Shopbop.com, Macy’s, and denim-maker Citizens of Humanity just can't seem to dodge a major class action lawsuit alleging that they mislabeled jeans as being American-made when that is not entirely true. According to the complaint, which was filed by Plaintiff Louise Clark in a California federal court in June 2014, while Citizens of Humanity jeans contain “Made in USA” labels, the jeans she purchased include fabric and other components that are foreign-made, including fabric, thread, rivets and buttons. As such, Clarks alleges that Citizens of Humanity, “through an unlawful, unfair and deceptive course of conduct” marketed its jeans as “Made in the U.S.A.” and distributed them through Macy’s and Shopbop, in violation of the Consumers Legal Remedies Act. This case is a particularly important one because it speaks to the differing standards in labeling required for clothing and accessories offered for sale in the U.S; namely, California’s stricter statute covering domestically produced merchandise. And therefore, has a direct impact on nearly all retailers and designers in the U.S.
Specifically at issue in this case is whether the California "Made in the U.S.A." labeling standard as mandated by California state law (which holds that companies can only use the "Made in the U.S.A" label in California if “the product is 100 percent made in the U.S.") takes precedence over a national standard overseen by the Federal Trade Commission ("FTC"), which allows manufacturers to use the “Made in U.S.A.” label on clothing that is “all or virtually all” made domestically -- the latter is a much easier standard to meet.
Earlier this month, Judge Janis Sammartino upheld the California law banning “Made in the U.S.A.” labels on products containing foreign parts, rejecting a motion to dismiss by Macy’s, Citizens of Humanity and Shopbop. In holding that the California state law takes precedence over the FTC's national standard, Sammartino echoed the decision made by Judge Dana Sabraw, who in October denied a request in a similar lawsuit filed against denim co. AG Adriano Goldschmied and Nordstrom for failure to accurately label its denim.
BUT one thing to be sure to take note of, the higher standard for labeling in California only applies to California. Thus, according to the court, “the California law does not completely extinguish a right [to use the "Made in the U.S.A. label] because manufacturers can still use it in other states” -- just not California if the product is not 100 percent made in the U.S. In regards to the heightened standard in California that does not apply to the same garments if sold in other states, Judge Sammartino stated: While this may be burdensome or frustrating for defendants and other manufacturers and retailers, it is not impossible.”
Clark filed the lawsuit on behalf of herself and all consumers who have purchased Citizens of Humanity jeans in California in the past four years. More to come …