Court Opinion

ID: 2971047
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:27:50.545987+00
Date Added: 2024-06-11T15:02:05.912671
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                 Pursuant to Sixth Circuit Rule 206                      2    United States v. Alpine Industries, et al. No. 01-5759
         ELECTRONIC CITATION: 2003 FED App. 0449P (6th Cir.)
                     File Name: 03a0449p.06                                                 _________________
                                                                                                 COUNSEL
UNITED STATES COURT OF APPEALS
                                                                         ARGUED: J. Ronnie Greer, Greeneville, Tennessee, for
                   FOR THE SIXTH CIRCUIT                                 Appellants.     Peter R. Maier, UNITED STATES
                     _________________                                   DEPARTMENT OF JUSTICE, Washington, D.C., for
                                                                         Appellee. ON BRIEF: J. Ronnie Greer, Greeneville,
 UNITED STATES OF AMERICA , X                                            Tennessee, William A. Erhart, Gregory B. Davis, ERHART
             Plaintiff-Appellee, -                                       & ASSOCIATES, Anoka, Minnesota, for Appellants. Peter
                                   -                                     R. Maier, Douglas N. Letter, UNITED STATES
                                   -   No. 01-5759                       DEPARTMENT OF JUSTICE, Washington, D.C., for
            v.                     -                                     Appellee.
                                    >
                                   ,                                                        _________________
 ALPINE INDUSTRIES, INC. and       -
 WILLIAM J. CONVERSE ,             -                                                            OPINION
        Defendants-Appellants. -                                                            _________________
                                   -
                                  N                                         BOGGS, Chief Judge. Alpine Industries, Inc. and William
       Appeal from the United States District Court                      J. Converse, Alpine’s President and Chief Executive Officer,
   for the Eastern District of Tennessee at Greeneville.                 (collectively referred to as Alpine) appeal a judgment against
   No. 97-00509—Dennis H. Inman, Magistrate Judge.                       the company in an enforcement action brought by the
                                                                         government for violating a Federal Trade Commission
                    Argued: December 4, 2002                             Consent Order (the Consent Order). The Consent Order
                                                                         forbade the company, an organization engaged in marketing
             Decided and Filed: September 26, 2003*                      and distributing air-cleaning devices, from making product
                                                                         claims without the support of competent and reliable
 Before: BOGGS, Chief Judge; GUY, Circuit Judge; and                     scientific evidence. The case was bifurcated into a liability
            EDMUNDS, District Judge.**                                   phase, which was tried in front of a jury in the fall of 1999,
                                                                         and a remedy phase, which was tried by the court in January
                                                                         2001. In November 1999, the jury found that Alpine had
                                                                         violated the Consent Order. In particular, the jury found that
                                                                         Alpine had advertised that its air cleaning products removed
    *                                                                    over 60 separately titled but in many cases overlapping
      This decision was originally issued as an “unpublished decision”
filed on September 26, 2003. On December 4, 2003, the court designated
the opinion as one recommended for full-text publication.

    **
      The Honorable Nancy G. Edmunds, United States District Judge for
the Eastern District of Michigan, sitting by designation.

                                  1
No. 01-5759 United States v. Alpine Industries, et al.                 3    4         United States v. Alpine Industries, et al. No. 01-5759

categories of indoor air pollutants,1 controlled ambient ozone              Order. Finally, Alpine argues that the injunctive relief
levels, and produced various health benefits, without                       embodied in the Permanent Injunction issued by the district
competent and reliable scientific evidence to support these                 court, intended to prevent further representations by Alpine
claims. However, the jury also found that Alpine’s product                  regarding the efficacy of its air-cleaning machines without
claims regarding the ability of its air cleaning products to                competent and reliable scientific evidence, does not
remove smoke, tobacco smoke, and cigarette smoke, were                      accurately reflect the jury’s verdict and that furthermore, the
supported by competent and reliable scientific evidence. The                penalty imposed by the district court against Alpine is
district court’s final judgment against Alpine was entered in               excessive. For the reasons that follow, we affirm the district
April 2001 and included, in addition to injunctive relief, an               court’s judgment.
award of $1,490,000 in civil penalties.
