Alpine Industries, Inc., et al.; Proposed Consent Agreement With Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 932-3112]

Alpine Industries, Inc., et al.; Proposed Consent Agreement With

Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair acts and practices and unfair methods of competition, this

consent agreement, accepted subject to final Commission approval, would

prohibit, among other things, two Minnesota-based sister companies and

their principal officers from making unsubstantiated claims about the

ability of any air cleaning product to eliminate, remove, clear or

clean any indoor air pollutant--or any quantity of indoor air

pollutants--from a user's environment.

DATES: Comments must be received on or before September 5, 1995.

ADDRESSES: Comments should be directed to FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW, Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

Jeffrey Klurfeld, Kerry O'Brien, and Linda Badger, San Francisco

Regional Office, Federal Trade Commission, 901 Market Street, Suite

570, San Francisco, CA 94103. (415) 744-7920.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the

Commission's rules of practice (16 CFR 2.34), notice is hereby given

that the following consent agreement containing a consent order to

cease and desist, having been filed with and accepted, subject to final

approval, by the Commission, has been placed on the public record for a

period of sixty (60) days. Public comment is invited. Such comments or

views will be considered by the Commission and will be available for

inspection and copying at its principal office in accordance with

Sec. 4.9(b)(6)(ii) of the Commission's rules of practice (16 CFR

4.9(b)(6)(ii)).

Agreement Containing Consent Order to Cease and Desist

The Federal Trade Commission having initiated an investigation of

certain acts and practices of Alpine Industries, Inc. and Living Air

Corp., corporations, and William J. Converse individually and as an

officer of Alpine Industries, Inc. and Living Air Corp. (``proposed

respondents''), and it now appearing that proposed respondents are

willing to enter into an agreement containing an order to cease and

desist from the use of the acts and practices being investigated,

It is hereby agreed by and between proposed respondents, by their

duly authorized officers, and their attorney, and counsel for the

Federal Trade Commission that:

1. Proposed respondent Alpine Industries, Inc. is a corporation

organized, existing, and doing business under and by virtue of the laws

of the State of Tennessee, with its office and principal place of

business located at 9199 Central Avenue, NE., in the City of Blaine,

State of Minnesota.

Proposed respondent Living Air Corp. is a corporation organized,

existing, and doing business under and by virtue of the laws of the

State of Tennessee, with its office and principal place of business

located at 11673 Tulip Street, in the City of Coon Rapids, State of

Minnesota.

Proposed respondent William J. Converse is an officer of Alpine

Industries, Inc. and Living Air Corp. He formulates, directs, and

controls the policies, acts and practices of Alpine Industries, Inc.

and Living Air Corp. and his address is the same as that of Living Air

Corp.

2. Proposed respondents admit all the jurisdictional facts set

forth in the draft of complaint.

3. Proposed respondents waive:

a. Any further procedural steps;

b. The requirement that the Commission's decision contain a

statement of findings of fact and conclusions of law; and

c. All rights to seek judicial review or otherwise to challenge or

contest the validity of the order entered pursuant to this agreement.

4. This agreement shall not become part of the public record of the

proceeding unless and until it is accepted by the Commission. If this

agreement is accepted by the Commission, it, together with the draft of

complaint contemplated thereby, will be placed on the public record for

a period of sixty (60) days and information in respect thereto publicly

released. The Commission thereafter may either withdraw its acceptance

of this agreement and so notify the proposed respondents, in which

event it will take such action as it may consider appropriate, or issue

and serve its complaint (in such form as the circumstances may require)

and decision, in disposition of the proceeding.

5. This agreement is for settlement purposes only and does not

constitute an admission by proposed respondents of facts, other than

jurisdictional facts, or of violations of law as alleged in the draft

complaint.

6. This agreement contemplates that, if it is accepted by the

Commission, and if such acceptance is not subsequently withdrawn by the

Commission pursuant to the provisions of Sec. 2.34 of the Commission's

rules, the Commission may, without further notice to proposed

respondents, (a) issue its compliant corresponding in form and

substance with the draft of complaint and its decision containing the

following order to cease and desist in disposition of the proceeding

and (b) make information public in respect thereto. When so entered,

the order to cease and desist shall have the same force and effect and

may be altered, modified or set aside in the same manner and within the

same time provided by statute for other orders. The order shall become

final upon service. Delivery by the U.S. Postal Service of the

complaint and decision containing the agreed-to order to proposed

respondents' addresses as stated in this agreement shall constitute

service. Proposed respondents waive any right they may have to any

other manner of service. The complaint may be used in construing the

terms of the order, and no agreement, understanding, representation, or

interpretation not contained in the order or the agreement may be used

to vary or contradict the terms of the order.

7. Proposed respondents have read the proposed complaint and order

contemplated hereby. They understand that once the order has been

issued, they will be required to file one or more compliance reports

showing that they have fully complied with the order. Proposed

respondents further understand that they may be liable for civil

penalties in the amount provided by law for each violation of the order

after it becomes final.

