Opinion ID: 1678768
Heading Depth: 1
Heading Rank: 5

Heading: Evidentiary Findings.

Text: In order to determine if there has been a material misrepresentation, we have considered the following factors: (1) the product involved; (2) the type of claim; (3) the benefits of a truthful claim; (4) the ease of developing substantiation for the claim; (5) the consequences of a false claim; and (6) the amount of substantiation experts in the field would agree is reasonable. See In re Thompson Medical Co., 104 F.T.C. 648, 821 (1984), aff'd, Thompson Medical Co. v. FTC, 791 F.2d 189 (D.C.Cir. 1986), cert. denied, 479 U.S. 1086, 107 S.Ct. 1289, 94 L.Ed.2d 146 (1987). Based on the scientific evidence in this record, we conclude that the electromagnetic treatment of water is a speculative area which is, at best, in an embryonic stage of future development. Van Gorp designed, manufactured, and marketed the Hydro-Mag devices with no related scientific expertise. He made several very specific claims promising immediate results including; softer water, clean pipes, better health, and sparkling dishes. These wide ranging claims were based solely on Van Gorp's personal opinions and speculation. None of these advertising claims were substantiated by scientific testing. Van Gorp misrepresented the extremely experimental nature of the electromagnetic treatment of water. These misrepresentations were made with the intention that purchasers would rely on them. Van Gorp argues that the tests conducted by Dr. Baumann were incomplete and therefore inconclusive. Van Gorp cites the case of Evis Manufacturing Co. v. FTC, 287 F.2d 831, 838-39 (9th Cir.), cert. denied, 368 U.S. 824, 82 S.Ct. 43, 7 L.Ed.2d 28 (1961). In Evis, the Federal Trade Commission brought an action claiming that the marketing of a water conditioner was misleading. The Ninth Circuit would not rely on the tests of experts because they did not know the theory upon which the device purportedly worked; they did not know the composition of the metal; and they were not acquainted with the claimed special processing thereof. In performing their experiments, they did not follow instructions of operation which, according to evidence adduced by the company, was important to achieve desired results. In re Warner Lambert Co., 86 F.T.C. 1398, 1462 (1975) (discussing Evis ), aff'd as modified, Warner-Lambert Co. v. FTC, 562 F.2d 749 (D.C.Cir.1977), cert. denied, 435 U.S. 950, 98 S.Ct. 1575, 1576, 55 L.Ed.2d 800 (1978). Dr. Baumann's procedures do not approach the type of testing conducted in Evis. Dr. Baumann requested Van Gorp to set out his claims in writing. This writing served as a basis for Dr. Baumann's experiments. Van Gorp's expert, Dr. Cole, testified that Dr. Baumann's experiments were well constructed, well conducted and well intended ... I have no objection to them whatsoever. Because Dr. Baumann was retained by a major manufacturer of water softeners, Van Gorp asserts that his testimony was unreliable. Dr. Baumann's testimony is substantiated by other evidence, including that of Dr. Cole, Mr. Van Gorp's witness. We find Dr. Baumann's testimony is credible and reliable. We also find Mr. Van Gorp's lay witnesses to be unpersuasive. Each of these customers testified as to their beliefs concerning Hydro-Mag, however, none were able to say with any degree of confidence that the Hydro-Mag, and not any other changes, caused the improvement. Also, establishing that there were satisfied customers is not a complete defense to this type of action. See, e.g., In re Warner Lambert Co., 86 F.T.C. 1398, 1462 (1975). Finally, Van Gorp claims that an unfavorable ruling will have a chilling effect on legitimate scientists and inventors. We respect the experimental nature of scientific evolution. We understand that many of today's ideas will eventually develop into tomorrow's realities. The necessity for experimentation does not, however, provide justification for marketing products without the proper support for claims made to the public. In this case, Van Gorp made several very specific and unqualified claims to the public which had no scientific support. Van Gorp's advertisements gave no hint of the speculative nature of electromagnetic effects on water. We find that the State has established the necessary elements of consumer fraud under Iowa Code section 714.16 by a preponderance of clear, convincing and substantial evidence.