[Federal Register Volume 60, Number 128 (Wednesday, July 5, 1995)]
[Notices]
[Pages 35021-35023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16444]



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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