{"id":3061,"date":"2026-07-01T13:52:51","date_gmt":"2026-07-01T17:52:51","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=3061"},"modified":"2026-07-01T13:52:52","modified_gmt":"2026-07-01T17:52:52","slug":"california-court-of-appeal-affirms-trial-court-judgment-defeating-malicious-prosecution-action-where-sister-in-law-served-as-class-representative-in-underlying-lawsuit","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2026\/07\/01\/california-court-of-appeal-affirms-trial-court-judgment-defeating-malicious-prosecution-action-where-sister-in-law-served-as-class-representative-in-underlying-lawsuit\/","title":{"rendered":"California Court of Appeal Affirms Trial Court Judgment Defeating Malicious Prosecution Action Where Sister-in-Law Served As Class Representative In Underlying Lawsuit"},"content":{"rendered":"
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By Gerald L. Maatman, Jr., Daniel D. Spencer, and George J. Schaller<\/strong><\/p>\n\n\n\n

Duane Morris Takeaways<\/em>: <\/strong>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 <\/a>the trial court\u2019s decision in favor of Defendants in a malicious prosecution action stemming from a consumer class action over \u201cMade in the U.S.A.\u201d labeling on jeans.\u00a0 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.<\/em><\/p>\n\n\n\n

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.<\/em><\/p>\n\n\n\n

Case Background<\/strong><\/p>\n\n\n\n

Citizens of Humanity LLC is a jeans manufacturer whose products had \u201cMade in the U.S.A.\u201d labels, despite Citizens Ingrid-style jeans having fabrics and components sourced from Japan and China.  Citizens of Humanity, LLC v. John Donboli et al., <\/em>No. D085849, 2026 Cal. App. LEXIS 360, *7 n. 2 (Cal. App. June 10, 2026). <\/p>\n\n\n\n

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 \u00a7 17533.7, the Consumers Legal Remedies Act, and the Unfair Competition Law.  Id. <\/em>at *3.<\/p>\n\n\n\n

In the federal court action against Citizens, Louise Clark served as the named-plaintiff who previously purchased Citizens\u2019 Ingrid-style jeans.  Citizens later discovered Clark was attorney Slattery\u2019s sister-in-law.  Id.<\/em>  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.<\/em> at *4.  The federal court granted the motion to withdraw and substitute and found that the substitution \u201cvitiate[d]\u201d Citizen\u2019s disqualification motion and also held Citizens \u201cfailed to demonstrate that [Clark] or her counsel . . . acted in bad faith\u201d in requesting substitution.  Id.<\/em><\/p>\n\n\n\n

As the action was pending, the California Legislature amended \u00a7 17533.7 to permit \u201cMade in the U.S.A.\u201d 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.<\/em>  In response to the amendment, Citizens moved to dismiss.  The district court granted Citizens\u2019 motion and allowed Hass leave to amend, but Hass elected not to amend and the case was dismissed.  Id.<\/em> <\/p>\n\n\n\n

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 \u201cDefendants\u201d). <\/p>\n\n\n\n

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<\/em>, 46 Cal.App.5th 589 (2020)).  Citizens of Humanity, LLC<\/em>, 2026 Cal. App. LEXIS 360 at *5. <\/p>\n\n\n\n

In affirming, the Court of Appeal \u201cfound two conflicting narratives . . . regarding the origin of the federal mislabeling case.\u201d  Id.<\/em> at *5-6.  It concluded one possible narrative was \u201cthat Clark was a shill plaintiff, and [her attorneys] were aware of this fact.\u201d  The second possible narrative focused on Hass and whether Defendants \u201cknew \u2018that Hass purchased Ingrid-style jeans with a label that said \u2018Made in the U.S.A.\u2019 and components of those jeans came from a foreign country[.]\u2019\u201d  Id. <\/em>at *6. <\/p>\n\n\n\n

After affirming, the case was remanded and the matter proceeded to trial.  After opening statements, and after Citizens presented testimony from the company\u2019s founder, the parties asked the court \u201cto \u2018review certain exhibits, [and] deposition testimony from Clark and Hass\u2019 and the parties \u2018agreed to have the [c]ourt make a determination on probable cause\u2019\u201d consequently waiving their right for the jury to decide that issue.  Id.<\/em> at *7.  After accepting evidence and hearing argument the trial court ruled in favor of Defendants concluding \u201cCitizens had not established [Defendants] lacked probable cause for\u201d the previously filed putative class action and entered judgment for Defendants.  Id. <\/em>at *7-8.  Citizens appealed. <\/p>\n\n\n\n

