Facts

The Federal Trade Commission filed a complaint against defendants Lights of America Inc. (LOA), Usman Vakil, and Farooq Vakil alleging violations of the Federal Trade Commission Act related to the company's light emitting diode (LED) lamps. The FTC sought equitable monetary relief, a permanent injunction, and other relief against all defendants. The parties then filed cross-motions for summary judgment. A bench trial was held from October 30 to Nov. 2, 2012.

Individual defendants, Usman Vakil and Farooq Vakil, filed a motion to dismiss the complaint.

PLAINTIFF'S CONTENTIONS:
Plaintiff contended that the defendants violated Section 5 of the Act by marketing and selling their LED lamps with false and unsubstantiated claims regarding the LED lamps' light output and lifetimes.

Specifically, defendants sold their LED lamps with claims stating a particular LED lamp "replaces" a certain wattage lamp (ranging from 20 to 45 watts) and would last a stated number of hours (e.g. 30,000 hours).

Result

On summary judgment, U.S. District Judge James V. Selna ruled that defendants made unsubstantiated light output claims (i.e. the replaces watts claims) in violation of Section 5 of the Act. After the bench trial, the judge ruled that defendants' light output claims were false, and that defendants' lifetime claims were both unsubstantiated and false, in violation of Section 5 of the Act. As a result, the judge held that a permanent injunction against all defendants was warranted. In addition, the judge awarded plaintiff equitable monetary relief and held LOA and both individual defendants jointly and severally liable for $21,165,863 in consumer harm and/or disgorgement.