Home Depot and Whirlpool Face Class Action for "Fraudulent" Energy Star Appliance

        A lawsuit was filed on Friday in the United States District Court for the Northern District of Ohio on behalf of nationwide and Ohio-only classes of consumers who purchased three models of Maytag Centennial washing machines whose ENERGY STAR status was later revoked. 

          The plaintiffs allege that Whirlpool and Home Depot are in violation of Ohio’s Consumer Sales Practices Act, Ohio’s Deceptive Trade Practices Act, unjust enrichment under Ohio law, Ohio common law fraud, and breach of contract because they paid more up front for an energy efficient appliance which turned out not to be energy efficient.  The complaint is available here.      

           In November 2009, Adam Savett purchased a Maytag Centennial washing machine from a Home Depot retail store in Ohio. The machine he chose bore the now-familiar ENERGY STAR label, which is issued under a program jointly administered by the Environmental Protection Agency and the Department of Energy. While ENERGY STAR-qualified washing machines typically demand higher retail prices than standard models, consumers are projected to come out ahead due to the long-term operating savings that result from the more efficient use of both water and energy. 

            However, less than 10 months after Savett purchased his machine, an independent laboratory completed a DOE efficiency test of that model, revealing that the unit did not meet ENERGY STAR standards. In order to qualify for the ENERGY STAR label, the Maytag machine would have had to have been at least 37% more energy efficient than the minimum energy efficiency standards mandated by law.

            Now, Whirlpool Corporation, which acquired Maytag in 2006 and continues to sell appliances under the Maytag name, and Home Depot, are facing a nationwide class action lawsuit for fraud.

           Many green legal prognosticators, including me, anticipated that a suit of this type would be forthcoming.  The increased interest in green and energy efficiency has also led to a rise in "greenwashing"--making claims of environmental friendliness or energy efficiency simply for marketing purposes.  This suit echoes the allegations in Henry Gifford's ill-fated lawsuit against the United States Green Building Council that their buildings were not as energy efficient as promised. 

         It remains to be seen whether actual fraud, which requires the intent to deceive, was committed in this case.  Nonetheless, it is significant that this type of suit has been filed. 

More analysis to come….

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Lloyd Alter - June 2, 2012 3:12 PM

" This suit echoes the allegations in Henry Gifford's ill-fated lawsuit against the United States Green Building Council that their buildings were not as energy efficient as promised. "

Does it? USGBC never actually promised their buildings were more energy efficient. Energy Star, on the other hand, did, but without requiring third party verification.

SHARI SHAPIRO RESPONSE: Interesting point, Lloyd. I am not sure it is that clear cut. For example, in a Powerpoint presentation on the USGBC website for LEED for Homes, it "defines a green home" as one that is "energy efficient."

The Powerpoint is available here http://www.usgbc.org/DisplayPage.aspx?CMSPageID=1720

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