Corona v. It's a New 10, LLC

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8 UNITED STATES DISTRICT COURT

9 SOUTHERN DISTRICT OF CALIFORNIA

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11 MARIA CORONA, individually and on Case No.: 25CV377-GPC(BLM)

behalf of all others similarly situated,

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ORDER GRANTING IN PART AND

Plaintiffs,

13 DENYING IN PART DEFENDANT’S

v. MOTION TO DISMISS WITH

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LEAVE TO AMEND

IT’S A NEW 10, LLC,

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Defendant. [Dkt. No. 10.]

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Before the Court is Defendant’s motion to dismiss the complaint. (Dkt. No. 10.)

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Plaintiff filed an opposition. (Dkt. No. 12.) Defendant filed a reply. (Dkt. No. 13.) The

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Court finds that the matter is appropriate for decision without oral argument pursuant to

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Local Civ. R. 7.1(d)(1). Based on the reasoning below, the Court GRANTS in part and

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DENIES in part Defendant’s motion to dismiss with leave to amend.

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Background

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On February 20, 2025, Plaintiff Maria Corona (“Plaintiff”) filed a putative class

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action complaint against Defendant It’s a New 10, LLC (“Defendant”) for unlawfully

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labeling its haircare products with “Made in the USA,” when they allegedly contain

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undisclosed foreign-sourced ingredients and components. (Dkt. No. 1, Compl. ¶ 22.)

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Because Defendant’s products are “wholly and substantially made with ingredients and

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1 components sourced, grown, or manufactured outside the United States,” (id. ¶ 23),

2 Plaintiff claims Defendant’s labels violate the Federal Trade Commission’s “Made in the

3 USA” rule, (“the FTC Rule”), 16 C.F.R. § 323.2, and California’s “Made in the USA”

4 rule (“the CA MUSA Rule), Cal. Bus. & Prof. Code section 17533.7. (Id. ¶¶ 4, 25, 26

5 n.4, 44, 100.)

6 Around May 5, 2024, Plaintiff was shopping at Marshalls in Carlsbad, California

7 looking to purchase haircare products. (Id. ¶ 53.) While browsing, she noted

8 Defendant’s Silk Express Miracle Silk Leave-In, (the “Product”), with the label “Made in

9 the USA” on its Principal Display Panel (“PDP”), the most prominent and noticeable

10 location on the product. (Id. ¶¶ 7, 37.) Companies typically place the most important

11 and highest-value selling points on the product’s PDP because it is the part that faces the

12 consumer when placed on a shelf or displayed on a website, allowing customers to see

13 the claims without needing to turn the product around. (Id. ¶¶ 38, 39.) On the Silk

14 Express Miracle Silk Leave-In, the text “MADE IN THE USA” is in capital letters and

15 distinguished with metallic text and placed underneath the size or quantity of the Product

16 and isolated from other wording. (Id. ¶ 40.) Plaintiff claims that the “Made in the USA”

17 is in the same location on the packing of nearly every one of Defendant’s products, or in

18 some cases, in another conspicuous location on the product label. (Id. ¶ 42.) She asserts

19 that the Product she purchased contains palm oil, camellia sinensis (tea) leaf extract,

20 hydrolyzed silk, and silk amino acids, and none of these ingredients originate from the

21 United States. (Id. ¶ 45.) Relying on the unqualified “Made in the USA” representation

22 on the Product and looking to purchase a product made in the United States with U.S.

23 ingredients, Plaintiff purchased the product for about $8.99 (excluding tax) for her

24 personal use. (Id. ¶ 55.) The “Made in the USA” representation was material in her

25 decision to purchase the Product, and had she known the Product was not of U.S. origin,

26 she would not have purchased it. (Id. ¶¶ 59, 61.)

27 Plaintiff additionally alleges that despite the “Made in the USA” label, the Miracle

28 Moisture Shampoo contains acai berry extract, and other ingredients and components that

1 are not sourced from the United States; the Silk Express Miracle Daily Shampoo contains

2 palm oil and hydrolyzed silk; the Miracle Daily Conditioner contains silk amino acids;

3 and the Miracle Blowdry Volumizer contains hydrolyzed silk (collectively with Silk

4 Express Miracle Silk Leave-In, the “Products”). (Id. ¶¶ 46, 47.)

5 Plaintiff maintains that Defendant has been misleading consumers for years by

6 representing its products were made in the United States with ingredients and

7 components sourced from the United States. (Id. ¶ 43.) According to her, American

8 consumers view products, ingredients and components made in the United States as being

9 of higher quality than their foreign counterparts. (Id. ¶ 51.) As such, Defendant either

10 charged a premium for its products compared to its competitors or gained a competitive

11 advantage by having its products chosen over others based on false, unqualified “Made in

12 the USA” claims. (Id. ¶ 52.) Plaintiff alleges that Defendant’s “Made in the USA”

13 representation on the its products is false, unqualified, unfair and deceptive. (Id. ¶ 63.)

