM cites two deposition transcripts as evidence that 

customers were “never concerned” about how long it takes ECM Plastic to biodegrade. (Resp. 

App. Br. at 30, citing CCX-800 and 801.) In fact, these citations simply establish that these 

customers understood that ECM Plastic would degrade over time. (See CCX-800 (Ringley Dep. 

32-33) (BER understood that ECM Plastic would biodegrade in nine months to five years); id. at 

29 (BER understood ECM Plastic would biodegrade 100% “[o]ver time”); CCX-801 (Kizer Dep. 

22) (D&W understood that ECM Plastic would degrade “over a period of time”).) ECM also 

cites deposition testimony as support for its claim that customers’ “sole interest” was so-called 

“intrinsic” biodegradability—to the exclusion of “biodegradation rate.” (Resp. App. Br. at 16, 

30.) But only one citation arguably supports ECM’s argument that customers who wanted to 

make unqualified biodegradable claims actually separated biodegradability (a process that occurs 

over time) from time.

12 

Next, ECM argues that by issuing the Green Guides in 1996, the FTC “coerced industry, 

including ECM, into using ‘rate’ qualifiers.” (Resp. App. Br. at 34.) According to ECM, this 

“coercion” was the only reason ECM made the claim and customers cared about the claim. (Id.

at 34-36.) Leaving aside the absurdity of this argument, the 1996 Green Guides simply provided 

 12 Compare CCX-800 (Ringley Dep. 17, 32-33) (company bought ECM additive, which 

it understood in terms of Rate Claim, because customers wanted biodegradable plastic); CCX801 (Kizer Dep. 22) (company offered customers who wanted biodegradable product ECM 

Plastic, which would degrade “over a period of time”); CCX-802 (Leiti Dep. 52-53) (company 

made biodegradable claims “based off of what was given to us by ECM”); CCX-804 (Collins 

Dep. 15) (customers wanted biodegradable product); CCX-810 (Blood Dep. 197) (consumers 

care if biodegradation is accelerated); CCX-812 (Gormley Dep. 14-15) (company understood 

biodegradable claims customers wanted in terms of Rate Claim); CCX-817 (Bean Dep. 32-33) 

(company provided Rate Claim to downstream customer who wanted biodegradable product); 

CCX-822 (Samuels Dep. 12-13) (company interested in Additive and its Rate Claim because 

wanted a biodegradable product) with CCX-809 (Sandry Dep. 75) (company only concerned 

with “break down,” not time).
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that any marketer making an unqualified degradable claim should qualify the claim to the extent 

necessary to avoid deception about the rate and extent of degradation. 16 C.F.R. § 260.8 (Oct. 

11, 1996). The Guides did not grant a license to lie.

Finally, ECM argues that the Rate Claim is immaterial because “[i]f scientists are 

unconcerned with biodegradation rate, then, by extension, industry dependent on biodegradation 

science has little reason to be concerned with rate.” (Resp. App. Br. at 38.) This argument is a 

non sequiter. Even if rate were irrelevant to scientists with biodegradation expertise (which it is 

not, see CC App. Br. at 33-47), scientists’ views say nothing about the claim’s importance to 

ECM’s non-expert customers and their customers. 

B. ECM’s Various Arguments Against Entry of the Order Are Meritless.

Without viable legal or factual arguments, ECM resorts to challenging the administrative 

process. Specifically, ECM argues that entry of the Order violates its due process rights, is not in 

the public interest, and constitutes an ultra vires agency action. For the reasons explained below, 

these arguments are meritless.

1. ECM’s Due Process Arguments Are Groundless.

ECM makes baseless assertions that Complaint Counsel violated its due process rights by 

engaging in unfair litigation tactics. (Resp. App. Br. at 44-50.) ECM intertwines this accusation 

with equally groundless allegations that Complaint Counsel engaged in “legerdemain” and its 

experts “dissembled.” (Resp. App. Br. at 45-47). Such attacks are nothing new for ECM, which 

has long vilified its academic and industry critics as “paid assassins” and “paid proselytizers.” 

(CCX-289; CCX-294; cf. CCFF ¶¶ 104-106.) As with those ad hominem attacks, ECM’s 

arguments here seek only to deflect attention from the simple fact that ECM’s technology does 

not work. 
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a) Complaint Counsel Did Not Engage in Unfair Litigation Tactics.

