Pattison company gets $4.9m refund for faulty LED units

A company operated by businessman Jim Pattison has been awarded a $4.9-million refund for faulty LED lighting units installed on thousands of outdoor advertising billboards across Canada.

Between 2010 and 2013, Pattison Outdoor Advertising, which had been using halogen lighting fixtures to illuminate its billboards, ordered and installed 8,222 LED fixtures from Zon LED LLC, a Michigan-based company.

Zon had promoted its lighting retrofit packages by promising reduced operating costs, higher-quality light output, and easy installations.

But by December 2013, about 70 to 75 per cent of the LEDs had failed and the number of failures was growing on a daily basis. The failures were affecting Pattison’s entire operation and its brand and clients were demanding refunds.

Replacement parts were provided for the lights, but the parts did not solve the problems and Pattison hired an expert to conduct tests on the lights.

The tests revealed that the Zon fixtures had flaws that rendered them unsalvageable.

One key issue was that the LEDs were extremely sensitive to temperature changes and if they went 10 C above their operating temperature, it could cut the LED life in half.

After hearing from the expert, Pattison ended its relationship with Zon and demanded a full refund.

At a subsequent civil trial, Pattison claimed that the fixtures were not fit for their intended purpose and that there had been a breach of contract for failure to perform warranty obligations.

The defendant argued that it did not hold itself out as an expert, nor did Pattison rely on Zon’s skill and judgment and pointed out that Pattison performed its own review, inspection and testing of the product.

Andrew Stoll, one of the two creators of the Zon fixtures, testified that when Pattison placed its first large order, Stoll was “overwhelmed” since prior to then “we were just two guys working out of a garage.”

In her ruling on the case, B.C. Supreme Court Justice Barbara Young found that there were “numerous” design flaws in the fixtures, which caused or contributed to the failure or reduced functional life of the lighting units.

The judge noted that Pattison made it known that it needed a fixture that would brightly illuminate entire billboards across Canada in a variety of climates and would be illuminated up to 12 hours per day, year-round.

She rejected Zon’s argument that Pattison did not rely on Zon’s skill and judgment before determining that the fixtures were fit for the stated purpose and accepted Pattison’s argument that they had no expertise in lighting and were completely dependent on Zon.

“The design issues could not have been foreseen by Pattison. In fact, the defendant who designed the Zon fixtures does not know what caused the early failures.”

The judge awarded Pattison $4,901,893.49, the amount it spent to purchase the fixtures.