Consumer products companies may be eager to use Made in the USA labels to advertise, particularly given the political climate and increased publicity around domestic manufacturing. But they must pay close attention to the state and federal laws that regulate what Made in the USA actually means.
“Made in the USA” does not necessarily mean the same thing outside of California. In a recent decision, Paz v. AG Adriano Goldschmied Inc., a federal judge refused to dismiss a class action “Made in the USA” lawsuit, based on California’s strict regulation about the use of “Made in the USA” labels, suggesting that retailers may need to use different labels on the same goods depending on whether they are being sold inside or outside of California.
The issue stems from the fact that California is the only state in the union with its own statute governing the use of “Made in the USA” labels on consumer products. Most states use the Federal Trade Commission’s (FTC) regulation, which requires “all or virtually all” of the product be made in the United States to qualify for a “Made in the USA” label. The FTC regulation allows small amounts of foreign parts to be included as long as the product’s final assembly or processing happens in the U.S. In contrast, California’s stricter regulation prohibits use of the label if the merchandise “or any article, unit, or part thereof, has been entirely or substantially made, manufactured or produced outside the United States.” Continue Reading “Made in the USA” Continues to be Fodder for Class Action Lawsuits