Insurers Owners Insurance Company and Auto-Owners Insurance Company are heading to federal court, aiming to sidestep defending Dude Products, Inc. in a class action over “Assembled in USA” claims.
Filed on August 19, 2025, in Chicago, the case is a straightforward dispute between insurers and their policyholder. The insurers are asking the United States District Court for the Northern District of Illinois to declare that they have no obligation to defend or indemnify Dude Products, Inc. in a class action lawsuit pending in California. That underlying lawsuit, brought by Benjamin Karter and Diego Ornelas, alleges that Dude Products falsely represented its personal hygiene products as “Assembled in USA.”
Dude Products, a company incorporated in Delaware with its principal place of business in Chicago, is at the center of the dispute. The class action, filed March 20, 2025, in the Southern District of California, claims that Dude Products labeled its products, promoted them on its website, and advertised through third-party retailers as being “Assembled in USA.” According to the complaint, these claims were important to consumers, who believed they were buying higher-quality goods and supporting American jobs. The plaintiffs allege that, in reality, the products were made with ingredients and components - such as tea tree oil and shea butter - sourced, grown, or manufactured outside the United States. The complaint states that Dude Products “knew or should have known” these representations were false.
The plaintiffs in the California case are seeking orders for Dude Products to return all money, revenue, and profits obtained through the alleged misrepresentations, pay restitution, actual and punitive damages, and stop making the “Assembled in USA” claim. Their claims are based on California’s Consumer Legal Remedies Act, Unfair Competition Law, False Advertising Law, as well as unjust enrichment, negligent misrepresentation, and intentional misrepresentation.
Owners Insurance Company and Auto-Owners Insurance Company issued a tailored protection policy and a commercial umbrella policy to Dude Products, covering the period from April 21, 2015, to April 21, 2021. The policies provide coverage for “Bodily Injury and Property Damage Liability” and “Personal and Advertising Injury Liability.” Both policies define “bodily injury” as physical harm, “property damage” as physical injury to tangible property or loss of use, and “personal and advertising injury” as injury arising from offenses such as slander, libel, or disparagement of goods. The policies exclude coverage for knowing violations of rights, publication of material with knowledge of falsity, and failure of goods to conform to statements of quality or performance.
The insurers argue that the underlying lawsuit’s allegations of economic harm - specifically, that consumers overpaid for products - do not fall within the scope of bodily injury, property damage, or personal and advertising injury as defined by the policies. They also point out that, even if the claims could be considered covered injuries, the exclusions for knowing violations, material published with knowledge of falsity, and failure to conform to statements of quality or performance would apply.
Dude Products tendered the defense of the underlying lawsuit to the insurers on or about May 5, 2025. On July 2, 2025, the insurers notified Dude Products that the policies do not entitle the company to a defense or indemnity in connection with the underlying lawsuit. Dude Products has not withdrawn its tender.
No decision has been made yet, and the case remains at the complaint stage. The outcome will determine whether Owners Insurance Company and Auto-Owners Insurance Company are required to defend or indemnify Dude Products, Inc. in the class action over “Assembled in USA” representations. All statements and allegations described are as claimed by the parties in the complaint.
Insurers Owners Insurance Company and Auto-Owners Insurance Company are heading to federal court, aiming to sidestep defending Dude Products, Inc. in a class action over “Assembled in USA” claims.
Filed on August 19, 2025, in Chicago, the case is a straightforward dispute between insurers and their policyholder. The insurers are asking the United States District Court for the Northern District of Illinois to declare that they have no obligation to defend or indemnify Dude Products, Inc. in a class action lawsuit pending in California. That underlying lawsuit, brought by Benjamin Karter and Diego Ornelas, alleges that Dude Products falsely represented its personal hygiene products as “Assembled in USA.”
Dude Products, a company incorporated in Delaware with its principal place of business in Chicago, is at the center of the dispute. The class action, filed March 20, 2025, in the Southern District of California, claims that Dude Products labeled its products, promoted them on its website, and advertised through third-party retailers as being “Assembled in USA.” According to the complaint, these claims were important to consumers, who believed they were buying higher-quality goods and supporting American jobs. The plaintiffs allege that, in reality, the products were made with ingredients and components - such as tea tree oil and shea butter - sourced, grown, or manufactured outside the United States. The complaint states that Dude Products “knew or should have known” these representations were false.
The plaintiffs in the California case are seeking orders for Dude Products to return all money, revenue, and profits obtained through the alleged misrepresentations, pay restitution, actual and punitive damages, and stop making the “Assembled in USA” claim. Their claims are based on California’s Consumer Legal Remedies Act, Unfair Competition Law, False Advertising Law, as well as unjust enrichment, negligent misrepresentation, and intentional misrepresentation.
Owners Insurance Company and Auto-Owners Insurance Company issued a tailored protection policy and a commercial umbrella policy to Dude Products, covering the period from April 21, 2015, to April 21, 2021. The policies provide coverage for “Bodily Injury and Property Damage Liability” and “Personal and Advertising Injury Liability.” Both policies define “bodily injury” as physical harm, “property damage” as physical injury to tangible property or loss of use, and “personal and advertising injury” as injury arising from offenses such as slander, libel, or disparagement of goods. The policies exclude coverage for knowing violations of rights, publication of material with knowledge of falsity, and failure of goods to conform to statements of quality or performance.
The insurers argue that the underlying lawsuit’s allegations of economic harm - specifically, that consumers overpaid for products - do not fall within the scope of bodily injury, property damage, or personal and advertising injury as defined by the policies. They also point out that, even if the claims could be considered covered injuries, the exclusions for knowing violations, material published with knowledge of falsity, and failure to conform to statements of quality or performance would apply.
Dude Products tendered the defense of the underlying lawsuit to the insurers on or about May 5, 2025. On July 2, 2025, the insurers notified Dude Products that the policies do not entitle the company to a defense or indemnity in connection with the underlying lawsuit. Dude Products has not withdrawn its tender.
No decision has been made yet, and the case remains at the complaint stage. The outcome will determine whether Owners Insurance Company and Auto-Owners Insurance Company are required to defend or indemnify Dude Products, Inc. in the class action over “Assembled in USA” representations. All statements and allegations described are as claimed by the parties in the complaint.
