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….

Say It With Me Now--"GREENBASHING"

By now, everyone has heard of "greenwashing"--a term used to describe the practice of companies disingenuously spinning their products and policies as environmentally friendly.  The new wave of anti-environmental action is more devious, and potentially more destructive.  I choose to term it "greenbashing." 

What is greenbashing? The use of seemingly reasonable arguments about catastrophic costs or unforeseen dangers to undermine progressive environmental programs.  There have been lots of examples of greenbashing lately.  Here are a few choice examples:

1.  Green roofs may spontaneously combust.  In challenging Toronto's recent mandatory green roof by-law, Don Marks, executive director of the Ontario Industrial Roofing Contractors Association, warns that

“I don’t believe that the insurance industry has caught up with the increased risk of fire that may result from improperly maintained green roofs...”

According to engineer Rob Diemer, partner with AKF Engineering, this threat does not comport with reality:

This is a new technology and the codes, insurance companies, underwriters and testing agencies are just now catching up. From what I have seen, we should see code language and testing protocols dealing with wind uplift and fire hazard for green roofing in the near future. In the mean time I think the fire hazards are minimal and depend a lot on the type of roof and plants used.


On an extensive roof using shallow, lightweight, mineral based growing medium and sedum plants, there is probably little or no fire hazard. Even if the plants should die due to a prolonged drought, the fuel load of the dead plants is minimal and it is likely that any fire would rapidly consume the plants and die out before damaging the building structure. Intensive roofs using deeper growing medium and larger plants may provide a larger potential fuel base; however, most of these roofs need to be irrigated which would tend to mitigate the fire hazard due to drought induced plant death. As with all things in life there are no guarantees; however, it would appear that the potential fire hazard of green roofs is more than outweighed by the many positive benefits they provide.

2. A national energy efficiency code will catastrophically increase housing prices.  The National Association of Home Builders issued a press release on June 29 regarding the national energy efficiency provisions of Waxman-Markey that Chris Cheatham and I discussed here in our Green Building Guide to Waxman-Markey.  According to the NAHB, requiring increased energy efficiency will have catastrophic effects on affordable housing:

The market is not geared up to supply the necessary materials and equipment, and that's going to drive up costs. The result will be fewer working-class families in these new energy-efficient homes. They'll be relegated to older, less efficient housing stock and face ever higher utility bills.

In addition, a national energy efficiency code would apparently impede regional sustainability considerations: 

Usurping states' rights to determine appropriate building efficiency for homes and buildings within their jurisdiction would result in ineffective application of efficiency standards to address varying climate zones and specific needs, he added.

The reality of the situation is, of course, that builders benefit from lack of regulation. Currently,  thirteen states have no statewide commercial building codes, and fourteen states have no statewide residential building code.  A national energy efficiency building code would impose regulations where none existed before, or more stringent regulations in jurisdictions with lagging codes.  The result might be higher costs of construction--but of course lower cost of ownership of homes in the long term.  

3.  A National Energy Efficiency building code will require huge new federal bureaucracy.  Our friends over at Sullivan Kreiss  reprinted a letter that the International Council of Shopping Centers sent to its members warning of the dangers of a national energy efficiency building code: 

The cost and complexity of this federal takeover of state and local building codes forced ICSC to oppose the overall bill. The specific efficiency targets are too aggressive and the deadlines are too short. In addition, there is no trained inspection force to oversee a national building code, so it will require the federal government to retrain state employees and, no doubt, hire a huge number of new inspectors. Supporters of this new federal program simply refused to negotiate or compromise on the language. As a result, ICSC does not support this provision.

Of course, the way that Section 201 is written, building codes will be drafted and implemented by code councils and the states/local governments in the same way they are now, unless those entities fail to develop codes that meet the Waxman-Markey efficiency standards.  Also, the ICSC letter fails to identify how retraining code official in energy efficiency and creating additional green jobs enforcing an energy efficiency code would be a bad thing.  

Greenbashing would be a rational approach to protect vested interests if there was vested interest to protect.  However, according to the Census Bureau, new housing starts in May were down over 45% from 2008 and shopping centers are being decimated as well.  Instead, these groups could embrace sustainable programs to create new demand for their products, and to help the climate crisis which will effect us all.