Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 1 of 28 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF KANSAS 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

v. Case No. 2:20-cv-02366-HLT 

SUPERIOR PRODUCTS INTERNATIONAL 

II, INC., and JOSEPH E. PRITCHETT, 

Defendants. 

MEMORANDUM AND ORDER 

Plaintiff Federal Trade Commission brings this enforcement action against Defendants 

Superior Product International II, Inc. (“SPI”) and its president and CEO Joseph E. Pritchett. 

Defendants market and sell Super Therm® and Sunshield. Defendants claim these products provide 

energy efficiencies when applied like paint to businesses and homes by resisting heat flow and 

blocking heat gain. Plaintiff alleges Defendants marketed these products with deceptive R-value 

and energy-saving claims that violate the Federal Trade Commission Act (“FTC Act”).

1 

Plaintiff seeks summary judgment and contends that injunctive and monetary relief are 

warranted. Doc. 130. Defendants largely do not contest liability and concede some form of 

injunctive relief is appropriate. But Defendants challenge the scope of injunctive relief and seek 

summary judgment in their favor on the unavailability of monetary relief. Doc. 127. The Court 

finds that Defendants are liable, that Defendants owe $14,182.95 in monetary damages, and that a 

modified and narrowed injunction will issue.

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1 The relevant provisions of the FTC Act are Sections 5(a) (15 U.S.C. § 45(a)); 13(b) (15 U.S.C. § 53(b)); and 19 

(15 U.S.C. § 57b(b)). Also at issue is a provision of an FTC Rule, the “R-value Rule,” which is 16 C.F.R. § 460.22. 

2 Defendants request oral argument on page 129 of their 130-page response to Plaintiff’s summary judgment motion. 

This approach is certainly not the best way to catch the Court’s attention and gain the opportunity to expand on an

already-profuse written record. Regardless, the Court finds that the issues can be more efficiently and effectively 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 2 of 28 

I. BACKGROUND3 

A. Defendants’ Products and Marketing

Pritchett developed the first formulation of Super Therm® around 1990. Defendants 

describe Super Therm® as “a water-borne combination of high-performance aliphatic acrylics, 

urethanes, and resin additives which produces a tough, yet flexible coating film” and note it 

“contains 4 unique ceramics to block heat gain into the surface upon which the coating film is 

applied.” Doc. 90-2 at 1. SPI has at times described Super Therm® as a “white paint” that is

“thicker and heav[ier] than traditional white paint because of the resin system and ceramics.” Doc. 

132-28 at 57. But Defendants distinguish Super Therm® from white paint in its energy-saving 

performance. 

Defendants describe Sunshield as “a water-borne combination of [a] high-performance duo 

of elastomeric acrylics and resin additives, which produces a tough, yet flexible coating film” and 

“combines four different ceramics that provide both heat reflectivity and heat-blocking 

properties.” Id. at 86. A technical data sheet included with product shipments lists Sunshield’s first 

typical use as: “a one-coat roofing insulation system on exteriors to block the migration of Solar 

Heat gain.” Id. Defendants herald Sunshield as a “[c]ost-efficient alternative with similar 

performance characteristics to Super Therm.” Doc. 132-26 at 52. 

SPI often told customers that Sunshield is primarily for home/residential projects and that 

Super Therm® “is primarily designed for use in industrial and harsh environments where maximum 

resolved based on the briefing, which the Court closely reviewed, and that oral argument at this time is neither 

helpful nor necessary. Defendants’ request for oral argument is denied.

The Court considers the following uncontroverted facts for purposes of summary judgment. This recitation of facts 

is a significantly pared-down version of the uncontroverted facts propounded by the parties (494 facts relating to 

Plaintiff’s motion alone). The Court reviewed all the proposed facts and the responses and considered them in 

forming its understanding of the case. But for clarity and readership, the Court does not recount all of them here. 

To the extent facts are not specifically identified here, the Court assures the parties it has used the uncontroverted 

facts to resolve these motions. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 3 of 28 

performance and durability are critical.”4 See, e.g., Doc. 141-22 at 2, 4, 7, 9, 12, and 15. A 

distributor distinguished Sunshield as a “residential (do it yourself) version of [SPI’s] Super Therm

(industrial version).” Doc. 132-28 at 90. But if customers asked about a coating for an unclear 

purpose, SPI offered to sell them either Super Therm® or Sunshield. And there are many instances 

where advertising materials showed Super Therm® applied to homes or where Super Therm® was 

used on residences instead of (or in addition to) commercial and industrial properties. 

Defendants maintain authority to control marketing of Super Therm® and Sunshield, 

including through SPI’s distributors. Distributors sign agreements that require them to adhere to 

SPI’s policies, programs, instructions, and directions. SPI markets Super Therm® in about 40 

countries through its network of distributors. SPI makes more than 90% of its sales of Super 

Therm® and Sunshield through its authorized distributors. 

B. Defendants’ False, Misleading, and Unsubstantiated Claims 

Plaintiff alleges that Defendants repeatedly misrepresented to distributors and customers 

the characteristics and efficacy of the Super Therm® and Sunshield products to increase demand 

and make sales. Some of these misrepresentations were simply inaccurate or false. Others may 

contain truth but were presented in a misleading or incomplete way (i.e., without qualification). 

Others may or may not be true, but Defendants lacked substantiation to prove their accuracy. All 

three types of misinformation are actionable under the FTC Act. 

The Court often describes the actions of Defendants, customers, and distributors in the past tense. Defendants 

continue to sell Super Therm® and Sunshield, so many of these actions and descriptions are ongoing; the Court 

describes them in the past tense (sometimes with a date, sometimes not) when the record indicates an event or 

words that were used in materials or on a specific occasion. The Court clarifies if activity is ongoing when it 

matters for purposes of the relief requested in this case. 

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Tempera ture of c oa tings a nd othe r materials in s unlight 

THERMAL STUDY 

JUAYMAH NGL SPHEROID TANKS 

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SUPER THERM9 IN USE TODAY 

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Osaka, Japan 

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purrxhrmicals 

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applicatUm, 42"C apn, completion 

PROVEN ENERGY 

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Surface Temperal\Jre 

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U.S. Department of Energy 

• Surface conduction related 

to energy loads was reduced 

46-52" 

■ Ezterior surface temperature 

4 7T degrees cooler 

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U.S. Department of Energy 

• Super Therm• out-performed 

white paint 

■ 26" - 30" mcrease 

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INDUSTRY COMPLIANT 

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• U.S. Green Building Certified 

• MASDAR certifu:auon 

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• Class "A~ Fire Ratm g 

■ DNV and ABS Approved 

■ USDA Approved 

Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 4 of 28 

Plaintiff challenges two categories of Defendants’ marketing claims for these products: (1): 

the products’ energy savings claims, and (2) the products’ “R-value”5 or R-value equivalent claims 

before and after May 13, 2020. 

