NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________

Nos. 24-1548 & 24-3046 _____________

NEWBORN BROS. CO., INC., Appellant in No. 24-3046

v.

ALBION ENGINEERING COMPANY Appellant in No. 24-1548 ____________

On Appeal from the District Court for the District of New Jersey (D.C. Civil No. 1-12-cv-02999) District Judge: Honorable Edward S. Kiel ____________

Submitted Pursuant to Third Circuit L.A.R. 34.1(a) October 27, 2025 ____________

Before: CHAGARES, Chief Judge, BOVE and SCIRICA, Circuit Judges

(Filed: December 10, 2025) ______________

OPINION * ____________

* This disposition is not an opinion of the full Court and, pursuant to 3d Cir. I.O.P. 5.7, does not constitute binding precedent. CHAGARES, Chief Judge.

Albion Engineering Company (“Albion”) appeals the District Court’s orders

finding it liable for violating the Lanham Act, deferring its presentation of its affirmative

defense, and issuing a permanent injunction and an award of disgorgement. Newborn

Bros. Co., Inc. (“Newborn”) appeals the District Court’s order accepting Albion’s

affirmative defense as well as its disgorgement award. For the following reasons, we will

affirm the District Court’s orders.

I.

We write primarily for the parties and recite only the facts essential to our

decision. Albion has been manufacturing and selling caulking guns — a handheld tool

used to apply caulk — to industrial customers since 1929. For its first approximately

seventy years, Albion manufactured all of its products in the United States. In 2001,

however, Albion began importing four types of caulking guns — its “B-Line” guns —

from Taiwan. Joint Appendix (“App.”) 98. Albion stamped these products “Made in

Taiwan,” but that stamp was often (and by design) difficult to see. Albion eventually

switched out these stamps for hang tags that contained a Taiwan mark on one side.

Albion also printed “USA Manufacturer and Designer” on certain B-Line products. A

couple of years later, Albion expanded its overseas business to non-B-Line products by

exporting component parts to Taiwan before re-importing them for final assembly at its

plant in the United States. Some of these products bore stamps reading “ALBION ENG.

CO. PHILA. PA. U.S.A.” or “Made in USA.” App. 99. During this period, Albion

2 advertised that its products were “designed and manufactured in the USA” and stated that

“All Albion Products are Made in America.” App. 101–03.

Newborn also sells caulking guns and related products. While Newborn maintains

warehouses in several states, Newborn imports its products from overseas. Nevertheless,

Newborn utilized a logo that “place[d] the company name within an outline of a map of

the United States and list[ed] United-States-based office and warehouse locations without

mention of products’ exclusively overseas manufacture.” App. 17.

Newborn decided to enter the industrial caulk gun market in the 1990s. These

efforts, however, were met with limited success. After assessing the market, Newborn

believed that its limited success was because Albion, its competitor, manufactured its

products in America. But by 2012, Newborn had discovered that certain Albion products

were at least partially manufactured overseas. Newborn then filed a lawsuit against

Albion in the United States District Court for the District of New Jersey, alleging false

advertising in violation of the Lanham Act as well as New Jersey law.

Following more than 30 days of trial testimony over the course of seven years, the

District Court: (i) held Albion liable for false advertising in violation of the Lanham Act,

(ii) accepted Albion’s affirmative defense of unclean hands, (iii) awarded Newborn

3 $2,148,004 in disgorgement, and (iv) issued a permanent injunction. Albion timely

appealed the District Court’s award. Newborn then filed a timely cross appeal.

II. 1

We address the parties’ appeals in turn, beginning with Albion’s.

A.

On appeal, Albion challenges the District Court’s adverse liability finding, the

District Court’s decision to delay Albion’s presentation of its unclean-hands defense until

after the liability phase of the trial, and the remedies awarded. For the reasons set forth

below, we will affirm the District Court’s orders.

1.