14 As such, Plaintiff alleges violations of (1) California’s Consumer Legal Remedies

15 Act (“CLRA”), Cal. Civ. Code § 1750, et seq.; (2) California’s Unfair Competition Law

16 (“UCL”), Bus. & Prof. Code § 17200, et seq.; (3) California’s False Advertising Law

17 (“FAL”), Bus. & Prof. Code § 17500, et seq.; (4) breach of express warranty; (5) unjust

18 enrichment; (6) negligent misrepresentation; and (7) intentional misrepresentation. (Id.

19 ¶¶ 87-199.)

20 Defendant moves to dismiss the complaint for failing to state a claim under Federal

21 Rule of Civil Procedure 12(b)(6), 9(b) and for lack of subject matter jurisdiction under

22 Rule 12(b)(1), and the motion is fully briefed. (Dkt. Nos. 10, 12, 13.)

23 Legal Standards

24 A. Federal Rule of Civil Procedure 12(b)(1)

25 Rule 12(b)(1) permits challenges to a court’s subject matter jurisdiction and

26 includes a challenge for lack of Article III standing. See Chandler v. State Farm Mut.

27 Auto. Inc. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). Article III, Section 2 the United

28 States Constitution requires that a plaintiff have standing to bring a claim. See Lujan v.

1 Defenders of Wildlife, 504 U.S. 555, 560 (1992). Article III standing requires that a

2 plaintiff show that he has (1) “suffered an injury in fact” that is “concrete and

3 particularized” and “actual or imminent” (2) “that is fairly traceable to the challenged

4 conduct of the defendant,” and (3) “that is likely to be redressed by a favorable judicial

5 decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338-39 (2016) (citing Lujan v.

6 Defenders of Wildlife, 504 U.S. 555, 560 (1992)). The plaintiff has the burden to allege

7 Article III standing. See Lujan, 504 U.S. at 561. A “quintessential injury-in-fact” occurs

8 when the “plaintiffs spent money that, absent defendants’ actions, they would not have

9 spent.” Maya, 658 F.3d at 1069. Additionally, if plaintiffs “state that they would not

10 have purchased [a product] had there been proper disclosure” of relevant facts, that is

11 sufficient to plead causation. Id. at 1070.

12 B. Federal Rule of Civil Procedure 12(b)(6)

13 Rule 12(b)(6) allows a court to dismiss a complaint for “failure to state a claim

14 upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Dismissal under Rule

15 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient

16 facts to support a cognizable legal theory. Election Integrity Project Cal., Inc. v. Weber,

17 113 F.4th 1072, 1081 (9th Cir. 2024) (citing Navarro v. Block, 250 F.3d 729, 732 (9th

18 Cir. 2001)). To survive a motion to dismiss, the complaint must contain a “short and

19 plain statement showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2),

20 backed by sufficient facts that make the claim “plausible on its face.” Ashcroft v. Iqbal,

21 556 U.S. 662, 678, (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547

22 (2007)). Plausibility requires “more than a sheer possibility that a defendant has acted

23 unlawfully.” Iqbal, 556 U.S. at 678. Rather, it requires enough factual content for the

24 court to “draw the reasonable inference that the defendant is liable for the misconduct

25 alleged.” Id. (citing Twombly, 550 U.S. at 556). In reviewing the plausibility of a

26 complaint, courts must “accept factual allegations in the complaint as true and construe

27 them in the light most favorable to the non-moving party.” Dent v. Nat'l Football

28 League, 968 F.3d 1126, 1130 (9th Cir. 2020). But courts do not accept as true allegations

1 that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.

2 Coronavirus Rep. v. Apple, Inc., 85 F.4th 948, 954 (9th Cir. 2023). Ultimately, the court

3 must be able to “draw the reasonable inference that the defendant is liable for the

4 misconduct alleged.” Iqbal, 556 U.S. at 663.

5 C. Federal Rule of Civil Procedure 9(b)

6 Claims sounding in fraud are subject to the heightened pleading requirements of

7 Federal Rule of Civil Procedure 9(b), which requires a plaintiff bringing such a claim to

8 “state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P.

9 9(b). To properly plead fraud with particularity under Rule 9(b), “a pleading must

10 identify the who, what, when, where, and how of the misconduct charged.” Davidson v.

11 Kimberly-Clark Corp., 889 F.3d 956, 964 (9th Cir. 2018). In addition, the allegation

12 “must set forth what is false or misleading about a statement, and why it is false.” Id.

13 The purpose of Rule 9(b) is to require that allegations be “specific enough to give

14 defendants notice of the particular misconduct which is alleged … so that they can defend

15 against the charge and not just deny that they have done anything wrong.” Whiteside v.