1. Energy Savings Claims 

One repeated error Defendants made over the years is to claim energy savings without 

qualification. For example, a Super Therm® brochure that Defendants used from 2015 to 2021 

claimed without qualification that use of Super Therm® “combat[s] high energy costs,” results in 

energy “savings,” and brings about “cost-saving” and “long-term energy efficiencies.” Doc. 90-5 

at 2-5. The brochure then lists various uses without qualification or discussion. See, e.g., id. at 4. 

Another example for Super Therm® is that Defendants included technical data sheets with 

Super Therm® purchases from 2015 to October 2019 representing that Super Therm® “resists 95%

An “R-value” is a number quantifying a material’s ability to resist heat flow. See 16 C.F.R. § 460.5. The larger the 

number, the more a product resists heat flow. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 5 of 28 

of Solar heat blocking Visual Light, Ultra Violet (UV) and Infrared (IR).” Doc. 90-2. And 

NEOTech, one of SPI’s distributors, claimed that “Super Therm® Insulation Coating blocks 95% 

of heat.” Doc. 132-28 at 329. 

An example of the energy saving claims for Sunshield is Sunshield’s webpage on the 

homedepot.com website, which claimed as recently as March 2022 that Sunshield has “4 unique 

ceramic materials that are designed to block and prevent 95% of solar heat from ever loading” and

“[s]hatters high air conditioning/cooling cost when applied to all roofs and exterior walls.” Doc. 

132-26 at 32 ¶ 119. 

2. R-Value Claims before May 13, 2020 

The actual R-value of Super Therm ® when applied at 10 mils thick is approximately R0.020.6 The actual R-value of Sunshield at the same thickness is approximately R-0.016. But 

Defendants’ marketing claims were different. 

SPI gave marketing materials to distributors for years showing that Super Therm® had an 

R-value equivalent to R-19. Pritchett told SPI employees from the early 2000’s through December

2017 to market Super Therm® as proven in laboratory tests to have an unqualified equivalent R19 R-value. Defendants consistently gave distributors technical data sheets for Super Therm® since 

2004 and every year from 2011 to 2019 that claimed that independent testing shows Super Therm® 

has an unqualified equivalent R-19 R-value. But SPI also claims it began removing references to 

R-values in marketing materials around 2011. And around 2011 (or 2010) it talked with several 

United States distributors about “not using the concepts of R-19, R-value, and R-value equivalency 

to promote and market Super Therm®.” Doc. 141-5 at 40:11-19. 

Defendants recommend Super Therm® be applied at a thickness of “10 mils,” which equates to 0.01 inches once 

dried. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 6 of 28 

SPI and its distributors also advertised on their websites that Sunshield has an R-17 

equivalent rating in October 2016 and May 2019. And in 2019 two of Defendants’ distributors

advertised Sunshield as comparable to Super Therm® in terms of insulation effectiveness and Rrating. 

3. R-Value Claims after May 13, 2020 

Defendants continued making several R-value claims about Super Therm® after May 13, 

2020.

7 Those claims are summarized below. 

• On multiple occasions between May 2020 and May 2021, Defendants responded to 

customer questions about R-value by stating that Super Therm® is an R-19 equivalent 

product. 

• On September 14, 2020, SPI’s employee Timothy Cappel sent a 2017 Super Therm® 

document to a potential customer and an SPI employee. The document stated Super 

Therm® had an R-18.85 equivalent. Cappel did qualify the information by clarifying 

that: “Energy saving benefits from the use of Super Therm® will vary depending upon 

a variety of operational and environmental factors.” Doc. 132-28 at 308. He further 

advised that “[t]herefore, the best strategy is to discuss the significant reduction in heat 

load from solar radiation produced by the use of Super Therm®.” Id. 

• Continuing through at least October 2020, Defendants circulated a document created 

in May 2013 (and revised thereafter) that purports to provide scientific and 

mathematical support for Defendants’ R-18.85 equivalent claim. The document went 

to SPI employees, distributors, and Super Therm® customers and potential customers. 

• SPI continued making R-19 equivalent claims for Super Therm® through at least May 

2021 “because some of [SPI’s] distributors wanted to have this . . . always they want 

this comparison with standard insulation.” Doc. 132-17 at 137:1-138:6. SPI admitted 

in May 2021 it never told its employees to stop using Super Therm® R-19 equivalency 

claims. SPI believed “we had testing, we had letters, and we had equivalency.” Doc. 

132-14 at 224:5-22. 

• In 2020, Pritchett commissioned a 3.5-minute Super Therm® promotional video that 

included a 2-second clip claiming that Super Therm® performs “as effectively as

fiberglass with a R-19 rating as shown by the Hot Box Test.” Doc. 132-26 at 14-15 

¶¶ 56, 57. Plaintiff captured the video on June 8, 2021. 

7 This date is significant to monetary damages because it is the effective date of 16 C.F.R. § 466.22, the FTC Rule 

Plaintiff alleges Defendants violated by making false R-value claims that were not properly supported by approved 

testing. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 7 of 28 

• Plaintiff made several “website captures” after May 13, 2020, about Super Therm® 

being an R-19 equivalent, but many were on the websites of distributors with whom 

Defendants had previously terminated the distributor relationship. 

• SPI did not bar all distributors from claiming Super Therm® is an R-19 equivalent 

before May 2021. 

C. Defendants’ Culpability

Defendants concede they made many claims that were false, unqualified, or 

unsubstantiated. They attempt to justify the claims by citing tests they commissioned or performed, 

letters of validation they possessed, and their lack of control over former distributors. Plaintiff 

regards these arguments as an attempt to raise a “good faith reliance” defense, which is not a valid

defense to liability under the FTC Act. Doc. 144 at 26 n.42 (citing FTC v. Cyberspace.com, LLC, 

453 F.3d 1196, 1202 (9th Cir. 2006); FTC v. Freecom Commc’ns, Inc., 401 F.3d 1192, 1202 (10th 

Cir. 2005); FTC v. Affiliate Strategies, 2010 WL 11407103, at *10 (D. Kan. 2010)). But these facts 

also seem relevant to the scope of an injunction. This is the purpose for which the Court has 

considered these facts. 

1. Defendants’ Knowledge of Falsity

There were many red flags before Plaintiff contacted Defendants in April 2019. These red 

flags arguably alerted or should have alerted Defendants that their R-value claims were untrue. 

These red flags are summarized here. But mixed in with the red flags are resources and apparent 

validations from outside entities (largely from VTEC Laboratories Inc.) that seem, somewhat 

inexplicably, to have given Defendants a foundation for believing they had a valid R-19 claim. It 

is murky, but it seems possible that Defendants’ R-value debacle stems from one inadequate but 

well-meaning test in 1994. Regardless, the record shows that Defendants continued promoting an 

R-19 R-value (or equivalent) after they should have stopped. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 8 of 28 

• 1994: Pritchett conducted an experiment that is referred to as the “Pritchett Light Box

Demo.” In this experiment, he compared Super Therm® and fiberglass insulation using 

three 16-inch boxes. He painted Box 1 inside with Super Therm® . He wrapped Box 2 

in R-19 fiberglass batt insulation. He left Box 3 as a control box. Pritchett turned on a 

light bulb in each box and noted the temperature for 5 minutes. Pritchett testified that 

“some engineers” wanted the test done, so he “followed their instructions.” Doc. 141-

12 at 142:7-12. Plaintiff’s expert Dr. David Yarbrough opined the test does not provide 

meaningful data. It is not the type of standardized testing experts would use to evaluate 

thermal properties. But Dr. Yarbrough did agree that a similar test could indicate 

whether a product has an energy-saving component. 