We have explained that in order to establish a claim for false advertising under the

Lanham Act, a plaintiff must prove:

1) that the defendant has made false or misleading statements as to his own product [or another’s]; 2) that there is actual deception or at least a tendency to deceive a substantial portion of the intended audience; 3) that the deception is material in that it is likely to influence purchasing decisions; 4) that the advertised goods traveled in interstate commerce; and 5) that there is a likelihood of injury to the plaintiff in terms of declining sales, loss of good will, etc.

Groupe SEB USA, Inc. v. Euro-Pro Operating LLC,

(3d Cir. 2014).

When a plaintiff seeks monetary relief, it must demonstrate “not only that the defendant’s

advertisement is false but also that this falsification actually deceives a portion of the

buying public,” as well as make a “showing of some customer reliance on the false

1 The District Court had jurisdiction pursuant to

and

(a). We have jurisdiction pursuant to

.

4 advertisement.” Parkway Baking Co. v. Freihofer Baking Co.,

, 648 (3d

Cir. 1958). In addition, a plaintiff must demonstrate that it suffered “an injury to a

commercial interest in sales or business reputation proximately caused by the defendant’s

misrepresentations.” Lexmark Int’l, Inc. v. Static Control Components, Inc.,

(2014).

Albion challenges the District Court’s liability finding on three grounds,

contending Newborn failed to introduce evidence of (i) actual deception of the

purchasing public, (ii) materiality of the deception, and (iii) actual harm. We review the

District Court’s findings of fact for clear error and its conclusions of law de novo.

Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc.,

, 247 n.7 (3d Cir. 2011).

With respect to actual deception, Albion principally faults Newborn for not

introducing a consumer survey. Plaintiffs may prove actual deception by introducing a

properly conducted consumer survey,

, but we have explained that such surveys

are “not essential where[] . . . other evidence exists.” Charles Jacquin Et Cie, Inc. v.

Destileria Serralles, Inc.,

, 476 (3d Cir. 1990). That is the case here. The

District Court found that Albion customers and distributors believed Albion products

were made in America. See App. 128. The lack of a survey is thus not fatal to

Newborn’s case.

Albion next contends that Newborn failed to introduce evidence to demonstrate

that the deception was material. We disagree. At trial, Newborn elicited testimony

indicating that Albion’s “Made in America” claims led customers to prefer Albion’s

products. This testimony includes statements from Robert Wallace, Newborn’s branding

5 expert, that “Made in USA” has “tremendous value” and was a “factor in a significant

portion of consumer decisions,” as well as testimony from Stephen Nowlis, Albion’s own

expert, that “sometimes ‘Made in the USA’ is material to some people.” App. 131. In

addition, the District Court found that Albion customers “actively tried to buy American-

made products.” App. 131. The District Court therefore did not err in concluding that

the deception was material.

Finally, Albion contends that Newborn failed to show that it suffered any harm on

account of Albion’s conduct. Newborn, however, demonstrated injury through diverted

sales. As just one example, a distributor of Albion products testified that he pushed

Albion products to the detriment of Newborn’s products but, once he realized that Albion

products contained foreign materials, he sold more Newborn products. And conversely, a

Newborn employee testified that during a pitch, potential buyers “couldn’t get past the

fact that [Newborn] [was] not made in the U.S.A.” App. 95. The District Court also

found that once Newborn filed this lawsuit and increased the attention on Albion’s

labelling practices, its sales rose. The District Court thus properly concluded that

Newborn suffered harm on account of Albion’s conduct.

In sum, the District Court did not err in concluding that Newborn had met its

burden in proving the elements of its Lanham Act claim by a preponderance of the

evidence.

2.

Albion next challenges the District Court’s decision to preclude evidence

concerning Albion’s affirmative defense of unclean hands until after the liability phase of

6 the bench trial. We review this decision for an abuse of discretion. Marra v. Phila. Hous.