The thrust of ECM’s accusation appears to be that Complaint Counsel took efforts to 

conceal the existence of the Ohio State Study13 (showing the ECM Additive does not work) and 

Dr. Michel (the study’s author) in order to “foist it upon” Robert Sinclair in his deposition and to 

surprise ECM in our rebuttal case.14 (Resp. App. Br. at 44-45.) This marks the seventh attempt 

by ECM to exclude Dr. Michel and the Ohio State Study, the only peer-reviewed scientific study 

evaluating ECM Plastic.15 Unsurprisingly, ECM’s conspiracy theory is mere fantasy. The short 

delay between Complaint Counsel’s receipt of the published study and its questioning of Mr. 

Sinclair caused no conceivable prejudice. Moreover, Complaint Counsel’s identification and use 

of Dr. Michel as a rebuttal witness was timely and fair. Finally, ECM’s last-ditch attacks on Dr. 

Michel are unsupported by the record.

 13 CCX-164 and 880, Eddie, F. Gómez & Frederick C. Michel, Jr., Biodegradability of 

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

Anaerobic Digestion, and Long-Term Soil Incubation, 98 POLYMER DEGRADATION AND 

STABILITY 2583-2591 (2013).

14 It is not clear from ECM’s argument why, if we intended to surprise ECM with this 

study in our rebuttal case, we showed the article to Mr. Sinclair at his deposition.

15 ECM filed three motions to exclude the Ohio State Study and three motions to exclude 

the rebuttal testimony of Dr. Michel: (1) Respondent’s Motion for Sanctions, filed Feb. 28, 2014 

(request to rule Ohio State Study inadmissible); (2) ECM BioFilm’s Motion to Sanction 

Complaint Counsel for Unauthorized Intentional Dissuasion of Response to Subpoena Duces 

Tecum, filed Mar. 25, 2014 (requesting exclusion of Ohio State Study); (3) Respondent ECM 

BioFilms’ Motion to Compel and to Sanction Complaint Counsel for Violation of Discovery 

Rules, filed Mar. 25, 2014 (requesting Ohio State Study be excluded from evidence and to 

prohibit any mention of Dr. Michel during trial); (4) Respondent’s Combined Motion for 

Sanctions to Exclude Complaint Counsel’s Concealed Expert Rebuttal Witness (Not Identified 

By Notice in Accordance with Rule 3.31A and the Revised Scheduling Order) and For Leave to 

Include Surrebuttal Expert, filed July 9, 2014 (seeking to exclude Dr. Michel as a rebuttal 

expert); (5) Respondent’s Supplement to Motion for Sanctions and to Exclude, filed July 21, 

2014 (seeking to exclude Dr. Michel); and (6) Respondent ECM BioFilm’s Motion to Extend 

Page Count In Response to Complaint Counsel’s Motion for Leave to Call Rebuttal Fact Witness 

and Motion to Prohibit Dr. Michel from Testifying as a Rebuttal Expert Witness, filed Aug. 26, 

2014.
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(1) Complaint Counsel Timely Produced the Ohio State Study.

In October 2013, Dr. Michel published the Ohio State Study in POLYMER DEGRADATION 

AND STABILITY, a well-regarded, peer-reviewed scientific journal. The Ohio State Study tested 

several ECM Plastics as well as over a dozen other potentially biodegradable materials 

(including an additive manufactured by an actual ECM competitor). (See generally CCX-164.) 

Significantly, the Ohio State Study concluded: “plastics containing additives that supposedly 

confer biodegradability to polymers such as polyethylene and polypropylene [including the ECM 

Additive] did not improve the biodegradability of these recalcitrant polymers.” (CCX-164 at 8.)

Complaint Counsel first received a copy of the Ohio State Study a little after 8 p.m. on 

Friday, February 14, 2014. (See generally Complaint Counsel’s Opposition to Respondent’s 

Motion for Sanctions.) Following the President’s Day holiday weekend, Complaint Counsel 

began Robert Sinclair’s deposition in his capacity as ECM’s corporate designee on Tuesday, 

February 18th. Complaint Counsel produced the study as an exhibit on the second day of Mr. 

