On Monday, November 30, 2015, Nordstrom and denim manufacturer AG Adriano Goldschmied filed a motion to approve a settlement in California federal court, agreeing to pay more than $4 million to settle a consumer class action suit that accused them of falsely labeling jeans as “Made in USA.” The settlement was agreed upon in October 2015 after over a year of intense litigation.
Plaintiffs brought the case against both the manufacturer, AG, and the retailer that sold AG jeans, Nordstrom, and alleged various claims under the California consumer protection laws and business and professions code. The class action claimed that AG jeans’ fabric, thread, buttons, rivets, and certain subcomponents of the zipper assembly were manufactured outside of the United States.
It should be noted that this class action was filed under California’s current Made in USA law, which is much stricter than the federal standard and enforced by the Federal Trade Commission. However, as reported in our previous Made in USA alert, California has passed a law, effective January 1, 2016, that will loosen its stringent 100% US content requirement for “Made in USA” labels and attempt to align itself closer to the FTC standard. To AG and Nordstrom’s regret, as the alleged falsely advertised jean sales took place before the new law becomes effective, they cannot take advantage of the forthcoming and more lenient Made in USA standard, which could have changed the outcome of this case.
Although the California Made in USA standard will loosen in January 2016, do not expect Made in USA litigation to slow down as competitors and class action groups are likely to continue targeting manufacturers, retailers, and their competitors through Made in USA litigation.
For more information on the case, please see David Paz et al. v. AG Adriano Goldschmied Inc. et al, case number 3:14-cv-01372, in the US District Court for the Southern District of California.