Order

For the purposes of this Order, the following definition shall

apply:

[[Page 35022]]

A. The term ``air cleaning product'' shall mean any products,

equipment, or appliance designed or advertised to remove, treat, or

reduce the level of any pollutant(s) in the air.

B. The terms ``indoor air pollutant(s)'' or ``pollutant(s)'' shall

mean one or more of the following: Formaldehyde, sulfur dioxide,

ammonia, trichlorethylene, benzene, chloroform, carbon tetrachloride,

odors, nitrogen dioxide, mold, mildew, bacteria, dust, cigarette smoke,

pollen, and hydrocarbons, or any other gaseous or particulate matter

found in indoor air.

C. The term ``competent and reliable scientific evidence'' shall

mean tests, analyses, research, studies or other evidence based on the

expertise of professionals in the relevant area, that has been

conducted and evaluated in an objective manner by persons qualified to

do so, using procedures generally accepted in the profession to yield

accurate and reliable results.

I

It is ordered that respondents Alpine Industries, Inc. and Living

Air Corp., corporations, their successors and assigns, and their

officers; William J. Converse, individually and as an officer of Alpine

Industries, Inc. and Living Air Corp.; and respondents' agents,

representatives, and employees, directly or through any corporation,

subsidiary, division or other device, in connection with the

manufacturing, labelling, advertising, promotion, offering for sale,

sale, or distribution of any air cleaning product in or affecting

commerce, as ``commerce'' is defined in the Federal Trade Commission

Act, do forthwith cease and desist from representing, in any manner,

directly or by implication,

A. Such product's ability to eliminate, remove, clear, or clean any

indoor air pollutant from a user's environment; or

B. Such product's ability to eliminate, remove, clear, or clean any

quantity of indoor air pollutants from a user's environment;

unless, at the time of making such representation, respondents posses

and rely upon competent and reliable scientific evidence that

substantiates the representation.

II

It is further ordered that respondents Alpine Industries, Inc. and

Living Air Corp., corporations, their successors and assigns, and their

officers; William J. Converse, individually and as an officer of Alpine

Industries, Inc. and Living Air Corp.; and respondent's agents,

representatives, and employees, directly or through any corporation,

subsidiary, division or other device, in connection with the

manufacturing, labelling, advertising, promotion, offering for sale,

sale, or distribution of any air cleaning product in or affecting

commerce, as ``commerce'' is defined in the Federal Trade Commission

Act, do forthwith cease and desist from representing, in any manner,

directly or by implication, that:

A. The use of ozone is more effective in cleaning or purifying

indoor air than other air cleaning methods;

B. The product does not create harmful by-products; or

C. When used as directed, the product prevents or provides relief

from any medical or health-related condition;

unless at the time of making such representation, respondents possess

and rely upon competent and reliable scientific evidence that

substantiates the representation.

III

It is further ordered that respondents Alpine Industries, Inc. and

Living Air Corp., corporations, their successors and assigns, and their

officers; William J. Converse, individually and as an officer of Alpine

Industries, Inc. and Living Air Corp.; and respondent's agents,

representatives and employees, directly or through any corporation,

subsidiary, division or other device, in connection with the

manufacturing, labelling, advertising, promotion, offering for sale,

sale, or distribution of any air cleaning product in or affecting

commerce, as ``commerce'' is defined in the Federal Trade Commission

Act, do forthwith cease and desist from representing, in any manner,

directly or by implication, the efficacy, performance, or health-

related benefit of any such product, unless, at the time of making such

representation, respondents possess and rely upon competent and

reliable evidence, which when appropriate must be competent and

reliable scientific evidence, that substantiates the representation.

IV

It is further ordered that for five (5) years after the last date

of dissemination of any representation covered by this Order,

respondents, or their successors and assigns, shall maintain and upon

request make available to the Federal Trade Commission for inspection

and copying:

A. All materials that were relied upon in disseminating such

representation; and

B. All tests, reports, studies, surveys, demonstrations, or other

evidence in their possession or control that contradict, qualify, or

call into question such representation, or the basis relied upon for

such representation, including complaints from consumers.

V

It is further ordered that respondents shall notify the Commission

at least thirty (30) days prior to any proposed change in the corporate

respondents such as dissolution, assignment or sale resulting in the

emergence of a successor corporation, the creation or dissolution of

subsidiaries, or any other change in the corporations which may affect

compliance obligations arising out of this Order.

VI

It is further ordered that the individual respondent shall, for a

period of five (5) years after the date of service of this Order upon

him, promptly notify the Commission, in writing, of his discontinuance

of his present business or employment and of his affiliation with a new

business or employment. For each such new affiliation, the notice shall

include the name and address of the new business or employment, a

statement of the nature of the new business or employment, and a

description of respondent's duties and responsibilities in connection

with the new business or employment.

VII

It is further ordered that the corporate respondents shall, within

ten (10) days from the date of service of this Order upon them,

distribute a copy of this Order to each of their officers, agents,

representatives, independent contractors, and employees involved in the

preparation and placement of advertisements or promotional materials,

or who is in communication with customers or prospective customers, or

who has any responsibilities with respect to the subject matter of this

Order; and for a period of three (3) years, from the date of issuance

of this Order, distribute a copy of this Order to all of respondents'

future such officers, agents, representatives, independent contractors,

and employees.