16 Kimberly Clark Corp., 108 F.4th 771, 785 (9th Cir. 2024).

17 Discussion

18 Defendant moves to dismiss arguing that the complaint fails to allege facts

19 establishing a violation of the CA MUSA rule and does not allege facts that its Products

20 fall outside California’s safe harbor rules. (Dkt. No. 10-1 at 11-17.1) In response,

21 Plaintiff argues that the California safe harbor rules are preempted by the FTC Rule under

22 express and conflict preemption. (Dkt. No. 12 at 12-19.) Alternatively, she asserts that

23 even if the CA safe harbor provisions are not preempted, she has sufficiently alleged that

24 the safe harbor provisions do not apply to the Products at issue. (Id. at 19-24.)

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1 A. Preemption

2 Under the Supremacy Clause of the U.S. Constitution, U.S. CONST. art. VI, cl. 2,

3 state laws that interfere with or contradict federal law are preempted. See Rose v.

4 Arkansas State Police, 479 U.S. 1, 3 (1986). The Supremacy Clause applies to federal

5 statutes as well as federal regulations. City of New York v. F.C.C., 486 U.S. 57, 63

6 (1988) (“[t]he phrase “Laws of the United States” [as stated in the Supremacy Clause]

7 encompasses both federal statutes themselves and federal regulations that are properly

8 adopted in accordance with statutory authorization”); Assurance Wireless USA, L.P. v.

9 Reynolds, 100 F.4th 1024, 1031 (9th Cir. 2024) (“Federal regulations can preempt state

10 law.”). The three types of preemption are: (1) express preemption, when Congress has

11 expressed its intent to displace state law; (2) field preemption, when “Congress takes

12 exclusive control over a particular issue”; and (3) conflict preemption, when state law

13 conflicts with federal law. Reynolds, 100 F.4th at 1032-33.

14 Conflict preemption applies when “compliance with both federal and state

15 regulations is a physical impossibility,” Florida Lime & Avocado Growers, Inc. v. Paul,

16 373 U.S. 132, 142-43 (1963), or when state law “stands as an obstacle to the

17 accomplishment and execution of the full purposes and objectives of Congress.” Hines v.

18 Davidowitz, 312 U.S. 52, 67 (1941); see also Bank of Am. v. City & Cnty. of San

19 Francisco, 309 F.3d 551, 558 (9th Cir. 2002). The party seeking preemption bears the

20 burden of establishing it. Corbett v. PharmaCare U.S., Inc., 567 F. Supp. 3d 1172, 1193

21 (S.D. Cal. 2021) (citing Dorsett v. Sandoz, Inc., 699 F. Supp. 2d 1142, 1155 (C.D. Cal.

22 2010)).

23 The Federal Trade Commission (“FTC”) specifically regulates products claiming

24 origin in the United States pursuant to its authority delegated by 15 U.S.C. § 45a.2 In

25 2021, the FTC authorized 16 C.F.R. § 323.2, the FTC Rule, instructing that,

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2 “To the extent any person introduces, delivers for introduction, sells, advertises, or offers for sale in

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1 it is an unfair or deceptive act or practice … to label any product as Made in

the United States unless the final assembly or processing of the product

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occurs in the United States, all significant processing that goes into the

3 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.

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5 16 C.F.R. § 323.2 (emphasis added). Under the CA MUSA Rule,

6 It is unlawful … to sell or offer for sale in this state any merchandise on

which merchandise or on its container there appears the words “Made in

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U.S.A.,” “Made in America,” “U.S.A.,” or similar words if the merchandise

8 or any article, unit, or part thereof, has been entirely or substantially made,

manufactured, or produced outside of the United States.

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10 Cal. Bus. & Prof. Code § 17533.7(a) (emphasis added). Two amendments to the CA

11 MUSA Rule, Cal. Bus. & Prof. Code sections 17533.7(b) and (c), (“CA safe harbor

12 provisions”), effective 2016, provide exceptions making a “Made in the USA” label

13 lawful. It provides that,

14 (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

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from outside of the United States, if all of the articles, units, or parts of the

16 merchandise obtained from outside the United States constitute not more

than 5 percent of the final wholesale value of the manufactured product.

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18 (c)(1) This section shall not apply to merchandise made, manufactured, or

produced in the United States that has one or more articles, units, or parts

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from outside of the United States, if both of the following apply:

20 (A) The manufacturer of the merchandise shows that it can neither produce

the article, unit, or part within the United States nor obtain the article, unit,

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or part of the merchandise from a domestic source.

22 (B) All of the articles, units, or parts of the merchandise obtained from

outside the United States constitute not more than 10 percent of the final

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wholesale value of the manufactured product.

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in order to represent that such product was in whole or substantial part of domestic origin, such label

27 shall be consistent with decisions and orders of the Federal Trade Commission issued pursuant to

section 45 of this title. This section only applies to such labels. Nothing in this section shall preclude the

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1 Cal. Bus. & Prof. Code §§ 17533.7(b), (c).

2 1. Express and Conflict Preemption

3 Plaintiff argues that the CA safe harbor provisions are preempted by the FTC Rule

4 as they are inconsistent with the FTC Rule because they provide less protection. (Dkt.

