A California federal judge on Thursday ordered a light bulb maker to pay $21 million for exaggerating the performance of its LED bulbs, handing the Federal Trade Commission a significant victory in its quest to crack down on deceptive advertising claims.
The FTC sued Lights of America Inc. and its two owners in U.S. District Court for the Central District of California in September 2010, alleging the company overstated the light output and life expectancy of its Light Emitting Diode, or LED, bulbs on packages and in brochures.
For example, according to the FTC, the company initially claimed its LED lamps had a 30,000-hour life and lasted “15 times longer than 2,000 hour incandescent bulbs.” But none of the LED bulbs that were tested lasted beyond a few thousand hours, the trade commission said.
In September, U.S. District Judge James Selna found that Lights of America violated Section 5 of the FTC Act by making unsubstantiated and false claims about its light bulbs. He held the company and its owners liable and ordered them to pay $21 million, most of which will be available for consumer refunds. Foley & Lardner represented the defendants.
Among the judge’s notable findings: The FTC “is not required to show that every reasonable consumer would have been, or in fact was, misled,” and that ads “that are capable of being interpreted in a misleading way should be construed against the advertiser.” In addition, Selna found that “Where an advertiser makes claims using specific figures or facts, a high level of substantiation, such as scientific or engineering tests, is required.”
The case “should serve as a light bulb moment for marketers,” wrote FTC senior attorney Lesley Fair in the agency’s Business Center Blog. “The message for marketers: If you make objective product claims, you must have appropriate scientific or technical evidence in hand before you start selling.”
Last month, the FTC settled deceptive advertising cases with Nissan North America Inc. and its ad agency; as well as the marketers of weight loss food additive Sensa; skin cream maker L’Occitane; two marketers of genetically customized nutritional supplements and diaper company Down to Earth Designs.
One of the FTC’s most hard-fought deceptive advertising cases, against juice maker POM Wonderful, is pending before the U.S. Court of Appeals for the D.C. Circuit.