FTC "Made in usa" labeling rule Attorney + MUSA Investigation defense Lawyer

Thought-leading FTC "Made in USA" Labeling Rule attorney and MUSA investigation defense lawyer representing marketers and manufacturers that have received an FTC access letter, civil investigative demand or other inquiry related to the FTC's Enforcement Policy Statement on U.S. origin claims and the “all or virtually all” standard codified into the Made in USA Labeling Rule

FTC "Made in USA" Labeling Rule attorney Richard B. Newman has assisted numerous marketers and manufacturers to succesfully defend FTC Made in USA investigations and enforcement actions.  As an authority on the FTC Labeling Rule, FTC U.S. origin claim guidance and FTC policy, he is able to identify various defense strategies designed to minimize potential liability exposure and, in some cases, achieve Made in USA investigation case closure via the implementation of non-monetary remedial actions rather than regulatory enforcement.

"Made in USA" Labeling Rule Attorney

The Federal Trade Commission finalized the Made in USA Labeling Rule in 2021.  The Labeling Rule  codifies the FTC’s long-standing enforcement policy that requires marketers and manufacturers that make unqualified “Made in USA” claims on labels, advertisements and other promotional materials be capable of substantiating that their products are “all, or virtually all” made in the United States.  The Labeling Rule also applies to all other forms of marketing, including, but not limited to, catalogues and marketing through digital or electronic mechanisms, such as Internet, email, or social media.

Generally, the Labeling Rule prohibits marketers and manufacturers from making unqualified Made in USA claims unless final assembly or processing of the product occurs in the United States; all significant processing that goes into the product occurs in the United States; and all or virtually all ingredients or components of the product are made and sourced in the United States.  The product should contain no — or negligible — foreign content.

Marketers and manufacturers must possess a “reasonable basis” to support such claims.  This means a marketer or manufacturer needs competent and reliable evidence to back up the claim that its product is “all or virtually all” made in the U.S.

There is an ongoing obligation to review claims and substantiation to ensure that they remain accurate.  In the even that something changes and a marketer or manufacturer can no longer plausibly claim that it possesses a reasonable basis to support a Made in USA claim, applicable materials must be updated.

See here for a discussion of the factors that the FTC considers to determine whether a product is “all, or virtually all made in the USA, as well as what items should be included in an analysis of the percentage of domestic content in a particular product.

The FTC also enforces forms of false or deceptive “Made in the USA” marketing that may fall outside of the Labeling Rule pursuant to Section 5 of the FTC Act.  However, the Labeling Rule provides for numerous regulatory remedies, including, but not limited to, harsh monetary civil penalties.

FTC Made in USA Attorney Defending Made in USA Misrepresentation Investigations

Richard Newman is an FTC Made in USA attorney that defends FTC investigations concerning Made in USA misrepresentations and other U.S.-origin claim rule violations.  The FTC can initiate an investigation by any number of means, including, but not limited to, voluntary access letter.  First time, inadvertent violators and repeat offenders are both potentially subject to investigation.

The FTC aggressively investigates and enforces Made in USA claims.  It is imperative that marketers and manufacturers proactively and properly address such investigations from the start by consulting with an experienced FTC Made in USA lawyer.

Comply With and Defend Made in USA Standards With the Assistance of a Made in USA Lawyer

Mr. Newman regularly guides and defends marketers and manufacturers that have made unqualified and qualified Made in USA claims, including the former under the “all or virtually all” standard.  The firm assists clients to navigate U.S. origin claim-related legal, regulatory and transactional issues in order to ensure that marketing and advertising is effective and compliant.  When necessary, the firm possesses a strong track record successfully defending those that are being investigated and face formal regulatory actions of Made in USA legal regulatory violations.

FTC Penalty Amounts and U.S. Origin Related Regulatory Activity Continue to Increase

Recent FTC "Made in USA" Labeling Rule violation settlements have continued to increase in record monetary amounts and broaden with respect to injunctive relief.  Such investigation and enforcement activity is not anticipated to subside.  It is therefore important that manufacturers and marketers consult with highly qualified Made in USA defense counsel in order minimize potential liability exposure and achieve an optimal outcome in the event of formal regulatory action.

Mr. Newman is a leading advocate for those that manufacture and market products using qualified and unqualified domestic origin and assembly claims.  The firm's Made in USA Labeling Rule defense practice  encompasses all manners of U.S. origin claim investigations and disputes, including regulatory agency inquiries and competitor challenges where the issues may involve, among other things, the truth or falsity of  advertising claims and the adequacy of claim substantiation.

Why Was the FTC Made in USA Labeling Rule Enacted?

