California Governor Edmond G. (Jerry) Brown Jr. recently signed into law Senate Bill 633 (Hill), a bill that modernizes California’s “Made in U.S.A.” labeling standard to reflect the real-world market in which companies make products using components from around the globe.
Under the prior law, it was unlawful to sell or offer for sale in California merchandise on which the merchandise or the packaging were the words “Made in U.S.A.,” “Made in America,” “U.S.A.,” or similar words “if the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the [U.S.]”
Under the new law, the above-prohibition does not apply to merchandise made, manufactured, or produced in the U.S. that has one or more articles, units, or parts from outside of the U.S. if:
(1) all of the articles, units, or parts of the merchandise obtained from outside the U.S. constitute not more than 5% of the final wholesale value of the manufactured product;
(2) both of the following apply: (A) the manufacturer of the merchandise shows that it can neither produce the article, unit, or part within the U.S. nor obtain the article, unit, or part of the merchandise from a domestic source; and (B) all of the articles, units, or parts of the merchandise obtained from outside the U.S. constitute not more than 10% of the final wholesale value of the manufactured product; or
(3) it is sold for resale to consumers outside of California, if the label conforms to the law of the forum state or country within which the merchandise is sold or offered for sale.
Kwikset Corp. v. Superior Court, 51 Cal. 4th 310 (2011) (“[P]laintiffs who can truthfully allege they were deceived by a product’s label into spending money to purchase the product, and would not have purchased it otherwise, have ‘lost money or property’ within the meaning of Proposition 64 and have standing to sue.”).