UNITED STATES OF AMERICA 

FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

In the Matter of 

ECM BioFilins, Inc., 

a corporation, also d/b/a 

Enviroplastics International, 

Respondent. 

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DOCKET NO. 9358 

PUBLIC 

ORDER DENYING RESPONDENT'S MOTION FOR PROTECTIVE ORDER 

On February 18, 2014, Respondent ECM BioFilms, Inc. ("Respondent" or "ECM") filed 

a Motion for Protective Order ("Motion"), seeking an order prohibiting Federal Trade 

Connhission ("FTC") Complaint Counsel from serving nonparty discovery upon 10 customers 

that Respondent identifies as its "top ten" revenue generating customer accounts, and limiting the 

total munber of nonparty subpoenas that may be served on ECM customers by Complaint 

Counsel to 35, including 11 that have previously been issued to certain prospective or former 

customers ofECM. Complaint Counsel filed an opposition to the Motion on February 28,2014 

("Opposition"). 

Having fully considered the Motion, Opposition, and all arguments and assertions 

therein, the Motion is DENIED, as further explained below. 

I. Applicable Legal Standards 

Pursuant to FTC Rule 3.3l(c)(l), "(u]nless otherwise limited by order of the 

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

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

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

proposed discovery meets the foregoing relevance test: 

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

the Administrative Law Judge ifhe or she determines that: 

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

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

burdensome, or less expensive;· 

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

I'• ,l'' 
action to obtain the information sought; or 

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

outweigh its likely benefit. 

16 C.F.R. § 3.31(c)(2). 

Even if requested discovery is otherwise permissible under the rules, FTC Rule 3.31 (d) 

permits the Administrative Law Judge to "deny discovery or make any other order which justice 

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

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

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

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

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

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

Furthermore, parties resisting discovery of relevant information carry a heavy burden of showing 

why discovery should be denied. In re Polypore, 2008 FTC LEXIS 155, at *16. 

IT. Background 

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

violation of Section 5 of the Federal Trade Commission Act by making false or unsubstantiated 

representations regarding the biodegradability of plastics treated with an additive manufactured 

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

distributes ECM Additives to its customers - independent distributors and plastic products 

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

treat plastics with ECM Additives and thereafter advertise and sell the treated plastic products to 

end-users as biodegradable. Complaint~ 2. The Complaint further alleges that ECM's 

representations to its customers were passed on to plastics end-users, and therefore, ECM 

provided its customers with the "means and instrumentalities" to deceive the end-users. 

Complaint~~ 4, 14, 15. Respondent defends against the charge, in part, by asserting that it sells 

to sophisticated customers who would not interpret Respondent's representations in the manner 

alleged in the Complaint. Answer~ 4. 

This is Respondent's second motion for a protective order directed at limiting Complaint 

Counsel's contact with ECM's customers. Among the issues presented by the previous motion, 

filed December 16, 2013, was whether Complaint Counsel was entitled to discover the identities 

of all Respondent's customers, the amount of ECM revenues that each such customer generated 

for ECM, and ECM's communications with its customers and potential customers. Respondent's 

requested protective order sought to limit Complaint Counsel to ECM's identification of 50 

customers that did not have orders pending and exclusive ofECM's top 10 revenue generating 

customers, and to preclude Complaint Counsel from contacting, by formal or informal process, 

in excess of 10 of ECM' s customers from the list of 50. Respondent's arguments in support of 

the proposed limitations included that (1) the benefit to Complaint Cotmsel of its requested 

discovery is outweighed by resulting economic harm from lost customer business, which, 

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Respondent argued, would surely occur if Complaint Counsel were to contact and/or issue 

subpoenas to ECM's customers; and (2) the customer communications requested by Complaint 

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

seeking such information from Respondent's customers. 

Respondent's previous motion for protective order was denied by Order issued January 

10,2014. ("January 10 Order"). The January 10 Order held, among other things, that "[t]he 

nature of Respondent's representations to its customers and distributors is a key issue in the 

case," and thus within the scope of discovery under Rule 3.31(c)(l). January 10 Order at 6. 

