The California Court of Appeal recently affirmed a lower court's ruling in a case involving Citizens of Humanity, LLC, a clothing manufacturer, and allegations of misleading labeling practices. The court's decision, filed on June 10, 2026, in case number D085849, concluded that Citizens did not prove its claim of malicious prosecution against the defendants, who were involved in a class action lawsuit against the company.
This ruling is significant as it addresses the legal standards for malicious prosecution claims and the adequacy of class representatives in consumer protection lawsuits. The outcome affects not only Citizens of Humanity but also sets a precedent for future cases involving similar allegations against businesses regarding labeling practices.
Background
The dispute began when John Donboli and Sean Slattery, attorneys at Del Mar Law Group LLP, filed a class action lawsuit in federal court against Citizens of Humanity. The plaintiffs, initially Louise Clark and later Coni Hass, claimed that the company misled consumers by labeling its jeans as "Made in the U.S.A." even though many components were imported. This claim was based on California's former Business and Professions Code section 17533.7, which prohibited such labeling if the product was substantially made outside the United States.
As the case progressed, the California Legislature amended the statute in 2016, allowing some products to be labeled as "Made in America" if they contained minimal foreign components. Citizens of Humanity filed a motion to dismiss the lawsuit based on this amendment. When the plaintiffs chose not to amend their complaint, the district court dismissed the case.
Following the dismissal, Citizens of Humanity filed a malicious prosecution claim against the plaintiffs and their attorneys, arguing that the defendants lacked probable cause to pursue the initial lawsuit. The trial court ruled in favor of the defendants, leading to the appeal by Citizens.
The Ruling
The California Court of Appeal upheld the trial court's decision, affirming that Citizens of Humanity had not established that the defendants lacked probable cause for the underlying action. The court noted, "the Made in the USA labeling that Citizens of Humanity used was violating the law," indicating that there was reasonable ground for the defendants to believe their claims were valid at the time of the original lawsuit.
The court also addressed Citizens' argument regarding the adequacy of Clark as a class representative, stating that the relationship between Clark and Slattery did not automatically disqualify her from serving as a plaintiff. The court emphasized that the mere existence of a familial relationship does not negate probable cause for pursuing a claim.
Judge Wendy M. Behan presided over the original case, and the appellate court's ruling confirmed her findings, stating that there was no evidence to suggest that Clark was a "shill plaintiff" or that the defendants acted with malice in filing the lawsuit.
Impact
This ruling has significant implications for businesses facing similar allegations of misleading labeling practices. By affirming the lower court's decision, the California Court of Appeal reinforced the legal standards for establishing probable cause in malicious prosecution claims. The court's opinion clarifies that a familial relationship between a class representative and class counsel does not inherently disqualify the representative or undermine the validity of the claims.
The ruling may also deter frivolous malicious prosecution claims against businesses, as it sets a precedent that emphasizes the need for clear evidence of a lack of probable cause before such claims can succeed. This decision could influence future cases involving class action lawsuits and consumer protection, particularly in the context of labeling and advertising practices.
What's Next
While the appellate court's ruling is final, Citizens of Humanity could potentially seek further review by the California Supreme Court. However, as of now, there are no indications that such an appeal is forthcoming. The outcome of this case may also prompt other businesses to review their labeling practices to ensure compliance with state and federal regulations, particularly in light of the evolving legal landscape surrounding consumer protection.