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.

from Blogger

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