• "Made in USA" Jeans Case
  • December 29, 2014 | Author: Douglas J. Behr
  • Law Firm: Keller and Heckman LLP - Washington Office
  • A federal court recently ruled that the Federal Trade Commission Act and the Textile Fiber Products Identification Act (TFPIA) do not preempt the California law that prohibits the use of the “Made in U.S.A.” label if any part of a product has been entirely or substantially made outside of the United States. Cal. Bus. & Prof. Code § 17533.7. A California District Court refused to dismiss a class action against clothing manufacturer, AG Adriano Goldschmied, and retailer, Nordstrom, Inc., over the sale of “The Protégé” brand jeans with the “Made in U.S.A.” label. The complaint alleged that the jeans were made from fabric, thread, buttons, and rivets that were manufactured outside of the United States; therefore, the sale of the jeans violated the California law.

    The manufacturer argued that the plaintiff’s claims were preempted by the TFPIA because the manufacturer could not comply with both laws. The TFPIA deems as misbranded any textile fiber product processed in the United States that is not labeled as made in the United States. 15 U.S.C.A. § 70b. According to the manufacturer, the product was assembled in the United States and therefore, the TFPIA required that it identify the United States as the place where it was “processed and manufactured.”

    The court rejected the manufacturer’s preemption argument. According to the Court, the California statute did not prohibit the use of a qualified “Made in USA” label because such a label would not be false or misleading. Therefore, by adding a qualifier to the jeans label such as “Made in USA with imported fabric and components,” the manufacturer could have complied with both the federal and state statutes.

    The manufacturer also argued that the differences in the FTCA and the California statute resulted in conflict preemption because FTCA would allow the manufacturer to use the “Made in USA” label while the state law would not. The Court found that there was no conflict preemption because the manufacturer could have simply not used “Made in USA” label on clothes that were on sale in California.

    The decision demonstrates that it is not enough to consider federal regulations when designing labeling for merchandise. Both manufacturers and retailers will be paying closer attention to the individual state laws that govern how products may be represented.