5 No. 12 at 16-17.) Specifically, she claims the CA safe harbor provisions prevent or

6 frustrate the accomplishment of the federal objective to provide greater labeling law

7 protections and because the FTC Rule imposes a more stringent “all or virtually all”

8 standard than California, the safe harbor provisions patently conflict with the federal

9 requirement. (Id. at 18.) Defendant replies that the CA safe harbor provisions are

10 different, and not in conflict with the FTC Rule. (Dkt. No. 13 at 7-9.)

11 In determining express preemption, the court’s role is to determine Congress’

12 intent in enacting the federal regulation at issue. See Shaw v. Delta Airlines, Inc., 463

13 U.S. 85, 95 (1983). When there is an express preemption clause, “we do not invoke any

14 presumption against pre-emption but instead ‘focus on the plain wording of the clause,

15 which necessarily contains the best evidence of Congress’ pre-emptive intent.’” Puerto

16 Rico v. Franklin Cal. Tax–Free Trust, 579 U.S. 115, 125 (2016) (citation omitted). As

17 such, “[e]xpress preemption is a question of statutory construction, requiring a court to

18 look to the plain wording of the statute and surrounding statutory framework to determine

19 whether Congress intended to preempt state law.” Jones v. Google, 73 F.4th 636, 641

20 (9th Cir. 2023).

21 In this case, Congress did not intend to expressly preempt state law by legislating

22 “Made in the USA” labels. See 15 U.S.C. § 45a (“Nothing in this section shall preclude

23 the application of other provisions of law relating to labeling.”); see Rules and

24 Regulations Federal Trade Commission, 16 C.F.R. Part 323, 86 Fed. Reg. 37022, 37030

25 (July 14, 2021) (by enacting 15 U.S.C. § 45a, “Congress declined to expressly preempt

26 state regulation or otherwise demonstrate a clear intent for federal law to occupy the field

27 of regulation in question.”); see also Darnell McCoy v. McCormick & Co., Inc., Case No.

28 1:25-cv-00231-JLT-SAB, 2025 WL 1918546, at *9 (E.D. Cal. July 11, 2025) (findings

1 and recommendations) (“express preemption does not generally apply to California’s

2 Section 17533.7 safe harbor provisions”). Therefore, the Court concludes that the FTC

3 Rule does not expressly preempt the CA safe harbor provisions.

4 Rather, the FTC Rule preempts a state statute, or regulation “to the extent that

5 such statute, regulation . . . is inconsistent with the provisions of this part, and then only

6 to the extent of the inconsistency.”3 16 C.F.R. § 323.5(a) (emphasis added).

7 When a preemption statute uses the term “inconsistent”, it refers to “contradictory

8 state law requirements, or to requirements that stand as obstacles to federal objectives.”

9 Jones, 73 F.4th at 642. But state laws that “supplement, or require the same thing, as

10 federal law, do not stand[ ] as an obstacle, to Congress's objectives, and so are not

11 ‘inconsistent.’” Id. (citations and quotation marks omitted).

12 First, Plaintiff has not shown that the CA safe harbor provisions stand as an

13 obstacle to the federal objectives. The FTC Rule was enacted under the FTC’s statutory

14 authority under Section 5 of the Federal Trade Commission Act to prohibit “unfair or

15 deceptive acts or practices.” See 15 U.S.C. § 45(a)(1) (“Unfair methods of competition in

16 or affecting commerce, and unfair or deceptive acts or practices in or affecting

17 commerce, are hereby declared unlawful.”); see also Rules and Regulations Federal

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3 In full, the FTC regulation provides,

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(a) In general . . . this part shall not be construed as superseding, altering, or affecting any

22 other State statute, regulation, order, or interpretation relating to country-of-origin

labeling requirements, except to the extent that such statute, regulation, order, or

23 interpretation is inconsistent with the provisions of this part, and then only to the extent

of the inconsistency.

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25 (b) Greater protection under State law. For purposes of this section, a State statute,

regulation, order, or interpretation is not inconsistent with the provisions of this part if the

26 protection such statute, regulation, order, or interpretation affords any consumer is greater

than the protection provided under this part, as determined by the Commission on its own

27 motion or upon the petition of any interested party.

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1 Trade Commission, 16 C.F.R. Part 323, 86 Fed. Reg. 37022-01, 37026 (July 14, 2021)

2 (noting that “all or virtually all” standard is meant to prevent consumer deception).

3 Similarly, California enacted the CA MUSA rule in order to protect “consumers

4 from unfair, dishonest, or harmful market practices.” Sen. Judiciary Comm., Bill

5 Analysis of Sen. Bill 633, 2015-2016 Reg. Sess., at 4 (Aug. 13, 2015). By amending and

6 adding the CA safe harbor provisions, the California legislature recognized that the

7 existing law prohibited the use of the “Made in the USA” label unless the product was

8 entirely made in the United States. Id. at 5. Recognizing it is the only state that requires

9 “a 100 percent domestic requirement” and is unrealistic standard in a complex, global

10 economy, the California legislature amended the CA MUSA to add in two exceptions

11 based on percentages of the wholesale value of the product. Id. at 6.

