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California Modifies The Strict Liability Component in Its “Made in U.S.A.” Label Law But It Is Unlikely That These Changes Will Alleviate Threat Of Class Actions

October 16, 2015 | Topic: Class Actions

Whether or not it was intended, California’s current “Made in U.S.A.” label law includes a strict liability component, because it requires that products marked as “Made in U.S.A.,” “Made in America,” or with similar words, must be 100 percent manufactured in the United States.

Governor Jerry Brown signed a bill amending this law on September 1, 2015.  The amended law, which goes into effect January 1, 2016, loosens the 100 percent manufacturing requirement.  Specifically, manufacturers will not run afoul of the amended law if their “Made in the USA” products contain foreign components and these foreign components combined constitute 5 percent or less of the final wholesale value of the manufactured product. 

In addition, if the manufacturer shows that they cannot make the foreign components in the U.S. or obtain them domestically, their “Made in the U.S.A.” products can contain foreign components as long as the combined value of these foreign components is 10 percent or less of the final wholesale value of the manufactured product.   

While the law in California will soon be less rigorous, it is still different and possibly stricter than its federal counterpart.  That federal standard requires that “all or virtually all” of the parts of a “Made in the U.S.A.” product be made in the U.S. and that the product’s final assembly occur in the U.S.  

Accordingly, manufacturers and retailers selling “Made in the U.S.A.” products in and outside of California must comply with both standards.