Further, Respondent had acknowledged that ECM's wrmnunications with its customers 

regarding ECM Additives are discoverable. See id at 8. In addition, the January 10 Order held 

that "Respondent's assertion that disclosure ofECM's customer list will inevitably result in a 

devastating loss of business" was not sufficiently supported by the facts that Respondent 

presented. January 10 Order at 6. Furthermore, the January 10 Order held that it was "premature 

to deterinine whether obtaining discovery of communications directly from ECM's customers is 

more burdensome or more expensive than obtaining such communications from ECM" because 

no discovery had yet been issued to any ECM customer, and there was no pending motion by any 

customer resisting discovery ofECM communications on the ground of burden or expense. Id. 

III. Analysis 

Based upon the representations of the parties and the exhibits attached to the Motion and 

Opposition, on or about January 29, 2014, Complaint Counsel issued subpoenas duces tecum to 

11 ECM prospective or former customers, drawn from a list of customers provided by 

Respondent. In addition, on February 3, 2014, Complaint Counsel notified Respondent's 

counsel that it intended to issue subpoenas to 35 ECM customers identified by Respondent as 

current customers. On February 4, 2014, Complaint Counsel indicated it would issue subpoenas 

to 15 additional current ECM customers. 1 A copy of one document subpoena issued by 

Complaint Counsel, attached to the Motion, seeks all documents pertaining to ECM and the 

ECM Additive, including any communications with ECM; marketing materials; testing or 

scientific information; internal communications; and third-party communications. Motion RXD. Respondent represents, and Complaint Counsel does not dispute, that other customer 

subpoenas are, or will be, substantially identical. 

According to Complaint Counsel, in connection with previous discovery, Respondent 

provided a list of .} prospective customers and another list of .} current customers. 

Opposition at 2. Robert Sinclair, Respondent's President and Chief Executive Officer, states in a 

declaration attached to the Motion that ECM sold its product to .} customers in 2013. Motion 

RX-A (hereafter, "Sinclair Decl.") ~ 5. 

Respondent does not dispute the relevance of the requested documents under Rule 

1 Respondent states that Complaint Counsel has represented that it will not serve subpoenas on additional ECM 

customers pending resolution of the instant Motion. 

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3.31 (c)( I), but argues that customer subpoenas should nevertheless be limited under Rule 

3.31(c)(2). Specifically, Respondent contends that (1) the discovery sought from ECM 

customers is redundant and cumulative because the same information is obtainable from ECM 

directly; (2) the probative value of discovery from ECM' s top 1 0 customers is substantially 

outweighed the burden the will as a result of 

; and (3) it is reasonable to 

impose an overall limit of 35 customer subpoenas and to exclude the top ECM accounts, given 

the fmancial harm that Respondent asserts will occur. Memorandum in Support of Motion 

("Memorandum") at 6-8. · 

Complaint Counsel contends that there is insufficient evidence that any ECM customer 

has stopped, or will stop, purchasing from Respondent solely as a result of being contacted by 

Complaint Counsel; that it cannot properly litigate this case without taking discovery from 

ECM's customers; and that there are no other means to obtain the requested discovery. 

Opposition at 5-8. 

As of the date of this Order, no ECM customer has filed a motion seeking to quash any 

subpoena issued by Complaint Counsel. 

A. Asserted Duplic~tion oflnformation Available from ECM Directly 

Respondent argues that Complaint Couns~l has received database summaries ofECM's 

communications with customers, .and also has received, or will receive, thousands of pages of 

customer correspondence with ECM, such as e-mails and faxes. Included in these materials, 

Respondent asserts, are not. only customer communications with ECM, but also marketing 

materials, and testing and scientific data that ECM conveyed to its customers in support of 

ECM' s product claims. Because this is the same information Complaint Counsel seeks in its 

customer subpoenas, Respondent argues, the subpoenas seek cumulative and redundant 

documents, and should, therefore, be limited pursuant to Rule 3.31 ( c )(2)(i). 

