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Baum v. J-B Weld Co., LLC

United States District Court, N.D. California

December 16, 2019

FELIX BAUM, Plaintiff,
v.
J-B WELD COMPANY, LLC, Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO DISMISS DOCKET NO. 43

          EDWARD M. CHEN United States District Judge.

         I. INTRODUCTION

         Plaintiff Felix Baum (“Plaintiff”) has filed a class action complaint against Defendant J-B Weld Company, LLC (“Defendant” or “J-B Weld”). Defendant manufactures a range of epoxy products, which it represents as being “Made in the U.S.A.” Plaintiff brings claims under the Unfair Competition Law and Consumers Legal Remedies Act, alleging that Defendant's “Made in the U.S.A.” representations are false and misleading because the products contain impermissible amounts of foreign-sourced content. Critically, the parties disagree as to whether the accused products' containers (specifically, the products' caps, tubes, and bottles, which in this case are foreign made) should be considered part of the “product” for the purpose of determining “Made in the U.S.A.” eligibility.

         II. BACKGROUND

         A. Factual Background

         J-B Weld is “a leading manufacturer of cold weld products” that makes a wide range of sealants, adhesives, and other products. Second Amended Complaint (“SAC”) at 1, Docket No. 38. It “is a Georgia company whose headquarters is . . . [in] East Hanover, NJ.” Id. at 19. Felix Baum is a California citizen who is domiciled in San Francisco and who has “purchased [J-B Weld's] Products at various stores in San Francisco, California.” Id. at 18.

         At issue in this lawsuit are representations that J-B Weld has made indicating that its products are “Made in U.S.A.” Id. at 2-3. Plaintiff alleges that he “routinely was exposed to, saw, and relied upon Defendant's ‘Made in U.S.A.' representations by reading the front and back of” various J-B Weld product labels. Id. at 18. Plaintiff notes that on the front of “each and every” product package the phrase “Made in U.S.A.” appears directly below a picture of the American flag. Id. at 2-3. However, he contends that J-B Weld products “contain more than a ‘de minimis, or negligible,' amount of foreign content” despite the fact that the company “prominently represents that [its] Products are Made in U.S.A.” Id. at 13. Plaintiff states that had he “known the truth about Defendant's ‘Made in U.S.A.' representations, he would not have purchased [Defendant's] Products.” Id. at 18. As a result, Plaintiff claims to have “suffered injury in fact and lost money at the time of purchase.” Id.

         The California statute that governs “Made in U.S.A.” origin claims is Section 17533.7 of the state's Business and Professions Code, which states:

(a) 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.
(b) This section shall not apply to merchandise made, manufactured, or produced in the United States that has one or more articles, units, or parts from outside of the United States, if all of the articles, units, or parts of the merchandise obtained from outside the United States constitute not more than 5 percent of the final wholesale value of the manufactured product.

Cal. Bus. & Prof. Code § 17533.7.

         Plaintiff has identified 24 of Defendant's products that he believes contain impermissible levels of foreign content. Id. at 1-2. More specifically, Plaintiff's contention is that the products' various casings and containers (i.e. their tubes, plastic bottles, and resealable caps) have either a foreign provenance or contain imported materials. Id. at 2. Because American consumers have a “preference for American-made goods” and a “willingness to pay more for domestically made products, ” Plaintiff believes that Defendant was able to charge more than the company would have been able to in the absence of its “Made in U.S.A.” messaging. Id. at 16. He contends that “all consumers of Defendant's Products - whether they relied on the ‘Made in U.S.A.' representations or not - paid a premium for a U.S. origin benefit they did not receive.” Id. at 17.

         B. Procedural Background

         Plaintiff filed this suit as a proposed class action on April 3, 2019. Class Action Complaint, Docket No. 1. He filed a First Amended Class Action Complaint on May 9, 2019. See Docket No. 19. Defendant subsequently filed a Motion to Dismiss the First Amended Class Action Complaint. See Docket No. 23. That motion challenged the adequacy of Plaintiff's pleadings under Rules 8 and 9(b) and sought dismissal of the complaint under Rule 12(b)(1) for lack of standing (because Plaintiff had only purchased four of the thirty-nine products identified in the complaint) and 12(b)(6) (contending that the law governing the use of “Made in U.S.A.” labels does not concern packaging and/or containers in which products are sold).

         The Court dismissed the First Amended Complaint with leave to amend. See Docket No. 34. The Minute Order stated: “Plaintiff must specially allege each product he contends exceeds the 5% limit and state whether that excess is based on the container/packaging being included as part of the product on which the over-5% allegation is based. As stated on the record, the Court intends the parties to tee up the issue of statutory interpretation discussed at the hearing.” Id. Plaintiff filed a Second Amended Complaint, see Docket No. 38, and Defendant subsequently filed the Motion to Dismiss that is currently before the Court, see Docket No. 43 (“MTD”).

         A motion for class certification has not yet been filed. The only motion pending before the court is Defendant's Second Motion to Dismiss.

         III.DISCUSSION

         A. Le ...


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