• January 1997: Thermophysical Properties Research Laboratory Inc. (“TPRL”) tested 

Super Therm® and gave Defendants a report without an R-value. But the report 

included data from which one can calculate the R-value at 10 mils thickness to be 

approximately R-0.0023. 

• March 1997: Defendants possessed a letter purportedly from David L. Taylor, a 

researcher with TPRL, that indicated that he had reviewed the information provided by 

SPI and found Super Therm® resisted heat “as effectively as fiberglass with a R 19

rating as shown by the Hot Box Test.” Doc. 132-29 at 111. The “Hot Box Test” was

the 1994 Pritchett Light Box Demo. 

• January 1, 1998: VTEC wrote a letter at Defendants’ request. The letter (inaccurately)

stated in part: “As stated in the [January 1997] testing report performed at [TPRL] the 

calculated R-value is to be RE-19.” Id. at 113. The January 1997 TPRL report did not 

make this statement. 

• April 1998: VTEC tested Super Therm® and found the combined R-value of the coating 

on a one-half-inch thick gypsum wallboard to be R-0.48 if the combination were 

expanded to be one-inch thick. 

• Early 2000’s: Pritchett promised TPRL that “the [1997 David L. Taylor] letter is gone” 

and that “I will not use it” to market Super Therm® after having a “major disagreement”

with TPRL over the matter. Id. at 112. 

• 2002: Defendants knew from TPRL’s statements that the R-value of Super Therm® at 

10 mils is approximately R-0.002. 

• May 5, 2004: VTEC wrote a letter at Defendants’ request stating that Super Therm® 

“has performed as an insulation when applied to exterior/interior building materials” 

and that “[Super Therm®] can perform as an equivalent R 19 based upon the application 

and test method.” Doc. 132-30 at 7. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 9 of 28 

• 2005: VTEC sent Defendants results of seven tests on Super Therm® by NETZSCH 

Instruments Inc. The tests showed the mean thermal conductivity to be 0.559 w/(mK), 

which is an R-value of approximately R-0.0026 at the thickness of approximately 10 

mils. 

• 2011: The Oak Ridge National Laboratory Building Envelopes Research Team tested 

Super Therm®. Defendants received the testing results on June 20, 2011. The results 

showed the R-value of the coating to be R-0.0030 if applied 20 mils thick. The team 

also stated that considering “the cooling benefits of the high solar reflectivity during 

hot, sunny months and heating penalty during cold months by estimating energy costs 

to heat and cool the building, the energy use costs per roof area for the Super Therm 

roof were slightly less than the reference white roof system” (which was coated in nonceramic white paint). Doc. 132-28 at 83. 

• November 29, 2012: VTEC sent a letter to SPI purporting to summarize the results of 

six tests of Super Therm®. VTEC stated the combined R-value of Super Therm® on a 

1/16-inch stainless steel plate, along with 50 mils of another coating, is R-0.06. 

• May 2, 2013: VTEC wrote a letter to Defendants stating that Super Therm® “has

performed as an insulation when applied to exterior/interior building materials” and 

that “[Super Therm®] can perform as an equivalent R 19 based upon the application 

and test method.” Doc. 132.29 at 165. It is unclear to the Court why (particularly after 

VTEC sent Defendants results inconsistent with this R-value in both 2005 and 2012) 

VTEC would continue to write R-19 letters for Defendants. Defendants represented to 

VTEC that Super Therm® only had minor changes in formula (improvements) since 

the time VTEC wrote its previous letters, so perhaps this was all VTEC needed. 

• November 9, 2017: SPI’s employee Cappel told Pritchett, five SPI employees, and a 

distributor: “We cannot represent in general that Super Therm has an R value 

equivalency of R-19; it does not, and we open ourselves up to serious criticism by 

making such a false statement.” Doc. 132-29 at 69. 

• January/February 2019: VTEC sent Defendants a letter stating, “VTEC Laboratories, 

Inc. has reviewed the ASTM C 1363 test data referenced as qualifying test methods for 

determining thermal properties in ASHRAE 90.1: 2016 and have found the [Super 

Therm®] material can perform as equivalent to R-19 insulation based upon 

application.” Id. at 175. 

• May 3, 2019: SPI wrote to Plaintiff that Super Therm® “cannot have a R-value or a Rvalue equivalency based upon established criteria” and that Super Therm® “does not 

have a R-value or a R-value equivalency.” Id. at 76. 

• September 8, 2021: SPI sent a memo to all distributors stating: “We have disputed and

challenged each of the claims made by [Plaintiff]” in this lawsuit. SPI told distributors 

not to claim Super Therm® or Sunshield (1) “has an R-value or RE-Value”; (2) “is an 

insulation or an insulation coating”; (3) “isintended for use on interior surfaces to block 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 10 of 28 

heat transfer”; or (4) that their “performance compares favorably to any other type of

insulating material.” SPI required distributors to “have a reasonable basis” for energy

savings claims. Doc. 132-26 at 265. 

2. Other Coatings 

Plaintiff is concerned that Defendants will simply market their products under different 

names and falsely represent the characteristics of the products if the Court enjoins Defendants from 

making deceptive claims only about Super Therm® and Sunshield. Plaintiff supports this concern 

by identifying several products Defendants have produced and marketed over the years wherein 

they represent R-values of over 11. The Court does not recount all these products here, as 

Defendants have attached evidence showing the products are no longer produced (or never were). 

Suffice it to say that after reviewing the list of products and the circumstances under which they 

were produced and marketed, the Court finds no inference of a pattern of “bait-switching,” such

as to cause the Court concern that Defendants would try to circumvent the Court’s order by 

renaming and repackaging Super Therm® and Sunshield. 

II. STANDARD 

Summary judgment is appropriate if there is “no genuine dispute as to any material fact 

and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The moving party 

bears the initial burden of establishing the absence of a genuine issue of fact. Celotex Corp. v. 

Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the nonmovant to demonstrate that 

genuine issues remain for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 

586-87 (1986). In applying this standard, courts view the facts and any reasonable inferences in a 

light most favorable to the non-moving party. Henderson v. Inter-Chem Coal Co., 41 F.3d 567, 

569 (10th Cir. 1994). “An issue of material fact is genuine if a reasonable jury could return a

verdict for the nonmoving party.” Id. (internal quotation and citation omitted). 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 11 of 28 

III. ANALYSIS 

There are several statutes and regulations at play in this case. The Court briefly highlights 

the differences here for ease of reference: 

• Sections 5(a) and 13(b) of the FTC Act grant Plaintiff the authority to obtain injunctive 

relief for “unfair or deceptive acts or practices in or affecting commerce.” 15 U.S.C.

