A recent jury decision in the Banks v. R.C. Bigelow, Inc. case has stirred discussions about national origin marketing claims, as the tea manufacturer was fined $2.3 million. The litigation centered on the validity of Bigelow’s “Manufactured in the USA 100%” labels, which plaintiffs contended were misleading since the raw tea was imported. The company argued that the designation referred only to the blending and packaging processes, which occur in the United States. The court had earlier ruled that the claim was indeed false, leaving the jury to decide on the extent of the damages and the consideration of punitive damages, which they ultimately rejected.
This legal battle underscores a growing scrutiny around the application of “Made in USA” labels, governed by strict Federal Trade Commission (FTC) guidelines. According to these guidelines, for a product to bear an unqualified “Made in USA” claim, all significant parts and processing must originate in the United States, and the final assembly must take place within the country. Products not fully made in the U.S. can still feature qualified claims such as “Made in USA with imported parts” provided it’s truthful and verified.
The FTC’s regulations extend not only to direct claims but also to implied ones, which can be interpreted from the overall presentation of the product’s packaging. This includes the use of specific words or images that suggest American origin. Therefore, companies must ensure any such imagery or language is accompanied by clear qualifications if the product is not entirely made in the USA.
Recent years have seen an uptick in litigation concerning national origin claims, with 2021 marking a peak of 14 cases. The resolution of the Banks trial may signal a renewed focus on this area, suggesting that companies might face increased legal risks if their USA labels or promotions are found misleading.
Legal experts suggest that the FTC’s updated guidance and stringent scrutiny are likely aimed at enhancing consumer trust and ensuring fair competition among manufacturers. Retailers, in turn, must make any qualified U.S. origin claims both clear and prominent to avoid misleading consumers.
Given this landscape, companies are advised to carefully review their product labels against FTC regulations to mitigate the risk of litigation and potential damages.
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