False labeling class actions are often mired in debates about how a reasonable consumer would understand a product’s label. In many cases, the fight is centered on what third-party certification marks warrant to reasonable consumers. In Dzielak v. Whirlpool Corporation, — F.4th —, No. 20-2551, 2023 WL 6331102 (3rd Cir. Sept. 29, 2023), the Third Circuit articulated powerful arguments against finding that these marks create broad warranties.
Dzielak concerned the rules and regulations surrounding the EPA’s “Energy Star Program,” a voluntary labeling program administered by the Department of Energy that is designed to promote energy-efficient products to consumers. Under the program, products—such as clothes washers—that pass efficiency tests created by the DOE are eligible to display the “Energy Star” logo, a registered mark owned by the EPA.
Starting in April 2009, Whirlpool sold three clothes washers that were permitted to display the Energy Star logo. In July 2010, however, the DOE issued new guidance on how to measure compliance with its efficiency standards. Whirlpool’s washers underwent months-long recertification testing under the new method, but they were unable to meet the DOE’s standards. The DOE permitted Whirlpool to continue to use the Energy Star logo until February 2011, but Whirlpool instead chose to discontinue its three washers.
In 2012, purchasers of the three models filed a class action lawsuit against Whirlpool and several retailers for violating state consumer-protection statutes and breaching various warranties. The plaintiffs alleged that Whirlpool’s use of the Energy Star logo misled them into believing that the washers satisfied the Energy Star Program’s standards under the July 2010 testing method.
On appeal, the Third Circuit grappled with what type of warranty the Energy Star logo creates. Without formally deciding, the Court favored the narrowest theory: the use of the logo indicated only that the EPA and the DOE authorized Whirlpool to use the mark. The Court was skeptical that the logo warranted that the washers met the DOE’s standards under a specific testing method because nothing in the record suggested that ordinary consumers possessed a deep technical understanding of the DOE’s test procedures. The Court was likewise unconvinced that the logo told consumers that the washers were more energy efficient than most items sold in the same category, as that reading would render authorized users of a certification mark liable for the mark owner’s wrongful approval, contravening federal trademark law.
Ultimately, the Court did not decide which theory to adopt because all three supported the denial of the plaintiffs’ claims. Whirlpool was authorized to use the Energy Star mark for the entire life of the washers, the washers were in fact more energy efficient than most items sold in the same category, and the DOE did not formally complete recertification testing until after Whirlpool discontinued the three models.
Although the Third Circuit did not formally decide which warranty theory to adopt, Dzielak provides powerful arguments against broad warranty theories based on third party certification. Defendants facing similar claims should therefore strongly consider raising these arguments.