The FTC recently filed suit against a glue maker over “Made in the USA” claims. This development is notable given that the FTC regularly investigates U.S. origin claims, but rarely initiates litigation in the area. The recent lawsuit likely involves a company that was unwilling to revise its advertising.
Typically, during the course of an investigation into U.S. origin clams, the company will agree to modify its claims, and the FTC will then issue a closing letter. Since January 2015, the FTC has issued 33 such closing letters, which averages to about two per month. These letters indicate not only that the FTC remains active in the area, but also that it has targeted claims for an extremely wide variety of products – specifically, watches, computers, televisions, cleaning products, cookware, bakeware, lanyards, battery chargers, standing desks, regular desks, artificial grass, tape, magnetic harmonica holders, food service sinks, security systems, snow blowers, disposable butane lighters, laser sights for firearms, deck screws and kits, floor and wall tile, lumber, auto parts, a cleaning device for cloth diapers, skateboard trucks, and pet products.
The FTC has not investigated U.S. origin claims for any dietary supplements in recent years, but this wide net cast over all manner of products provides little comfort. If magnetic harmonica holders made it in, who’s to say a dietary supplement won’t be next.
For “Made in the USA” claims, the FTC follows a stringent and often-complex standard requiring that “all or virtually all” of a product is made in the United States. A challenge for dietary supplements is that, in the past, processing like mixing with other ingredients or removing impurities has not been considered a “substantial transformation” adequate to overcome the use of foreign raw dietary ingredients.
Companies selling dietary supplements and conventional foods have faced litigation (or the threat of litigation) by private actors based on California’s law on U.S. origin claims. See, e.g., Alaei v. H.J. Heinz Co., No. 3:15-cv-02961 (S.D. Cal) (ongoing case); Alaei v. Rockstar Inc., Case No. 3:15-cv-02959 (S.D. Cal) (ongoing case). Last year, however, California amended its law so that it’s more in line with the federal standards. This change may slow the number of California cases given that the California law had previously been even tougher than the FTC standards and may have caught some companies off guard if they sold products that were truthfully “Made in the USA” – everywhere except California.