12 The legislative history of both the FTC Rule and CA safe harbor provisions show

13 that both share the same purpose of consumer protection and the prevention of deceptive

14 “Made in USA” labelling. There is no indication that the FTC intended to provide

15 greater labeling law protections over the CA safe harbor provisions. As such, Plaintiff

16 has not shown the CA safe harbor provisions stand as an obstacle to the federal objective

17 of protecting consumers.

18 Second, Plaintiff has not meaningfully shown how the CA safe harbor provisions

19 and the FTC Rule impose contradictory or inconsistent requirements.

20 In 2021, the FTC codified the “all or virtually” standard for U.S. origin on labels

21 for products after eliciting comments. See Rules and Regulations Federal Trade

22 Commission, 16 C.F.R. Part 323, 86 Fed. Reg. 37022-01 (July 14, 2021).

23 Relying on its past Policy Statement4, FTC explained that the “all or virtually all”

24 standard to substantiate “Made in USA” means “[a] product that is all or virtually all

25 made in the United States will ordinarily be one in which all significant parts and

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1 processing that go into the product are of U.S. origin.” Id. at 37028. “In other words,

2 where a product is labeled or otherwise advertised with an unqualified claim, it should

3 contain only a de minimis, or negligible, amount of foreign content.” Id. Recognizing

4 that there is no “bright line” rule, the FTC looks at factors to determine if a product is “all

5 or virtually all” made in the United States. Id. The FTC explained that at a minimum the

6 final assembly or processing of the product must take place in the United States and

7 besides that, the FTC will consider other factors, “including but not limited to the portion

8 of the product's total manufacturing costs attributable to U.S. parts and processing; how

9 far removed from the finished product any foreign content is; and the importance of the

10 foreign content to the form or function of the product.” Id.

11 The FTC declined to adopt a “bright-line, percentage-based standard” as in

12 California, or even a “broad carve-out for inputs not available in the United States” and

13 adopted the preexisting and flexible “all or virtually all” standard because of the vast

14 array of products and how consumers would interpret “Made in the USA” claims

15 differently depending on the product. Id. at 37025-37028.

16 The California legislature also noted the federal “all or virtually all” standard

17 “requires that the significant parts of a final manufactured product come from domestic

18 sources” but recognized the federal standard allows a product to contain a negligible

19 amount of foreign sourced material. Sen. Judiciary Comm., Bill Analysis of Sen. Bill

20 633, 2015-2016 Reg. Sess., at 6 (Aug. 13, 2015). “As an example, New Balance

21 sneakers are made from roughly 70 percent domestic sources and the Federal Trade

22 Commission allows them to advertise as ‘Made in USA.’” Id.

23 Nothing in the FTC’s analyses or the California legislature’s analyses suggest that

24 the CA safe harbor provisions are inconsistent with the FTC Rule. The FTC and the

25 California legislature were cognizant of the other’s standards without stating any conflict

26 or inconsistency. Plaintiff has not provided any authority that a product containing 5 or

27 10 percent foreign-sourced material under California safe harbor provisions would

28 necessarily fail to meet the FTC Rule’s “all or virtually all” standard which is a “flexible”

1 one. In fact, the New Balance sneakers example the California legislature referenced

2 stating that the FTC Rule would permit a sneaker made with 70 percent domestic sources

3 shows that “all or virtually all” is pliable. Sen. Judiciary Comm., Bill Analysis of Sen.

4 Bill 633, 2015-2016 Reg. Sess., at 6 (Aug. 13, 2015).

5 The Court is also not persuaded by Plaintiff’s argument that the CA safe harbor

6 provisions are inconsistent with the FTC Rule because they are “less protective.”

7 Plaintiff cites Lensch v. Armada Corp., in support of their argument that state law may be

8 preempted where it provides less protection than federal law. (Dkt. No. 12 at 17.)

9 However, in Lensch, the Washington law expressly permitted behaviors which the

10 Federal Debt Collection Practices Act expressly prohibited. Lensch v. Armada Corp.,

11 795 F. Supp. 2d 1180, 1186-87 (W.D. Wash. 2011) (“[a]s a matter of law, this statute

12 wholly contradicts the FDCPA, which states the exact opposite”). Here, the FTC Rule of

13 “all or virtually all” does not explicitly forbid the CA safe harbor provisions’ requirement

14 of 5 or 10 percent, making the instant case very distinct from Lensch’s narrower holding.

15 Thus, the Court concludes that the CA safe harbor provisions, sections 17533.7(b)

16 & (c) are not preempted by the FTC Rule expressly or by conflict preemption. See

17 Darnell McCoy, 2025 WL 1918546, at *9 (findings and recommendations) (FTC rule did

18 not preempt CA safe harbor provisions under express or conflict preemption).

