FTC Case: ALG-Health and Axis LED Sold Imported PPE and Lights as Made in USA

The Federal Trade Commission said on August 9, 2022 that it had referred a complaint to the Department of Justice against Adam J. Harmon and his companies, Axis LED Group, LLC and ALG-Health LLC. It alleges they falsely marketed pandemic PPE and light fixtures as Made in USA.

The allegations

• The FTC says the masks, gowns, gloves and lights were wholly imported or used significant imported materials, despite claims they were all or virtually all made in the USA.
• The defendants also allegedly claimed their PPE gave better COVID-19 protection because it was USA-made, and that products were NIOSH-certified USA respirators.
• The complaint cites the COVID-19 Consumer Protection Act, the Made in USA Labeling Rule and the FTC Act.

The proposed settlement

• A $157,683.37 civil penalty, due immediately.
• A $2.8 million redress judgment, suspended because the defendants can’t pay.
• Origin claims must meet the all-or-virtually-all standard or be clearly qualified, and all Made in USA and COVID-19 claims must be substantiated.

The defendants neither admitted nor denied the allegations. The FTC said this was its second action in 2022 under the Labeling Rule, after cases against Resident Home, Lions Not Sheep and Lithionics Battery.

A revised press release

The company later went to court over the FTC’s first press release, which said it had been “lying.” By September 2022, the FTC had revised the headline and added a note that the claims are allegations only, according to Venable attorneys writing on JD Supra.

FAQ

Who are the defendants?

Adam J. Harmon, Axis LED Group, LLC and ALG-Health LLC.

What is the penalty?

$157,683.37, plus a suspended $2.8 million judgment.

Did the FTC change its press release?

Yes. The word “lying” was removed and a no-admission statement was added.