Misleading-made-in-USA ruling
A 12-years-old legal dispute over nation-of-origin labeling for caulking guns has led to a $2 million-plus ruling for the plaintiff, Newborn Brothers of Hanover, Maryland.
A New Jersey court has sided with Newborn in its suit against competing caulk-gun manufacturer Albion Engineering Co. of Moorestown, New Jersey.
In a case that dates back to an original filing in May of 2012, Newborn claimed that Albion’s improper use of “made-in-USA” labeling provided an unfair and illegal advantage.
The court ruled Feb. 29 that Newborn is entitled to $2,148,004 from Albion’s profits.
(In 2020, the court ruled that Albion violated the Lanham Act and New Jersey law because Albion made false representations to consumers and the marketplace about the country of origin of its products.)
“Newborn is pleased with the Court’s decision to hold Albion accountable for its conduct and looks forward to continuing to compete with Albion in the dispensing gun marketplace,” Newborn said in a statement.
Efforts to reach Albion were not immediately successful. But Albion released the following statement to a New Jersey legal publication:
“While we are still evaluating the court’s most recent opinion, we note that there were significant legal issues decided during the underlying liability phase that merit appellate review. We intend to pursue those issues vigorously.”
Newborn’s caulk guns, which are made in China, Taiwan and, most recently, Vietnam, were competing at a disadvantage due to Albion’s claims of made-in-USA, according to Newborn President Albert Lee.
Court papers show that a Newborn customer, Lowry’s, opted to give more business to Albion after being informed that Newborn’s products were made in China and Taiwan while Albion claimed it manufactured products in the United States. Also in the court papers, a former purchasing agent for Denver-based Western Waterproofing testified that “Made in USA” was an “underlying guideline” for his purchasing decisions, and that he believed Albion products were made in USA.
“There is no dispute that country of origin is just one of a variety of factors that may lead a customer to purchase one caulking gun over another," the Judge Noel L. Hillman wrote in his opinion. “But it is also clear that Albion saw value in representing itself as an American manufacturer and sought to distinguish itself from competitors, particularly Newborn, on that basis.”
Just how much of a disadvantage is difficult to measure, and the judge’s opinion went on for 44 pages attempting to quantify a “disgorgement” figure, before landing on its figure of $2.1 million.
The ruling also included highly detailed instructions for Albion to clear up confusion over its products’ country of origin. That corrective action includes supplying 8” x 10” notices “printed on durable cardboard or plastic” that reads:
NOTICE REGARDING COUNTRY OF ORIGIN OF ALBION ENGINEERING CAULKING GUN PRODUCTS
A judge of the United States District Court for the District of New Jersey has ruled that Albion
Engineering Corp. has previously misrepresented that certain products were “Made in USA,” through product mismarking and statements in advertising, promotional materials, websites, and to customers. Newborn Brothers Co. Inc. v. Albion Engineering Co., No. 12-Civ-2999 (NLH).
The Court has ordered Albion to comply with all applicable country-of-origin marking and disclosure requirements. The Court has ordered Albion to provide to its distributors copies of this notice so that they may be displayed at all distributor sales locations.
It is unclear how (or if) the display of these notices will be enforced at each distributor location.
Twelve years ago, Newborn’s original complaint alleged that import reports show Albion buying complete caulking guns and handle assemblies from Taiwanese manufacturers for Albion’s Deluxe, Special Deluxe and B-Line products. The Federal Trade Commission restricts the use of “Made in USA” marking to products that are virtually all made in the United States. Newborn alleged in its complaint that Albion’s products should be advertised and marked “Made in Taiwan.”
Newborn President Albert Lee told HBSDealer that a yet-to-be determined amount of proceeds from the ruling will be shared with a charity that supports military veterans.
“The Court’s decision is not only a victory for Newborn but also a victory for consumers who are entitled to transparency when making purchasing decisions,” the company’s statement reads. “Newborn hopes that the Court’s decision is a deterrent for other companies from engaging in similar misconduct.”
