Calif. Made in USA Statute Upheld in Jeans Class Action

Clothing manufacturers and distributors selling products marked as ‘Made in the USA’ may face an increased risk of being sued in California if those products contain even minor foreign components.

Two recent federal district court cases involving Citizens of Humanity designer jeans have analyzed Made in USA labels under California Business and Professions Code, which prohibits a Made in USA label if the product contains any material made outside of the U.S.

The district court concluded that federal law on Made in USA claims does not preempt California law and that manufacturers of clothing could comply with both sets of laws by using a “qualified” label to describe the goods as containing foreign and domestic parts, or by having a separate label for products sold in California.

Made in USA Lawsuits

In both American made jeans lawsuits involving Citizens of Humanity and AG Adriano Goldschmied clothing, the plaintiffs alleged that they purchased the defendants’ jeans. The plaintiffs in both cases (who are represented by the same counsel) alleged that the jeans contained unqualified Made in USA labels at the time of purchase.

The plaintiffs also alleged in both cases that despite the Made in USA labels, component parts (including fabric, thread, buttons, rivets, and zippers) were made outside of the U.S. As such, the plaintiffs claimed to have been deceived under California law.

Background on Made in USA Labeling Standards

The use of U.S.-origin claims in product labeling and advertising is governed at the federal level by rules promulgated by the Federal Trade Commission (FTC).

In short, the FTC requires a product to be “all or virtually all” made in the United States to be labeled Made in USA, and “all or virtually all” means that all significant parts and processing that go into the product must be of U.S.-origin (i.e., the product may only contain a negligible amount of foreign content).

Most states defer to the FTC’s “all or virtually all” standard when determining whether a U.S-origin claim is appropriate. California does not, however.

The California Business and Professions Code prohibits the use of an unqualified U.S-origin claim on a label — such as Made in USA — unless “the product and all articles, units and parts thereof has been entirely or substantially made, manufactured or produced in the United States.”

In other words, California’s law is stricter than federal law because it requires that 100% of the materials used to make the product be American made.

California law prohibits any product from being labeled Made in USA if that product or any article, unit or part thereof has been entirely or substantially made, manufactured or produced outside of the United States.

Apparel companies are particularly vulnerable to claims of violating this law, as their goods are typically composed of many components sourced from numerous locations around the world.

The Made in USA Jeans Class Action Lawsuits are Paz v. AG Adriano Goldschmied, Inc., Case No. 3:14-cv-01372 and Clark v. Citizens of Humanity, LLC et al, Case No. 3:14-cv-01404, both in the U.S. District Court, Southern District of California.

Join a Free Citizens of Humanity ‘Made in the USA’ Class Action Lawsuit Investigation

If you purchased one or more Citizens of Humanity apparel products in California in the past four years based, in part, on a “Made in the USA” label, you may be able to seek compensation by joining a class action lawsuit investigation.

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