                                                                                                             I
  Following the district court’s final judgment, Alpine filed
motions to amend the district court’s judgment, for JNOV, or                   In the early 1990's, the FTC conducted an investigation of
for a new trial. The district court denied these motions.                   claims made by Alpine in promoting, advertising, and selling
Alpine appeals the district court’s denials of its motions to               its air-cleaning machines. The investigation concluded when
amend the judgment and for JNOV, arguing that the                           Alpine agreed to an FTC Consent Order, effective October 2,
government did not present sufficient evidence to support the               1995, which reads in relevant part:
jury’s findings. Alpine also appeals the district court’s denial
of its motion for a new trial, arguing that the jury’s verdict is               For the purposes of this Order, the following definitions
internally inconsistent and that the special verdict form was                   shall apply:
worded in such a way as to place the burden of proof
improperly on Alpine instead of the government. Alpine                          A. The term “air cleaning product” shall mean any
additionally argues that it was entitled to seek judicial                       product, equipment, or appliance designed or advertised
reformation of the underlying Consent Order on the grounds                      to remove, treat, or reduce the level of any pollutant(s) in
of mutual mistake and that it was prejudiced by the district                    the air.
court’s exclusion of parol evidence surrounding the Consent
                                                                                B. The terms “indoor air pollutant(s)” or “pollutant(s)”
                                                                                shall mean one or more of the following: formaldehyde,
    1                                                                           sulfur dioxide, ammonia, trichlorethylene, benzene,
      Styrene, Benzene, Dust Mites, Bacteria, Allergens, Formaldehyde,          chloroform, carbon tetrachloride, odors, nitrogen dioxide,
Dust, Pollens, M old S pores, Chemical Ga ses, Pa rticulates, M ildew,
Legio nella, Dry C leaning Chem icals, Skin Flakes, Dust Mite Fec es,
                                                                                mold, mildew, bacteria, dust, cigarette smoke, pollen,
Yeast, Fungi, Gases, Chemical Fumes, Mold, Germs, Cleaning Product              and hydrocarbons, or any other gaseous or particulate
Fumes, Dead Skin, M icrob iological Growth, Skin, H air, Chemicals,             matter found in indoor air.
Dried-up Rat Urine, Microbiological Organisms, Dried-up Mouse Urine,
Streptoco ccus, Staphylococcus, Aspergillus Fungus, Salmonella,                 ...
Cockroach Eggs, Cat Dandruff, Asbestos, Rat Urine, Legionella, Solid
Particulate, Microorganisms, Microbials, Volatile Organic Chem icals,
Organic Ga ses, Cat Dander, Viruses, Dry Cleaning Fluids, Pieces of
Insects, Micro bes, Dirt, Da nder, E-co li, Gas Contaminants, Car Fu mes,
Candida Yeast, Disinfectant Fumes, Cockroach Pieces, Animal Dander,
Traffic Fum es, Smog, Cockro ach Feces, Pencillium, and Tub erculosis.
No. 01-5759 United States v. Alpine Industries, et al.           5   6      United States v. Alpine Industries, et al. No. 01-5759

  I                                                                      III
  IT IS ORDERED that [Alpine] in connection with the                     IT IS FURTHER ORDERED that [Alpine] in connection
  manufacturing, labelling, advertising, promotion,                      with the manufacturing, labelling, advertising,
  offering for sale, sale, or distribution of any air cleaning           promotion, offering for sale, sale, or distribution of any
  product . . . do forthwith cease and desist from                       air cleaning product . . . do forthwith cease and desist
  representing, in any manner, directly or by implication,               from representing, in any manner, directly or by
                                                                         implication, the efficacy, performance, or health-related
  A. such product’s ability to eliminate, remove, clear, or              benefit of any such product, unless, at the time of making
  clean any indoor air pollutant from a user’s environment;              such representation, respondents possess and rely upon
  or                                                                     competent and reliable evidence, which when appropriate
                                                                         must be competent and reliable scientific evidence, that
  B. such product’s ability to eliminate, remove, clear, or              substantiates the representation.
  clean any quantity of indoor air pollutants from a user’s              ....
  environment;
                                                                        On December 30, 1997, the government initiated an action
  II                                                                 alleging violations of the Consent Order, requesting
  IT IS FURTHER ORDERED that [Alpine] in connection                  injunctive relief, consumer redress, and civil penalties against
  with the manufacturing, belling, advertising, promotion,           Alpine. Alpine requested a jury trial, which the district court
  offering for sale, sale, or distribution of any air cleaning       granted with respect to the issue of liability for civil penalties.
  product . . . do forthwith cease and desist from                   On November 1, 1999, after a fourteen-day trial, the jury
  representing, in any manner, directly or by implication,           filled out a special-verdict form containing over 900
  that:                                                              questions. The jury found that in all cases but smoke, tobacco
                                                                     smoke, and cigarette smoke, Alpine’s claims were not
  A. The use of ozone is more effective in cleaning or               supported by competent and reliable scientific evidence.
