Wednesday, November 15, 2017

Church & Dwight not protected against challenge to "Made in USA" claim for condoms

Claiborne v. Church & Dwight Co., 2017 WL 5256752, No. 17-cv-00746 (S.D. Cal. Nov. 13, 2017)

At least two lines of Trojan brand male condoms have the words “Made in U.S.A.” printed on the packaging. This statement allegedly violates California law because more than ten percent of the condoms’ wholesale value allegedly derives from natural latex material produced outside of the United States.  Claiborne alleged that the condoms state that they contain natural latex, and that US domestic production of natural latex is minimal, with 90% of the global supply coming from Southeast Asia.  Further, the US is allegedly the largest consumer of natural latex—accounting for approximately 20% of global consumption. In addition, the natural latex is allegedly the only substantial component of the Condoms.

The court found that Claiborne plausibly alleged that more than ten percent of the condoms’ wholesale value comes from outside of the United States, which would make it unlawful to market as “Made in U.S.A.” in California.  It was true that Claiborne didn’t allege exactly what percentage of the wholesale value comes from abroad, but all he needed to do was plausibly allege that the foreign wholesale value was greater than ten percent, rather than an exact percentage above that.

Claiborne also plausibly alleged that he suffered damage: he alleged that, but for the “Made in U.S.A.” representation, he would not have purchased the condoms or he would have paid less. That’s enough under Kwikset.  He also had standing to pursue injunctive relief even though he now believed the representations were currently false (this opinion appeared to have been drafted before the 9th Circuit’s recent ruling on this, because the court says there’s no binding authority; fortunately the court’s reasoning is consistent with the current law).  “[W]here false advertising misleads a consumer, the consumer tends to suffer continuing injury in the form of a lessened ability to trust that any similar future representation is accurate.” Relief “could restore the consumer’s trust, thus aiding him in making informed purchasing decisions in the future.”  Claiborne didn’t need a present intention to purchase a Trojan product in the future; false advertising still injured him “because it lessens his ability to gather all relevant information and incorporate it into his future purchasing decisions.”

Church & Dwight argued that, even under this approach, the allegations of the complaint established that it is not possible for a natural latex condom to carry a lawful “Made in U.S.A.” label because of insufficient domestic natural rubber production. That wasn’t true; it merely alleged that, because of the current domestic supply/demand imbalance, C&D uses imported natural latex.  If C&D changed its sourcing, it could keep the label.

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