Lowe’s entered into a settlement in Northern California agreed to pay a $1.6 million due to a lawsuit alleging the inaccurate description of dimensional building products. Since the settlement was announced there has been questions concerning what our members need to do to make sure they are not sued for the same issue.
NRLA had the law firm of Bernstein Shur analyze the judge’s order on the settlement, the implications for retailers, and what it means for our members going forward.
If Lowe’s complies with the standards referenced above, and labels the product dimensions according to those conventions, there should be no violation of the Judgment. But, again, there is no guarantee that any jurisdiction will honor those exemptions. The Voluntary Product Standards are just that—voluntary—but compliance with those standards and labeling those products accordingly greatly reduces exposure. On the other hand, manufacturers, wholesalers, and retailers can further reduce exposure by always including actual dimensions even when products are labeled using nominal dimensions or manufacturers’ dimensional descriptions (remember, when Lowe’s uses popular or common labeling it already has to accompany such sales with actual dimensions).
The Judgment may strike many in the building products industry as extreme and devoid of common sense, but right or wrong, it has changed the conversation. The heart of the Judgment is that it is not a defense for a consumer products seller to claim “Everyone knows that ‘X’ Product does not really mean ‘X’ Product.”
All of the NRLA states have adopted the Uniform Deceptive Trade Practices Act, or equivalent statutes, which generally prohibit misleading descriptions of the characteristics or quantities of products. Even though many jurisdictions may end up rejecting the reasoning reflected in the Judgment, the cautious seller will take every reasonable opportunity to inform the consumer whenever there is an arguable gap between the labeling, packaging, and advertising of a product and the true characteristics of that product.
It should be noted that as more information has come to light this was not an issue of a single item or a single instance where Lowe’s was found to have dimensional lumber that was below accepted standards. The suit was not just because a 2×4 isn’t actually a 2×4 (nominal name), but because the dimensional lumber being sold was below standards repeatedly. The suit was filed under “misleading or deceptive practices” because the materials being sold were not acceptable for industry standards, not just because the nominal name did not match the true dimensions.
Below is the memo. We hope that this help answers questions that our members have. If you have any further questions, please contact me at either 518.880.6376 or firstname.lastname@example.org.