In its decision, the court indicated for the first time that a “made in USA” claim using qualifying language, such as “made in USA of imported fabric and components,” would not run afoul of the California statute. The court noted that the strict conditions in the California law only apply to “made in USA” labels and that the statute fails to provide any guidance on whether qualified labels would constitute a violation. However, the decision is not yet final.
The court held that there is no conflict between the different federal and California standards because it is possible to comply with both (e.g., by labeling the jeans according to the California standard inside California and according to the federal standard elsewhere), even though doing so may be burdensome to the apparel company.
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 because their goods are typically composed of many components sourced from numerous locations around the world.
For more information, please contact Elise Shibles at (415) 986-1088 or Arthur Purcell at (212) 549-0131.