Another MLM Scheme in Hot Water

The Greeneville Sun, Oct 21, 1999
By Cameron Judd

The outcome of a federal government lawsuit against Greeneville's Alpine Industries Inc. now rests in the hands of an 11-member jury.

After a morning of hearing closing arguments from attorneys and procedural instructions from a magistrate judge, jurors in the trial of the Federal Trade Commission lawsuit against the air-cleaner manufacturer and William Converse, its founder and president, began deliberations just after 1 p.m. on Thursday.

During closing arguments, the jury was told by a government attorney that Alpine relies on '"junk science" to support its claims, while lawyers for both Alpine and Converse said Alpine relies on valid science. The jury now must decide who is correct.

Plans to move the deliberations from the Courtside office complex, where the trial was held in a leased annex courtroom, to the U.S. District Courthouse, fell through because courthouse space already was mostly scheduled for use. The jury is deliberating in a locked conference room at the Courtside.

Because the government bears the burden of proof in the lawsuit, its attorneys were allowed to make two presentations to the jury: one prior to the defense's closing argument, and a briefer one afterward.

Stein's Closing Argument

Elizabeth Stein, who had presented most of the government's case against Alpine, also handled the government's initial closing argument, which lasted about an hour and 15 minutes.

Stein told jurors that the government's case was not about '"shutting down Alpine," denigrating Alpine employees, or '"big government telling Alpine how to run its business."

Instead, she said, it was about '"being truthful about the things you manufacture and sell."

She said, '"The reason we're here is to keep Alpine from deceiving people with ... outrageous claims."

She accused Converse and others involved in Alpine's marketing of using '"scare tactics" that describe typical homes as '"poison environments," full of dangerous and foul chemicals, microbes, and particulates that threaten health.

She charged that these descriptions are used in particular to sell Alpine machines to people who suffer from respiratory disorders. Some of these people, she said, are in bad health and desperate for relief.

In its 1995 consent decree with the FTC, Alpine promised not to make scientifically unsupported claims, but has continued to do so, she said.

She criticized Alpine's claims concerning what it calls '"radio frequency ionization," or RF ionization, a process that purports to allow some Alpine air cleaner units to ionize airborne particles through solid walls, causing those particles to clump together and drop out of the '"breathing zone."

RF ionization, Stein said, is apparently a '"secret magic process" though '"no one really knows what it is," and '"Alpine won't tell."

Nothing exists in '"credible scientific literature" that supports the existence of RF ionization, she said.

She also charged Alpine with misleading consumers about the ability of itsmachines to kill or reduce environmental microbe populations.

Alpine implies through its advertising that almost all microorganisms will be removed from environments by its cleaners, though scientific tests show that is not the case, she said.

Alpine relies on '"junk science," she said. She cited, as examples of '"junk science," '"anecdotal evidence," and '"extrapolation" of second-step conclusions from scientific studies.

She criticized Alpine's expert witness, Dr. Robert Olcerst, who has credentials in industrial hygiene, toxicology and other related areas and performed some scientific tests of his own for Alpine.

But one of the most crucial tests contained '"serious flaws," Stein said, citing criticisms made by an earlier government expert witness of Olcerst's test methods.

She also accused Olcerst of testifying outside his areas of expertise.

She accused Alpine of leaving out crucial data related to some of its claims, of giving credence to substandard testing devices, and of misleading consumers about what degree of pollutants its machines can take out of the air.

She encouraged the jury to compare the credibility and credentials of the government's expert witnesses with those of Alpine's experts.

She cited statements by Olcerst to the effect that even a very small level of pollutant reduction should be considered a cleaning of the air.

'"That's not what Alpine's talking about," she said. In advertising, Alpine talks about '"purifying, 'mountain fresh' air," and so on, she said, implying high levels of pollutant reduction.

Converse Criticized

She also called into question Converse's personal credibility, saying that '"close is good enough for him" when it comes to making claims about himself and his company's products.

She cited the fact that Converse has presented himself as a '"co-owner" of Alpine when in fact his wife, not he, is the actual co-owner, and also Converse's published claim to possess a bachelor's degree in engineering, when in fact he was two hours short of fulfilling requirements for that degree.

