NJ Federal Court Finds Caulk Gun Maker Owes Damages to Importer for False 'Made in USA' Claims

An importer of caulk guns is entitled to monetary damages from a competitor that claimed its caulk guns were made in the U.S. when substantial portions of them were imported, the New Jersey U.S. District Court said in a recent decision. The court found that Albion Engineering continued to claim “Made in U.S.A.” in its marketing materials, representations to customers and even on some product labeling after moving much of its production to Asia, to the detriment of Newborn Bros.'s ability to attract business.

According to the decision, Albion had started to produce a cheaper, foreign-manufactured “B-Line” in 2001, after having manufactured all of its dispensing guns in Philadelphia since 1929. The company would gradually move more of its production to Taiwan over the ensuing decade, including of parts of its original line of products and some accessories. Despite having moved production, Albion continued to bill itself as a U.S. manufacturer on some guns until 2012, and on its marketing literature until only a couple of years before that.

For example, up until 2010, Albion’s website said: “All our dispensing gun products and accessories are designed and manufactured in the USA, from our location in Philadelphia, Pennsylvania.” Albion also issued NAFTA certificates of origin during the period that said its caulk guns met Federal Trade Commission Made in U.S.A. standards, and even complied with requests from distributors to remove made in Taiwan markings from its caulk guns to make them more appealing to potential customers of the caulk guns, who were sensitive to country of origin claims.

Meanwhile, Newborn Bros., which relies on contract manufacturers in Taiwan and China for production, faced trouble competing with Albion’s purportedly Made in U.S.A. product, the decision said. Potential customers would inquire as to whether Newborn’s caulk guns were made in the U.S.A., like Albion’s, and Newborn lost customers to Albion due to its overseas production. Newborn’s president would eventually undertake his own investigation into Albion, and found that Albion was importing from Taiwan in large volumes. Newborn filed its Lanham Act false advertising suit in 2012.

After several days of trial in 2017 and 2019, the district court issued its decision on Aug. 25. It found that many of Albion’s statements were literally false, including its representations on NAFTA certificates, while others were misleading. Newborn also identified the actual deception by Albion of its customers, including by way of product labeling, promotional literature and conversations with Albion employees, the court said. And as required for a suit seeking monetary damages, Newborn showed the false advertising caused real financial harm by way of lost sales.

Although the court found Newborn eligible for monetary damages in the form of Albion’s disgorgement of its profits, as well as an injunction barring future false advertising by Albion, it declined to issue the injunction or set the amount of damages in its decision. Instead, the case will proceed to arguments over several affirmative defenses alleged by Albion.

(Newborn Bros. v. Albion Engineering Company, D.N.J. 12-2999, dated 08/25/20, Judge Hillman; Attorneys: Michael Tomenga of Neville Peterson for plaintiff Newborn Bros. Co., Inc.; Michael Berkowitz of Volpe & Koenig for defendant Albion Engineering Company)

Email ITTNews@warren-news.com for a copy of the decision.