July 12, 2013

Agencies Step Up ENERGY STAR Enforcement

Consumer Advertising Law Blog,

The ENERGY STAR program generally has been a boon rather than a burden to manufacturers, who have placed the blue ENERGY STAR symbol on more than 4.5 billion products since 1993. Recently, however, stepped-up enforcement actions by EPA and the Department of Energy (DOE) have begun to pose risks for those who make and sell ENERGY STAR products.

After suffering criticism that its standards had grown to lax, the ENERGY STAR program in 2010 began requiring third-party testing prior to certifying products as ENERGY STAR qualified. The program also has begun testing products available from retailers to ensure compliance with standards. According to EPA, 10% of unique models may be tested for compliance annually. Models that fail tests may be lose their ENERGY STARstatus.

Recent data show that the impact of stepped-up enforcement is beginning to hit home. In 2012, EPA disqualified 286 product models, compared to 241 in 2011. As of July 1, EPA has disqualified 191 ENERGY STAR models in 2013 -- suggesting that the agency may be on track to disqualify a greater number of models this year.

As discussed in Arnold & Porter's advisory, disqualification can be costly for many reasons, including EPA requirements that the manufacturer remove a disqualified product from the marketplace, possible consumer lawsuits, the potential for trademark-based enforcement, and reputational costs. Because costs can be substantial -- and because ENERGY STAR enforcement tends to be unusually fast-moving -- manufacturers and distributors of ENERGY STAR products may want to develop enforcement response plans and to monitor current trends in enforcement -- as well as to consider adopting internal controls aimed at reducing the risk of non-compliance.

© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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