'"That's okay , he came within two hours" of getting his degree," she said, speaking in an ironic manner. '"Close is good enough for him."

Likewise, she said, '"he's not a co-owner of Alpine; his wife is. That's okay , close is good enough for him."

She accused Converse of holding a similar attitude about the science behind Alpine products.

Converse's wrongful claiming of a degree and inaccurate presentation of the company ownership were not '"a mistake," but a '"pretense," she said, because the statements were allowed to stand uncorrected for years.

After showing charts that depicted some of Alpine's product claims with a purported lack of scientific support, Stein declared, '"Alpine makes these outrageous claims, and will continue to do so unless they are stopped." The jury, she said, is empowered to finally stop Alpine from making unsupported claims. She encouraged the jury to do so in reaching its verdict.

Defense Has Its Say

William Erhart, one of Alpine's attorneys, presented the closing argument on the company's behalf.

Erhart used several charts as visual aids in his presentation.

In informal terms, he said, Alpine's claims can be divided into three categories. Alpine maintains its devices can deal with what Erhart called '"solid stuff , particulate," as well as '"gases and odors," and '"'bugs', microbes."

He then discussed each category and presented a list of scientific papers and/or indoor air authorities he said were supportive of Alpine's claims in that category.

For example, Erhart noted that Alpine's fundamental position regarding particulate removal is that particles of many different types react in generally the same way to ionization, meaning that an inert particle and a germ within the same general size range will react in much the same way to ionization.

Thus, he argued, Alpine had no need to test the capabilities of its devices to remove individual kinds of particulate, only to demonstrate the effectiveness of its machines on particles within certain size ranges.

He argued that Olcerst, whose credentials the government had attacked, actually possessed a wider range of expertise than any other expert witness in the trial, on either side.

In Olcerst, the court saw '"one of the most qualified individuals in air quality you could possible have," Erhart said. The government's experts looked at the issues '"from their own narrow specialty," while Olcerst and Alpine's other experts looked at a broader picture, he said.

He also charged the government with being unrealistic in its view of what constitutes an Alpine product claim. '"Just because Bill Converse gets up and says something doesn't mean it is a claim," he said.

He also accused the government of inconsistency regarding Stein's charge that Alpine and Converse market through '"scare tactics." Erhart said that one of the government's own expert witnesses, Dr. Richard Shaughnessy, painted a bleaker picture of indoor air quality than does Alpine's material, yet the government did not accuse Shaughnessy of '"scare tactics."

Erhart said that the government , faced with the various studies, scientific papers and authorities that Alpine cites to bolster its positions , must '"knock down" each study, like stacked milk bottles in a carnival ball-toss game.

He argued that Alpine is not required, in the consent decree, to prove unanimity of scientific opinion on any given issue, only to prove that a reasonable body of authorities and evidence exists to back up its own positions.

If the government cannot knock down all the metaphorical milk bottles in the case, he said, '"We (Alpine) win."

Erhart said Alpine relies heavily on '"real world" scientists, such as industrial hygienists who work with cleaning actual environments, rather than what he described as the government's '"ivory tower academic" expert witnesses.

Greer In Defense

Converse's attorney, Ronnie Greer, also was allowed to give a closing argument because Converse is named separately as a defendant in the lawsuit.

Greer characterized the case as '"The Government vs. Common Sense" and '"The Academics vs. the Real World People."

He said that Alpine has possessed many supporting scientific documents for years, but the main studies upon which the government relied in criticizing Alpine in the case were not done until 1998 and could not have been taken into account by Alpine prior to that time.

He echoed Erhart's criticism of the government's approach to defining what i terms '"product claims" on Alpine's part. In some cases, the government make '"downright silly" allegations, he said.

He cited one supposed Alpine '"representation" on the verdict forms the jury will be asked to fill out. Because somewhere in some of Alpine's promotional material, someone made a reference to '"dirt," Greer said, the government alleges that Alpine claims an ability to clean dirt from the air. A similar government allegation is made that Alpine claims the ability to clean '"cockroaches" from the air, Greer said.

He also charged that the government has attempted to '"toughen the standard" that Alpine must meet in the consent decree, rather than abiding by the consent decree language itself.

