Court Dismisses Sharper Image Lawsuit against Consumers Union

Stephen Barrett, M.D.
April 19, 2005

In November 2004, the U.S. District Court for the Northern District of California dismissed a lawsuit that the Sharper Image Corporation filed against Consumers Union (CU) over reviews of the Ionic Breeze Quadra air cleaner [1]. The lawsuit, filed in September 2003, concerned articles in the October 2003 and February 2002 issues of Consumer Reports which concluded that the Ionic Breeze was “ineffective” as an air cleaner and produced “almost no measurable reduction in airborne particles.”

CU dismissal motion [2] was filed under California’s Anti-SLAPP (Strategic Lawsuits Against Public Participation) statute. The statute, originally enacted in 1992, provides a way for a defendant served with a complaint arising out of constitutionally protected speech to move for dismissal of the lawsuit at the outset—before the personal and financial costs of litigation pile up. Under the statute, a defendant can immediately bring a “special motion to strike” to force the plaintiff to show that its claims have legal and factual merit, thus placing a heavy burden of proof on the plaintiff. Regarding the anti-SLAPP motion, Michael Pollet, CU’s long-time general counsel, stated:

Consumers Union believes the district court will see Sharper Image’s lawsuit for what it really is—a meritless case aimed at silencing an honest critic that has held the public’s trust for nearly 70 years. We are confident that we will prevail because our magazine’s review of the Ionic Breeze is not only protected by the First Amendment, but is fully accurate, as Sharper Image well know [2].

CU’s motion also stated that “Because Sharper Image cannot come forward with any evidence from which a finding of malice could be made, this action must be dismissed.” The motion contends that there could be no finding of malice because CU’s findings are opinions, based upon fully disclosed truthful facts. The challenged article fully discloses Sharper Image’s criticisms of CU’s testing procedure. Further support for CU’s motion on malice comes from CU’s use of two nationally known independent experts who reviewed and validated CU’s test protocols, rejected Sharper Image’s claims, and confirmed CU’s opinions about Sharper Image’s criticism, said Joseph W. Cotchett, CU’s lead counsel on the defense [2].

In February 2002 issue, CR reported that the Ionic Breeze Quadra air cleaner “proved unimpressive” and that its tests “found almost no measurable reduction in airborne particles.” [3] The company complained, maintaining that CR’s tests, based on the industry standard for measuring clean-air delivery rate (CADR) were inadequate. Sharper Image replied that the Ionic Breeze technology is “vastly different” from that of other air cleaners and would fare better in a longer test.

CR’s experts re-examined their test procedures and had them reviewed by an independent expert, who confirmed the validity of CR’s methodology. This year, in addition to regular tests for air cleaner Ratings, CR then ran additional long-term tests to find out whether the Sharper Image technology is, as the company says, “so unique” that we have to “look beyond the limiting CADR test protocol” to evaluate it fairly. In these in-depth tests, CR tested the Sharper Image Ionic Breeze and the similar Honeywell Environizer against two high-scoring air cleaners, the Friedrich electrostatic precipitator and the Whirlpool HEPA filter.

In its extended testing, CR gauged how well each air cleaner could handle the periodic introduction of small amounts of pollutant into a sealed test chamber over a 6-hour period. One set of tests used smoke, another fine dust. A second set gauged how well each cleaner worked for the next 17 hours, after the last injection of pollutant. For both sets of tests, CR’s experts ran the Ionic Breeze and the Environizer on high to maximize performance; the others were on low, their quietest setting. CR reported that the Ionic Breeze and the Environizer didn’t come close to the performance of the others. CR’s experts concluded that they were but ineffective and advised readers that there are much better air cleaner choices [4].

In dismissing the Sharper Image lawsuit, the court concluded that the company “has not shown that the test protocol used by Consumers Union was scientifically, or otherwise, invalid,” and had not “demonstrated a reasonable probability that any of the challenged statements were false.” [1] The dismissal entitled CU to reimbursement for legal fees an costs, for which it collected $525,000 early in 2005.

In previous reports, CR has criticized the claims made for ozone-generating “air purification devices” of the type marketed by Living Air, Alpine Industries, and EcoQuest [5].

Californians have filed at least two lawsuits seeking class-action status for consumers who bought Ionic Breeze air purifiers from The Sharper Image during the past five years [6].

In 2005, another class-action suit was filed by Sharper Image stockholders who believe that the company’s management withheld information in order to support the price of the company’s stock. The complaint, which names company chairman/CEO Richard Thalheimer and three other officers as defendants, alleges:

  • Between February 5 and August 4, 2004, defendants had overstated the company’s business prospects and estimated that its second-quarter earnings would be 11¢ per share.
  • As a result, Sharper Image stock traded at inflated levels for several months, during which Thalheimer sold shares totaling more than $15.5 million and the others sold about $2.57 million more.
  • The defendants failed to reveal that sales of the company’s key product—the Ionic Breeze family of air purifiers—had significantly fallen. One factor in the slowdown was criticism by Consumer Reports magazine.

On August 5, when Sharper Image announced that its second quarter earnings would be only 5¢ per-share, the price of its shares plummeted 23%. Plaintiff seeks to recover damages on behalf of all who purchased Sharper Image common stock between February 5 and August 4, 2004 [7,8].

In May 2005, Consumer Reports reported new finings that the Ionic Breeze Quadra S1737 SNX and four competing devices emitted excessive amounts of ozone that could cause respiratory difficulty when operated close to the user [9].

  1. Chesney MM. Order granting Consumer Union’s special motion to strike. In Sharper Image Corporation v. Consumers Union. U.S. District Court for the Northern District of California, Case No. 03-4094 MMC, Nov 9, 2004.
  2. Consumers Union files motion to strike Sharper Image lawsuit under California Anti-SLAPP statute: Organization contends lawsuit is an abuse of the courts, intended to chill free speech rights. CU news release, Oct 30, 2003.
  3. Cleaning the air: Portable air cleaners. Consumer Reports 67(2):46-47, 2002.
  4. Air cleaners: Behind the hype. Consumer Reports 68(10):26-29, 2003.
  5. Barrett S. Alpine Industries ordered to stop unsubstantiated claims for ozone generators. MLMWatch, March 13, 2002.
  6. Class-action status sought in Sharper Image lawsuit. IEQ Review, April 7, 2004.
  7. Lerach Coughlin announces class action lawsuit against Sharper Image Corporation. News release, April 18, 2005.
  8. Class action complaint. Rosenbaum Capital, LLC, on behalf of itself and all others similarly situated, vs. Sharper Image Corporation, Richard Thalheimer, Tracy Wan, Anthony Farrell, and Jeffrey Forgan. U.S. District Court for the Northern District of California. Filed April 18, 2005.
  9. New concerns about ionizing cleaners. Consumer Reports 70(5):22–5, 2005.

This article was revised on April 19, 2005.