Complaint Counsel responds that ECM's document production is not duplicative of all 

information it seeks from ECM customers. Complaint Counsel states that Respondent's records 

provide little or no information about verbal communications, and further, that even if 

Respondent's records may indicate what Respondent said to its customers, it cannot be 

determined how customers understood Respondent's claims without hearing from the customers 

themselves. In addition, Complaint Counsel asserts, Respondent's reo.ords will not reflect 

customers' internal communications regarding Respondent's product claims, or customers' thirdparty communications in this regard that were not shared with ECM. 

In In re LabMD Inc., No. 9357,2013 WL 6327986 (Nov. 22, 2013), an Order was issued 

holding that the respondent could not object to subpoenas issued to nonparties on the ground that 

the subpoenas sought information that was duplicative of information already provided by the 

respondent, because such argument improperly relied upon the rights of or burdens imposed on 

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nonparties, rather than those of the r.espondent. 2013 WL 6327986 at *4. See also In re 

Horizon Corp., 88 F.T.C. 208, 1976 FTC LEXIS 209, at *4 n.5 (July 28, 1976) (holding that a · 

party may not ask for an order to protect the rights of another). Other than citing the general 

language of3.31(c)(2)(i) placing limits on cumulative discovery, Respondent fails to articulate 

how its interests are hurt by nonparties' producing allegedly duplicative documents. 

Moreover, Respondent fails to demonstrate, and it will not be presumed, that customer 

records of communications, or marketing or testing materials, regarding ECM or the ECM 

Additive, are entirely duplicative of Respondent's records. There is no basis for concluding that 

Respondent's records include customers' internal communications, or all customers' third-party 

communications regarding ECM or the ECM Additive, or all non-written communications 

between ECM and its customers. In addition, while Respondent's database summaries of 

customer communications may purport to recite what ECM or a customer said in a given 

conversation, this is not a basis for preventing Complaint Counsel from exploring customer 

recollections of those conversations, and limiting discovery to Respondent's recitations. 

Furthermore, as noted in the January 10 Order denying Respondent's previous motion for 

protective order, a ''key issue" in this case is the nature of Respondent's representations to its 

customers. How customers interpreted Respondent's statements and written materials, which is 

uniquely within the knowledge of those customers, is relevant to this issue. See In re Telebrands 

Corp., 140 F.T.C. 278, 291,2005 FTC LEXIS 178 (Sept. 19, 2005) ("An ad is misleading if at 

least a significant minority of reasonable consumers are likely to take away the misleading 

claim."). Indeed, Respondent specifically claims, in defense, that it sells to "sophisticated 

customers" who would not interpret Respondent's representations in the manner alleged in the 

Complaint, further placing in issue the manner in which ECM customers interpreted 

Respondent's representations. 

Accordingly, ECM customer subpoenas will not be limited on the basis that the requested 

discovery is cumulative and redundant of discovery provided, or to be provided, by Respondent. 

B. Asserted Undue Burden 

Respondent asserts, as it did in its previous motion for a protective order, that Complaint 

Counsel's issuance of subpoenas will result in ECM losing customers. Respondent further 

asserts, relying upon the declarations of Mr. Sinclair and ECM's Chief Financial Officer and 

certain ECM financial documents attached that if ECM 

. SinClair Decl. ,, 6, 15-16; Motion RX-C (Declaration ofKennet:h 

C. Sullivan) ,, 10-13. Thus, Respondent argues, the burden that will be placed on Respondent 

by the issuance of customer subpoenas outweighs the relevance of the information sought from 

the customers. 

Fundamental to Respondent's claim of w1due bmden is the:: factual assertion that 

customers will cease doing business with ECM if subpoenaed by Complaint Counsel. In support 

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of this claim, Respondent points to four customers: ; American Plastic 

Manufacturing, Inc.; MacNeill Engineering Company; and Sigma Plastics Group. 

1. 

Motion RX-A:4. Respondent asserts that the foregoing supports its claim that issuance of 

subpoenas will cause its customers to cease doing business with ECM. 

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. While it is possible that the FTC subpoena 

was the "last straw" for respect to ECM-treated ba~ cannot be concluded on the 

record ptesented that, but for Complaint Counsel's subpoena, ~} would have continued 

doing business with ECM, or that ~ decided not to purchase ECM additive treated bags 

"because of' Complaint Counsel's subpoena, as opposed to - concerns about 

Respondent's claims. Thus, the loss of-} business does not prove that Respondent will 

lose customers solely because they receive subpoenas from Complaint Counsel. 