Government witnesses, he said, have faulted Alpine for not relying heavily on peer-reviewed scientific literature or demonstrating that its products can achieve a 99 percent reduction in certain microorganisms, though the consent decree has no language about percentages of reductions or the necessity for documents supporting Alpine's claims to be peer reviewed.

The consent decree is a contract, Greer said, and '"the government is bound by the language of the contract just as we are."

Greer charged that the government '"has gotten involved in what started out as a dispute between competitors," those competitors being Alpine and Shaklee Corporation, a company for whom Alpine's executive vice president, Michael Jackson, worked before joining Alpine.

Assistant U.S. Attorney Helen Smith objected, and the judge briefly dismissed the jury. Smith told the judge that Greer was veering into territory (previous litigation between Alpine and Shaklee) that was outside the scope of evidence presented in the case.

Greer replied that the government had earlier noted that Alpine's witnesses had aided Alpine in some of its previous litigation, and therefore it seemed fair to him to note that some of the government's experts witnesses in this case had, on behalf of an Alpine competitor, provided evidence against Alpine in past litigation.

Magistrate Judge Dennis Inman ruled that Greer could go on with his comments if he did not address the outcome of any past litigation involving Alpine.

The jury returned, and Greer went on to say that the government in this case '"has used, or been used by, experts affiliated or recommended by those with ties to Shaklee."

Converse's Character Defended

Greer, after noting several points in the government's case which he considers '"unfair," turned to the government's negative presentation of Converse's personal character.

'"Is it fair to attack the credibility of Bill Converse when that isn't an issue in this case?" Greer asked.

He said the government entered that area as a '"distraction" from the main points of the case.

Concerning the question of Alpine ownership, Greer said: '"I don't know how it is" elsewhere, but '"where I come from, if you and your wife own something, you own it."

About the issue of Converse's lack of a college degree, Greer said that indeed Converse fell two English hours short of earning an engineering degree, but had taken all the main courses relevant to engineering.

He accused the government of using the issue in an '"unfair" way, telling the jurors the government wanted them to hear only part of the story, not that Converse '"had a young family he had to go to work to support" at the time he left college.

Greer also chided the government's attorneys for bringing in, at the last moment, a rebuttal witness from the state of Washington, indoor air expert Dr. Anthony Basabe, with the apparent intent of showing that Converse had presented an inaccurate depiction of an earlier conversation between himself and Basabe.

Greer said that Basabe's testimony ended up presenting a '"recollection" of the conversation that was much the same as Converse's.

Greer closed his argument by a quick review of some of the scientific literature Alpine uses to support its position, further accused the government of inconsistency on several points, and closed by noting that '"competent scientists can and sometimes do disagree."

He urged the jurors to look at the government's allegations '"with a critical eye ... think about them in common, everyday terms."

Government Has Last Word

Following Greer's presentation, Helen Smith spoke briefly to the jury, noting that Alpine '"voluntarily" had signed the consent order and agreed to its language.

'"What the government wants from Bill Converse and Alpine is the truth" about what Alpine's products can do, she said.

She disagreed with Erhart's carnival game analogy, saying the government was not obligated to '"knock over" every study or paper Alpine cites in its own support, only to show that the weight of science tilts the scales against Alpine's claims.

Concerning the issue of Converse's college degree, she said, '"The lack of a degree is not what's relevant. What is relevant is the pretense" regarding that degree. '"What is important is that it was important to him (Converse)," she said.

She said that, in her view, Converse claimed the degree to add to his personal image of credibility when making scientific claims for Alpine products. The claim to possess a college degree he does not really have was made for much the same reason Converse '"wears that white lab coat in so many of those (Alpine) videos," she charged.

Judge Instructs Jurors

After Smith was finished, Magistrate Judge Inman addressed the jurors, instructing them on how to proceed with selecting a foreman, and making several practical suggestions about how to streamline their work.

He also outlined the basic rules of evidence, and told jurors that they were to consider not only Alpine's direct claims for its products, but '"implied" claims as well.

When the jury was dismissed for lunch prior to beginning deliberations on Thursday afternoon, Inman briefly thanked the lawyers on both sides for their handling of the case, saying he wished that publicity for the legal profession focused more on attorneys such as they are, rather than on the '"relatively few twerps that are at loose among us."

 

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