§§ 45(a) and 53(b).8 

• Section 19 of the FTC Act gives the FTC rule-enforcement authority by allowing the 

FTC to obtain monetary relief for rule violations. Id. § 57b(b).9 

• 16 C.F.R. § 460.22 is part of the “R-value Rule” and is aimed at non-insulation 

products. 

First, the Court addresses liability and then relief for Plaintiff’s three claims for which it 

seeks injunctive relief under Section 5(a). Second, the Court addresses Plaintiff’s claim that it is

entitled to monetary damages under Section 19 for violation of 16 C.F.R. § 460.22, which is a 

section of the R-value Rule. 

A. Injunctive Relief for False Claims in Violation of Section 5(a) 

Plaintiff claims it is entitled to injunctive relief under Section 5(a) of the FTC Act, which 

corresponds to 15 U.S.C. § 45(a), because Defendants: (1) made false energy savings claims, (2) 

made false R-value claims before May 13, 2020, and (3) furnished distributors with the means and 

instrumentalities to make false claims. Plaintiff contends Defendants made these false claims while 

advertising and promoting Super Therm® and Sunshield. And Plaintiff seeks injunctive relief as a 

8 Plaintiff originally sought monetary damages under this provision, but the Supreme Court foreclosed this attempt 

in AMG Cap. Mgmt., LLC v. FTC, 141 S. Ct. 1341 (2021). Plaintiff then amended its complaint to add a count 

under Section 19 of the FTC Act. Doc. 90. 

9 Plaintiff may also seek damages for any unfair or deceptive acts for which it “has issued a final cease and desist 

order.” § 57b(a)(2). Because Plaintiff did not go through an administrative process and issue a cease-and-desist 

order to Defendants, it is limited to seeking redress for rule violations only. See § 57b(b). 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 12 of 28 

result. The Court starts by analyzing liability for these claims and then turns to the scope of 

injunctive relief. 

1. Liability under Section 5(a) 

Plaintiff establishes liability for these claims by showing that “(1) there was a

representation; (2) the representation was likely to mislead customers acting reasonably under the 

circumstances, and (3) the representation was material.” FTC v. On Point Cap. Partners LLC, 17 

F.4th 1066, 1079 (11th Cir. 2021) (citation omitted). Defendants do not dispute liability on these 

claims.10 Neither do they dispute that Pritchett is liable individually for the actions of his 

company. 11 The Court nevertheless briefly discusses the elements of these Section 5(a) claims to 

establish the foundation for the scope of the injunction. 

a. False Energy Savings Claims 

The Court analyzes the three elements. First, the unconverted facts establish that 

Defendants made many representations about the characteristics and benefits of Super Therm® and 

Sunshield. These statements, or “claims,” may be sorted into two categories: efficacy claims and 

establishment claims. Efficacy claims represent that a product performs as advertised. POM 

Wonderful, LLC v. FTC, 777 F.3d 478, 490 (D.C. Cir. 2015). Efficacy claims do not suggest a 

backing of scientific proof. Id. Establishment claims, on the other hand, suggest the product is 

scientifically proven effective. Id. Establishment claims may be “specific” or “non-specific.” Id. 

at 491. 

10 Defendants do dispute the R-value Rule claims, which are discussed below. 

11 Individuals may be enjoined for the actions of a corporation under the FTC Act if they (1) directly participated in 

the challenged actions or (2) had authority to control the actions. Freecom Commc’ns, Inc., 401 F.3d at 1202-03. 

They may be responsible for restitution resulting from corporate misconduct if they “had knowledge that the 

corporation or one of its agents engaged in dishonest or fraudulent conduct, that the misrepresentations were the 

type upon which a reasonable and prudent person would rely, and that consumer injury resulted.” FTC v. Grant 

Connect, LLC, 763 F.3d 1094, 1101 (9th Cir. 2014) (citation omitted). The undisputed evidence (including a 

stipulation in the Pretrial Order) shows Defendant Pritchett is liable for the actions of Defendant SPI. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 13 of 28 

Plaintiff alleges Defendants made many misleading or unsubstantiated claims over the past 

two decades. Defendants admit they made such claims (but disagree some of them were misleading 

or unsubstantiated). The following is a small sampling of the statements that are indisputably 

untrue, misleading, or unsubstantiated: (1) Super Therm® blocks interior heat; (2) Super Therm® 

blocks heat, 95% of solar heat, and 99% of BTU heat; (3) Defendants’ products offer savings on 

utilities and energy, up to 90% savings with Super Therm®; and (4) the United States Department 

of Energy found certain energy savings amounts ranging from 26-52%. 

Second, these representations are likely to mislead. A claim is likely to mislead consumers 

when it is false or lacks substantiation. FTC v. Pantron I Corp., 33 F.3d 1088, 1095 (9th Cir. 1994). 

Actual deception is unnecessary, and Plaintiff need only show the likelihood that a reasonable 

consumer would be deceived. FTC v. LoanPointe, LLC, 525 F. App’x 696, 701 (10th Cir. 2013). 

The standard for “substantiation” depends on the type of claim. For an efficacy claim, an 

advertiser must possess a “reasonable basis” for the claim. POM Wonderful, LLC, 777 F.3d at 490. 

For an establishment claim, the amount of substantiation is different based on whether the claim 

is specific or non-specific. Id. at 491. If specific, the advertiser must possess the specific 

substantiation claimed. Id. If non-specific, the advertiser “must possess evidence sufficient to 

satisfy the relevant scientific community of the claim’s truth.” Id. Defendants bear the burden to 

show the basis for their advertisements, and they must possess the substantiation before making 

the claim(s). FTC v. Direct Mktg. Concepts, Inc., 569 F. Supp. 2d 285, 298 (D. Mass. 2008) (citing 

FTC v. QT Inc., 448 F. Supp. 2d 908, 959 (N.D. Ill. 2006)). 

The sampling of statements identified above are either misleading or lack proper 

substantiation. Defendants argue that many of their claims are accurate under certain conditions, 

for certain time periods, in particular locations, and on specific structures. This may be true. But 

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the fact remains that Defendants didn’t qualify their statements with the details behind the claims. 

There may be accurate and non-deceptive claims that could be made of energy savings, but those 

claims are not the ones the Court is evaluating. 

Third, the misleading energy-savings representations were material. Liability is only 

warranted “if the omitted information would be a material factor in the consumer’s decision to 

purchase the product.” In re Am. Home Prods. Corp., 98 F.T.C. 136, 368 (1981), enforced as 

modified, 695 F.2d 681 (3d Cir. 1982); see also FTC v. Colgate-Palmolive Co., 380 U.S. 347, 386-

89 (1965). 

Defendants do not seriously dispute that the misleading and unsubstantiated claims 

identified above are material to the product-purchase decision. There would be no reason to 

purchase Defendants’ products over a can of white paint if Defendants’ claims were not material. 