2. American Plastic Manufacturing, Inc. and MacNeill Engineering 

Company 

In further support of Respondent's claim that Complaint Counsel's subpoenas will cause 

customers to cease doing business with ECM, Respondent states that in the investigative stage of 

this case, American Plastic Manufacturing, Inc. ("American PlastiC") and MacNeill Engineering 

Company ("MacNeill';) also ceased doing business with ECM after being "contacted" by 

Complaint Counsel during the investigative phase of this case, and before these companies 

entered into consent agreements with the FTC. Memorandum at 1; Sinclair Dec.I. ~ 9. Even 

assuming that American Plastic and MacNeill have ceased doing business with ECM, 

Respondent submits no evidence to support a finding that such entities ceased doing business 

with ECM because of being subpoenaed by Complaint Counsel in the instant case. Further, in an 

affidavit, Complaint Counsel Katherine Johnson states that American Plastic and MacNeill knew 

that they were being investigated as targets, and that Complaint Counsel informed these 

companies that they would face litigation if they did not agree to stop conveying ECM's 

biodegradability claims. Opposition CCX-A (hereafter, "Johnson Decl.") ~ 17. Thes.e unique 

circumstances do not wammt the inference that other ECM customers will discontinue business 

with ECM merely because they are subpoenaed to give information in this case. 

3. Sigma Plastics Group 

..... 1'. ...... Plastic Group ("Sigma") has 

. Sinclair Decl. ~ 9. However, this statement does not 

explain the relationship of Sigma to ECM, state that has been subpoenaed by Complaint 

Counsel, or assert any reason for Sigma's . It cannot be concluded 

based on this statement that Sigma is a "customer," or that Sigma's conduct is related to being 

subpoenaed by Complaint Counsel. Moreover, Complaint Counsel states that "Sigma has not 

received a subpoena, nor has Complaint Counsel proposed to subpoena Sigma." Opposition at 5 

~on Decl. ~ 15). Thus, ~ere is no basis for_ concluding that Sigma's -

- was caused by Complamt Counsel's servmg a subpoena, or that other ECM 

customers would cease doing business with ECM if they are served with a subpoena by 

Complaint Counsel. 

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4. Conclusion 

Respondent has failed to demonstrate as a factual matter that {1111}, American Plastics, 

MacNeill, or Sigma ceased doing business with ECM solely because they were subpoenaed by 

Complaint Counsel. Thus, Respondent bas failed to support its factual assertion that it will lose 

customers that are subpoenaed by Complaint Counsel. Because this assertion is the basis for 

Respondent's argument that Complaint Counsel's subpoenaing customers will unduly burden 

Respondent with irreparable financial harm, Respondent bas similarly failed to demonstrate that 

Complaint Counsel should therefore be limited in its discovery, as proposed by Respondent? 

C. Reasonableness of the proposed limitation 

Respondent asserts that "given the fact of business loss" that it claims has been 

demonstrated as a result of Complaint Counsel's issuing its first 11 subpoenas, "it is reasonable 

to impose an overall limit." Memorandum at 7-8. This assertion is logically indistinguishable 

from Respondent's claim that the issuance of subpoenas should be limited because it will result 

in irreparable financial harm to ECM, and thereby present an undue burden. As noted above, 

Respondent has failed to prove its assertion of business loss solely as a result of customers; being 

subpoenaed by Complaint CounseL Absent such proof, the "reasonableness" of the proposed 

limitation is not materiaL 

IV. Conclusion 

For all the foregoing reasons, Respondent's Motion for Protective Order is DENIED. 

ORDERED: 

D. Michael Chappell 

Chief Administrative Law Judge 

Date: March 18,2014 

2 Given that Respondent has not proven its basic factual premise that it will lose customers that are subpoenaed by 

Complaint Counsel, it is not necessary to further determine whether or not Respondent's financial documents prove 

Respondent's assertion that it will be "irreparably harmed" if it loses even one top ten customer. 

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