19 B. Whether the Consumer Fraud Statutes Fail to State a Claim

20 Defendant seeks dismissal of all causes of action based on Plaintiff’s failure to

21 allege facts establishing a violation of CA MUSA Rule and that its products fall outside

22 of the CA safe harbor provisions because each cause of action is based on the false

23 representation that the Product is “Made in the USA.” (Dkt. No. 10-1 at 16.) However,

24 the Court notes that Defendant fails to tether its arguments to each cause of action. On a

25 Rule 12(b)(6) motion, Defendant must articulate the elements of each cause of action and

26 explain why the complaint fails to state a claim. See Corbett, 567 F. Supp. 3d at 1194

27 (“Defendant, in its moving brief, fails to tether its deception argument to a specific cause

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1 of action. It fails to specifically explain what element of each of the consumer fraud

2 statute requires deception and why they fail under each cause of action.”).

3 Nonetheless, Plaintiff has not opposed Defendant’s argument that the complaint

4 failed to state a claim by failing to identify the elements of each of cause of action.

5 Moreover, because the CA safe harbor provisions, section 17533.7, are part of the FAL,

6 the Court will address the FAL and related UCL and CLRA causes of action. However,

7 because Defendant has failed to meet its burden on the remaining state law claims of

8 breach of express warranty, unjust enrichment, negligent misrepresentation and

9 intentional misrepresentation, the Court DENIES Defendant’s motion to dismiss.

10 The UCL prohibits “any unlawful, unfair or fraudulent business act or practice”,

11 Cal. Bus. and Prof. Code § 17200; the FAL prohibits “any unfair, deceptive, untrue, or

12 misleading advertising”, see Cal. Bus. and Prof. Code §§ 17200, 17500; and the CLRA

13 prohibits “unfair methods of competition and unfair or deceptive acts or practices”, Cal.

14 Civ. Code § 1770. “[A]ny violation of the false advertising law . . . necessarily violates”

15 the UCL. Kasky v. Nike, Inc., 27 Cal. 4th 939, 950 243 (2002), as modified (May 22,

16 2002) (citation omitted). Claims under the UCL, FAL and CLRA are governed by the

17 “reasonable consumer” test.” Williams v. Gerber Prod. Co., 552 F.3d 934, 938 (9th Cir.

18 2008) (citation omitted); Hadley v. Kellogg Sales Co., 273 F. Supp. 3d 1052, 1063 (N.D.

19 Cal. 2017) (courts often analyze claims under the CLRA, FAL and UCL together).

20 Under the reasonable consumer standard, plaintiffs “must show that members of

21 the public are likely to be deceived” by the alleged representations. Williams, 552 F.3d at

22 938 (citation and internal quotation marks omitted). Likely to deceive requires a

23 probability “that a significant portion of the general consuming public or of targeted

24 consumers, acting reasonably in the circumstances, could be misled”, and not a “mere

25 possibility” that the label or advertising “might conceivably be misunderstood by some

26 few consumers viewing it in an unreasonable manner.” Ebner v. Fresh, Inc., 838 F.3d

27 958, 965 (9th Cir. 2016) (quoting Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496,

28 508 (2003)).

1 The complaint alleges violations of the CLRA, UCL and FAL arguing Plaintiff,

2 including reasonable consumers, were deceived and misled by Defendant’s “Made in the

3 USA” representations that all ingredients and components originated from the United

4 States, when in fact they did not. (Dkt. No. 1, Compl. ¶¶ 88, 138, 139, 140, 152.)

5 Defendant argues that Plaintiff has not alleged facts establishing a violation of the

6 CA MUSA Rule and that the Products fall outside the CA safe harbor provisions. (Dkt.

7 No. 10-1 at 11-17.) Plaintiff responds that Defendant’s products are not subject to the

8 CA safe harbor provisions and plausibly alleges that a substantial portion of its products

9 all contain foreign sourced ingredients sufficient to fall outside the safe harbor

10 provisions’ percentages. (Dkt. No. 12 at 19-21.)

11 As recited above, the CA MUSA Rule provides,

12 It is unlawful … to sell or offer for sale in this state any merchandise on

which merchandise or on its container there appears the words “Made in

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U.S.A.,” “Made in America,” “U.S.A.,” or similar words if the merchandise

14 or any article, unit, or part thereof, has been entirely or substantially made,

manufactured, or produced outside of the United States.

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16 Cal. Bus. & Prof. Code § 17533.7(a). The CA safe harbor provisions provide,

17 (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

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from outside of the United States, if all of the articles, units, or parts of the

19 merchandise obtained from outside the United States constitute not more

than 5 percent of the final wholesale value of the manufactured product.

