We have been following California’s “Made in the USA” standard and recent cases interpreting it. While courts so far have been reluctant to dismiss claims at the pleading stage, last week a federal judge dismissed a class action claiming Lands’ End violated California’s “Made in the USA” standard.
In Oxina v. Lands’ End, Inc., plaintiff filed a false labeling claim because she ordered a necktie from the Lands’ End website described as “Made In USA”, but received a necktie that was identified as “Made In China.” The court granted Lands’ End’s motion to dismiss (with leave to amend) on the ground that the complaint did not allege that the words “Made in the USA” appeared on the necktie itself (or its packaging), but only appeared on the description of the necktie on the website.
In reaching this decision, the court focused on the language of the statute, which reads that “[i]t is unlawful for any person, firm, corporation or association to sell or offer for sale in this State any merchandise on which merchandise or its container appears the words ‘Made in the USA’…or similar words when the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States.” The court explained “[i]t is clear and unambiguous that the text of § 17533.7 only creates liability where the words ‘Made in the U.S.A.,’ or words to that effect, appear on the merchandise, or on the merchandise’s container. It does not create liability for a product that is misleadingly described on a website with the words ‘Made in the U.S.A.’”
Interestingly, the Federal Trade Commission “Made in the USA” standard is not limited to labels on a product or its container. The FTC’s Q&A page contemplates that “Made in the USA” statements on a company’s website implicate the FTC standard. The Oxina decision therefore appears to demonstrate yet another difference between California’s “Made in the USA” standard and that of the FTC, not to mention a fairly broad category of advertising that is not implicated by California’s “Made In USA” standard. It is uncertain whether this interpretation of the law will stand further judicial scrutiny and we will be on the lookout for appeals of this ruling.