  purifying indoor air than other air cleaning methods;
                                                                                                     II
  B. The product does not create harmful by-products; or
                                                                                         Directed Verdict / JNOV
  C. When used as directed, the product prevents or
  provides relief from any medical or health-related                   Alpine moved for a directed verdict at the conclusion of the
  condition;                                                         government’s case in chief and again at the close of evidence,
                                                                     and later moved for a judgment notwithstanding the verdict.
  unless at the time of making such representation,                  We review the district court’s denial of Alpine’s motions for
  respondents possess and rely upon competent and                    judgment as a matter of law (motions for a directed verdict)
  reliable scientific evidence that substantiates the                and renewed motion for judgment as a matter of law (motion
  representation.                                                    for judgment notwithstanding the verdict) de novo. Moore v.
                                                                     KUKA Welding Sys. & Robot Corp., 171 F.3d 1073, 1078
                                                                     (6th Cir. 1999) (citing K & T Enters. v. Zurich Ins. Co., 97
                                                                     F.3d 171, 175 (6th Cir. 1996) and Wehr v. Ryan’s Family
No. 01-5759 United States v. Alpine Industries, et al.       7    8    United States v. Alpine Industries, et al. No. 01-5759

Steak Houses, 49 F.3d 1150, 1152 (6th Cir. 1995)). In doing       requirement, recognizing that the government was being
so, we use the same standard of review used by the district       asked to prove a negative. The government’s lawyer stated
court. Phelps v. Yale Sec., 986 F.2d 1020, 1023 (6th Cir.         that she understood the government’s burden as being met if
1993). In order to prevail, Alpine must demonstrate that “no      expert testimony were offered for the proposition that such
reasonable juror could have found for the nonmoving party.”       experts were unaware of scientific data supporting Alpine’s
Moore, 171 F.3d at 1078. In applying this standard, we            claims (or, if testimony has been offered in support of Alpine,
cannot weigh the credibility of witnesses and cannot              which explained that the information produced by Alpine
substitute our judgment for that of the jury. K & T Enters., 97   pursuant to the Consent Order in support of their claims was
F.3d at 175-76. Instead, we are to view the evidence in a light   insufficient or incompetent). The court stated that it “was
most favorable to the government and give the government          inclined to agree” with the government lawyer’s assessment
the benefit of all reasonable inferences. Ibid.                   and that upon receipt of such testimony, Alpine would be
                                                                  expected to rebut the government’s proffer and the jury would
   Alpine contends that the burden was on the government to       determine whether or not Alpine had done so effectively.
establish a prima facie case and that the government did not      Given that the Consent Order puts the onus on Alpine to
meet this initial burden, so that Alpine is entitled to a         make available on request all information relied upon by
judgment as a matter of law, notwithstanding the jury’s           Alpine in making representations regarding the efficacy of its
verdict. The government conceded in a pretrial hearing that       air-cleaning devices, we agree that the government’s burden
it had the burden of proving at trial 1) that Alpine had made     for making a prima facie case is satisfied if evidence was
claims or representations that fell within the terms of the       offered at trial that the information provided pursuant to the
Consent Order, and 2) that Alpine did not possess and rely        Consent Order was either insufficient or incompetant. The
upon competent and reliable scientific evidence at the time       government certainly need not have proven that there was no
such claims or representations were made. Alpine takes issue      competent or reliable basis upon which Alpine might have
with the second requirement in this appeal. Alpine contends       rested its claim. If the experts knew of none and information
that the government did not present sufficient proof that         received from Alpine was insufficient to provide such a basis
Alpine did not possess and rely upon competent and reliable       or was deemed unreliable, it was up to Alpine to provide
scientific evidence at the time it made representations           further information that would convince the jury.