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21 (c)(1) This section shall not apply to merchandise made, manufactured, or

produced in the United States that has one or more articles, units, or parts

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from outside of the United States, if both of the following apply:

23 (A) The manufacturer of the merchandise shows that it can neither produce

the article, unit, or part within the United States nor obtain the article, unit,

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or part of the merchandise from a domestic source.

25 (B) All of the articles, units, or parts of the merchandise obtained from

outside the United States constitute not more than 10 percent of the final

26

wholesale value of the manufactured product.

27

Cal. Bus. & Prof. Code §§ 17533.7(b), (c).

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1 The complaint alleges that Plaintiff purchased Defendant’s Silk Express Miracle

2 Silk Leave-In which contained foreign ingredients of palm oil, camellia sinensis (tea) leaf

3 extract, hydrolyzed silk, and silk amino acids. (Dkt. No. 1, Compl. ¶¶ 7, 45.) She alleges

4 that the Product is “wholly or substantially made with ingredients and components

5 sourced, grown, or manufactured outside the United States.” (Id. ¶ 23, see also ¶ 44

6 (“they are substantially made with foreign ingredients”); ¶ 6 (“substantially and

7 materially composed of indispensable foreign ingredients”.) Accepting the allegations in

8 the complaint as true and construing them in the light most favorable to the non-moving

9 party, the complaint sufficiently alleges a violation of the CA MUSA rule because it

10 alleges that the ingredients and components are wholly or substantially manufactured

11 outside the United States.

12 However, as to whether Plaintiff has plausibly alleged that Defendant’s Products

13 fall outside the CA safe harbor provisions, the complaint fails to allege any percentage of

14 the foreign sourced ingredients and as such fails to state a claim under Rule 8, and

15 necessarily under Rule 9(b). See Hood v. Handi-Foil Corp., Case No. 24-cv-02373-RS,

16 2024 WL 4008711, at *3 (N.D. Cal. Aug. 29, 2024) (general claim that “parts of

17 Defendants' products obtained from outside the United States constitute more than 10

18 percent of the final wholesale value of the manufactured products are insufficient and

19 vague” and formulaic recitation of the elements); Hass v. Citizens of Human., LLC, Case

20 No.: 14-CV-1404 JLS (WVG), 2016 WL 7097870, at *4 (S.D. Cal. Dec. 6, 2016)

21 (dismissing as insufficient allegation that products “are substantially made,

22 manufactured, or produced from component parts that are manufactured outside of the

23 United States” and the mere listing of foreign materials does not raise plausible inference

24 that these materials constitute more than five or ten percent of the wholesale value of the

25 product) (emphasis in original); Alaei v. Rockstar, Inc., 224 F. Supp. 3d 992, 1000 (S.D.

26 Cal. 2016) (“Plaintiff fails to specify where the allegedly foreign-sourced ingredients

27 were made and what percentage of Defendants' products are comprised of foreign-

28 sourced ingredients.”).

1 Plaintiff argues that because silk is in the Product name, it is an important

2 ingredient for purposes of marketing, formulation and the wholesale value of the Product,

3 and combined with other ingredients such as palm oil, the combination is sufficient to

4 plausibly allege the foreign ingredients in the Products are more than 5% or even 10% of

5 the final wholesale value of the Product. (Dkt. No. 12 at 20.) However, these assertions

6 in the opposition are not in the complaint and the Court declines to consider allegations

7 outside the complaint.

8 Plaintiff also argues that the CA safe harbor provisions are an affirmative defense

9 that Defendant must bear in defending the case and not a pleading requirement. (Dkt.

10 No. 12 at 25-26.) The Court disagrees. Because “the safe harbor doctrine . . . precludes

11 plaintiffs from bringing claims based on ‘actions the Legislature permits[]’”, Ebner, 818

12 F.3d at 963 (quoting Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163,

13 (1999)), caselaw supports Defendant’s position that Plaintiff must allege that its products

14 fall outside the safe harbor provisions on a Rule 12(b)(6) motion because section 17533.7

15 makes lawful the labeling of products that contain a certain percentage of ingredients

16 from foreign sources. See Fitzpatrick v. Tyson Foods, Inc.. 714 Fed. App’x 797, 798 (9th

17 Cir. 2018) (affirming Rule 12(b)(6) dismissal of California’s consumer protection statutes

18 based on the safe harbor provisions of section 17533.7) (citing Ebner, 838 F.3d at 963);

19 Hood v. Handi-Foil Corp., Case No. 24-cv-02373-RS, 2024 WL 4008711, at *3 (N.D.

20 Cal. Aug. 29, 2024) (rejecting argument that safe harbor is an affirmative defense).

21 Accordingly, the Court does not find Plaintiff’s argument that the CA safe harbor

22 provisions are an affirmative defense to be persuasive or legally supportive.

23 Accordingly, the Court DENIES Defendant’s motion to dismiss for failing to

24 allege a violation of the CA MUSA Rule and GRANTS Defendant’s motion to dismiss

25 for failing to allege that foreign ingredients in the Products fall outside the CA safe

26 harbor provisions.

