Made-in-USA claims over tea survive; "America's Classic" could be falsifiable in context

Banks v. R.C. Bigelow, Inc., --- F.Supp.3d ----, 2021 WL 1734779, No. 20-cv-6208 DDP (RAOx) (C.D. Cal. May 3, 2021)

Plaintiffs sued over tea labeled “MANUFACTURED IN THE USA 100% AMERICAN FAMILY OWNED” and “AMERICA’S CLASSIC.” However, the tea leaves which comprise over 90% of the products were allegedly “grown by tea plantations, and processed by tea processing plants, located in places such as Sri Lanka and India.” Many of the “additional flavors or spices added to some of the Products, are also not from the United States.”  They brought the usual California claims; the court allowed some to continue.

Defendants first argued that no reasonable consumer would be deceived by the statements “America’s Classic” and “Manufactured in the USA 100% Family Owned.” The placement of “America’s Classic” at the top of the package, with a large bold “Bigelow” between the two words could plausibly have the effect of drawing a reasonable consumer’s attention to the statement. Further, on the back of the packaging, styled as a stamp, are the statements “Manufactured in the USA,” “American Family Owned” and “100%” in larger font between those two statements, which could plausibly mean 100% manufactured in the USA and 100% family owned. Given the allegations about the actual source of the tea and other ingredients, plaintiffs plausibly alleged that the representations were likely to deceive reasonable consumers.

Likewise, at the motion to dismiss stage the court wasn’t going to review the statements in isolation to determine whether the single statement “America’s Classic” is nonactionable puffery. “[E]ven statements that ‘might be innocuous “puffery” or mere statement of opinion standing alone may be actionable as an integral part of a representation of material fact when used to emphasize and induce reliance upon such a representation.’ ” Nor was the court going to assess whether the claims were in fact true at this stage. UCL, FAL, and CLRA claims survived.

What about California’s Made in the USA statute?

It is unlawful for any person, firm, corporation, or association to sell or offer for sale in this state any merchandise on which merchandise or on its container there appears the words “Made in U.S.A.,” “Made in America,” “U.S.A.,” or similar words if the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States.

“Made” means artificially produced by a manufacturing process. “[O]ne would not violate the statute by making, manufacturing, or producing merchandise solely in the United States even though using raw materials acquired from a foreign source.” However, plaintiffs alleged that the raw materials were manufactured, that is, processed, outside the US, creating a fact question. And the law plainly covered both “made” and “manufactured” claims.

The package had a side panel statement in small font: “Blended and Packaged in the U.S.A.” That wasn’t sufficient to grant a motion to dismiss.

However, following Sonner, equitable claims under the UCL, FAL, and unjust enrichment were dismissed without leave to amend because plaintiffs didn’t allege that they lacked legal remedies.