Plaintiff has met its burden as to all three elements of its first Section 5(a) deception claim and is 

entitled to some injunctive relief. 

b. R-Value Claims before May 13, 2020 

Plaintiff’s next type of Section 5(a) claim principally relates to Defendants’ R-value claims 

before May 13, 2020.12 Specifically, Plaintiff alleges Defendants (1) made false R-value claims 

and (2) “represented that testing establishes an R-value or R-value equivalent of R-19 for Super 

Therm®, but testing does not do that.” Doc. 122-1 at 9. 

Defendants’ representations about the R-value of their products ultimately require two 

separate analyses. One is relatively simple, and the other is not. The first is addressed in this 

12 Claims after May 2020 are also relevant to these causes of action, but the Court only addresses earlier claims here 

for simplification. They are sufficient to establish liability without discussing more recent R-value claims. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 15 of 28 

paragraph and primarily relates to representations made before May 13, 2020.13 Defendants 

acknowledge that they inaccurately portrayed the R-value of Super Therm® before this date. They 

also made at least two inaccurate representations about the R-value of Sunshield. And they 

represented that testing established those R-values, but this was also false. These representations 

were likely to mislead and were material, so Plaintiff has shown all three elements and is entitled 

to some injunctive relief on this claim. 

c. Means and Instrumentalities 

Plaintiff’s third cause of action is for furnishing distributors with promotional materials

that make false, misleading, or unsubstantiated representations. Defendants are not only 

responsible for their own advertising representations, but they are also responsible for the 

representations of their distributors. See Waltham Watch Co. v. FTC, 318 F.2d 28, 32 (7th Cir. 

1963 (“Those who put into the hands of others the means by which they may mislead the public, 

are themselves guilty of a violation of Section 5 of the Federal Trade Commission Act.”). 

Defendants do not dispute that they furnished distributors with promotional materials that made 

false, misleading, and unsubstantiated representations. These representations are likely to mislead 

and are material for largely the same reasons previously discussed. Again, Plaintiff has established 

this claim and has shown entitlement to some level of injunctive relief for it. 

2. Injunctive Relief under Section 5(a) 

The Court has determined that Plaintiff is entitled to some measure of injunctive relief for 

Defendants’ Section 5(a) violations. And the Court has authority under the FTC Act to issue a 

permanent injunction when the facts demonstrate that there is “some cognizable danger of

13 The second, about representations made after May 13, 2020, is addressed in more detail in the discussion about 

Defendants’ violation of the R-value Rule. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 16 of 28 

recurrent violation.” United States v. W. T. Grant Co., 345 U.S. 629, 633 (1953); see also 15 U.S.C. 

§ 53(b). The Court considers (1) the “bona fides of the expressed intent to comply,” (2) “the

effectiveness of the discontinuance,” and (3) “in some cases, the character of the past violations.”

FTC v. Accusearch, Inc., 570 F.3d 1187, 1201 (10th Cir. 2009) (quoting W.T. Grant Co., 345 U.S. 

at 633). Because Defendants concede some injunctive relief is appropriate, the Court uses these 

factors to craft the scope of the injunction instead of to decide whether any relief is appropriate at 

all. 

The principal disputes are the breadth of relief with respect to product scope and length of 

compliance period. The Court analyzes these issues but also makes other changes to the proposed 

injunctive relief in an exercise of its discretion based on the facts of this case. Injunctive relief is 

“not limited to prohibiting the illegal practice in the precise form in which it is found to have 

existed in the past.” FTC v. Ruberoid Co., 343 U.S. 470, 473 (1952). The remedy must, however, 

retain a reasonable relation to the unlawful practices. Id. Violators must expect some level of 

“fencing in.” FTC v. Nat’l Lead Co., 352 U.S. 419, 431 (1957). Stated differently, the Court may 

extend prohibitions to “similar practices with respect to ‘any product’ Defendants advertise.”

Colgate-Palmolive, Co., 380 U.S. at 384. 

a. Product Scope 

Plaintiff wants the injunction to cover any “Architectural Coatings Product.” Plaintiff

defines these products as “any coating marketed for application on buildings, including paint, paint

with additives (such as ceramic spheres), varnishes, and lacquers, and products that incorporate 

such coatings.” 2022-03-14 Proposed Final Order. Plaintiff argues this broad application is critical 

because “[o]therwise, Defendants could simply tweak formulae or rename the products to sidestep 

this provision—and the uncontested evidence shows they do just that.” Doc. 132 at 124.

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Plaintiff’s fears do not justify a broader product scope. It appears Defendants have 

marketed and, in some instances, produced other products with claimed energy savings and Rvalues. But the other products were not created or marketed to avoid the consequences of a court 

ruling. The Court is not convinced Defendants will now try to circumvent an injunction by making 

false or unsubstantiated claims with other existing or new products. Plaintiff simply assumes too 

much. The Court has authority to issue the broad ban Plaintiff wants but exercises its discretion to 

more narrowly tailor relief to the violations found in this case. 14 The Court makes the injunction 

applicable to “non-insulation products,” which are products Defendants create “that are not

insulation but marketed, in whole or in part, to reduce energy use.”15 Cf. 16 C.F.R. § 460.22. This 

is the definition Defendants suggest, and the Court finds it appropriate here. 

b. Length of Compliance Period 

Plaintiff also asks the Court to impose a 10-year compliance-reporting period and an 

indefinite compliance-monitoring period. But this request is disproportionate to the harm suffered 

and level of culpability. Most of Defendants’ customers are commercial and industrial clients. 

These purchasers have often independently studied Super Therm® before purchasing. And 

residential customers, by and large, appear satisfied with their purchases.16 Plaintiff has not shown 

that Defendants’ deception was as rampant, intentional, or damaging as would justify burdensome 

long-term compliance reporting and monitoring. 

14 Specifically, the Court recognizes that other orders have contained similarly broad injunctions. See, e.g., FTC v. 

SuperTherm, Inc., Doc. 132-30 at 20; In re Kryton Coatings Int’l, Inc., 2002 WL 34463119 (F.T.C. 2002). But 

FTC v. SuperTherm was decided on default judgment. 2021 WL 3419035 (D. Ariz. 2021). And In re Kryton was 

an administrative proceeding consent order. Thus, neither case convinces the Court to issue a broader injunction. 

15 The Court acknowledges that this definition relates to R-values and Plaintiff’s claims are broader than just Rvalues. But Plaintiff’s definition is too broad and the definition for non-insulation products in the R-value Rule is 

a reasonable, more targeted, substitute. 

16 The Court does not find Defendants’ evidence of homedepot.com reviewssufficient to establish a pattern of “happy 

customers,” but likewise Plaintiff has not uncovered evidence of a significant number of customer complaints. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 18 of 28 

The Court determines that 5 years of compliance reporting and 5 years of compliance 

monitoring is sufficient to adequately address the level of deception presented in this case. See 

SuperTherm, Inc., 2021 WL 3419035, at *9 (imposing 5-year compliance-reporting period); 

Affiliate Strategies, Inc., 2011 WL 3300097, at *8-10 (ordering 11-year recordkeeping and 8-year 

compliance reporting and distribution of order to agents). But see FTC v. Pointbreak Media, LLC, 

376 F. Supp. 3d 1257 (S.D. Fla. 2019) (Doc. 266 in Case No. 18-61017: imposing 20-year 

recordkeeping and compliance reporting). This 5-year period will serve to support the purpose of 

the FTC Act while avoiding lengthy and burdensome reporting and monitoring responsibilities 

that are disproportionate to this case. 