Sinclair’s deposition, February 19th—the second business day after receiving it. During the 

deposition, Complaint Counsel’s inquiry was limited to a handful of questions about whether 

ECM was familiar with the study and whether it had any reason to believe the authors were 

biased. (CCX-819 at 144-150.) 

The ALJ incorrectly sanctioned Complaint Counsel for not timely supplementing its 

discovery responses by prohibiting Complaint Counsel from using or relying on Mr. Sinclair’s 

deposition testimony.16 That testimony, however, was meaningless because Mr. Sinclair gave no 

 16 Even this mild sanction was unreasonable. The ALJ’s order essentially interprets 

Commission Rule 3.31(e) as imposing a duty on parties to turn over supplemental discovery 

within one business day. This is both an unreasonable burden and inconsistent with the ALJ’s 

Scheduling Order. (Scheduling Order, filed Nov. 13, 2013, ¶ 14 (requiring parties to produce 
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substantive responses to these brief inquiries. More importantly, the ALJ found that, other than 

not having a chance to review the study prior to questioning, Respondent was not prejudiced. 

The ALJ, therefore, rejected Respondent’s many motions to exclude the study and otherwise 

sanction Complaint Counsel.17

(2) ECM Was Not Prejudiced.

ECM cannot reasonably argue that Complaint Counsel’s not producing the study twentyfour hours earlier caused prejudice. First, the fact that Complaint Counsel never used Mr. 

Sinclair’s testimony eliminates any possible prejudice from the deposition questioning. Second, 

ECM had constructive, if not actual, notice of the study long before Complaint Counsel. ECM’s 

business records reveal that the company that commissioned the Ohio State Study, Myers 

Industries Lawn and Garden, contacted ECM in January 2010 about incorporating the ECM 

Additive into nursery pots, and subsequently informed ECM that it had commissioned Ohio State 

University to conduct ASTM D5511 tests of pots infused with the ECM Additive in February 

2010.18 (CCX-417.) 

 

documents from non-parties within three business days).) Moreover, the Ohio State Study had 

been publicly available for more than four months. (See CCX-164.)

17 Order Granting in Part and Denying in Part Respondent’s Motion for Sanctions, filed 

Mar. 21, 2014; Order Denying Respondent’s Motion to Sanction Complaint Counsel for 

Violation of Discovery Rules, filed Apr. 7, 2014; Order Denying Respondent’s Motion to 

Sanction Complaint Counsel for Unauthorized Dissuasion of Response to Subpoena Duces 

Tecum, filed Apr. 9, 2014.

18 And, as was ECM’s usual practice, it both attempted to dissuade Myers from 

conducting its own testing, insisting that ECM’s testing was sufficient (CCX-417 at 4), and then 

steered Myers to other labs that had “successful” tests (CCX-417 at 12-14). ECM also falsely 

told Myers: “this is the first time we have been told there is no biodegradation in a product with 

our additive.” (CCX-417 at 13.) In fact, ECM had received repeated warnings that its claims 

were false and lacked proof. See, e.g., CCX-323 at 3 (“The bottom line is that up to now, there 

has been no information provided that definitively substantiates ECM’s claims....”); CCX-328 at 

2 (“[I]n the view of some leading scientists whom I earlier questioned about the ECM paper on 

their website, there is no proof here of biodegradation and certainly nothing that quantifies the 
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Third, even if ECM did not already have notice of the study,19 Complaint Counsel 

produced it three months before the close of fact discovery and almost five months before the 

close of expert discovery.20 Thus, ECM had more than sufficient time to conduct necessary 

discovery, and for its experts to analyze and report on the study’s findings. ECM took every 

advantage of this time. ECM served Dr. Michel and Ohio State University and other third 

parties21 with subpoenas duces tecum before the end of February and received responsive 

information before the end of March, two months before the close of fact discovery. Indeed, 

both Drs. Sahu and Burnette’s expert reports contained an analysis of the Ohio State Study. 

Accordingly, ECM knew about the Ohio State Study well in advance of trial, so there was no 

prejudice to ECM and no due process issue.

 

rate.”); CCX-375 at 1 (“Are you aware the testing which we conducted on our netting using your 

product did not produce any results [from] the ASTM D5511 test....[?]”); CCX-701 at (“[T]he 

ECM data for ‘biodegradation in a landfill’ does not meet accepted norms and standards for 

biodegradable materials....”) and CCX-816 at 138 (ECM employee Alan Poje stating in 

deposition that he was familiar with CCX-701); CCX-716 at 3 (“Every scientist[] we have 

spoken to tell[s] us that your claims are false and impossible to prove.”); see also CCFF ¶¶ 102-

103.