VIII

It is further ordered that the corporate respondents shall, within

ten (10) days from the date of service of this Order upon them, deliver

by first class mail or in person a copy of this Order or Attachment A

to each of their present distributors or retailers of their ozone

generators.

It is further ordered that respondents shall, within sixty (60)

days from the date of service of this order upon them, and at such

other times as the

[[Page 35023]]

Commission may require, file with the Commission a report, in writing,

setting forth in detail the manner and form in which they have complied

with this Order.

Attachment A

[To Be Printed on company letterhead]

[Date]

Dear [distributor]: Alpine Industries, Inc. and Living Air Corp.

recently settled a civil dispute with the Federal Trade Commission

(``FTC'') regarding certain claims for our product, the Living Air

Model XL15 ozone generator. As a part of the settlement, we are

required to make sure that our distributors and wholesalers stop

using or distributing advertisements or promotional materials

containing those claims.

We have entered into this agreement to resolve a dispute with

the FTC on certain claims it contends are not substantiated. The

agreement entered into is not an admission that we have violated the

law. However, as part of the agreement, we will not be making

certain claims unless they are supported by competent and reliable

scientific evidence.

Your assistance will be greatly appreciated in fulfilling the

terms of the agreement. We have agreed not to make the following

claims unless we have competent and reliable scientific evidence:

(1) That the product eliminates or clears indoor air pollutants; (2)

that the product creates no harmful by-products; (3) that the

product provides relief from specific medical or health-related

conditions; and (4) that the use of ozone is more effective in

cleaning or purifying indoor air than other air cleaning products

such as filters.

We ask each or our dealers, distributors, and sales managers to

cooperate with us to ensure that no current advertising or

promotional material makes these claims. Again, your assistance in

this regard will be greatly appreciated.

Sincerely,

William J. Converse,

President, Alpine Industries, Inc., and Living Air Corp.

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from respondents Alpine

Industries, Inc. and Living Air Corp., Tennessee corporations, and

William J. Converse, individually and as an officer of the

corporations.

The proposed consent order has been placed on the public record for

sixty (60) days for reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and the comments received and will decide whether it should

withdraw from the agreement and take other appropriate action or make

final the agreement's proposed order.

This matter concerns the advertising of ozone generators, including

the ``Living Air Model XL15,'' as air cleaning products for use in

homes, offices, and other commercial establishments. The Commission's

complaint charges that respondents' advertising contained

unsubstantiated representations concerning the efficacy of their ozone

generator in cleaning the air.

Specifically, the complaint alleges that the respondents lacked

substantiation for their claims that: (1) When used as directed, the

Living Air Model XL15 eliminates, removes, clears, or cleans

formaldehyde, sulfur dioxide, ammonia, trichlorethylene, benzene,

chloroform, carbon tetrachloride, odors, nitrogen dioxide, mold,

mildew, bacteria, dust, cigarette smoke, pollen, and hydrocarbons from

a user's environment; (2) the use of ozone is more effective in

cleaning or purifying indoor air than air cleaning products that use

filters; (3) the Living Air Model XL15 does not create harmful by-

products; and (4) when used as directed, the Living Air Model XL15

prevents or provides relief from colds, flu, allergies, asthma, sinus

headaches, and ear, eye, nose and throat infections.

The proposed consent order contains provisions designed to remedy

the violations charged and to prevent the respondents from engaging in

similar acts and practices in the future.

Part I of the proposed order prohibits respondents from

representing any air cleaning product's ability to eliminate, remove,

clear, or clean any indoor air pollutant or any quantity of indoor air

pollutants from a user's environment, unless respondents possess

competent and reliable scientific evidence that substantiates the

representation.

Similarly, Part II of the proposed order prohibits respondents from

claiming that (1) the use of ozone is more effective in cleaning or

purifying indoor air than other air cleaning methods, (2) any air

cleaning product does not create harmful by-products, or (3) when used

as directed, any air cleaning product prevents or provides relief from

any medical or health-related condition, unless respondents possess

competent and reliable scientific evidence that substantiates the

representation.

As fencing-in relief, Part III of the proposed order provides that

if respondents represent the efficacy, performance, or health-related

benefit of any air cleaning product, respondents must possess competent

and reliable evidence that substantiates the representation.

The proposed order also requires respondents to maintain materials

relied upon to substantiate claims covered by the order; to notify the

Commission of certain changes in the business or employment of the

named individual respondent; to provide a copy of the consent agreement

to their employees involved in the preparation and placement of

respondents' advertisements, or in communication with respondents'

customer or prospective customers; to distribute a copy of the order or

Attachment A of the consent agreement to their present distributors or

retailers of their ozone generators; and to file one or more reports

detailing compliance with the order.

The purpose of this analysis is to facilitate public comment on the

proposed order. It is not intended to constitute an official

interpretation of the agreement and proposed order or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 95-16444 Filed 7-3-95; 8:45 am]

BILLING CODE 6750-01-M