January 1, 2016
The “Made in the USA” label isn’t as clear cut as you would imagine. Under federal law, “virtually all” of a finished product needs to be made in the U.S. in order to earn the designation. Until recently, California was the only state in the country to use a strict interpretation of “Made in the USA,” requiring that every part of a product be manufactured domestically. That requirement unleashed a flood of consumer class actions against manufacturers, alleging misleading or false advertising.
To put an end to the lawsuits, California enacted Senate Bill 633 in September of last year. ABA Journal spoke to Partner Lee S. Brenner about the Bill, which will loosen California’s standards to more closely match the rest of the country. Although detractors argued that SB 633 would punish companies that adhered to California’s “Made in the USA” regulations, lawmakers determined that the original standard represented an unfair burden on businesses.
“Every client I have wants to know they’re doing it right,” explained Mr. Brenner. “When they hire American instead of foreign employees, pay higher state taxes, subject themselves to our labor and workers’ compensation laws, they take great pride in using the ‘Made in the USA’ label. So it’s devastating when they’re sued. This new law is much clearer and anytime you have more clarity, you’ll have less litigation.”
SB 633 will reduce the threat of litigation and allow more manufacturers to use the “Made in the USA” label, but it is not yet known how the new bill will compare to the federal “virtually all” standard. Mr. Brenner also noted that it is unclear whether the pending class actions will be dismissed.
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