It seems that we all just can’t get enough of “up to.” Earlier this week the FTC sent letters to 15 window or window glass manufacturers notifying them that the Commission recently settled allegedly misleading “up to” energy savings claims for windows and that a staff review of their website found similar claims that may or may not be misleading. The companies were asked to review their marketing materials and identify for the staff any claims they intend to remove or revise and when they intend to do so.
There are a number of things we thought were worth mentioning about this. First, the letters reiterate the FTC’s findings that “up to” energy savings claims for windows are deceptive unless they specify an “up to” savings that all or almost all consumers are likely to get. (Click here to read our prior blog post on this topic.)
Second, at least one letter was sent to a company that makes glass for windows but does not sell window products directly to consumers. The FTC warned the company that a number of window marketers were linking to or repeating energy savings claims that it was making on its own website. The FTC also reminded companies in all of its letters that they can be liable for misleading claims they make directly to dealers and retailers and not just to consumers. And that, additionally, these types of claims are sometimes passed on by dealer or retailers to consumers. This serves as a good reminder that although the FTC most often deals with claims made directly to consumers, the agency views its reach as extending more broadly.
And just like dessert, we’ve saved the potential good news for last. 15 USC 45 (m)(1)(B) provides that if the Commission issues a final cease and desist order (other than a consent order) against an act or practice, then the FTC can seek civil penalties against any company that engages in such act or practice with actual knowledge that it is unfair or deceptive even if the company was not a party to the order. In the past, the Commission has sometimes used recent consent orders to remind potentially similarly situated companies of their responsibilities under Section 5 and has referenced other litigated orders for the express purpose of putting the letter recipients on notice under 45 (m)(1)(B) that their failure to comply could subject the company to civil penalties. (click here to see an example.) No such language appears in these most recent letters, perhaps because the Commission felt that it had no relevant litigated cease and desist orders. While there is little case law on this subject, at least one appellate court has held that any cited orders must involve an act or practice that is closely analogous to the act or practice for which civil penalties are being sought. Thankfully we are not aware of any decisions holding that reading a blog on a subject satisfies the “actual knowledge” requirement.
So as we have cautioned before, it may be worth taking a second look to see what your marketing department might be “up to.”