Following its March 2022 order granting the Federal Trade Commission's motion for summary judgment, the U.S. District Court for the Middle District of Florida has ordered SPM Thermo-Shield, Inc. to permanently halt deceptive claims about its products' insulation and energy-saving capabilities.
The FTC's complaint against SPM Thermo-Shield and two of its officers alleged (i) false and unsubstantiated performance claims, (ii) false establishment of R-values (a product's "R-value" is the measure of its resistance to heat flow; the higher the R-value, the greater the product's insulating effectiveness), and (iii) that defendants furnished resellers with promotional materials that made false or misleading representations. The FTC brought the case back in August 2020.
Defendants allegedly violated the FTC Act by misrepresenting that their Thermo-Shield Coatings products have specified R-values (R-20, R-21, R-22, and R-40) when applied as instructed and that using the products would save consumers money, including up to 50% on heating and cooling costs. According to the FTC, these products do not significantly restrict heat flow, let alone to the extent claimed by defendants, and do not provide the advertised energy savings. Indeed, the FTC asserts that the R-value of Thermo-Shield Coatings when applied as instructed is less than one.
Although defendants admitted that the challenged R-value claims were false and stated that they had been removed from marketing materials, the court found that the claims did, in fact, reappear after the lawsuit was filed. The court's order permanently prohibits the defendants from:
- Misrepresenting the R-value of any architectural coating product or its ability to provide energy savings;
- Making unsubstantiated claims that any architectural coating product is equivalent to, or substantially similar to, the R-value of any other product or system;
- Claiming that any architectural coating product will provide energy savings without disclosing that such savings vary according to several factors, including location, climate, building type, and level of construction; and
- Providing to others the "means and instrumentalities" with which to make such misleading R-value or energy-savings claims.
This case underscores the importance of substantiating any energy-savings claims with competent and reliable scientific evidence, particularly in the current climate, as energy prices are rising. "We know consumers are concerned about rising energy costs," said Samuel Levine, Director of the FTC's Bureau of Consumer Protection. "In this environment, it's more critical than ever that sellers be honest about energy efficiency claims—and we are poised to hold them accountable when they are not."
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.