regarding all of the indoor air pollutants listed on the jury
form (with the exception of smoke, cigarette smoke, and              During the two-week long trial, the government produced
tobacco smoke), and regarding the health benefits bestowed        experts in the fields of air pollution, ozone chemistry, and the
on users by the product. Alpine does not dispute the              efficacy of air cleaners, all of whom testified that they were
sufficiency of the evidence presented by the government           unaware of any competent and reliable evidence to support
regarding the product’s ability to maintain indoor ozone          various claims made by Alpine. These experts also discussed
concentrations at a particular level.                             tests they had participated in, which further discredited
                                                                  Alpine’s claims. Moreover, the FTC officer assigned to
  Alpine, however, misconstrues the level of proof necessary      Alpine’s case testified that the evidence submitted by Alpine
to establish a prima facie case under these circumstances.        to the FTC in support of its claims regarding the efficacy of
During the hearing that led to the order establishing the         its air-cleaning machines was evaluated by experts and
shifting burden of proof in this case, some explanation was       deemed to be insufficient. In response, Alpine provided its
offered as to how the government would fulfill this               own experts, who described in their testimony the various
No. 01-5759 United States v. Alpine Industries, et al.                        9    10       United States v. Alpine Industries, et al. No. 01-5759

tests they had done on the air-cleaning machines, and the                          presented by the government in their prima facie case, but
evidence they had relied on in support of the claims made by                       rather to the consistency of the jury’s verdict.
Alpine.
                                                                                     Next, Alpine argues that the government did not address
   In particular, Alpine points out that the government’s                          Alpine’s claims that its devices introduce ozone into the air,
experts focused on tests done on particles in tobacco smoke                        which kills microbes through ionization.            However,
and states that there was no evidence presented regarding any                      government expert Eugene C. Cole testifed to the fact that
of the other particulates such as dust, animal dander, insect                      tests published by the American Industrial Hygiene
parts, and so on. On this basis, Alpine contends that a verdict                    Association demonstrated that exposure of a large variety of
must be directed in its favor with regard to all particulates and                  organisms, including microbes and fungi, to concentrations of
some microbe and allergen claims. However, the government                          gas-phase ozone at the same or at higher concentrations than
experts explained in their testimony that the results of these                     those claimed to be maintained by the Alpine air-cleaning
tests can be applied to other particulates, such as those at                       products, had an impact on some organisms but were not
issue in this case, since they are in the same size range as                       ultimately effective at removing any of them according to
those found in tobacco smoke.2 As it turns out, Alpine does                        industry standards.3 Furthermore, Cole testified that in his
not dispute this fact, but instead argues that because the                         expert opinion he was unaware of reliable scientific evidence
results garnered from the tests on tobacco smoke can be                            to support the claims made by Alpine with respect to the
extrapolated to all other particulates within the same size                        impact of ozone on microbes and fungi. This testimony is
range, including microbes, and because the jury found that                         sufficient evidence to support the jury’s findings of liability.
Alpine’s claims regarding the efficacy of its air-cleaning
devices with respect to tobacco smoke were supported by                               Alpine further contends that because none of the
reliable and competent scientific evidence, it is not possible                     government experts were medical doctors, toxicologists, or
for the evidence to support the jury’s findings against Alpine                     health officials, they were not qualified to opine on whether
on the other particulates and microbes in that size range.                         its air-cleaning machines provide medical and health-related
Although we will address this argument, it is not properly                         benefits and their testimony cannot, therefore, be considered
raised here, as it goes not to the sufficiency of the evidence                     sufficient evidence to support the jury’s finding of liability on
                                                                                   this question. This argument is unpersuasive. Alpine’s
                                                                                   experts and the government’s experts did not disagree on
                                                                                   which indoor pollutants cause health problems, the issue in
     2                                                                             dispute between them was whether Alpine’s air-cleaning
       For example, government expert R ichard Sextro noted in his
testimony that “we used environmental tobacco smoke, partly beca use it            products were capable of removing the pollutants that cause
was representative of typical indoor particles, . . . if one looks at size         health problems. Thus, the expertise needed under these
dependent remova l characteristics of any of the filters, those
characteristics will be the same whethe r . . . it’s a one micro meter particle
that’s environmental tobacco smoke or whether it’s a one micro meter dust               3
particle.” Government expert Richard Shaughnessy stated: “Tobacco                        Dr. Cole explained that within this “area of biocide efficacy or
smoke is, as I said, it is perfect dispersion, you know, looking at particles,     effectiveness, the standard that’s been set for decades has been efficacy
to be looking at particle reduction within a space. It provides you [sic] the      or effectiveness based upon achieving a three log reduction.” In sum,
range of particles that are of co ncern. . . . [I]t generates uniform dispersion   although the tests did show that some organisms were killed, more than
and it is often used by investigators in the field to track the performance        one in one thousand we re left alive, which is not co nsidered to be
of air cleaning d evices.”                                                         effective b y the indu stry.
