Osram Sylvania Inc. has agreed to pay $30 million to settle a class action accusing the company of consumer fraud for falsely marketing its SilverStar automobile headlights as a safety enhancement because they are brighter, project a wider beam and allow better sight down the road.
Those claims, according to a complaint by New Jersey resident Imran Chaudhri in U.S. District Court for the District of New Jersey, were based on a rigged study that did not base comparisons between the premier Sylvania halogen headlight bulbs and other bulbs under similar testing conditions.
“Sylvania rigged the process,” alleges the complaint, Chaudhri v. Osram Sylvania Inc.
U.S. Magistrate Judge Madeline Cox Arleo tentatively approved the settlement on July 11. A fairness hearing for final approval is set for March 20, 2015.
Sylvania denied wrongdoing but agreed to alter the front and back packaging of its SilverStar family of headlight bulbs to modify graphics that purport to give the impression that the bulbs are substantially brighter than “standard halogen” bulbs, according to the plaintiffs’ complaint and the order granting preliminary approval of the settlement.
Bar charts illustrate the comparison, with a SilverStar bulb depicted with three bars versus one bar for the standard bulb, implying the SilverStar’s light provides three times the down-road visibility of the regular one. But on the back of the packages a small-print disclaimer says the comparison was based on 100 percent of the SilverStar bulbs’ light output versus 80 percent of the light output of the ordinary bulbs, the complaint says.
The plaintiffs accuses Sylvania of common law fraud, unjust enrichment, negligent misrepresentation and violations of New Jersey’s consumer fraud laws.
The tentative agreement does not disclose the number of potential class members, but estimates that, from the $30 million settlement fund, they could receive a minimum of $10 each. A two-pack of SilverStar 9004 bulbs costs about $45 at Walmart stores, according to Walmart’s website.
No specific award for the plaintiffs’ attorneys fees is listed, but the amount will be no more than 30 percent of the fund, the preliminary deal states.
Class counsel are John Keefe Jr. of Keefe Bartels and Barry Eichen of Eichen Crutchlow. Representing Sylvania are Brant Bishop and Eunnice Eun of Kirkland & Ellis and Stephen Orlofsky and David Kistler of Blank Rome.
Lisa Hoffman is a contributor to law.com.