B. Monetary Relief under Section 19(b) for Violation of the R-Value Rule 

Plaintiff also seeks monetary relief for violations of the R-value Rule. This claim is 

discussed separately because the liability arguments are nuanced and the requested relief is 

monetary. Indeed, it is Plaintiff’s claim for damages based on Defendants’ R-value claims 

(specifically the R-value claims made after May 13, 2022) that forms the central dispute in this 

case. On May 13, 2020, the R-value Rule (16 C.F.R. part 460) was modified to apply to noninsulation products like Super Therm® and Sunshield. The revision is in 16 C.F.R. § 460.22, which 

states: 

If you make an R-value claim for a product . . . that is not home 

insulation and is marketed in whole or in part to reduce residential 

energy use by slowing heat flow, you must test the product pursuant 

to § 460.5 using a test or tests in that section appropriate to the 

product. Any advertised R-value claims must fairly reflect the 

results of those tests. 

This revision prompts two main issues that require resolution in this case: (1) the meaning of “Rvalue claim” and (2) how that meaning applies to Defendants’ products.

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 19 of 28 

1. Meaning of “R-value Claim”

The parties dispute the meaning of an “R-value claim.” Defendants argue that it means a 

claim that a product has a specific, numeric R-value. Plaintiff argues that the term is much broader 

and covers express, implied, and comparative claims. The R-value Rule does not define the term. 

See generally 16 C.F.R. part 460. 

Plaintiff repeatedly argues that the Court must defer to its interpretation of its own 

regulation. Courts refer “to that doctrine as Auer deference.” Kisor v. Wilkie, 139 S. Ct. 2400, 2411 

(2019) (plurality opinion). But “a court should not afford Auer deference unless the regulation is 

genuinely ambiguous.” Id. at 2415 (majority opinion). “And before concluding that a rule is 

genuinely ambiguous, a court must exhaust all the ‘traditional tools’ of construction.” Id. (citation 

omitted). Thus, resolving this dispute initially involves deciding whether the term “R-value claim”

is ambiguous. 

A regulation is “ambiguous if it is reasonably susceptible to more than one interpretation

or capable of being understood in two or more possible senses or ways.” Nat’l Credit Union Admin.

Bd. v. Nomura Home Equity Loan, Inc., 764 F.3d 1199, 1226 (10th Cir. 2014) (quotations and 

citations omitted). To determine ambiguity, courts “reference . . . the language itself, the specific 

context in which that language is used, and the broader context of the [regulation] as a whole.” Id. 

(quoting Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997)). Courts begin by “examining the 

plain language of the text, giving each word its ordinary and customary meaning.” Mitchell v. 

Comm’r, 775 F.3d 1243, 1249 (10th Cir. 2015). “If, after engaging in this textual analysis, the 

meaning of the regulations is clear, our analysis is at an end, and we must enforce the regulations 

in accordance with their plain meaning.” Jake’s Fireworks Inc. v. Acosta, 893 F.3d 1248, 1261 

(10th Cir. 2018) (quoting Mitchell, 775 F.3d at 1249). But again, before declaring a regulation 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 20 of 28 

ambiguous, a court must use all its “tools,” including not only the text but also the structure,

history, and purpose. Kisor, 139 S. Ct. at 2423-24. 

As noted above, an R-value is a number quantifying a material’s ability to resist heat flow.

See 16 C.F.R. § 460.5. The size of the number indicates a product’s ability to resist heat flow. The 

larger the number, the more the resistance. E.g., Labeling & Advertising of Home Insulation: Trade 

Regulation Rule, 70 Fed. Reg. 31258-01, at 31258 (May 31, 2005) (“R-value is the numerical 

measure of the ability of an insulation product to restrict the flow of heat . . . the higher the Rvalue, the better the product’s insulating ability.”). The plain language therefore indicates that an 

R-value claim is a claim that a product has a particular numerical R-value. 

The R-value Rule’s scheme and structure also support this definition. The rule “requires

covered entities to disclose R-value and related information.” Labeling & Advertising of Home

Insulation: Trade Regulation Rule, 84 Fed. Reg. 20777-01, 20777 (May 13, 2019). Multiple 

sections of the rule discuss R-values. Section 460.5 requires advertisers to base “R-values given”

in marketing on a prescribed test. Section 460.8 specifies that marketing materials for insulation 

specimen must not “have an R-value more than 10% below the R-value shown.” Section 460.11

governs when R-values “shown” in promotional materials may be rounded off. To calculate a

percentage of or “round off” an R-value requires that the R-value must be a number. 

Other portions of the R-value Rule further support the conclusion that the R-value claim 

must be a number. Section 460.12 requires that most insulation labels contain the R-value and the 

statement: “R means resistance to heat flow. The higher the R-value, the greater the insulating 

power.” 16 C.F.R. § 460.12(c). The same section discusses required disclosures about how 

insulation must be installed properly to attain the “marked R-value.” Id. § 460(d), (e). Similarly, 

§ 460.13(c) requires disclosures of numeric R-values on insulation fact sheets. Sections 460.18 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 21 of 28 

and 460.20 discuss additional requirements for R-value disclosures that involve providing an Rvalue for a specific thickness of insulation and limitations on R-value per inch calculations. Again, 

each of these sections refers to the R-value as a number. 

One last contextual clue supports Defendants’ definition of R-value claim: the use of 

implied claims elsewhere in the R-value Rule but not in § 460.22. Section 460.19 specifically 

prohibits insulation marketers from “say[ing] or imply[ing]” that their products “can cut fuel bills”

without a “reasonable basis for the claim.” Section 460.21 prohibits marketers from “say[ing] or

imply[ing]” that a government agency uses a product “unless it is true.” Likewise, under § 460.23, 

a marketer may not “say or imply” that a product qualifies for a tax benefit unless that claim is

true. 

Despite Plaintiff’s decision to address implied claims in other sections of the R-Value Rule, 

§ 460.22 makes no mention of implied R-value claims. This omission is telling. See Russello v. 

United States, 464 U.S. 16, 23 (1983) (“We refrain from concluding here that the differing

language in the two subsections has the same meaning in each. We would not presume to ascribe 

this difference to a simple mistake in draftsmanship.”). It indicates to the Court that Plaintiff is 

incorrect that an R-value claim also includes implied claims. 