No. 01-5759 United States v. Alpine Industries, et al.       11    12   United States v. Alpine Industries, et al. No. 01-5759

circumstances was not that of a medical doctor, toxicologist,      jury’s separate finding that Alpine’s claim that “[t]he sensor
or health official, but rather an expert on the removal of         in [its] air cleaning products maintains indoor ozone
indoor air pollutants. The jury simply determined that the         concentrations at .05 parts per million or less” is not
government’s experts were more credible on this point and we       supported by competent and reliable scientific evidence. It is
are compelled to defer to the jury’s judgment. K & T Enters.,      not unreasonable to assume that if the machine’s ability to
97 F.3d at 175-76.                                                 maintain a concentration of ozone is unsubstantiated, then its
                                                                   ability to remove certain pollutants by way of a reaction with
  Finally, Alpine contends that the government offered no          ozone is also unsubstantiated.
proof that Alpine did not rely on competent and reliable
evidence for its claims with respect to its product’s ability to      Second, we return to Dr. Weschler’s testimony. Although
remove certain chemical gases from indoor air: specifically        Dr. Weschler did say that concentrations of ozone will
styrene, isoprene, d-limonene, and alpha-pinene. And               generally react with compounds containing double bonds,
moreover, that Dr. Weschler’s testimony for the government         such as the ones mentioned above, he particularly noted that
supported Alpine’s claims that hydrogen sulfide, 4-                “it’s an important thing to remember when we speak about
ethenylcyclohaxene, 4-phenylcyclohaxene, double-bonded             ozone reacting with compounds in the air because often you
volatile organic chemicals, odiferous chemicals, acrolein,         might initially have one pollutant, and you’ll result [sic] in
body odor, indole, scatole, garlic odor, and thyocyanite could     two pollutants.” In other words, rather than “cleaning” the
be reduced through the use of ozone.                               air, as suggested in Alpine’s literature, the ozone introduced
                                                                   by Alpine’s air-cleaning devices may change a given
  Dr. Weschler did in fact testify to the fact that even a         molecule into two new compounds, which may be more
relatively small concentration of ozone tends to break down        concerning than what existed previously. As an example of
styrene, hydrogen sulfide, 4-ethenylcyclohaxene, and 4-            this phenomenon, Dr. Weschler described an experiment he
phenylcyclohaxene, which suggests that Alpine might prevail        had conducted in which ozone had in fact lowered the amount
with respect to these compounds at least. Yet, if one views        of styrene, 4-ethenylcyclohaxene, and 4-phenylcyclohaxene
the evidence in a light most favorable to the government and       in a controlled environment, but had nevertheless increased
gives the government the benefit of all reasonable inferences      the level of formaldehyde and acetaldehyde in the air. Given
as we must, one finds that there was other evidence presented      this information, it is not unreasonable for a juror to
through Dr. Weschler’s testimony and Dr. Cole’s expert             determine that a claim by Alpine that a user’s environment
report on gas-phase ozone that can explain the jury’s findings     will be cleaned of a pollutant by its air-cleaning product is
on these chemical pollutants. It is Alpine’s contention that all   unsupported by competent and reliable scientific evidence,
of these pollutants are broken down and thus “removed” from        when in fact the pollutant may be broken down into other,
the environment by Alpine’s air-cleaning devices through           even more noxious, pollutants. Thus, viewed in a light most
their reaction with ozone. However, there are two problems         favorable to the government, there was sufficient evidence
with this theory. First, this process requires a certain           presented at trial with respect to the jury’s findings.
concentration of ozone, and the evidence presented in Dr.
Cole’s report and through other expert testimony is that
Alpine has not provided reliable test results that demonstrate
the ability of its machines to maintain that level of ozone
concentration. In fact, Alpine does not contest on appeal the
No. 01-5759 United States v. Alpine Industries, et al.        13    14   United States v. Alpine Industries, et al. No. 01-5759

                              III                                   microbes and allergens in particulate form and within the
                                                                    relevant size range.
                   Motion for a New Trial
                                                                      In Gallick v. Baltimore and O.R. Co., 372 U.S. 108, 119
   A district court’s decision to deny a new trial on the basis     (1963), the Supreme Court stated in relevant part:
of the weight of the evidence shall be reversed only upon
finding an abuse of discretion. See Bruner v. Dunaway, 684            [I]t is the duty of the courts to attempt to harmonize the
F.2d 422, 425 (6th Cir. 1982). Alpine contends that the jury          answers, if it is possible under a fair reading of them . . . .
verdict was inconsistent and irreconcilable, that the district        We therefore must attempt to reconcile the jury’s
court allowed for an improper shifting of the burden of proof         findings, by exegesis if necessary, before we are free to
in the jury’s special verdict form and through a comment              disregard the jury’s special verdict and remand the case
made to the jury, and that the district court improperly              for a new trial.
