Published on March 26th, 20190
By the Numbers: Made in the USA Class-Action Lawsuits
Quickly, for a product to be marketed as made in the USA, “all or virtually all” of the product must be made in the United States. That means the product must contain no — or negligible — foreign content. For example, a product that is assembled in the United States with mainly imported parts cannot be marketed as made in the USA under the FTC’s Made in USA standard.
TINA.org is currently tracking more than 30 class-action lawsuits challenging made in the USA marketing claims. A breakdown of everything from where and when the complaints were filed, to the status of the cases as of March 2019, follows.
Products and Companies
More than one-third of the made in the USA class-action complaints relate to U.S.-origin claims for clothing, shoes and accessories. There are lawsuits alleging that:
- AG Adriano Goldschmied jeans labeled as “Made in the USA” use fabric, thread, and buttons manufactured outside of the states;
- Chippewa boots marketed as “handcrafted in the USA” have inner leather linings from China; and
- Shinola watches marketed as made in America use timekeeping parts from Switzerland and Thailand.
Plaintiffs also hit companies with lawsuits alleging that dietary supplements, energy drinks, tobacco products, condoms, pet treats and children’s toys are deceptively marketed as made in the USA. Some of the companies named as defendants include Walmart, Kraft Heinz Foods, Lands’ End and New Balance.
Breakdown of Products at Issue
Location of Courts
Made in the USA class actions were filed in six different states, with 10 cases filed in state courts and 23 cases in federal courts. (Note: Some of the lawsuits were originally filed in state court and later transferred to federal court.) A vast majority (25) of the cases were filed in California. The remaining lawsuits were filed in Illinois, Florida, Georgia, Maine and New York.
Original File Date
Made in the USA complaints in our sampling were filed between 2012 and 2018. The number of complaints increased each year until 2015. The decrease in lawsuits in subsequent years may be attributable to the fact that in 2015, California changed its Made in USA law. The law was amended to relax the state’s strict requirements that prohibited Made in USA labels on products containing any part that was “entirely or substantially made, manufactured, or produced outside of the United States,” to a rule that closely aligns with the FTC’s standard. The new California law allows merchandise to bear the Made in USA label as long as it has been “all or virtually all made in the United States.” Since then, the number of Made in USA class actions has dropped drastically. Only one complaint was filed in 2018.
Status of the Cases
Ninety-four percent (31 of the 33) of the made in the USA lawsuits TINA.org has been tracking have been resolved, with 20 settlement agreements, three dismissals and eight voluntarily dismissals for undisclosed reasons.
Federal courts dismissed one of the made in the USA actions in 2016 and two in 2017. Specifically, a California court dismissed a case against Rockstar Energy because the complaint did not specify where the foreign ingredients were from nor the percentage of foreign ingredients in the products. Another California court dismissed a case against the jeans company Citizens of Humanity because the allegations were conclusory and did not meet a requirement for fraud claims. A court in Illinois dismissed a case against the pet food company WellPet, LLC because the complaint did not sufficiently allege injury and likelihood of future damages.
Of the 20 cases that were settled, the terms were disclosed in 14 of the settlement agreements. The settlement agreements in 13 of these cases provided class members with cash awards, promo codes or gift cards to purchase products, or a free product. The company agreed to make changes to marketing materials or to comply with the law in 12 of the agreements.
Find more of our coverage on made in the USA claims here.