Albion Hit With $2 million Fine for False ‘Made In USA’ Claims

March 13th, 2024 by Joshua Huff

A protracted court case between caulking gun competitors has culminated in a $2 million fine for a New Jersey-based company accused of misrepresenting certain products as “Made in U.S.A.”

A judge for the U.S. District Court for the District of New Jersey ruled on Feb. 29, 2024, that Albion Engineering Corp. distorted the country of origin on products through mismarking and advertising, promotional materials and websites.

In addition to the monetary penalty, the court ordered Albion to comply with all applicable country-of-origin marking and disclosure requirements. It also ordered it to provide its distributors with copies of the judge’s opinion so they could display them at all distributor sales locations.

Background

The suit was introduced in May 2012 by Newborn Bros. Company. It alleged violations of the Lanham Act and “unfair competition premised on allegedly false statements, misrepresentations and omissions of the geographic origin of Albion products.”

The Lanham Act prohibits several activities, including trademark infringement, dilution and false advertising.

Following a lengthy process, the court found several of Albion’s statements actionable under the Lanham Act. In particular, statements claiming that each of Albion’s products is “Made in America” and that its “dispensing products and accessories are designed and manufactured in the U.S., from our location in Philadelphia.”

The judge added that signed certificates of origin, website and catalog statements, and products stamped “ALBION ENG. CO. PHILA. PA. U.S.A.,” markings indicating seventy-five or eighty years of American manufacture were all false or misleading.

Strategic Market Advantage

Court documents indicate that Albion saw value and a strategic market advantage by presenting itself as an American manufacturer; however, its products were imported from Taiwan. Albion’s customers stated that it labeled caulking guns “Made in U.S.A.” despite some guns having imported barrels and handle assemblies.

In one example, Anthony Carroll, former purchasing agent for Denver-based specialty contractor Western Waterproofing, testified that “Made in U.S.A.” was an “underlying guideline” for his purchasing and believed Albion products to be American-made.

Furthermore, an Albion independent sales representative testified that he had attempted unsuccessfully to sell Newborn products to Giroux Glass between 2012 and 2017. According to the testimony, Giroux would not consider Newborn products because they are made in China. When Newborn sent Giroux samples, the company’s project manager threw away the caulking guns.

According to court documents, another company, Midwest Sealant & Supply, was reluctant to purchase Newborn’s products but ordered anyway after discovering a “Made in Taiwan” marking on Albion’s spatulas in September 2012.

In June 2012, U.S. Customs and Border Protection officials directed Albion to place country of origin stickers on each piece of imported product that is not easily removed, showing the country of origin near the line “U.S.A. Manufacturer and Designer” and that the “Made in Taiwan” hangtags were “not in close proximity to line stating, ‘U.S.A. Manufacturer and Designer.’” Albion responded by placing “Made in Taiwan” stickers on the handles.

During the liability phase of the trial, Newborn president Albert Lee testified that the company’s sales increased following Albion’s change in country-of-origin markings, with a 50% increase from 2011 to 2016.

Conclusion

In 2020, the court concluded that Albion’s repeated claims that its products were made in America were “closely related to competitive superiority in the dispensing gun market, and customers refused to consider purchasing from Newborn even though neither Newborn nor Albion manufactured all their products in the U.S.”

The conclusion came after Albion argued that it had proactively sought to correct its claims that it sold U.S. products.

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