A jury in the Central District of California recently awarded $2.36 million in damages to a consumer class, finding that R.C. Bigelow Inc. (“Bigelow”) violated the Consumer Legal Remedies Act (CLRA), breached an express warranty, and made a false misrepresentation by labeling its tea products as “Manufactured in the USA 100% American Family Owned” when the company’s black, green, and oolong teas were grown and processed abroad. This lawsuit and corresponding verdict are a rarity, given most consumer class actions resolve prior to trial and highlights growing interest in “Made in USA” statements. This case underscores the complicated “Made in USA” requirements and the importance of complying with them to minimize risk.
Case Background & Legal Landscape:
“Made in USA” statements are highly regulated and have been the subject of consumer class actions in recent years. In 1997, following consumer research and public comments, the Federal Trade Commission published an Enforcement Policy Statement on U.S. Origin Claims. In August 2021, the FTC finalized its Made in USA Labeling Rule, which explains that for a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be “all or virtually all” made in the U.S.[1] “All or virtually all” means that the final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States. That is, the product should contain no—or negligible—foreign content.
Against this backdrop, in 2020, Plaintiffs in Banks v. R.C. Bigelow (“Banks”) brought a class action alleging that Bigelow’s use of “Manufactured in the USA 100% American Family Owned” on its teas was false and deceptive.[2] While Bigelow’s tea bags are manufactured in the United States and Bigelow owns a tea plantation in the United States, all of the tea is grown and processed overseas, mostly in China, India, and Sri Lanka.[3] On July 31, 2023, the court certified a class comprising of all purchasers in California of at least one box of Bigelow tea containing the label at issue between 2017 and 2023.[4] Before trial, the court ruled that the statement “Manufactured in the USA” was “literally false” because the tea leaves undergo processing outside the United States that transforms them from raw unconsumable leaves into a consumable good of black, green, or oolong tea.[5] The court also ruled that because the California legislature has prohibited false or misleading U.S. origin claims, the false representation was “material as a matter of law.”[6]
Trial:
At trial, the only issues before the jury were whether Bigelow engaged in unfair competition and unfair or deceptive acts under the CLRA, whether Bigelow breached its express warranty that the products were “Manufactured in the USA,” whether Bigelow made the false statement knowingly or recklessly, and what the amount of damages is.[7]
One of the lead plaintiffs testified that she bought Bigelow’s tea because of the American-made labeling. Class counsel argued that Bigelow’s CEO received an email containing the FTC’s requirements for a “Made in the USA” label and that several employees recommended alternative labels to her, but Bigelow instead chose the “Manufactured in the USA 100% American Family Owned” label. Bigelow’s counsel argued that the label was meant to reference Bigelow’s blending and packaging facilities in the United States and was not intended to be misleading. Colin Weir, the damages expert for the class, attributed 11.3% of Bigelow’s sales to the false label, arguing that consumers overpaid for the tea by $3.26 million. Mr. Weir testified that he conducted a study of hundreds of tea buyers in which he showed consumers images and attributes of three brands of tea and found that some survey takers preferred to pay more when the product included the phrase “Manufactured in USA 100% American-Family Owned.”
The Verdict:
After a five-day trial, the jury returned a verdict for the class on all claims and awarded $2.36 million in compensatory damages.[8] The jury did not award any punitive damages.[9]
Reading the Tea Leaves:
Banks reflects a number of trends in consumer class action litigation, including the proliferation of “Made in America” lawsuits and the increasing willingness of the Plaintiffs’ bar to bring matters to trial. As the Banks verdict demonstrates, companies should seek counsel to ensure compliance with “Made in USA” requirements.
[1] 16 C.F.R. § 323.
[2] First Amended Class Action Complaint, Banks v. R.C. Bigelow Inc., No. 2:20-cv-06208 (C.D. Cal. Aug. 20, 2020), ECF No. 11.
[3] Order Granting Plaintiffs’ Motion for Partial Summary Judgment, Banks v. R.C. Bigelow Inc., No. 2:20-cv-06208 (C.D. Cal. July 8, 2024), ECF No. 129.
[4] Order Granting Class Certification, Banks v. R.C. Bigelow Inc., No. 2:20-cv-06208 (C.D. Cal. July 31, 2023), ECF No. 83.
[5] Order Granting Plaintiffs’ Motion for Partial Summary Judgment, Banks v. R.C. Bigelow Inc., No. 2:20-cv-06208 (C.D. Cal. July 8, 2024), ECF No. 129.
[6] Id.
[7] Jury Instructions, Banks v. R.C. Bigelow Inc., No. 2:20-cv-06208 (C.D. Cal. Apr. 7, 2025), ECF No. 268.
[8] Verdict, Banks v. R.C. Bigelow Inc., No. 2:20-cv-06208 (C.D. Cal. Apr. 8, 2025), ECF No. 264.
[9] Id.
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