19 Tellingly, none of ECM’s so-called “experts” who testified to conducting a broad 

literature search on the topic of biodegradable plastic identified the study, although it was in the 

public sphere as of October 1, 2013. (CCX-164.)

20 ECM’s argument that Complaint Counsel prevented it from conducting a fact 

deposition of Dr. Michel is equally preposterous. In fact, the communications between the 

parties demonstrate that ECM and Complaint Counsel stipulated to the admissibility and 

authenticity of the Ohio State Study to avoid taking another unnecessary deposition. (See

Complaint Counsel’s Opposition to Respondent’s Combined Motion for Sanctions, to Exclude 

Complaint Counsel’s Rebuttal Witness, and for Leave to Include Surrebuttal Expert, filed July 

21, 2014, at Exhibit CCX-D). In any event, ECM ultimately took Dr. Michel’s deposition and 

questioned him extensively about the study. (See generally RX-970, Michel Dep. Tr.)

21 ECM also served subpoenas duces tecum on Elsevier, the publisher, Dr. Ramani 

Narayan, who provided Complaint Counsel the unsolicited copy of the Ohio State Study, and 

Eddie Gómez, the Ph.D. student who assisted Dr. Michel with the study. 
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(3) Complaint Counsel’s Identification of Dr. Michel as Rebuttal 

Expert Witness Was Timely and Fair.

Similarly, ECM was not prejudiced by Complaint Counsel’s identification or use of Dr. 

Michel as a rebuttal expert witness.22 Complaint Counsel was under no duty to identify Dr. 

Michel as a rebuttal expert witness until June 30, 2013, when it did so by filing its expert rebuttal 

report.23 (Order Denying Motion to Exclude Michel; see also Amended Scheduling Order, filed 

Apr. 10, 2014.) Despite ECM’s protestations otherwise, Dr. Michel’s report was limited to 

rebuttal of points raised by Drs. Sahu and Burnette. (Order Denying Motion to Exclude Michel.) 

In effect, ECM simply complains that Complaint Counsel followed the rules.

b) ECM’s Attempts to Discredit Dr. Michel Fail.

As a last resort, ECM attempts to discredit Dr. Michel and the Ohio State Study with 

outrageous accusations. ECM asserts that Dr. Michel and Myers Industries were “competitors” 

of ECM, insinuates that they conspired to falsify a negative report about ECM, and accuses Dr. 

Michel of “dissembling” under oath to further the conspiracy. (Resp. App. Br. at 46-47.) But 

ECM’s own records refute the motive ECM attributes to Dr. Michel and Myers (i.e., their alleged 

desire to buoy the compostable industry (Resp. App. Br. at 9)). Over the course of a year, Myers 

and ECM actively engaged in discussions about making biodegradable pots, which included calls 

 22 See Order on Respondent’s Combined Motion for Sanctions, to Exclude Expert 

Witness, and For Leave (“Order Denying Motion to Exclude Michel”), filed July 23, 2014 (ALJ 

rejected ECM’s arguments that Complaint Counsel did not properly disclose Dr. Michel as a 

rebuttal expert witness); and Order Denying Complaint Counsel’s Motion for Leave to Call 

Rebuttal Fact Witnesses and Respondent’s Request to Bar Rebuttal Expert Witness (ALJ 

explaining that Dr. Michel’s testimony was limited to matters in expert rebuttal report to avoid 

prejudice to ECM).

23 Ironically, ECM complains about receiving the rebuttal report shortly before midnight

(Resp. App. Br. at 50 n.34), even though it did not serve Complaint Counsel with its expert 

reports until 1:09 a.m. on June 19, 2014—technically the day after they were due under the 

Amended Scheduling Order.
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from Myers with “technical questions” (CCX-417 at 2), a three-hour in-person meeting at ECM 

(CCX-417 at 3), a site visit of Myers’ manufacturing facility by Mr. Sinclair (CCX-417 at 4), a 

test-run of plastics with ECM Additive (CCX-417 at 5), and negotiations regarding an 

exclusivity agreement between Myers and ECM (see generally CCX-417). ECM was aware as 

early as January 2010 that Myers intended to conduct biodegradability testing, and as early as 

February 2010 that Myers was conducting biodegradability testing of its ECM Plastic at Ohio 

State University under ASTM D5511. It appears from ECM’s records that the only reason 

Myers did not move forward with the purchase was that the ECM-infused samples showed no 

biodegradation under these tests. (CCX-417 at 12-14.) 

