By Gerald L. Maatman, Jr., Daniel D. Spencer, and George J. Schaller
Duane Morris Takeaways: On June 10, 2026, in Citizens of Humanity, LLC v. John Donboli et al., No. D085849, 2026 Cal. App. LEXIS 360 (Cal. App. June 10, 2026), the California Court of Appeal affirmed the trial court’s decision in favor of Defendants in a malicious prosecution action stemming from a consumer class action over “Made in the U.S.A.” labeling on jeans. The Court of Appeal held that a familial relationship between a named plaintiff and class counsel does not, as a matter of law, deprive a class action of probable cause, and that Apple Computer, Inc. v. Superior Court, 126 Cal.App.4th 1253(2005), does not establish a per se bar on relatives of class counsel serving as class representatives.
For companies that have faced consumer class actions and are considering malicious prosecution counterclaims, this decision underscores that the probable cause standard remains a high bar and requires a showing that any reasonable attorney would agree the underlying claims were totally and completely without merit.
Case Background
Citizens of Humanity LLC is a jeans manufacturer whose products had “Made in the U.S.A.” labels, despite Citizens Ingrid-style jeans having fabrics and components sourced from Japan and China. Citizens of Humanity, LLC v. John Donboli et al., No. D085849, 2026 Cal. App. LEXIS 360, *7 n. 2 (Cal. App. June 10, 2026).
In June 2014, attorneys John Donboli and JL Sean Slattery of Del Mar Law Group LLP filed a putative class action against Citizens in federal court, alleging the labels violated former California Business and Professions Code § 17533.7, the Consumers Legal Remedies Act, and the Unfair Competition Law. Id. at *3.
In the federal court action against Citizens, Louise Clark served as the named-plaintiff who previously purchased Citizens’ Ingrid-style jeans. Citizens later discovered Clark was attorney Slattery’s sister-in-law. Id. Based on this familial relationship, Citizens moved to disqualify Del Mar Law Group as class counsel. While that motion was pending, Clark filed a motion to withdraw and substitute a new named-plaintiff, Coni Hass. Id. at *4. The federal court granted the motion to withdraw and substitute and found that the substitution “vitiate[d]” Citizen’s disqualification motion and also held Citizens “failed to demonstrate that [Clark] or her counsel . . . acted in bad faith” in requesting substitution. Id.
As the action was pending, the California Legislature amended § 17533.7 to permit “Made in the U.S.A.” labeling where foreign-sourced materials constitute no more than 5% (or 10% if not domestically sourceable) of the final wholesale value of the product. Id. In response to the amendment, Citizens moved to dismiss. The district court granted Citizens’ motion and allowed Hass leave to amend, but Hass elected not to amend and the case was dismissed. Id.
In February 2018, Citizens filed this action for malicious prosecution against attorneys Donboli and Slattery, Del Mar Law Group, and former named plaintiffs Clark and Hass (collectively “Defendants”).
Defendants moved to strike the complaint under the anti-SLAPP statute, but the trial court denied their motion, and that ruling was later affirmed by this Court of Appeal (see Citizens of Humanity, LLC v. Hass, 46 Cal.App.5th 589 (2020)). Citizens of Humanity, LLC, 2026 Cal. App. LEXIS 360 at *5.
In affirming, the Court of Appeal “found two conflicting narratives . . . regarding the origin of the federal mislabeling case.” Id. at *5-6. It concluded one possible narrative was “that Clark was a shill plaintiff, and [her attorneys] were aware of this fact.” The second possible narrative focused on Hass and whether Defendants “knew ‘that Hass purchased Ingrid-style jeans with a label that said ‘Made in the U.S.A.’ and components of those jeans came from a foreign country[.]’” Id. at *6.
After affirming, the case was remanded and the matter proceeded to trial. After opening statements, and after Citizens presented testimony from the company’s founder, the parties asked the court “to ‘review certain exhibits, [and] deposition testimony from Clark and Hass’ and the parties ‘agreed to have the [c]ourt make a determination on probable cause’” consequently waiving their right for the jury to decide that issue. Id. at *7. After accepting evidence and hearing argument the trial court ruled in favor of Defendants concluding “Citizens had not established [Defendants] lacked probable cause for” the previously filed putative class action and entered judgment for Defendants. Id. at *7-8. Citizens appealed.
The Court of Appeal’s Decision
The Court of Appeal affirmed the decision of the trial court.
Citizens’ primary argument on appeal was that Defendants lacked probable cause as a matter of law because Clark, as Slaterry’s sister-in-law, was an improper class representative under Apple Computer, Inc. v. Superior Court. Citizens relied on the Apple court’s observation that “the majority of courts . . . have refused to permit class attorneys, their relatives, or business associates from acting as the class representative.” Citizens of Humanity, LLC, 2026 Cal. App. LEXIS 360 at *10-11. The Court of Appeal rejected this argument on multiple grounds.
First, the Court of Appeal distinguished Apple factually and noted that the plaintiff in that case was an attorney at one of the representing firms who stood to gain monetarily from recovery of attorney fees. Id. at *11. The Court of Appeal reasoned that Apple addressed a “‘financial relationship and interdependence between’ the plaintiff and associated.” Id. Here, however, Citizens presented no information “about any ‘financial relationship’ between Slattery and Clark.” The Court of Appeal also determined it was not “reasonable to presume ‘interdependence’ solely based on [Slattery and Clark’s] relationship as siblings-in-law.” Id.
Second, the Court of Appeal held that the relevant passage in Apple is, “at best” “dictum that cannot bind very reasonable attorney on threat of a malicious prosecution judgment.” Id. at *12.
Third, it reasoned that even if a disqualifying conflict existed, it would not be fatal to the putative class action against Citizens. As the Court of Appeal noted “Clark could have pursued the claim with different counsel, or [Del Mar] Law Group could have proceeded with a different representative plaintiff, which is what the district court authorized here after Clark decided to withdraw.” Id. at *13.
Accordingly, the Court of Appeal affirmed and agreed with “the trial court’s conclusion that Apple is not determinative of the probable cause analysis here.” Id.
Implications For Corporate Litigants
For companies facing consumer class actions, including those with origin-of-manufacture claims such as “Made in the U.S.A.,” this decision serves as a reminder that labeling must comply with current statutory standards.
Even assuming a company is successful in defeating a consumer class action, then companies considering malicious prosecution actions should take note that class representative conflicts, including familial relationships with class counsel, are evaluated on a fact-specific basis. There is no per se rule of disqualification, and even where a conflict exists, it goes to the fitness of counsel or the representative, not the viability of the underlying claim itself. As the Court of Appeal noted here, the class action can proceed with substitute counsel or a substitute plaintiff.
The decision in Citizens of Humanity, LLC, serves as a cautionary tale that even relatives of class counsel can potentially serve as class representatives and further narrows adequacy challenges to class certification. It also demonstrates another way class counsel can creatively select representative plaintiffs while still allowing courts to scrutinize representative plaintiffs for actual conflicts on a case-by-case basis.