Background

The Federal Trade Commission has finalized a consent order imposing an $815,809 monetary judgment against a U.S. company and its owner for falsely labeling goods as made in the U.S.

The FTC’s “Made in USA” rule, which took effect in August 2021, prohibits marketers from labeling products as “Made in USA” unless (1) the final assembly or processing, and all significant processing that goes into the products, occur in the U.S. and (2) all or virtually all ingredients or components of the products are made and sourced in the U.S. The rule also requires all “Made in USA” labels appearing in mail order catalogs to be truthful and non-misleading. Violators may be subject to civil penalties.

According to the FTC, the company at issue sells mattress pads of varying sizes, with wires and thermostats that provide heat. Prior to 2019 the company used U.S.-made textiles for mattress pads intended for use in truck bunks. It later decided to move production to China and stop using U.S.-made textiles but continued to market these goods as “Made in USA,” “Made in the USA since 1939,” and “made-in-America products.”

The consent order (1) imposes a penalty on the company and its owner but suspends it based on their financial statements, (2) prohibits them from making any country-of-origin claim about a product or service unless the claim is not misleading and they have a reasonable basis that substantiates their claim, and (3) requires them to make certain disclosures about the country of origin of any product subject to the Textile Fiber Products Identification Act and to provide compliance reports.

For more information on “Made in USA” labeling requirements, please contact attorney Elise Shibles at (415) 490-1403 or via email.

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