Furthermore, Dr. Michel provided uncontested testimony that he tested the material for 

Myers to determine whether the ECM Additive worked so it could market products that 

incorporate it. (Tr. 2934 (Dr. Michel testifying that Meyers’ only interest was evaluating 

materials with the ECM Additive to see whether it could market them as biodegradable); Tr. 

2982-2983 (Dr. Michel testifying that he had no reason to believe that Myers did not 

manufacture the plastic properly because “it’s what they do”); Tr. 2996 (Dr. Michel’s 

understanding is that Myers wanted the ECM technology to work).) There is no evidence 

whatsoever to support ECM’s insinuations of impropriety.24 

 24 ECM makes numerous unsupported factual assertions regarding Dr. Michel’s and Dr. 

McCarthy’s supposed connections to alleged competitors in the compostable industry. (Resp. 

App. Br. at 8 n.4, 9.) For instance, ECM points to Dr. Michel’s consultancy for DuPont and then 

claims DuPont is a member of the Biodegradable Products Institute (“BPI”). (Id.) However, 

other than ECM’s counsel’s representation that DuPont is a member of BPI, there is nothing in 

the record supporting that assertion, or even describing the nature of the consultancy, or when it 

occurred. Moreover, ECM does not explain why or how Dr. Michel’s receipt of a “small grant” 

from DuPont (Tr. 2918) affected his opinions in this matter. Likewise, ECM makes much of Dr. 

McCarthy’s connection with Metabolix. (Resp. Br. at 9.) But, as explained in Complaint 

Counsel’s Post-Trial Reply Brief, there is absolutely no evidence that Dr. McCarthy’s (or Dr. 
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It is worth noting that every substantive challenge ECM raises to Dr. Michel’s study is 

equally true of the studies ECM relies on. No lab independently evaluated the material to 

determine the amount of ECM Additive in the plastic, nor do the reports contain information 

about the source, production, or chain of custody of the test samples.25 (See Tr. 1932-1933; 

1940, 1961.) In the end, because ECM conducted such prolific discovery, there is more 

information and data available in connection with the Ohio State Study than any other of an 

ECM Plastic. And this data definitively demonstrates that even under optimized conditions, the 

ECM Additive does nothing. 

c) ECM Was Not Denied Fair Rebuttal to Challenge the Credibility 

of Dr. McCarthy.

ECM argues that its due process rights were further limited because it had no opportunity 

to challenge the credibility of Dr. McCarthy through Dr. Grossman, its proposed surrebuttal 

expert. (Resp. App. Br. at 48-50.) This convoluted and unpersuasive argument misstates 

essential facts.

 

Michel’s) opinions were financially motivated or otherwise affected by these relationships. (See

CCPTRB 19-21.)

25 ECM also alleges that biodegradation of the control plateaued prematurely at 70%, 

invalidating the Ohio State Study results. But Dr. Michel explained in his rebuttal report, and 

both during his deposition and at trial that there was no premature “plateau.” Instead, the data 

reflect the widely-accepted view that biodegradation will not reach 100%: “the plateau is 

evidence that the biotransformation of cellulose was complete and that the remaining carbon had 

been converted into more recalcitrant residues.” (CCX-895, Michel Dep. 8.) Moreover, to be 

valid, the test method only requires 70% biodegradation of the positive control in 30 days, which 

is indisputably reflected in the data. (CCX-85.) Certainly, the editor and referee would have 

identified any such problem with the test during the peer review process. Instead, Dr. Tadahisha 

Iwata, an expert in the area of degradable plastics and the editor of POLYMER DEGRADATION AND 

STABILITY that published the Study, testified that the data submitted with the draft article 

(reviewers never view the raw data itself, only what is submitted, CCX-808 at 20) did not appear 

incorrect, fabricated, or incomplete. (CCX-808, Iwata Dep. 17-18.) And the referee approved 

publication of the Study without any revisions, which is rare. (CCX-808, Iwata Dep. 15.)
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ECM moved to introduce the surrebuttal report of Dr. Grossman before trial.26 In 

addition to being untimely, ECM’s motion was improper because ECM made no attempt to 

challenge the rebuttal opinions of Dr. McCarthy. Instead, ECM tried to use Dr. Grossman to 

challenge Dr. McCarthy’s credibility and the opinions contained in his first expert report. Thus, 

ECM improperly attempted to do what it accused Complaint Counsel of doing—using the 

surrebuttal report to support its case in chief. 