Contrary to Plaintiff’s assertion, the presence of the word “any” in § 460.22 does not alter 

the Court’s analysis. Plaintiff argues that § 460.22’s reference to “any advertised R-value claims” 

covers “claims of ‘whatever kind’—e.g., express, implied, and comparative.” Doc. 143 at 43. And 

Plaintiff maintains that Defendants’ proposed narrow definition of R-value claim violates the 

principle that the FTC Act should be interpreted broadly and advertisements construed against the 

advertiser. Id. at 44-45 (citing FTC v. AT&T Mobility LLC, 883 F.3d 848, 854 (9th Cir. 2018); 

FTC v. Gill, 71 F. Supp. 2d 1030, 1045-46 (C.D. Cal. 1999)). The Court disagrees. Based on the 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 22 of 28 

plain language of § 460.22, its context, and the scheme of the R-value Rule, the Court finds 

§ 460.22 unambiguous. An “R-value claim” is a claim that a product’s R-value is a particular 

number. It is no more and no less. If an advertised claim lacks an explicit R-value number, it does 

not fall under § 460.22’s umbrella.17 

2. Application to Defendants’ Products

The next issue is whether Defendants made any R-value claims about the products after 

May 13, 2020, based on this definition. 

a. Sunshield 

The Court starts with Sunshield. The answer is no. Plaintiff identifies the following 

statements Defendants made about Sunshield after May 13, 2020: 

• a “[c]ost-efficient alternative with similar performance 

characteristics to Super Therm,” while claiming Super Therm® 

“[r]eplaces 6-8 in. of traditional insulation” and is

“[Defendants’] best-selling insulation coating.”

• “similar to Super Therm in solar heat blocking performance”

and “will perform 85% as well as Super Therm” using “4 similar

unique ceramic compounds as used in Super Therm.”

• having “a similar ceramic package as our best-selling Super 

Therm” to “[r]educe energy costs for less.”

• in general having the same or similar components and suggested 

uses as Super Therm. 

• just “[n]ot as long lasting as Super Therm.”

• a “do it yourself” “version of Super Therm” or “a little brother

to Super Therm.” 

17 Even if the regulation were genuinely ambiguous, deference to the agency’s interpretation would still be 

inappropriate. To trigger Auer deference, the agency interpretation must also (among other things) “be the agency’s

‘authoritative’ or ‘official position,’ rather than any more ad hoc statement not reflecting the agency’s views.”

Kisor, 139 S. Ct. at 2416 (citation omitted). Plaintiff fails to show that its interpretation emanates from authoritative 

actors using those vehicles that “are understood to make authoritative policy in the relevant context.” Id. And the 

Court is also concerned that Plaintiff’s interpretation would create “unfairsurprise to regulated parties” Id. at 2417. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 23 of 28 

• able to “[s]hatter[] high air conditioning / cooling cost[s]” for

residential users. 

Doc. 143 at 41 (citations omitted). 

None of these statements or Sunshield’s marketing materials include a numeric R-value. 

Plaintiff argues this omission is immaterial because of the repeated comparisons and references to 

Super Therm®, which Defendants claimed has an R-19 R-value. This is an impermissible stretch 

based on the Court’s analysis. Plaintiff is attempting to impute claims about Super Therm® to 

Sunshield without citing authority for doing so. Defendants have not made an R-value claim with 

respect to Sunshield since May 13, 2020. 

b. Super Therm® 

The Court now turns to Super Therm®. This is a different story. Defendants have made 

specific numeric R-value claims for Super Therm® since that date (without properly supporting 

them with testing). Super Therm® is primarily targeted at commercial and industrial customers, 

but the record showsthat it is also “marketed . . . in part to reduce residential energy use by slowing 

heat flow.” The question then becomes whether there is monetary relief for those violations. 

Plaintiff added a cause of action for the R-value Rule violation after the Supreme Court decided 

Plaintiff’s original avenue for seeking monetary relief (Section 13(b) of the FTC Act) was invalid. 

AMG Capital Mgm’t, 141 S. Ct. 1341; see also Doc. 90. Plaintiff seeks nearly $1.5 million in 

redress, most of which consists of sales of Super Therm® through distributors to commercial and 

industrial end users. Defendants have sold only about $15,000 of Super Therm® to individuals 

(presumably residential end-users) since May 13, 2020. 

Section 19(b) of the FTC Act permits Plaintiff to seek monetary relief “necessary to redress 

injury to consumers or other persons, partnerships, and corporations resulting from [a] rule 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 24 of 28 

violation.” 15 U.S.C. § 57b(b).

18 This authority is limited. See, e.g., FTC v. Noland, 2021 WL 

5493443, at *6 (D. Ariz. 2021) (highlighting Section 19(b)’s “narrow focus on providing damage

awards ‘necessary to redress injury’”); FTC v. Zurixx, LLC, 2021 WL 5179139, at *7 (D. Utah 

2021) (“The change . . . from the previous gross revenue damages under Section 13(b) to the 

individualized consumer redress damages under Section 19 is a significant change in not only the 

amount of damages but the type of evidence needed to demonstrate those damages.”). Relief may 

come in the form of “rescission or reformation of contracts, the refund of money or return of 

property, the payment of damages, and public notification.” 15 U.S.C. § 57b(b). 

The parties dispute whether commercial and industrial end users are “consumers” under 16 

C.F.R. § 460.22. Plaintiff argues the answer is simple: Section 19(b) specifically provides that 

corporations may recover under the Act. And Plaintiff further argues that the R-value Rule is not 

limited by the type of user. Rather it applies based solely on how a product is marketed. If a 

business markets a product in any way to residential users, who then buys and uses the product is 

irrelevant. The answer is not so simple. 

The right to recovery for corporations in the FTC Act does not answer the question of 

whether corporate end-users are covered by the R-value rule. The FTC Act does not define 

“consumer.” See generally 15 U.S.C. § 44. Neither does the R-value Rule offer a definition. See 

generally 16 C.F.R. part 460. But the regulation is not ambiguous once the Court utilizes 

interpretive tools. See Kisor, 139 S. Ct. at 2415. 

Plaintiff does not dispute that the R-value Rule only covered purchases by residential 

consumers before § 460.22’s addition on May 13, 2020. See Doc. 143 at 35; Labeling and 

18 As previously noted, Plaintiff is limited to seeking damages for rule violations because it did not go through an 

administrative process and issue Defendants a cease-and-desist order. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 25 of 28 

Advertising of Home Insulation: Trade Regulation Rule, 84 Fed. Reg. 20777, 20780 (May 13, 

2019) (“[The R-value Rule] does not cover insulation sold for use in commercial (including 

industrial) buildings.”); see also, e.g., Mono-Therm Indus., Inc. v. FTC, 653 F.2d 1373, 1375 (10th 

Cir. 1981) (“The primary purpose of the [R-value] Rule . . . is to correct the failure of the home 

insulation marketplace to provide . . . essential pre-purchase information to the consumer (for 

home insulation products).”); Nationwide Tarps, Inc. v. Midwest Canvas Corp., 228 F. Supp. 2d 

202, 208 (N.D.N.Y. 2002) (“[T]he [R-value] Rule mandates standards in the home insulation 

market, but not in the commercial insulation market.”). And, contrary to Plaintiff’s current

argument, there is no evidence that amending the R-value Rule to cover non-insulation products 

also broadened the R-value’s scope to extend to purchases by commercial entities. 

