California Enacts Law to Loosen Strict 'Made in USA' Labeling Requirements

California Gov. Jerry Brown (D) recently enacted a new law loosening the state’s tough requirements for labeling products sold in the state as “Made in the U.S.A,” said his office in a list of recently signed legislation (here). S.B. 633 (here) amends Section 17533.7 of the California Business and Professions Code to allow for “Made in the U.S.A.” labeling if less than 5 percent of an article’s value is from foreign components, or if less than 10 percent of the value is foreign and the components are not available in the U.S.

Section 17533.7 previously said labels cannot claim Made in the U.S.A. if any portion of the underlying product was made outside the U.S. That contrasts with the federal standard enforced by the Federal Trade Commission, which only requires an article be “in substantial part” of U.S. origin. The tough standard, adopted in 1961, was unique to California, with “all 49 other states” following a more flexible standard that allows companies to use a negligible amount of foreign content in products and still label them as “Made in USA,” said an Aug. 19 letter from the bill’s co-sponsor State Senator Jerry Hill urging Gov. Brown to sign the legislation.

Several lawsuits, including class actions against Macy’s, Lands’ End and Nordstrom, have been filed by consumers alleging the retailers violated California law by selling “Made in the U.S.A.” apparel that incorporates minor foreign-made components (see 1504100014, 1411030049 and 1506220017). Lawyers for both plaintiffs and defendants in the three cases did not immediately comment, nor did Gov. Brown’s office.

The five-year effort to change California labeling law “has finally undone an overly burdensome regulation that has hurt California manufacturers since the 1960’s,” said Assemblyman Brian Jones, who also co-sponsored the bill, on Sept. 2 (here). “I’m pleased that Governor Brown signed this bill into law, allowing for manufacturers to market their products proudly displaying the “Made in America” label,” he said. The new law takes effect Jan. 1, 2016, said Jones.