27 / / /

28 / / /

1 C. Standing

2 Defendant contends that Plaintiff has failed to plead that she has standing to sue

3 over unidentified products with unidentified ingredients that she did not purchase. (Dkt.

4 No. 10-1 at 9-10; Dkt. No. 13 at 14.) Plaintiff responds that she has identified four other

5 substantially similar products but appears to suggest that she also has standing over

6 unidentified products. (Dkt. No. 12 at 31-33.)

7 Absent controlling authority, the prevailing view among district courts in the Ninth

8 Circuit is to allow class action plaintiffs to have constitutional and statutory standing to

9 bring claims for products they did not purchase “so long as the products and alleged

10 misrepresentations are substantially similar.” Miller v. Ghirardelli Chocolate Co., 912 F.

11 Supp. 2d 861, 869 (N.D. Cal. 2012); see also Brown v. Hain Celestial Grp., Inc., 913 F.

12 Supp. 2d 881, 890 (N.D. Cal. 2012); Werdebaugh v. Blue Diamond Growers, Case No.:

13 12–CV–02724–LHK, 2013 WL 5487236, at *13 (N.D. Cal. Oct. 2, 2013) (“prevailing

14 view within this district (and elsewhere in the Ninth Circuit), which holds that a plaintiff

15 may . . . have constitutional and statutory standing to assert claims based on

16 misrepresentations appearing on products he did not purchase” . . . “as long as the

17 products and claims at issue are ‘substantially similar’”).

18 Here, both parties apply the prevailing view allowing a class action plaintiff to

19 have standing over products as long as the products and ingredients are substantially

20 similar. According to the complaint, Plaintiff purchased Silk Express Miracle Silk

21 Leave-In product, which contains palm oil, Camellia sinensis leaf extract, hydrolyzed

22 silk, and silk amino acids. (Dkt. No. 1, Compl. ¶¶ 7, 45.) She also alleges four other

23 products, that she did not purchase, make an unqualified “Made in the USA” on their

24 labels: Miracle Moisture Shampoo, Silk Express Miracle Daily Shampoo, Miracle Daily

25 Conditioner, and Miracle Blowdry Volumizer when they contain ingredients not sourced

26 from the United States. (Id. ¶¶ 46, 47.) Defendant does not dispute that these four

27 identified products that Plaintiff did not purchase are substantially similar but focus on

28

1 Plaintiff’s overbroad allegation that she has standing over all products featured on

2 Defendant’s website. (See Dkt. No. 10-1; Dkt. No. 13.)

3 The complaint alleges “[i]n addition to the unqualified ‘Made in the USA’

4 representation on the Product, It’s a 10’s other haircare products – including, but not

5 limited to, those featured on its website (together with the Product, the ‘Class Products’)

6 – also display the same unqualified ‘Made in the USA’ representation or a similar

7 unqualified U.S. origin claim.” (Dkt. No. 1, Compl. ¶ 11.) To the extent Plaintiff is

8 alleging she has standing to sue over all products on Defendant’s website, Plaintiff does

9 not have standing to bring claims for these unidentified products. See Hass, 2016 WL

10 7097870, at *7 (plaintiff lacked standing because she failed “to describe or even identify

11 any other type of apparel product made and sold by Defendant, let alone demonstrate that

12 those products and their labels are substantially similar to the [product] Plaintiff

13 purchased.”); see also Ruiz v. Celsius Holdings, No. 3:21cv128-GPC(KSC), 2021 WL

14 5811264, at *4 (S.D. Cal. July 27, 2021) (plaintiffs had standing to sue products they did

15 not purchase where specific product names were identified in the complaint5).

16 Accordingly, the Court GRANTS dismissal of Plaintiff’s claims of Products not

17 identified in the complaint.

18 D. Leave to Amend

19 Where a motion to dismiss is granted, leave to amend should be granted “unless

20 the court determines that the allegation of other facts consistent with the challenged

21 pleading could not possibly cure the deficiency.” DeSoto v. Yellow Freight Sys., Inc.,

22 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv Well Furniture

23 Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to amend would

24 be futile, the Court may deny leave to amend. See Desoto, 957 F.2d at 658; Schreiber,

25 806 F.2d at 1401. Here, Plaintiff seeks leave to amend on any claims that the Court

26

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1 ||dismisses. (Dkt. No. 12 at 33.) Because Plaintiff can cure the deficiencies, the Court

2 || GRANTS Plaintiff leave to file an amended complaint. See De Soto, 957 F.2d at 658.

3 Conclusion

4 Based on the above, the Court GRANTS in part and DENIES in part Defendant’s

5 || motion to dismiss with leave to amend. Plaintiff shall file an amended complaint within

6 || twenty-one (21) days of the Court’s order.

7 IT IS SO ORDERED.

8 Dated: July 31, 2025 2

9 Hon. athe Ck

10 United States District Judge

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