Auth.,

(3d Cir. 2007); see also United States v. Schiff,

(3d Cir. 2010) (“We give a district court broad discretion in its rulings concerning

case management both before and during trial.”). Albion does not explain why this

decision constituted an abuse of the District Court’s broad discretion in this arena, much

less articulate why this error was not harmless when the District Court ultimately

accepted that defense. Thus, the District Court did not abuse its discretion in deferring

Albion’s presentation of its affirmative defense.

3.

Albion finally challenges the remedies the District Court awarded. We focus on

Albion’s challenge to the permanent injunction. 2 This Court will “review the District

Court’s award of equitable remedies under section 35(a) of the Lanham Act under an

abuse of discretion standard.” Banjo Buddies, Inc. v. Renosky,

(3d

Cir. 2005).

In the injunction, the District Court ordered Albion to send a letter to “each

distributor it has sold a caulking gun to within the past five years” and “request that any

samples, displays, or other materials referencing ‘Phila. PA.’ or referring to Albion

caulking guns being ‘Made in USA’ be returned,” as well as display a notice concerning

this litigation. App. 87. The District Court also ordered Albion to list on its packaging

2 Albion’s attacks on the disgorgement award largely rehash its challenges to the District Court’s liability decision. We do not find those arguments to be persuasive, and we will not address them further.

7 each component of the product and its country of origin until U.S. Customs and Border

Protection (“CBP”) provides Albion with updated guidance.

Albion claims this injunction is overbroad because there was no finding that its

current practices violate the Lanham Act. The District Court, however, found that

Albion’s old products and marketing materials were still in circulation. App. 83

(distributor advertised B-Line gun as American made up until October 2023); App. 83–

84 (old versions of Albion catalogues available on distributor website); App. 84 (image

of B-Line gun displaying “U.S. manufacturer” label present on Albion website in

December 2023). Thus, we cannot conclude that the District Court abused its discretion

in this respect.

Albion next challenges the injunction’s requirement that it provide detailed

country-of-origin information until it receives CBP guidance. The District Court found

that Albion had previously sought guidance from the CBP in 2012 concerning certain

country-of-origin practices and had not sought guidance since then. In 2019, Newborn

received CBP guidance concerning a proposed scenario in which it would import steel

rods to the United States and then make certain changes to the rods once in the United

States. CBP concluded that this process did “not constitute a substantial transformation,”

and thus the country of origin was not the United States. App. 83 (quoting PTX-2073).

Based upon these findings, the District Court concluded that “Albion has intentionally

foregone a subsequent, clarifying ruling [from the CBP], choosing instead to forego any

8 country-of-origin markings at all.” App. 85. 3 On this record, we cannot conclude that

the District Court abused its discretion in ordering Albion to display detailed country-of-

origin information on its products until it receives CBP guidance.

In sum, the District Court did not abuse its discretion in issuing this permanent

injunction.

B.

We turn now to Newborn’s cross-appeal. Newborn advances two arguments.

First, Newborn urges that the District Court erred by accepting Albion’s unclean-hands

defense. Second, Newborn asserts that the District Court erred by admitting and relying

on testimony from Albion’s expert, Dr. Brett Margolin, in calculating the disgorgement

award. As set forth below, we will affirm the District Court’s orders.

1.

Newborn first contends that the District Court should not have accepted Albion’s

affirmative defense of unclean hands. We review the application of the unclean-hands

doctrine for an abuse of discretion. Ne. Women’s Ctr., Inc. v. McMonagle,

, 1354 (3d Cir. 1989). We have explained that “[t]he equitable doctrine of unclean

hands applies when a party seeking relief has committed an unconscionable act

3 Albion further contends that the injunction is overbroad because it applies to all of Albion’s products, even ones that it claims are correctly labeled “Made in Taiwan.” Albion Br. 39. Albion urges that “[n]o customs regulation requires such a detailed description.” Albion Br. 39. That misses the point. The injunction does not order compliance with CBP requirements; it is an exercise of the District Court’s discretion to fashion a remedy.

9 immediately related to the equity the party seeks in respect to the litigation.” Highmark,

Inc. v. UPMC Health Plan, Inc.,

(3d Cir. 2001).

