Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Ill.: ‘Made In USA’ labelling class action partially dismissed against hair care giant, (Dec 15, 2025)

By Wendy Biddle, J.D.

Consumer alleged John Paul Mitchell Systems violated federal regulations by using unqualified domestic origin claims on products containing foreign ingredients.

The federal district court in Chicago granted in part and denied in part John Paul Mitchell Systems' motion to dismiss a proposed class action challenging the company's use of "Made in the USA" labels on more than 200 hair care products. The court dismissed several claims while allowing the plaintiff to proceed with amended allegations under the Illinois Consumer Fraud Act and common law theories (Lauer v. John Paul Mitchell Systems, No. 1:25-cv-02438 (N.D. Ill. Dec. 4, 2025)).

Background. The lawsuit centers on the plaintiff’s purchases of six products from JPMS's Tea Tree line between August 2024 and February 2025, all bearing "Made in the USA" labels. Federal Trade Commission regulations prohibit such labeling unless "all or virtually all ingredients or components of the product are made and sourced in the United States." After purchasing the products, the plaintiff discovered that tea tree oil, described as "the namesake and key ingredient" of the Tea Tree line, is endemic to Australia, and that jojoba seeds used in some products are not produced in commercial quantities in the United States. The complaint challenged not only the six products the plaintiff purchased but also over 200 additional products that JPMS allegedly labels as "Made in the USA" despite containing various foreign-sourced ingredients.

Beyond his personal purchases, the plaintiff seeks to represent a class of Illinois consumers who bought any of over 200 JPMS products allegedly mislabeled with domestic origin claims despite containing foreign ingredients. The complaint asserts five causes of action: violations of the Illinois Consumer Fraud Act (ICFA) and Illinois Uniform Deceptive Trade Practices Act (UDTPA), as well as common law claims for unjust enrichment, negligent misrepresentation, and intentional misrepresentation.

Standing for unpurchased products. The court first addressed JPMS's threshold jurisdictional challenge regarding the plaintiff’s standing to pursue claims related to products he did not personally purchase. The court acknowledged the split among district courts on this issue, with some holding that class representatives categorically lack standing for unpurchased products, others applying a "substantially similar" test, and a third group deferring the question to class certification.

The court adopted the third approach, reasoning that Article III requires only that the named plaintiff demonstrate a case or controversy regarding his own claims. Once individual standing is established, the plaintiff "may have standing to seek relief on the basis of the legal rights and interests of others," the court explained. The opinion emphasized that class actions inherently involve representatives pursuing claims based on injuries they did not personally suffer.

The court distinguished the issue from a true Article III challenge, characterizing it instead as a question of typicality or adequacy under Rule 23 that should be resolved at class certification. The court similarly deferred JPMS's personal jurisdiction challenge regarding unpurchased products, noting that jurisdiction in class actions is based on the class representative's claims rather than those of unnamed members.

Standing for injunctive relief. The court reached a different conclusion regarding the plaintiff's request for injunctive relief under the UDTPA. Because injunctive relief is the sole remedy available under that statute, the plaintiff needed to demonstrate likelihood of future harm. The court found he failed to do so.

The court applied established precedent holding that once a consumer becomes aware of allegedly deceptive practices, future deception becomes implausible. While the plaintiff claimed he wanted to purchase the products again but could not be certain he would not be misled without labeling changes, the court found this theory insufficient. "Uncertainty alone is a far cry from a concrete harm," the opinion stated, adding that self-imposed injuries from choosing not to purchase products rarely confer standing for injunctive relief.

Actual damages under the ICFA. The court rejected JPMS's argument that the plaintiff failed to adequately plead actual damages under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA). Under Seventh Circuit precedent, actual loss may occur when a seller's deception causes a plaintiff to pay more than the actual value of property, and a plaintiff who actually bought a product can plead actual damages by alleging she paid more than the product was worth.

The plaintiff satisfied this standard by asserting he "paid a price premium for the Class Products or chose them over competing products due to Defendant's misrepresentations and deceptive packaging." JPMS urged the court to adopt a theory articulated in two cases requiring plaintiffs to show that cheaper alternatives were available in the market. The court declined, noting that the allegation of paying more than a product was worth "is a commonly accepted theory of actual pecuniary loss under the ICFA" and that JPMS presented no compelling reason to depart from the majority approach.

Rule 9(b). The court found several deficiencies in the plaintiff's pleading under FRCP 9(b), which requires that circumstances constituting fraud be alleged with particularity. The heightened pleading standard applies to claims under the ICFA, UDTPA, and intentional misrepresentation.

Regarding intent, the court distinguished between the requirements for ICFA claims and common law fraud. For ICFA claims, intent to deceive is not required; it suffices to allege that the defendant committed a deceptive act and intended that the plaintiff rely on it. The court found the plaintiff adequately alleged that JPMS intends customers to rely on product labels, analogizing to Seventh Circuit precedent accepting that retailers intend customers to rely on shelf pricing.

However, for intentional misrepresentation claims, the court found the allegations inadequate. While intent may be alleged generally under Rule 9(b), plaintiffs must provide more than conclusory allegations. The plaintiff's assertions that JPMS has "expansive resources and operational sophistication" and no reason to violate labeling laws other than for financial gain were insufficient. The court noted that allegations that a defendant is a large, sophisticated company with national distribution do not demonstrate intent under Rule 9(b).

The court also agreed with JPMS that some allegations regarding the content of the misrepresentation were too general. The complaint made vague references to unnamed foreign-sourced ingredients and, where ingredients were named, failed to specify which class products contained them. The court emphasized that Rule 9(b) functions to minimize strike suits and fishing expeditions by forcing plaintiffs to conduct adequate investigation before filing.

Disposition. The court dismissed the UDTPA claim (Count II) and negligent misrepresentation claim (Count IV) with prejudice. The negligent misrepresentation claim was dismissed because Illinois law bars such claims where damages are purely economic, an argument the plaintiff failed to address and thus waived. The ICFA claim (Count I), unjust enrichment claim (Count III), and intentional misrepresentation claim (Count V) were dismissed without prejudice, with leave to amend by January 9, 2026.

The court noted that under Illinois law, unjust enrichment typically does not constitute an independent cause of action but rather a condition brought about by unlawful or improper conduct. Therefore, if an unjust enrichment claim rests on the same conduct alleged in another claim, it will stand or fall with the related claim.

The Case is No. 1:25-cv-02438.

Judge: Tharp, Jr., J.

Attorneys: Pamela E. Prescott (Kazerouni Law Group, APC) for Sam Lauer. Alicia Anne Baiardo (McGuireWoods LLP) for John Paul Mitchell Systems.

Companies: John Paul Mitchell Systems

Cases: Advertising StateUnfairTradePractices IllinoisNews