The Court of Appeal\u2019s Decision<\/strong><\/p>\n\n\n\n

The Court of Appeal affirmed the decision of the trial court. <\/p>\n\n\n\n

Citizens\u2019 primary argument on appeal was that Defendants lacked probable cause as a matter of law because Clark, as Slaterry\u2019s sister-in-law, was an improper class representative under Apple Computer, Inc. v. Superior Court<\/em>.  Citizens relied on the Apple <\/em>court\u2019s observation that \u201cthe majority of courts . . . have refused to permit class attorneys, their relatives, or business associates from acting as the class representative.\u201d  Citizens of Humanity, LLC<\/em>, 2026 Cal. App. LEXIS 360 at *10-11.  The Court of Appeal rejected this argument on multiple grounds.<\/p>\n\n\n\n

First, the Court of Appeal distinguished Apple <\/em>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. <\/em>at *11.  The Court of Appeal reasoned that Apple <\/em>addressed a \u201c\u2018financial relationship and interdependence between\u2019 the plaintiff and associated.\u201d  Id.<\/em>  Here, however, Citizens presented no information \u201cabout any \u2018financial relationship\u2019 between Slattery and Clark.\u201d  The Court of Appeal also determined it was not \u201creasonable to presume \u2018interdependence\u2019 solely based on [Slattery and Clark\u2019s] relationship as siblings-in-law.\u201d  Id.<\/em> <\/p>\n\n\n\n

Second, the Court of Appeal held that the relevant passage in Apple<\/em> is, \u201cat best\u201d \u201cdictum that cannot bind very reasonable attorney on threat of a malicious prosecution judgment.\u201d  Id.<\/em> at *12. <\/p>\n\n\n\n

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 \u201cClark 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.\u201d  Id. <\/em>at *13. <\/p>\n\n\n\n

Accordingly, the Court of Appeal affirmed and agreed with \u201cthe trial court\u2019s conclusion that Apple <\/em>is not determinative of the probable cause analysis here.\u201d  Id.<\/em> <\/p>\n\n\n\n

Implications For Corporate Litigants<\/strong><\/p>\n\n\n\n

For companies facing consumer class actions, including those with origin-of-manufacture claims such as \u201cMade in the U.S.A.,\u201d this decision serves as a reminder that labeling must comply with current statutory standards. <\/p>\n\n\n\n

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<\/em> 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.<\/p>\n\n\n\n

The decision in Citizens of Humanity, LLC<\/em>, 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. <\/p>\n","protected":false},"excerpt":{"rendered":"

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\u2019s decision in favor of Defendants … <\/p>\n

Continue reading “California Court of Appeal Affirms Trial Court Judgment Defeating Malicious Prosecution Action Where Sister-in-Law Served As Class Representative In Underlying Lawsuit”<\/span><\/a><\/p>\n","protected":false},"author":575,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[112],"tags":[],"ppma_author":[7,155,96],"class_list":["post-3061","post","type-post","status-publish","format-standard","hentry","category-consumer-fraud-class-actions"],"authors":[{"term_id":7,"user_id":575,"is_guest":0,"slug":"gmaatman","display_name":"Gerald L. Maatman, Jr.","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/maatmangerald-100x100.jpg","author_category":"","last_name":"Maatman Jr.","first_name":"Gerald L.","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/geraldmaatman.html","description":"Read Gerald's bio.<\/a>"},{"term_id":155,"user_id":755,"is_guest":0,"slug":"dspencer","display_name":"Daniel Spencer","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2026\/02\/spencerdaniel-100x100.jpg","author_category":"","last_name":"Spencer","first_name":"Daniel","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/danielspencer.html","description":"Read Daniel's bio.<\/a>"},{"term_id":96,"user_id":655,"is_guest":0,"slug":"gschaller","display_name":"George Schaller","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/07\/schallergeorge-100x100.jpg","author_category":"","last_name":"Schaller","first_name":"George","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/georgeschaller.html","description":"Read George's Bio<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/3061","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/575"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=3061"}],"version-history":[{"count":1,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/3061\/revisions"}],"predecessor-version":[{"id":3064,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/3061\/revisions\/3064"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=3061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=3061"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=3061"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=3061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}