“Made in USA” Advertising Lawsuits — Legal Rights & Recent Developments

The Legal Standard for “Made in USA” Claims

The global supply chain has complicated labeling matters for consumers, and it is frequently unclear where a product is produced, assembled, and packaged. According to the standard guidelines set by the Federal Trade Commission (FTC), Made in USA is meant to describe an instance where “all or virtually all” of the product has been made domestically in America. That means that the vast majority of raw materials, designing, processing, and labor must be of domestic origin in order to label a product as such.

Can the product use Canadian raw materials? Can it be sent from China in a raw form, then molded and processed? The law says they cannot if they want to be labeled as a domestic product. But there are other gray areas, and it has even been argued that the word “made” is too ambiguous to be able to define what it denotes in these cases. There are several moving parts in the global supply chain and that is why it is more common to go to a shop and see the majority of products are labeled as made abroad.

Understanding “Made in USA” Regulations

Any deviation from FTC requirements—such as using imported materials or outsourcing final assembly—can make a label misleading. Businesses that violate these rules risk lawsuits, fines, and mandatory changes to their labeling and advertising practices.

The FTC has tried its best to be clear and concise with these legal questions. Essentially, to be labeled “Made in USA,” a product’s last “substantial transformation” must occur in the United States. That is to say, a product’s final form and most critical processing steps should occur in the U.S.

Due to trade complexities, the FTC sometimes updates its “Complying with the Made in USA Standard.” The FTC last made updates to add the Made in USA Labeling Rule, which codified the ​“all or virtually all” standard for product labels in 2021. This is all clearly spelled out for business practices, and negligent corporations may be subject to civil penalties if they make false ​“Made in the USA” claims on labels or in marketing materials.

The last updated FTC requirements note the following:

• The product’s final assembly or processing must occur in the USA;
• All significant processing that goes into the product must occur in the USA; and
• All or virtually all ingredients or components of the product must be made and sourced in the USA.

What Consumers Must Prove to Win a Claim

Made in USA lawsuits have been filed against several companies that allegedly falsely labeled their products as being produced in the United States. Consumers do not have time to scrutinize and research every item they purchase and have to rely on the companies’ good faith to fairly and honestly label their products. The law now stipulates that companies should err on the side of caution and not test the waters with potentially false claims in promotional materials and product labels.

Companies should be aware of federal and state consumer laws, and they have a duty make sure their claims remain accurate. It has been common practice for American companies to outsource and move some or all of their production, assembling and packaging outside of the country. These kinds of changes must be reflected in marketing materials and labeling.

There can be significant confusion in these matters, but typically a reasonable consumer should be able to understand at first glance where a product is produced. And if a product includes both foreign and domestic parts, that should be noted, and the companies must be able to show clearly that the “domestic” parts are made in the USA.

If you believe you have been misled into believing that you purchased a product made in the USA, but it was made or assembled elsewhere, you may have a valid claim. Contact our attorneys for a free case review.

Why Hiring a False Advertising Lawyer Matters

When companies place profits before transparency, and engage in deceptive marketing, they may be held liable in false advertising class action lawsuits. Practices like mislabeling products, or otherwise violating consumer protection laws, are unacceptable betrayals of trust. You can help hold these companies accountable.

The Lyon Firm is a highly-rated product liability and consumer safety law firm headquartered in Cincinnati, Ohio. We represent plaintiffs nationwide in individual claims and consumer safety class action lawsuits.

If you need consumer protection representation, contact our offices today at (513) 381-2333 for a free, confidential, no-obligation consultation.