A light bulb burns out. The shelves of your local Lowe’s or Home Depot are stocked with replacements. Some are LEDs (light-emitting diodes). Others are CFLs (compact fluorescent lamp). Some promise “long life.” Others boast “duallife.” What is a consumer to do?
In 2007, Congress passed the Energy Independence and Security Act of 2007 (“EISA”) to make the trip to the home improvement store simpler. The Federal Trade Commission (“FTC”) promulgated regulations under EISA. The FTC rule demands that light bulb manufacturers provide consumers information concerning a bulb’s energy use in a “lighting facts” panel. The panel must contain information concerning the bulb’s brightness, estimated annual energy cost, life, appearance, and energy use. See 16 C.F.R. § 305.15(b)(3)(i)-(ix). This detailed panel must be displayed on the “side or rear display panel of the box.” § 305.15(b)(3). By contrast, a light bulb manufacturer only has to show the brightness (in lumens) and the estimated annual energy costs of running the light on the “principal display panel”—the front of the light bulb box. § 305.15(b)(1)(i)-(ii).
EISA does not define promotional phrases like “long life” or “duallife.” Neither did the FTC in its rulemaking. All the FTC rule requires is that “the assumptions” underlying “any representation” on a light bulb package “regarding the cost of operation or life of such lamp” be “clearly and conspicuously disclose[d].” § 305.15(d)(6). The practical result is that an incandescent light manufacturer can make claims like “long life” and “energy-efficient” on the front of the box while burying detail on the life of the bulb on the back of the package in the lighting facts panel.
Consider the competitive situation this puts LED light bulb manufacturers like Cree in. Cree’s LED bulbs use “84 percent less energy than incandescents and last 25 times longer.” Home Depot sells Cree’s 40 watt replacement bulbs for $10.97 per bulb. Home Depot sells a four-pack of GE’s soft white “long life” incandescent bulbs for $1.97. A consumer not concerned solely with price might be assuaged by the “long life” claim on the front of the package and reach for the cheaper bulbs.
Historically, a party in Cree’s position did not have much recourse against this kind of competition. It could simply wait for the FTC to take action. Courts would have seen a false advertising claim premised on section 43(a) of the Lanham Act as an attempt to circumvent the market-policing function of the FTC.
These were the same kind of challenges raised against POM Wonderful’s false advertising claim in POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228 (2014). In that case, POM Wonderful sued Coca-Cola for false advertising, alleging Coca-Cola’s 0.5% “pomegranate blueberry” beverage was misappropriating POM’s market for its 100% pomegranate blueberry juice. The lower courts told POM to take its complaint before the Food and Drug Administration.
This past June, the Supreme Court unanimously reversed and reinstated POM’s false advertising claim, opening the door wider for Lanham Act challenges to product labels in regulated industries. POM Wonderful dealt with the interplay of the Federal Food, Drug, and Cosmetic Act, but the decision’s logic can be extended to other regulatory regimes, including the one Congress created for light bulb labels in EISA.