Owners Insurance Company and Auto-Owners Insurance Company have taken their policyholder, Dude Products, to federal court in Chicago.
The insurers are asking the Northern District of Illinois to declare they have no duty to defend or indemnify the company in a California class action tied to “Assembled in USA” marketing claims.
The underlying case, filed March 20, 2025, in the Southern District of California by plaintiffs Benjamin Karter and Diego Ornelas, alleges Dude Products misled consumers by labeling and promoting its personal hygiene products as “Assembled in USA.”
The complaint says consumers were led to believe they were buying higher-quality products that supported domestic jobs, when in reality, ingredients such as tea tree oil and shea butter were sourced abroad. The plaintiffs accuse the company of knowingly misrepresenting product origins.
The California suit seeks restitution, disgorgement of profits, actual and punitive damages, and an injunction stopping Dude Products from continuing the claims.
Causes of action include violations of California’s Consumer Legal Remedies Act, Unfair Competition Law, False Advertising Law, as well as unjust enrichment and misrepresentation claims.
Dude Products held both a tailored protection policy and a commercial umbrella policy with the insurers from April 21, 2015, to April 21, 2021. Those contracts covered bodily injury, property damage, and personal and advertising injury.
The insurers argue that the class action’s allegations of economic loss—consumers paying more for products than they otherwise would have—do not fit the definitions of bodily injury, property damage, or personal and advertising injury.
They further contend that policy exclusions apply, including those for knowing violations, publishing false material, and failure of goods to meet stated quality.
Dude Products tendered the defense on May 5, 2025, but on July 2 the insurers rejected the request, saying the policies provide no coverage for the claims at issue.
The company has not withdrawn its tender, leaving the dispute unresolved.
As of now, the case sits at the complaint stage, and no court has ruled on the insurers’ obligations. The outcome will determine whether Owners and Auto-Owners must fund Dude Products’ defense and potential liabilities in the California class action.
For insurers, the case highlights how product marketing disputes intersect with policy definitions and exclusions in liability coverage.