ECM also argues that the ALJ improperly rejected Dr. Grossman’s rebuttal to Dr. 

McCarthy’s trial testimony. (Resp. App. Br. at 48.) But ECM never filed a motion or made a 

request during trial asking the ALJ to permit Dr. Grossman’s testimony (as it reserved its right to 

do for Dr. Michel, see Tr. 2622). Thus, there is absolutely no basis for ECM’s accusation that it 

was deprived of a full and fair opportunity to challenge Dr. McCarthy’s opinions before, or 

during, trial.

2. This Proceeding Is In the Public Interest.

ECM also makes two meritless “public interest” arguments. First, it argues that 

Complaint Counsel has not shown injury. (Resp. App. Br. at 40-42.) Second, ECM argues that 

the order is against the public interest because it will result in bad environmental policy. (Resp. 

App. Br. at 42-43.) Both arguments fail, for the reasons explained below.

a) ECM’s Deceptive Claims Have the Potential to Injure the Public.

ECM’s argument that there is no proof of injury has no substance. Relying on two 

factually distinguishable cases, Buchsbaum and Arnold Stone, ECM argues that Complaint 

 26 Respondent’s Combined Motion for Sanctions to Exclude Complaint Counsel’s 

Concealed Experts Rebuttal Witness (Not Identified By Notice in Accordance with Rule 3.31A 

and the Revised Scheduling Order) and For Leave to Include Surrebuttal Expert, filed July 9, 

2014.
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Counsel must show actual injury to demonstrate that the order is in the public interest. (Resp. 

App. Br. at 40-42.) This is wrong.27 Rather, Complaint Counsel must demonstrate that ECM’s 

deceptive claims may be detrimental to the public at large. Cf. S. Buchsbaum & Co. v. FTC, 160 

F.2d 121, 123–24 (7th Cir. 1947); Arnold Stone Co. v. FTC, 49 F.2d 1017, 1018 (5th Cir. 1941). 

In both Buchsbaum and Arnold Stone, the courts held that the public interest is not served where 

there is no deception, or potential for deception, of the intended audience. Id. In both cases, the 

evidence failed to show that the intended audience, i.e., consumers (Buchsbaum) or customers 

(Arnold Stone), were deceived or could have been deceived. Buchsbaum, 160 F.2d at 123-124; 

Arnold Stone, 49 F.2d at 1018. 

The evidence here demonstrates both high likelihood of actual deception of ECM’s 

customers and consumers, see supra Section II.A, as well as myriad potential harms to 

consumers in allowing ECM’s deceptive claims. Environmentally conscious consumers (a large 

segment of the consumer population) are likely to purchase “biodegradable” plastics in lieu of 

traditional plastics—and pay higher prices for the perceived environmental benefit. (CCFF ¶ 14; 

see also CCX-35 at 1 (discussing premium charged for ECM Plastic); CCX-417 at 14 (same); 

CCX-487 at 3 (same); RX-23 (discussing cost-competitiveness of ECM Plastic); CCX-38 at 8 

(discussing passing cost of ECM Plastic to consumers); CCX-56 (Island Plastic’s brochure 

discussing 15% premium for ECM Plastic bags).) See Thompson Med. Co., 104 F.T.C. 648, 824 

(1984) (significant economic harm “result[s] from the repeated purchase of an ineffective 

product by consumers who are unable to evaluate” the efficacy claims, even where “there is little 

 27 See infra at 3. Importantly, the Commission would not have issued the Complaint had 

it determined that this case would not be in the public interest, and absent extraordinary 

circumstances (not present here), the Commission will not revisit that determination. In re Brake 

Guard Prods., Inc., 125 F.T.C 138, 247 (1998) (citing cases). 
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potential for the product to cause serious injury to consumers’ health”); FTC v. Pantron I Corp., 

33 F.3d 1088, 1102 (9th Cir. 1994) (“[A] major purpose of the Federal Trade Commission Act is 

to prevent consumers from economic injuries.”); see also POM Wonderful LLC, No. 9344, 2013 

FTC LEXIS 6, at *50 (Jan. 10, 2013) (holding the ALJ erred in finding no economic injury 

where consumers paid more for a perceived health benefit of the POM products, even if safe). 