First, the text of § 460.22 regulates “R-value claims . . . marketed in whole or in part to 

reduce residential energy use by slowing heat flow.” This language indicates the rule is designed 

to protect residential buyers from false or misleading R-value claims. These are the “consumers”

who may be entitled to redress. And use of the term “[a]ny advertised R-value claims” in the 

second sentence of § 460.22 does not broaden the definition of consumer. The sentence specifies 

that any advertised R-value claims must “fairly reflect the results of [the] tests [identified in 

§ 460.5].” The tests are for products that are “marketed in whole or in part to reduce residential 

energy use by slowing heat flow.” Again, all indications are that the rule intends to protect 

residential end-users and not commercial and industrial customers. 

The context and structure of the R-value Rule support the same restriction. The title of the 

R-value Rule is “Labeling and Advertising of Home Insulation.”19 16 C.F.R. § 460. The R-value 

19 The Court realizes the relevant products at issue are non-insulation products. This difference neither changes the 

analysis nor suggests that § 460.22 should be treated differently than the rest of the R-value Rule. 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 26 of 28 

Rule itself contains multiple references to homes and residences. See, e.g., 16 C.F.R. § 460.2 

(specifying the rule applies to “insulation developed and marketed for commercial and industrial 

buildings that is also marketed for and used in residential buildings” (emphasis added)); Id. § 460.3 

(stating the rule covers members of the “home insulation industry”); Id. § 460.4 (stating the rule 

applies “each time you . . . sell . . . home insulation,” and that “[y]ou must follow the requirements

in § 460.22 each time you make an R-value claim for non-insulation products marketed in whole 

or in part to reduce residential energy use”).

Plaintiff essentially argues that all this no longer matters. Plaintiff now says (correctly) that 

Super Therm® was marketed in part to residential users. Thus, because § 460.22 focuses on 

marketing, Plaintiff reasons (incorrectly) that commercial users must also be protected under the 

rule. But a look at the regulatory history rejects this interpretation. 

When Plaintiff proposed amendments to the R-value Rule in 2018, it proposed requiring 

“marketers to use the Rule’s testing requirements to substantiate any R-value claims for noninsulation products.” Labeling and Advertising of Home Insulation: Trade Regulation Rule, 83 

Fed. Reg. 2934-01, 2935 (January 22, 2018). In doing so, Plaintiff was proposing an addition to 

the R-value Rule. When speaking of the application of the rule, however, Plaintiff described itself 

as “[c]larify[ing] that the Rule covers products marketed for residential applications, even if those 

products are originally developed for the commercial market.” Id. Sweeping industrial users into 

the group of protected consumers is belied by Plaintiff’s description of its actions as a clarification. 

The Court’s interpretation is further bolstered by Plaintiff’s response to comments. One 

commenter “urged the [FTC] to clarify that ‘if a product is used in residential insulation 

applications, there must be compliance with the Rule, even if the lion[’s] share of the product’s 

use is in the commercial and industrial market.’” Id. at 2937 (emphasis added). Plaintiff responded 

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Case 2:20-cv-02366-HLT Document 147 Filed 09/22/22 Page 27 of 28 

that: “Such products already fall within the Rule’s existing coverage of ‘home insulation.’

However, the proposed amendments would clarify this fact to ensure that industry members 

understand their compliance obligations.” Id. at 2938. (emphasis added). Plaintiff’s own 

description therefore states that non-insulation products would become just like “home insulation.”

Plaintiff’s argument before this Court that “the obligations of . . . insulation and non-insulation 

marketers . . . are vastly different under the Rule” and that “[a] non-insulation product marketed 

under § 460.22 is an exception” to the rule that industrial consumers are not protected is 

disingenuous under its own description. 

In summary, there is nothing in the regulatory text or history to suggest that commercial 

users are now protected consumers under the R-value Rule. Plaintiff can now seek damages for 

industrial non-insulation products that are sold to residential consumers, but it has not enacted a 

sea change such that industrial end-users are protected consumers. 20 

This analysis leads to the following result: The monetary relief appropriate here is for 

residential buyers of Super Therm® since May 13, 2020.21 It is not for all purchasers of Super 

Therm®. The amount of individual sales proceeds since May 13, 2020, of Super Therm® is 

$14,182.95. This will be the judgment. The Court will not reduce this amount based on the 

theoretical “happy consumers” or based on purchasers still receiving the value of white paint.22 

Defendants have not shown either reduction is appropriate for the purchasers in this case. 23 

20 Like above, even if the regulation were genuinely ambiguous, deference to the agency’s interpretation is not 

appropriate because the agency has not presented an authoritative or official position on this issue. Kisor, 139 S. 

Ct. at 2416. The agency’s interpretation would also likely cause unfair surprise to regulated parties. Id. at 2417. 

21 The Court need not address Defendants’ alternative argument that industrial consumers are not “injured” because

it holds that industrial consumers are categorically not protected by the R-value Rule. 

22 The Court need not discuss whether Plaintiff can recover for foreign sales because all individual sales were 

domestic. 

23 Plaintiff proposes that Defendants be barred from seeking “the return of any assets.” It appears Plaintiff may now

concede this relief is inappropriate. Doc. 144 at 34 n.60. But to be clear, the Court will not preclude Defendants 

from seeking the return of assets after redress has been made to consumers. Use of any remaining funds by Plaintiff 

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IV. CONCLUSION 

After review of the substantial record, the Court determines that Plaintiff is entitled to some 

relief, but not all it seeks. Defendants and their distributors made multiple misrepresentations about 

the qualities and efficacy of the products. These misrepresentations must stop. And Defendants 

also violated the R-value Rule, but their monetary liability for that infraction is limited because 

the rule protects residential customers and most of Defendants’ unsubstantiated R-value claims 

after May 13, 2020, were about Super Therm®, which was primarily purchased by commercial and 

industrial customers. The Court will modify Plaintiff’s proposed permanent injunction and 

judgment accordingly. 

THE COURT THEREFORE ORDERS that Plaintiff’s Motion for Summary Judgment 

(Doc. 130) is GRANTED IN PART and DENIED IN PART. 

IT IS FURTHERED ORDERED that Defendants’ Motion for Partial Summary Judgment 

(Doc. 127) is GRANTED IN PART and DENIED IN PART. 

IT IS FURTHER ORDERED that Defendants owe $14,182.95 in monetary damage. A 

permanent injunction will also issue. 

IT IS SO ORDERED. 

Dated: September 22, 2022 /s/ Holly L. Teeter 

HOLLY L. TEETER 

UNITED STATES DISTRICT JUDGE 

for purposes other than consumer redress exceeds the scope of Section 19(b) of the FTC Act. See FTC v. Figgie, 

994 F.2d 595, 607-08 (9th Cir. 1993) (explaining that requiring the defendant to pay the FTC the excess between 

the defendant’s receipts and redress to consumers “would be for purposes of punishing” the defendant).

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