In December 2020, former commissioner of the Federal Trade Commission Rohit Chopra issued a statement expressing that "Made in USA fraud harms both consumers and honest competitors.  Yet for decades, FTC Commissioners pursued a no-money, no-fault settlement strategy to tackle this problem,
ignoring Congressional authority to penalize bad actors ... For markets to function fairly, the Federal Trade Commission must be a credible watchdog, ensuring that companies have an incentive to follow the law and adhere to the agency's rules and orders.  Corporate defendants that blatantly lie about their products have been able to convince Commissioners that their conduct caused no harm, allowing them to extract settlements with virtually no consequences whatsoever.  Robert Pitofsky, who served as a Commissioner and later as the agency’s Chairman, described these no-money, no-fault orders as 'scandalously weak' ... One of the best examples of our moving away from lax enforcement is our Made in USA fraud program."

Prior to FTC Made in USA attorneys encating the Labeling Rule, there was bipartisan consensus at the Federal Trade Commission that Made in USA fraud should not be penalized.  Even in egregious cases, most matters were resolved with no-money, no-fault settlements, and many violators were merely required to complete various remedial measures and received nothing more than closing letters.

Consequently, the FTC proposed codifying the Made in USA standard into a rule in order to end the agency's reliance on no-money settlements, and allow the Federal Trade Commission to seek civil penalties and damages.

FTC Made in USA ("MUSA") Labeling Rule Investigation and Defense Lawyer for Advertisers and Manufacturers

Paying close attention to the Made in USA Labeling Rule is critical in order to reduce risks to your brand and avoid monetary damages, including severe civil penalties that can result from an FTC MUSA-related investigation or enforcement action.

Advertisers and manufacturers that utilize express or implied, qualified or unqualified, U.S. origin claims in any form or fashion should consult with experienced FTC Made in USA Labeling Rule investigation and defense lawyers in order to inventory such claims and make updates, as appropriate.  Compliance with the Made in USA Labeling Rule and advertising rules generally is not only important from a regulatory scrutiny standpoing, it can also protect brands from competitor challenges and Lanham Act violation lawsuits.

As a leading FTC Made in USA Labeling Rule investigation and defense lawyer, Richard Newman of Hinch Newman LLP provides the full range FTC U.S. origin claim claim investigation and defense services.  The firm also continuously monitors current and future Made in USA investigation and enforcement matters, as they arise.  Please contact Mr. Newman with any questions or concerns.

Contact an FTC "Made in USA" Labeling Rule attorney and MUSA investigation defense lawyer that concentrates on FTC Made in USA-related legal issues and investigation matters to discuss your rights and obligations.

Frequently Asked Questions (FAQs)

  • What Do Marketers and Manufacturers That Sell "American-Made" Products Need to Know About Making "Made in USA" Claims?

    • For textile and wool products: Under the Textile and Wool Acts, these products must be labeled to identify the country where they were processed or manufactured.
    • Imported products must identify the country where they were processed or manufactured.
    • Products made entirely in the U.S. of materials also made in the U.S. must be labeled "Made in USA" or with an equivalent phrase.
    • Products made in the U.S. of imported materials must be labeled to show the processing or manufacturing that takes place in the U.S., as well as the imported component.
    • Products manufactured in part in the U.S. and in part abroad must identify both aspects.

    In addition, print and online catalogs must disclose whether a textile was made in USA, imported or both.

    A seasoned FTC Made in USA Labeling Rule lawyer can assist marketers and manufacturers with compliance, training and defense of FTC Made in USA Labeling Rule investigations and enforcement proceedings.

  • What are Some Key Aspects to the FTC Made in USA Labeling Rule?

     

    Some key aspects to the FTC Made in UDSA Rule include, but are not limited to:

    • The FTC Made in USA Labeling Rule empowers the FTC to seek civil penalties of more than  up to $50,000 per violation (i.e., each day of non-compliance)  The FTC Made in USA Rule also authorizes the FTC to seek “such relief as the court finds necessary to redress injury to consumers or other persons” such as “rescission or reformation of contracts, the refund of money or return of property, the payment of damages, and public notification respecting the rule violation or the unfair or deceptive act or practice.”
    • Manufacturers and marketers should also ensure that the are in compliance with state legal regulations because the latter may not necessarily be preempted (e.g., California).
    • The FTC declined to incorporate various proposed modifications to the "all or virtually all standard," including, but not limited to, a standard based upon a percentage of costs; exemptions in the event that imported components are available in the United States; and the implementation of a safe harbor defense for “good faith” compliance efforts. 

  • Do FTC Made in USA Labeling Rule attorneys publish cases, enforcement proceedings and closing letters?

    Yes.  FTC staff attorneys responsible for investigating and enforcing Made in USA Labeling Rule compliance publish Made in USA-related cases, enforcement proceedings and closing letters.  The matters reflect investigations and enforcement actions against individuals and companies that have allegedly violated the FTC Made in USA Guidance, including the Made in USA Labeling Rule.