Also, this same large segment of environmentally-conscious consumers will be harmed (because 

they care about the environment) if they replace environmentally beneficial practices such as 

recycling with disposal of “biodegradable” plastic in landfills, a practice that has dubious 

environmental benefit. (See CCX-943, Barlaz Dep. Tr. at 168 (discussing Dr. Barlaz’s study 

concluding that landfill disposal of biodegradable materials may be harmful to the environment); 

Tr. 2289 (Dr. Barlaz explaining that it is a complicated analysis to determine the environmental 

benefit of a product that biodegrades in a landfill).) And, of course, false claims of 

biodegradability (when exposed as false) undercut faith in truthful claims. Consequently, ECM’s 

deceptive biodegradability claims have the potential to result in injury to the public, and,

therefore, preventing these deceptive claims serves the public interest.

Citing U.S. v. Klesner, 280 U.S. 19, 25 (1929), ECM also argues that mere deception is 

insufficient to justify an action as in the public interest. (Resp. App. Br. at 40.) But Klesner is 

inapposite. Specifically, Klesner addresses whether the FTC Act could be used to vindicate 

private wrongs. Klesner, 280 U.S. at 25-29. The Court held that the FTC Act does not “provide 

private persons with an administrative remedy for private wrongs” including deception. Id. at 

27. Instead, “the purpose must be protection of the public.” Id. In explaining the scope of the 

public interest, the Court explained that the “Commission exercises a broad discretion.” Id. at 
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28. The Court provided examples where the public interest is sufficient: harm to competition, 

oppression of the weak by the strong, and widespread aggregate loss. Id.

Through promulgation of the Green Guides, the Commission has long recognized the 

public interest in truthful and substantiated environmental benefit claims. Green Guides, 61 Fed. 

Reg. 53,312 (Oct. 11, 1996) (“The Commission promulgates industry guides ‘when it appears to 

the Commission that guidance as to the legal requirements applicable to particular practices 

would be beneficial in the public interest . . . .’”) (citing 16 C.F.R. 1.6). Thus, the Commission 

clearly recognizes that prohibiting deceptive environmental claims serves the public interest by,

inter alia, “stemming the tide of spurious environmental claims, bolstering consumer confidence 

. . . and increasing the flow of specific and accurate environmental information to consumers, 

enabling them to make informed purchasing decisions.” Cf. Green Guides, 61 Fed. Reg. 53,312 

(Oct. 11, 1996) (codified at 16 C.F.R. pt. 260); Green Guides, 75 Fed. Reg. 63,555 (Oct. 15, 

2010) (codified at 16 C.F.R. pt. 260).

b) Effect on Environmental Issues is Not Relevant to Whether this Case or 

the Order is in the Public Interest.

ECM also argues that, if the order is enforced, it will lead to more methane emission into 

the atmosphere. (Resp. App. Br. at 42.) This argument fails in several ways. First, ECM has no 

evidence that allowing ECM to market its product deceptively has an environmental benefit. In 

fact, Dr. David Stewart, ECM’s consumer perception expert agreed that prohibiting claims like 

“nine months to five years” would serve the public interest if they do not have scientific support. 

(CCFF ¶ 191.)
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Moreover, ECM’s argument assumes that the product works, and in a manner that could 

reduce methane emissions, but the evidence shows it does not.28 Additionally, assuming ECM 

could substantiate any efficacy, it could qualify its claim in a number of ways to make it nondeceptive, as permitted by the Notice Order. (See CC App. Br. at 51; CCPTB at 92, 93 

(discussing scope of Notice Order provisions).)

Finally, even assuming the proposed order caused some negative environmental impact, 

the Supreme Court has previously rejected the argument that an environmental benefit is a 

license to deceive:

Finally, the argument is made that the restraining orders are not necessary to 

protect the public interest (see Federal Trade Commission v. Royal Milling Co., 

supra), but to the contrary that the public interest will be promoted by increasing 

the demand for pinus ponderosa, though it be sold with a misleading label, and 

thus abating the destruction of the pine forests of the east. 

