The Made in the U.S. standard just got a bit more stringent for those operating in California. In ruling on the Paz v. AG Adriano Goldschmied case late last week, U.S. District Court for the Southern District of California Judge Dana M. Sabraw held that the standards set forth by the Federal Trade Commission do not preempt the California standard that governs the labeling of products as “Made in the USA” The case at hand was filed in June 2014 against Goldschmied for allegedly mislabeling jeans as “Made in the USA” when parts of the garments, including the fabric, thread, and buttons, are actually manufactured outside of the United States. David Paz, the lead plaintiff in the class action lawsuit, also named Nordstrom, which stocks Goldschmied garments, as a defendant in the lawsuit.
As a result of the most recent proceedings, California, the home of an array of denim manufacturing in the U.S., will be held to a standard higher than that of the Federal Trade Commission's. According to the FTC Act, manufacturers are permitted to use a “Made in the USA” label even if the product contains foreign components as long as it is “virtually all” made in the United States, according to the order. Under California law, however, manufacturers are forbidden from using such a label “unless the product and all articles, units, or parts thereof were ‘entirely or substantially made, manufactured, or produced’ in the United States.”
The court didn't stop there. In fact, it went on to address the Textile Fiber Products Identification Act, which would require the jeans at issue be labeled “Made in the USA of imported fabric," The court held that the federal law does not preempt the California state standard because manufacturers can comply with both laws.
Assuming for a moment that Goldschmied does not appeal the decision, Judge Sabraw's ruling ultimately establishes a higher standard for California-based manufacturers than others in the country. The court acknowledged the “burdensome” nature of the ruling, but nonetheless, stood firm on its interpretation of the law, suggesting that Goldschmied could use different labels for products sold in California and those sold in other states. Sabraw's suggestion: “They can simply indicate on the label that their products were ‘Made in U.S.A. of imported fabric and components,’ or something similar that accurately describes where the parts of the product and the product as a whole were sourced and made."
Still pending in the Southern District of California court is a a very similar class action lawsuit, Clark v. Citizens of Humanity. In that case, lead plaintiff Louise Clark failed suit against denim brand, Citizens of Humanity, as well as CoH stockiest, Macy's, for falsely labeled its jeans as “Made in USA.”