Baum v. J-B Weld Company, LLC

Background

On July 28, 2020, the court granted J-B Weld’s motion for summary judgment in part. That earlier ruling addressed only Baum’s claim under California Business and Professions Code § 17533.7, concerning “Made in USA” labeling, as a basis for his California unfair-competition claim.

Baum’s second amended complaint asserted two counts. Count I was a claim under California’s Unfair Competition Law, based on alleged violations of § 17533.7, the Federal Trade Commission Act, California’s Consumer Legal Remedies Act provision concerning geographic-origin misrepresentations, and California fraud and deceit statutes. Count II was a claim under the Consumer Legal Remedies Act based on alleged misrepresentation of a product’s geographic origin.

J-B Weld sought permission to file a motion for reconsideration under Civil Local Rule 7-9. It argued that the court had failed to consider arguments and authorities showing that the five-percent safe harbor applied not only to the § 17533.7 claim but also to all of Baum’s other state-law claims.

Court’s analysis

The court explained that reconsideration is generally disfavored and requires a showing such as a material difference in fact or law, newly emerged material facts or a change in law, or a manifest failure to consider material facts or dispositive legal arguments previously presented. J-B Weld relied on the third ground.

The court reviewed decisions holding that when a plaintiff cannot establish a viable claim under § 17533.7 because the five-percent safe-harbor limit is not exceeded, California’s safe-harbor doctrine also bars other state-law claims based on the same alleged “Made in USA” conduct. In the court’s prior summary-judgment ruling, Baum had not presented evidence that a reasonable consumer would understand the product’s containers as part of the “merchandise.” Under that construction, there was no evidence that the five-percent limit was exceeded.

The court concluded that the same safe-harbor reasoning barred Baum’s remaining state-law predicate claims, including the claims supporting Count I and the geographic-origin claim in Count II. The court noted that Baum appeared to concede that the cited cases would defeat his other state-law claims if his § 17533.7 claim failed, while arguing that his reliance on the Federal Trade Commission Act made his case different.

The court separately considered the Federal Trade Commission Act predicate. It concluded that even if Baum could prove a violation of that federal statute by showing foreign content exceeding the federal “all or virtually all” standard, his California unfair-competition claim could not proceed unless he also showed that the foreign content exceeded California’s five-percent threshold. The court found that California’s safe-harbor rule barred that claim as well.

Ruling and effect

The court granted J-B Weld’s motion for leave to file a motion for reconsideration and modified its prior order. It granted summary judgment in favor of J-B Weld on all remaining state-law predicate claims and on the Federal Trade Commission Act predicate claim. This fully disposed of all of Baum’s claims. The court directed the clerk to enter judgment and close the case. The order disposed of Docket No. 90.