The conservation of our forests is a good of large importance, but the end will 

have to be attained by methods other than a license to do business unfairly.

FTC v. Algoma Lumber Co., 291 U.S. 67, 81 (1934). Therefore, even if ECM had substantiation 

that its additive reduces methane emissions (it does not), this would not give ECM license to 

deceive its customers and end-use consumers.

c) This Order is Not Ultra Vires.

ECM argues that this action is ultra vires because it is, in effect, setting nationwide 

environmental policy, a power delegated to the EPA. (Resp. App. Br. at 43-44.) ECM’s 

argument is a rehashing of its public interest argument. Essentially, ECM argues that 

consumers’ understanding of the marketing term “biodegradable” incentivizes marketers to make 

 28 See generally CCPTB 54-76 (discussing falsity and lack of substantiation for ECM’s 

claims); CC App. Br. 30-47. Curiously, ECM now seems to be arguing that its Rate Claim, if 

true, would be environmentally harmful.
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rapidly biodegrading products, or will keep marketers from making biodegradable products at 

all, both in supposed conflict with environmental policy set by the EPA. As explained above, 

there is no support for ECM’s assertion that its technology will result in fewer methane 

emissions. Furthermore, an appropriate order will not stop ECM from making appropriatelyqualified, truthful, and substantiated claims. Finally, any alleged, speculative effect that an order 

crafted to prevent deception may have on environmental policy is irrelevant. 

III. CONCLUSION

For the reasons stated above, Respondent’s practices, as alleged in the Complaint, 

constitute unfair or deceptive acts or practices, in or affecting commerce, in violation of Sections 

5(a) and 12 of the FTC Act. Complaint Counsel respectfully requests that the Commission enter 

the relief proposed in the Notice Order.

Dated: March 31, 2015

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
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CERTIFICATE OF SERVICE

I hereby certify that on March 31, 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:

Donald S. 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 Wolf Run Lane

Clifton, VA 20124

Email: jemord@emord.com 

Peter Arhangelsky

Emord & Associates, P.C.

3210 S. Gilbert Road, Suite 4

Chandler, AZ 85286

Email: parhangelsky@emord.com 

Eric J. Awerbuch

Emord & Associates, P.C. 

3210 S. Gilbert Road, Suite 4 

Chandler, AZ 85286 

Email: eawerbuch@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: March 31, 2015 /s/ Elisa Jillson

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
Notice of Electronic Service

I hereby certify that on March 31, 2015, I filed via hand a paper original and electronic copy of the foregoing

Complaint Counsel's Answering Brief, with:

D. Michael Chappell

Chief Administrative Law Judge

600 Pennsylvania Ave., NW

Suite 110

Washington, DC, 20580

Donald Clark

600 Pennsylvania Ave., NW

Suite 172

Washington, DC, 20580

I hereby certify that on March 31, 2015, I filed via E-Service of the foregoing Complaint Counsel's Answering

Brief, with:

Jonathan Emord

Emord & Associates, P.C.

jemord@emord.com

Respondent

Peter Arhangelsky

Emord & Associates, P.C.

parhangelsky@emord.com

Respondent

Lou Caputo

Emord & Associates, P.C.

lcaputo@emord.com

Respondent

Katherine Johnson

Complaint Counsel

Federal Trade Commission

kjohnson3@ftc.gov

Complaint

Elisa Jillson

Complaint Counsel

Federal Trade Commission

ejillson@ftc.gov

Complaint

Jonathan Cohen

Federal Trade Commission, Bureau of Consumer Protection, Enforcement Division

jcohen2@ftc.gov

Complaint

Joshua Millard

Attorney

Federal Trade Commission

jmillard@ftc.gov

Complaint

Benjamin Theisman

Attorney
Federal Trade Commission

btheisman@ftc.gov

Complaint

Eric Awerbuch

Emord & Associates

eawerbuch@emord.com

Respondent

Arturo DeCastro

Attorney

Federal Trade Commission

adecastro@ftc.gov

Complaint

Bethany Kennedy

Ms.

Emord & Associates, P.C.

bkennedy@emord.com

Respondent

Elisa Jillson

Attorney