By Okram (Own work) [CC BY-SA 3.0], via Wikimedia Commons
A recent NAD decision provided an opportunity for NAD to once again opine on the standard for performance-related “up to” claims – this time related to energy efficiency.  As even infrequent readers of the blog are aware, this is a popular topic and one we’re prepared to talk about more often than Disney releases a Star Wars movie.

In this case, the North American Insulation Manufacturers Association (NAIMA) challenged several claims that Applegate made about its cellulose insulation.  Among other things, NAIMA challenged Applegate’s energy savings claims. Although the FTC in a similar case involving window energy efficiency claims applied a strict standard — that the majority of consumers using the product under ordinary operating conditions achieve the maximum touted results —  the NAD in response said it would not vary from its standard of an “appreciable number” of consumers achieving the touted results.  This case arguably put that pronouncement to the test as it involved claims virtually identical to those addressed by the FTC.  Nevertheless, NAD stuck to its guns and applied the “appreciable number” test, which raises the possibility that an advertiser, particularly one advertising energy savings claims might satisfy the NAD but still face FTC regulatory scrutiny.

In this case, however, the NAD still shot down the energy savings claim because the evidence didn’t support that the claims held true for an appreciable number of consumers.  The NAD determined the evidence was faulty because it was based on old tests, which did not use the products referenced, reflect changes in the industry since that time, or account for geographical differences.

And for those of you who were excited about renovating your garage to add soundproof insulation, bad news on that front too.  NAIMA also challenged Applegate’s claims that its insulation is made with non-toxic materials, provides more R-value per inch, and performs better acoustically.  The NAD recommended discontinuing the non-toxic and soundproof claims but determined Applegate met the exception for R-value per inch.

But wait, NAIMA? NAIMA!  Do they even go here?  It’s unusual for a trade association to make challenges, but any person or legal entity can submit a complaint to the NAD and it’s obviously not a bad way to engage in some cost-sharing providing the association can reach consensus.

*John Ferry is a Venable summer associate and not admitted to practice law.