Unreported / Non-Citable
Background
Plaintiff Nancy Samberg filed a putative class action against Whitestone Home Furnishings, LLC, doing business as Saatva, alleging that Saatva misleadingly advertised its mattresses as “Made in the U.S.A.” Samberg purchased a Saatva Classic Mattress in November 2023 after viewing Saatva’s website, which stated that all mattresses were “Made in the U.S.A.” and “handcrafted in America,” as well as a physical label on the mattress reading “Made in America” with an American flag. Samberg alleged she relied on these representations and understood the mattress to be made from domestically sourced materials.
The second amended complaint asserted claims under California Business & Professions Code § 17533.7, the Consumer Legal Remedies Act (CLRA), the False Advertising Law (FAL), the Unfair Competition Law (UCL), and breach of contract. Saatva moved to dismiss, arguing that Samberg lacked standing under § 17533.7 because she did not rely on the physical label, and that all claims were barred by the safe harbor in § 17533.7(b), which permits “Made in U.S.A.” labeling if foreign-sourced articles, units, or parts constitute no more than 5% of the final wholesale value.
The Court’s Holding
The court granted Saatva’s motion to dismiss the second amended complaint with prejudice. First, the § 17533.7 claim was dismissed because Samberg failed to allege she relied on the physical mattress label to her detriment; her complaint alleged reliance only on Saatva’s advertising, and her new argument in opposition—that she would have returned the mattress if the label were accurate—was deemed implausible because federal regulations require the label to show the manufacturer’s name and address (Bedding Industries of America) but not material sourcing, so an “accurate” label would not have alerted her to foreign components. Second, the court held that the § 17533.7(b) safe harbor applies to the CLRA, FAL, and UCL claims, rejecting Samberg’s argument that dismissal of the § 17533.7 claim precluded application of the safe harbor.
The court reasoned that the Legislature’s permission to label products “Made in America” when foreign inputs are ≤5% of wholesale value would be undermined if accompanying advertisements could still be challenged under general consumer protection statutes. Third, the court held that Samberg bears the burden of plausibly alleging her mattress exceeds the 5% safe harbor threshold. Her allegations—including a 2025 article about foreign-sourced wire and hardware, the low volume of domestic foam, the steel coils representing “at least 20%” of wholesale value on information and belief, and tariff-related price increases—were found insufficient because they relied on volume rather than value, omitted labor and assembly costs, conflated raw materials (which are excluded under Benson v.
Kwikset) with articles/units/parts, and failed to disentangle foreign-sourced components from domestic ones. Finally, the court extended the safe harbor to the breach of contract claim, following Calgano v. Scotts Co., because the claim was premised on the same “Made in U.S.A.” representations that the statute permits. The court denied leave to amend as futile, noting Samberg had three opportunities to plead and could not identify new facts to cure the deficiencies.
Key Takeaways
- A plaintiff asserting a claim under California Business & Professions Code § 17533.7 must allege actual reliance on the physical product label or container, not merely on advertising, to establish statutory standing.
- The safe harbor in § 17533.7(b)—permitting “Made in U.S.A.” labeling when foreign-sourced articles, units, or parts constitute ≤5% of final wholesale value—bars not only § 17533.7 claims but also CLRA, FAL, and UCL claims based on the same representations.
- The plaintiff bears the burden of plausibly alleging that the product exceeds the 5% safe harbor threshold; conclusory allegations on information and belief, volume-based inferences, and tariff-related price increases without disaggregation of component value, labor, and raw materials are insufficient.
- The safe harbor doctrine extends to common law claims such as breach of contract when they are premised on conduct the Legislature has expressly permitted, preventing plaintiffs from circumventing the safe harbor by recasting claims.
- Leave to amend may be denied as futile when a plaintiff has had multiple opportunities to plead, has had the benefit of court orders and oral argument identifying deficiencies, and cannot identify new facts to cure the pleading defects.
Why It Matters
This decision reinforces the strength of California’s § 17533.7(b) safe harbor as a comprehensive shield for “Made in U.S.A.” claims when foreign content is minimal. It clarifies that the safe harbor operates as a substantive permission that bars not only statutory consumer protection claims but also common law claims grounded in the same representations.
The ruling raises the pleading bar for plaintiffs challenging domestic-origin claims, requiring specific, value-based allegations about foreign-sourced articles, units, or parts—not just volume, raw materials, or general supply chain disclosures—and confirms that reliance on advertising alone cannot sustain a § 17533.7 claim when the statute’s text focuses on the merchandise or its container. The denial of leave to amend after three complaints signals judicial impatience with iterative pleading that fails to address core deficiencies identified by the court.
For businesses making domestic-origin representations, the decision treats section 17533.7’s five-percent rule as substantive permission, not merely a defense to one statutory count. That matters when the same advertising theory is repackaged under the CLRA, FAL, UCL, or contract law. For plaintiffs, the order sets a demanding but concrete pleading task: allegations should address the value of identifiable foreign articles, units, or parts in the particular product, while accounting for domestic labor and assembly and distinguishing component parts from raw materials excluded by precedent. The court dismissed the second amended complaint with prejudice and denied further leave to amend.