excluded evidence relating to the negotiation history of the
Consent Order, consumer satisfaction surveys, and marketing         The Sixth Circuit has also held that “[w]hen requested, a trial
information that Alpine believed would have allowed the jury        court faced with an apparent inconsistency between a jury’s
to perceive Alpine’s marketing promotions in context.               answers and the court’s instructions must attempt to reconcile
                                                                    the two.” Holloway v. McIntyre, 1988 WL 7961, Nos. 86-
A. Inconsistent Verdict?                                            1001, 86-1898 at *3 (6th Cir. Feb. 4, 1988) (citing Waggoner
                                                                    v. Mosti, 792 F.2d 595, 597 (6th Cir. 1986)).
   As we noted in section II, the government’s experts in
addressing the viability of Alpine’s claims regarding                  The district court reconciled the apparent inconsistency in
particulates focused on testing the ability of various devices      the jury’s verdict by determining that the jury had in fact been
in removing particles found in tobacco smoke, which the             referring to “visible smoke” rather than the particulates in
experts testified to be representative of the particles at issue    smoke, and we are persuaded that this is a reasonable
in this case and therefore a good surrogate for testing the         conclusion. Alpine’s reasoning assumes that the jury’s
efficacy of a device in removing these other particles. Alpine      favorable determination on the smoke removal claims
accepts this premise, but argues on appeal that if the              reflected an implicit determination that Alpine’s air purifiers
government’s experts are right, the jury’s verdict must be          effectively removed the particulate elements of smoke, when
considered inconsistent and irreconcilable, since the jury          in fact smoke contains much more than particulate matter. In
found Alpine’s claims regarding the ability of its air-cleaning     fact, Dr. Weschler noted in his testimony at trial that in
devices to remove smoke was supported by competent and              addition to the particulates present in tobacco smoke, there
reliable scientific evidence, but that none of its other claims     are “thousands of chemicals.”
made with respect to other particulates were supported by
such evidence. In sum, Alpine argues that if the results of           Furthermore, the jury was presented at trial with evidence
smoke testing could be extrapolated to all other indoor air         concerning the removal of “visible smoke.” Alpine had a
particulate at issue, then it would appear that the jury, because   videotape demonstration, which showed its air-cleaning
it found for Alpine on smoke, had no basis for a finding            machines removing visible smoke from a small transparent
against Alpine on all the other particulates listed on the jury     chamber. The jury also heard from the government’s expert,
verdict form. This logic would also extend to the question of       Dr. Sextro, who stated in doing his tests on particulates in
No. 01-5759 United States v. Alpine Industries, et al.      15    16   United States v. Alpine Industries, et al. No. 01-5759

smoke: “[W]e didn’t test [the effectiveness of the filter           Alpine and or Mr. Converse, as the case may be, have in
against smoke] gases. We didn’t look at – I mean, I don’t           their possession at that time and rely upon at that time on
know if there was any absorption by the HEPA filter of any          competent and reliable scientific evidence. Let that be
of the environmental smoke gases or not; that wasn’t the            burned into the back of your mind because that is the
purpose of our study.” Based on this information, the jury          area of inquiry; that’s what you will be called upon
could have concluded that Alpine had adequate substantiation        ultimately to decide.
to claim that its devices removed “visible smoke,” which
would be entirely consistent with the rest of the jury’s             Alpine argues that the verdict form was ultimately
determinations with regard to particulate claims.                 prejudicial and that as a result, Alpine did not receive a fair
                                                                  trial.
B. Burden of Proof
                                                                    The district court responded to Alpine’s claims, noting that:
   Alpine contends that the district court improperly shifted
the burden of proof during the course of the trial. Alpine          The jury was instructed, on more than one occasion, that
maintains that the jury’s special verdict form is improperly        the government had the burden of proving 1) that the
worded, with the second part of each question reflecting a          defendants made a particular representation, 2) which
burden on Alpine to provide scientific evidence of the various      was not supported by competent and reliable scientific
contaminants that it could remove. That part of the question        evidence. The wording on the verdict form could not
states “was the claim [made by Alpine with regard to a              reasonably be read as contradicting the Court’s explicit
particular contaminant] supported by competent and reliable         instructions regarding the burden of proof.
