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Energy Star Program Integrity Act Aims to Prevent Litigation

Whirlpool Corp. took action and successfully made its case to U.S. Representatives Bob Latta (R-OH) and Peter Welch (D-VT) that a manufacturer of Energy Star products is entitled to protection from private claims or rights of action under state or federal law relating to liability arising out of the disqualification of a product from Energy Star. As a result, Latta-Welch introduced HR 4856, the Energy Star Program Integrity Act.

The bill seeks to eliminate the creation of an express or implied warranty by a product’s participation in Energy Star and to pre-empt private claims under state and federal law, but only if:the product has been disqualified from Energy Star; the administrator of Energy Star has approved corrective measures including whether consumer compensation is appropriate; and the manufacturer has complied with the corrective measures.

This hardly represents a “get out of jail free” card. The manufacturer still suffers the loss of goodwill from notice to consumers, is subjected to administrative and compensatory penalties, and likely is put at the top of the list for further product investigation.

SELF DISCLOSURE

The package created by the seemingly unique contours of the Bill does a couple of other things well. The prospect of immunity from private litigation, of course, provides a benefit (making the best of a bad situation), but that benefit would promote self-reporting by manufacturers of Energy Star products.

Manufacturers often test as a quality control measure and may otherwise often be first to know of a problem. If an issue with materials, manufacturing consistency or a simple mistake puts product compliance in question, we want a manufacturer to come forward and pursue an administrative remedy, which may include disqualification of affected products from Energy Star.

In the same process, the manufacturer would seek the determination and approval of corrective measures, including a determination of any level of required consumer compensation. Disclosure, correction and compensation are all items that the system should encourage. The proposed structure provides for an efficient avenue for consumer relief, without millions of dollars in litigation costs.

Moreover, the relief afforded serves to maintain the current high level of manufacturer participation in the Energy Star program itself. The threat of widespread litigation arising out of Energy

Star participation creates a real disincentive.

PROGRAM STILL VIABLE

The Energy Star program has driven, if not led, innovation with regard to the efficiency of many products that necessarily involve energy consumption. Energy Star can and should remain a viable element in the marketplace. In 2008, I recognized and wrote on the subject of preemption of private claims based upon technical violations of Energy Star criteria. While my thinking then was not as refined as the Whirlpool approach, the basic factors involved have changed little.

After its introduction by Latta-Welch, House Bill 4856 was referred to the House Committee on Energy and Commerce. The remainder of this year will likely be filled with movement by interested parties. Those who advocate consumers’ rights for a living are already loudly vocal.

Let’s remember the wisdom of Einstein’s simple truism: “Nothing can happen until something moves.” If you are involved with Energy Star products, you should evaluate these issues and move to contact your own representative.
 

Author

Paul Gary

Paul Gary

Paul R. Gary is the prinicipal of The Gary Law Group, a law firm based in Portland, Ore., emphasizing legal issues facing manufacturers of windows and doors. He welcomes feedback about articles published in Window & Door and can be reached at 503/227-8424 or paul@prgarylaw.com.