As a political battle unfolds over tariffs and foreign imports, another fight is emerging in the courts over 'made in the USA' claims. In this update, we're looking at a surge of class actions alleging that products are falsely advertised as made in the USA (or 'MUSA') despite containing foreign ingredients. The suits come after a notable increase in enforcement by the U.S. Federal Trade Commission, signaling a potential wave of MUSA lawsuits on the horizon.

— Mike Neighbors, Editor, Law.com Radar

The Claims

The complaints seek relief under California Business and Professions Code section 17533.7, which bans companies from labeling a product as 'made in the USA' if foreign components constitute more than 5 percent of the finished product. The complaints also cite the FTC's 'Made in USA Labeling Rule,' which prohibits MUSA labeling unless 'all or virtually all' ingredients are sourced in the U.S.

The Bigger Picture

The FTC is cracking down on MUSA violations. Last year, the agency imposed a record penalty of nearly $3.2 million against Williams-Sonoma for labeling products from China and other countries as 'Made in USA.' Plus, the FTC recently updated its 'Complying with the Made in USA Standard' business guide explaining the 'all or virtually all' rule and clarifying that businesses have an ongoing duty to review claims and update marketing materials.

Why It Matters

A surge of consumer lawsuits following a ramp-up in FTC enforcement signals that 'made in the USA' claims are under scrutiny. Businesses should be vigilant about their labeling practices to avoid legal challenges and regulatory action.

Read More from Law.com:

What Businesses Need to Know About Anticipated FTC Leadership Changes

FTC's 'Made in USA' Probes Leading to Stiff Penalties, but They Sometimes Shrink

Read More from Law.com:

A Checklist for Navigating the Regulatory Landscape After 'Loper Bright' and 'Corner Post'

Challenges Expected Across the Employment Law Landscape

Corporate Regulation and Deregulation After the 2024 Presidential Election