scientific evidence at the time the claim was made?” Alpine
had requested instead that a different text be used: “Has         A special verdict form will only provide grounds for reversal
Plaintiff proved that the Defendants did not possess and rely     if it is confusing, misleading, or prejudicial when viewed as
upon competent and reliable scientific evidence for claims        a whole. See Hostetler v. Consolidated Rail Corp., 123 F.3d
that their air purifiers eliminate, remove, clear or clean [a     387, 393 (6th Cir. 1997). In this case, the form should be
particular contaminant]? Yes_____ No_____”                        viewed along with the jury instructions, which clearly stated
                                                                  where the burden of proof lay:
  Alpine also points to a statement made by the district judge
near the end of trial in which he addressed the jury and stated     The verdict form asks you a set of two questions as to
in relevant part:                                                   each alleged claim: First, has the government proven by
                                                                    a preponderance of the evidence that Alpine and Mr.
    [Y]ou recall that your area of inquiry will be if Alpine        Converse, individually and as an officer of Alpine, made
  and Mr. Converse made certain representations as                  a claim covered by the terms of the consent order; and,
  described in the Consent Order, and you will be given a           second, if yes, did the government prove by a
  copy of the Consent Order. . . . That will be the first           preponderance of the evidence that the defendants at the
  thing for you to decide, did Alpine after the date of that        time such claim was made did not possess and rely upon
  Consent Order make representations as, as described in            competent and reliable scientific evidence to substantiate
  the Consent Order, Question No. 1. Question No. 2, if             it, that claim or representation?
  they did, with regard to any particular representation, did
No. 01-5759 United States v. Alpine Industries, et al.      17    18   United States v. Alpine Industries, et al. No. 01-5759

These jury instructions reflect the proper placement of the       refers to “representations” and does not specify to whom
burden of proof, which starts with the government and moves       those representations will be made. Alpine argues that the
to Alpine, once the government offers enough evidence to          Consent Order must be interpreted in light of its principal
make its prima facie case.                                        purpose, which was to prevent unsubstantiated claims about
                                                                  the efficacy of Alpine’s air purifiers from being made to
C. Parol Evidence                                                 consumers.
   Alpine objects to the district court’s use of the parol          The Consent Order is unambiguous on this point, stating
evidence rule to exclude evidence of the negotiations with the    repeatedly that Alpine was not to make the relevant
FTC that led to the execution of the Consent Order, which         representations “in any manner, directly or by implication,”
ultimately prevented Alpine from explaining that it               “in connection with the manufacturing, labelling, advertising,
understood the Order to cover only assertions made by Alpine      promotion, offering for sale, sale, or distribution of any air
with regard to reducing the level of a contaminant by a           cleaning product in or affecting commerce.” The language of
specific percentage and not general statements made with          the Order is plain and does not require further interpretation.
regard to reducing the level of contaminants. The district        In addition, any representations made to distributors or other
court, however, properly concluded that the Consent Order         salespeople are obviously intended to be passed on to
unambiguously covered claims that Alpine’s devices                customers.
eliminated portions of contaminants whether or not such
claims were expressed as a numerical percentage.                    Furthermore, Alpine is not entitled to a new trial unless it
                                                                  can show that its substantial rights were prejudiced. See
D. Exclusion of Consumer Reports and Marketing                    McGowan v. Cooper Indus., 863 F.2d 1266, 1271 (6th Cir.
   Information                                                    1988). Alpine must show that the exclusion was not only
                                                                  erroneous, but also resulted in a substantial injustice. See
   Alpine also appeals the district court’s decision to exclude   Sutkiewicz v. Monroe County Sheriff, 110 F.3d 352, 357 (6th
testimony concerning consumer satisfaction surveys and            Cir 1997). Alpine has not demonstrated how the exclusion
marketing information. Alpine argues that the district court      of this evidence produced a substantial injustice.
abused its discretion in precluding the testimony that Alpine
wished to include relating to the context in which the various                                  IV
representations at issue in this case were made by Alpine.
The government’s position, upheld by the district court, was                       The Permanent Injunction
that it was necessary only for the government to show
promotional brochures, videotapes, audio tapes, and training        The permanent injunction is reviewable only for abuse of
tapes, in order to demonstrate that a claim had been made.        discretion. See S. Cent. Power Co. v. Int’l Bhd. of Elec.
