A previous post discussed an action brought by the U.S. Federal Trade Commission (FTC) against Lights of America (LOA), charging the California LED lamp maker of violating the FTC Act by making false or unsubstantiated advertising claims about its products.
In a recent decision, a Los Angeles federal court held that LOA violated Section 5 of the FTC Act by making false claims about LED lamps replacing certain wattage incandescent lamps and about the lifetime of the company’s LED lamps.
Section 5(a) of the FTC Act prohibits “unfair or deceptive acts or practices in or affecting commerce.”
At issue were LOA’s ”replacement” claims, which stated that certain LED lamps replace 20-, 40-, and 45-watt incandescent light bulbs and indicated that the lamps produce the lumen equivalent of each compared incandescent.
The court found that none of lumen output readings for the LED lamps at issue equaled the typical lumen output range for any of the compared incandescents. In fact, the measured lumen outputs of LOA’s best performing products were significantly lower than each incandescent:
Even the lamp with the highest measured lumen output . . . provides only 48% of the highest point in the range of typical lumen output [of a 45-watt incandescent], and 80% of the lowest point in the range of the typical lumen output.
The lamp with the highest measured lumen output . . . provides only 23% of the highest point in the range of typical lumen output [of a 40-watt incandescent], and 36% of the lowest point in the range of typical lumen output.
The lamp with the highest measured lumen output . . . provides only 39% of the highest point in the range of typical lumen output [of a 40-watt incandescent], and 20% of the lowest point in the range of typical lumen output.
Thus, the court found LOA’s “replaces watts” claims false and unsubstantiated and constituted a violation of Section 5(a) of the FTC Act.
The lifetime claims at issue included statements by LOA that certain lamps last six, seven, ten, and even fifteen times longer than 2,000 hour incandescent bulbs, for a maximum claimed 30,000 hours of life.
The court used as the standard for measuring the lifetime of an LED lamp something called “L70,” which is the point at which the light output of an LED lamp diminishes to 70% of its original light output.
Here the issue was partly lack of substantiation as the court found that LOA had no life test data for some of its LED lamps prior to February 2008.
Subsequent testing failed to support LOA’s 30,000 hour life claim or its later 20,000 claims:
None of the lamps tested by LOA maintained lumen output above L70 during the period tested. All had reached the end of life under L70 during . . . less than 7,000 hours of testing.
The court therefore held the lifetime claims false:
LOA’s substantiation does not support its 30,000 or 20,000 hour lifetime claims. Rather, the documents and data LOA relies upon show that none of the LEDs or Lifetime Lamps tested would last beyond a few thousand hours.
The false lifetime claims also constituted a violation of Section 5(a) of the FTC Act.
The court found injunctive relief warranted as well as restitution and disgorgement of LOA’s gross revenues from the deceptively advertised products, and requested the FTC to submit a proposed judgment for the court to consider.
The monetary penalty for LOA could be quite severe. According to the court’s decision, the company’s total gross sales for all of its LED lamps that it falsely and deceptively advertised through April 2011 equals $21,165,863.47.