Energy Labeling of a Household Appliance

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In a nationwide class action, the manufacturer’s counsel retained Cornerstone Research and an academic expert to respond to the damages analyses and a survey submitted by the plaintiffs’ experts.

In a nationwide class action against a leading household appliance manufacturer, the plaintiffs alleged that one of the defendant’s models was labeled with an ENERGY STAR logo even though it did not meet the required standards. The plaintiffs claimed that they had higher energy costs than advertised and paid a price premium for the logo.

In rebutting the damages analyses, Professor Hitt showed that the plaintiffs’ experts failed to account for individual differences.

Defense counsel retained Cornerstone Research and Professor Lorin Hitt of the University of Pennsylvania, to evaluate whether the economic effect of the ENERGY STAR logo could be assessed through a common method across all class members. Specifically, he responded to the plaintiffs’ damages analyses and their survey on consumers’ willingness to pay for the logo.

In rebutting the damages analyses, Professor Hitt showed that the plaintiffs’ experts failed to account for individual differences in the meaning and understanding of the ENERGY STAR logo, such as preferences for a more energy efficient product or appliance usage. Therefore, individual inquiry would be necessary to assess damages, if any, of the alleged mislabeling.

Professor Hitt also pointed out several flaws in the design and execution of the opposing side’s survey that rendered inflated and unreliable results. The case settled.


For additional information on this case, please contact Samid Hussain.

Case Expert

Lorin M. Hitt

Zhang Jindong Professor of Operations, Information, and Decisions,
The Wharton School, University of Pennsylvania;
Senior Advisor, Cornerstone Research