LG Must Remove 40K Energy Star Labels

(CN) - LG Electronics must remove the Energy Star labels from 40,000 refrigerator-freezers that don't meet federal efficiency standards, a judge in Washington, D.C., ruled.

U.S. District Judge John Bates said the Department of Energy's decision was consistent with the Energy Star government licensing program, which allows companies to label products that are 20 percent or more energy-efficient than federal minimum standards.

Bates denied LG's motion for a preliminary injunction allowing it to keep the labels.

The dispute arose after the government sent LG a letter on Nov. 10, 2009, stating that their 2008 agreement allowing LG to shut off two heaters during testing of their French door refrigerator-freezer units "has given LG an unintended advantage in the marketplace and [has] resulted in significant underreporting of the energy consumption of LG models to both DOE and consumers."

The exemption was only valid under the agreement and was not an industry-wide decision that required a notice-and-comment period in order to revoke it, Bates ruled.

LG had argued that the DOE's order was an impermissible retroactive agency action, because the refrigerator-freezer models were subject to the 2008 agreement. It also argued that the agency had stripped it of constitutionally protected property and liberty interests without due process.

Bates ruled that even if LG has a proven property interest in the Energy Star labels, it can sue only after a deprivation of that interest -- in this case, after the labels have been removed.

The judge also rejected LG's claim that its "stigmatizing suspension" from the Energy Star program would damage the company's reputation and business.

Bates pointed out that LG was not being excluded from the program. The decision applied to a select number of refrigerator-freezers within one product line, he noted, and LG can apply the Energy Star label on new models beginning Wednesday.

He said the reputational harm will be "relatively trivial," given LG's worldwide product lines, including cell phones and TVs.

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