Newborn contends there is no nexus between its conduct — the use of a U.S.A.

logo — and Albion’s conduct — the “Made in the U.S.A.” statements on its products and

in advertising. A review of the record, however, reveals that both Newborn and Albion

attempted to market themselves as American manufacturing companies and reap the

benefits of that image. The District Court did not abuse its discretion in crediting

Albion’s unclean-hands defense. See McMonagle, 868 F.2d at 1354. We have observed

that “the connection between the misconduct and the claim must be close.” In re New

Valley Corp.,

, 525 (3d Cir. 1999). While there were material differences in

timeframe, content, and context for some of the examples offered by Albion at trial, the

District Court focused on Newborn’s 2007 trademark renewal application. Newborn

averred in that submission that it was still using the “Newborn U.S.A.” trademark and

submitted an example of a calking-gun advertisement bearing the trademark without

reference to Newborn’s U.S. warehouse facilities. The District Court thus did not err in

crediting Albion’s unclean-hands defense.

Newborn next asserts that the unclean-hands doctrine cannot limit its recovery

because Albion introduced no evidence of consumer confusion or injury. Neither,

however, is required. See, e.g., In re New Valley Corp., 181 F.3d at 526 (citing Gaudiosi

v. Mellon,

, 881–82 (3d Cir. 1959)) (“[W]e explicitly stated that no injury

needed to be shown.”); Monsanto Co. v. Rohm & Haas Co.,

(3d Cir.

1972) (“[O]ne’s misconduct need not necessarily have been of such a nature as to be

10 punishable as a crime or as to justify legal proceedings of any character. Any willful act

concerning the cause of action which rightfully can be said to transgress equitable

standards of conduct is sufficient cause for the invocation of [the unclean-hands

doctrine.]”). Thus, the District Court did not abuse its discretion in accepting Albion’s

affirmative defense of unclean hands.

2.

Newborn contends the District Court abused its discretion by allowing Albion’s

expert, Dr. Brett Margolin, to testify during the remedy phase of the trial and by relying

on that testimony to reduce the disgorgement award. Newborn focuses its challenge on

Margolin’s testimony concerning repeat customers. Specifically, Margolin opined that

after a customer or distributor purchased a B-Line product, he or she became aware of the

products’ foreign origin by either stamp, sticker, or hang tag such that it is reasonable to

infer that any subsequent purchase by that same customer or distributor would be made

for reasons unrelated to the country of origin. The District Court credited this testimony

and excluded these sales from the disgorgement award. We review the decision to admit

expert testimony for an abuse of discretion, Cohen v. Cohen,

, 459 n.2 (3d

Cir. 2025), and its award of equitable remedies for an abuse of discretion, Banjo Buddies,

.

Newborn asserts that Margolin was not qualified to offer this opinion. The

District Court found that Margolin “holds a Ph.D. in economics and focuses his practice

on providing economic analyses for litigation, including disgorgement calculations.”

App. 162. The court further remarked that Margolin’s report and testimony “may be

11 helpful to the Court in understanding the competition between participants in the

caulking-gun market and crafting an appropriate remedy.” App. 164. In addition,

Margolin testified that “economics is the study of choice” and understanding how

consumers behave. App. 794. The challenged testimony — concerning consumer

behavior — falls squarely within Margolin’s expertise. We consequently cannot

conclude that the District Court abused its discretion by allowing this testimony. And

while Newborn contends this testimony is speculative, it is sufficiently grounded in the

record. The District Court therefore did not abuse its broad discretion in excluding repeat

customers from the disgorgement award. See Banjo Buddies,

. 4

III.

For the foregoing reasons, we will affirm the District Court’s orders in all respects.

4 We have considered the parties’ other arguments in favor of reversal and are not persuaded. Newborn separately asks us to direct the District Court to adjudicate its application for attorney’s fees, which the District Court had administratively terminated while this appeal was pending. Because we now issue our opinion adjudicating the parties’ appeals, no such direction is necessary.

12