Alpine argued that the context in which these materials were      Workers, 186 F.3d 733, 737 (6th Cir. 1999). Alpine is
disseminated was an important factor to be considered when        enjoined from making any claims or representations that its
determining whether the representations were directed to          product can:
consumers or instead to dealers. The government argues that
whether the statement was made to a consumer or to a dealer         [E]liminate, remove, clear, or clean from indoor air any
is immaterial for purposes of the Consent Order, which only         pollutant, contaminant, microorganism (including
No. 01-5759 United States v. Alpine Industries, et al.      19    20    United States v. Alpine Industries, et al. No. 01-5759

  bacteria, viruses, molds, and mildew), chemical or              during trial, which conceded that “odors are not a part of this
  particulate, or any specific quantity or amount of any of       case. They never have been.” Alpine also points to the fact
  the foregoing. Defendants may, however, represent that          that experts agreed that the product could be effective on
  their product can remove “visible” tobacco smoke and            some odors, specific ones of which were identified. In sum,
  some odors (without specifying what odor), providing,           Alpine maintains that even if its request for JNOV or a new
  however, defendants may not claim or represent,                 trial is not granted, the company should be allowed to make
  expressly or impliedly, that the removal of visible             claims for the reduction of smoke, tobacco smoke, cigarette
  tobacco smoke or some odors necessarily implicates the          smoke, all common indoor air particulates, general and
  removal of any chemical, particulate, or microorganism.         specific odors, and other chemical gases. Alpine, however,
    They shall make no claim or representations in any            goes too far. While it is possible that Alpine’s products may
  form or by any means expressly or impliedly that                be effective against some odors, none of the government’s
  Alpine’s products prevent or provide, or may prevent or         experts testified that there was competent and reliable
  provide, relief from any health or medical condition of         scientific evidence to support the claim that Alpine’s air-
  any kind.                                                       cleaning devices will reduce all common indoor air
                                                                  particulates, general and specific odors, and “other” chemical
Alpine contends that the scope of injunctive relief afforded by   gases. Furthermore, the district court’s injunction does not
the permanent injunction conflicts with the jury’s findings       prevent Alpine from claiming that it is able to remove “some
and the government’s concessions and is subsequently              odors” and yet prevents it from making specific claims,
overinclusive. In particular, Alpine argues that the court        which, for example, could be used in a misleading way to
should not have excepted only “visible” tobacco smoke since       make indirect claims that Alpine’s devices also reduce the
the jury made no such explicit distinction in their verdict.      particulates associated with those odors. Since the district
The judge’s reasoning for this language is revealed in the        court did not abuse its discretion, we find no reason to amend
memorandum attached to the prior modified Interim                 the permanent injunction now in place.
Injunction, which states that:
                                                                                                 V
  The jury was asked a specific question about “smoke”;
  they were not asked about the component parts of that                                 Excessive Penalty
  smoke. The jury likely interpreted the question literally,
  viz, visable smoke. Most lay people would define                   Alpine contends that the penalty assessed was excessive in
  “smoke” as something that can be seen or smelled.               light of the fact that Alpine relied in good faith on experts and
                                                                  should not be “harshly punished.” However, the district court
The court’s reasoning is consistent with its and our own          did not pick the penalty it assessed, $1.49 million dollars, out
interpretation of the jury’s verdict, and does not reflect an     of thin air. The court consulted the relevant statute, 15 U.S.C.
abuse of discretion.                                              § 45(l), which provides that:

  Next, Alpine contends that although the permanent                 Any person, partnership, or corporation who violates an
injunction allows claims for general odors, it prohibits claims     order of the Commission after it has become final, and
for specific odors without any supporting rationale. Alpine         while such order is in effect, shall forfeit and pay to the
points to a statement made by the government’s lawyer
No. 01-5759 United States v. Alpine Industries, et al.     21

  United States a civil penalty of not more than $10,000 for
  each violation . . . .
   The statute additionally provides that “[I]n the case of a
violation through continuing failure to obey or neglect to
obey a final order of the Commission, each day of
continuance of such failure or neglect shall be deemed a
separate offense.” The district court, in considering the
statute quoted above, noted that if each of the exhibits shown
to the jury were to be “parsed for individual
misrepresentations, there would be thousands upon thousands
of violations.” The court, therefore, determined to take a
reasonable course, calculated that Alpine’s violations
continued over a total of one thousand four hundred ninety
days, took into account Alpine’s conduct, its financial
resources, and the need to vindicate the FTC’s authority in
order to provide deterrence, and decided that a civil penalty
in the amount of one thousand dollars per day over the period
in question would be acceptable.
  Alpine contends that the court did not give proper
consideration to its good faith efforts to comply with the
FTC’s requirements. However, the court did so at length.
                             VI
   For the reasons given above, we AFFIRM the district
court’s judgment in its entirety.