BILL ANALYSIS Ó
AB 2827
Page 1
Date of Hearing: May 3, 2016
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 2827
(Levine) - As Amended March 18, 2016
As Proposed to be Amended
SUBJECT: ADVERTISING: MADE IN THE U.S.A. LABEL: VIOLATIONS:
CURE
KEY ISSUE: Should violations of the state's "made in the
u.s.a," and "made in america," labeling laws be added to the
consumer legal remedies act, which provides a potential
defendant with the right to cure potential violations of the
act?
SYNOPSIS
California's "Made in U.S.A." law, revised just last year in
order to be more flexible, not only protects consumers against
false or misleading advertising, but also protects domestic
businesses and the market value of the "Made in America" label
by ensuring that companies cannot gain a competitive advantage
through false or misleading advertising. Until January 1, 2016,
California was the only state in the nation that required
product manufacturers to source 100 percent of their products
domestically before using the "Made in USA" or "Made in America"
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label. This requirement applied to all components and
subcomponents. Thus, the entire supply chain was required to be
located within the United States. California departed from this
historic and unique labeling requirement when it enacted Senate
Bill 633 ((Hill), Chapter 238, Statutes of 2015) which relaxed
the standards for use of the labels. SB 633 allows a
manufacturer to use the Made in the U.S.A. label if 95 percent
of its product is domestically-produced, or 90 percent if the
remaining content could not be made or obtained within the
United States.
The author claims that at least one attorney has been busy in
the five months since SB 633 was enacted, stating that within
days of SB 633 taking effect, "hundreds" of demand letters were
sent out. The letters demand that the companies do the
following: (1) cease and desist sales; (2) initiate a corrective
action advertising campaign; and (3) pull all products off the
shelves and refund purchases. The author further states that
complying with these egregious demands would put the companies
out of business. Further, although the letter invites companies
to "enter into discussions to resolve the demands," the author
asserts that many companies view this as a shakedown. As
currently in print, this bill provides that notwithstanding any
other law, a person or business may cure an alleged "de minumus"
violation of the "Made in U.S.A." or "Made in California"
statutes in existing law within 33 days of receiving written
notice of the alleged violation. The original analysis of this
bill pointed out a number of philosophical and practical
problems with the bill as now in print, including but not
limited to the fact that a crucial term, "de mimimis" was not
defined. Those problems have largely been addressed by the
author's proposed amendments, which delete the content of the
bill in its entirety and add violations of the state's "Made in
U.S.A." law to the Consumer Legal Remedies Act (Civil Code
Section 1770 et seq). The author's proposed amendments are
reflected in this analysis.
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As currently in print, this bill is supported by a number of
business groups, including the California Chamber of Commerce,
and is opposed by consumer groups, labor unions, animal welfare
organizations, and the Consumer Attorneys of California. As
proposed to be amended, the bill has no known opposition.
SUMMARY: Adds a violation of the state's "Made in U.S.A."
statute to the Consumer Legal Remedies Act (CLRA).
Specifically, this bill:
1)Specifies that it is a violation of the CLRA to represent that
a product is made in the United States by using "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 United States, unless the product complies with
Section 17533.7 of the Business and Professions Code.
2)Incorporates the notice and right to cure provisions of the
CLRA to apply to Made in the U.S.A. claims made pursuant to
the CLRA.
EXISTING LAW: Existing State Law:
1)Makes it unlawful for any person, firm, corporation or
association to sell or offer for sale in this state any
merchandise on which merchandise or on its container there
appears the words "Made in U.S.A.," "Made in America,"
"U.S.A.," or similar words when the merchandise or any
article, unit, or part thereof, has been entirely or
substantially made, manufactured, or produced outside of the
United States. (Business & Professions Code (BPC) Section
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17533.7.)
2)Provides that merchandise made, manufactured, or produced in
the United States that has one or more articles, units, or
parts from outside of the United States may be labeled "Made
in U.S.A.," "Made in America," "U.S.A.," or similar words if
all of the articles, units, or parts of the merchandise
obtained from outside the United States constitute not more
than five percent of the final wholesale value of the
manufactured product. (BPC Section 17533.7 (b).)
3)Provides that merchandise made, manufactured, or produced in
the United States that has one or more articles, units, or
parts from outside of the United States may be labeled "Made
in U.S.A.," "Made in America," "U.S.A.," or similar words if
both of the following apply:
a) The manufacturer of the merchandise shows that it can
neither produce the article, unit, or part within the
United States 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 United States constitute not more
than 10 percent of the final wholesale value of the
manufactured product. (BPC Section17533.7 (c)(1)(A)(B).)
1)Provides that California's domestic origin labeling law shall
not apply to merchandise sold for resale to consumers outside
of the State of California. (BPC Section 17533.7 (d).)
2)States that merchandise sold or offered for sale outside of
the State of California shall not be deemed mislabeled if the
label conforms to the law of the forum state or country within
which they are sold or offered for sale. (BPC Section 17533.7
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(e).)
3)Prohibits, under the Consumer Legal Remedies Act (CLRA), any
unfair methods of competition, acts or practices by any person
which either results in or is intended to result in the sale
or lease of goods or services to any consumer. (Civil Code
Section 1770.)
4)Provides, under the CLRA, that any consumer who suffers damage
as a result of a practice declared to be unlawful under the
CLRA may bring an action against that person to recover
damages, as specified, and allows for a class action suit to
be filed on behalf of a class of consumers adversely affected
by an unfair method of competition, act or practice. (Civil
Code Sections 1780, 1781.)
5)Requires, under the CLRA, thirty days or more prior to the
commencement of an action for damages, the consumer to do the
following:
a) Notify the person alleged to have employed or committed
methods, acts, or practices that are alleged to be
violations of the CLRA in writing (sent by certified or
registered mail, return receipt requested, to the place
where the transaction occurred or to the person's principal
place of business within California). (Civil Code Section
1782 (a).)
b) Demand that the person correct, repair, replace, or
otherwise rectify the goods or services alleged to be in
violation of the CLRA. (Civil Code Section 1782 (a).)
1)Prohibits, under the CLRA, any action for damages if an
appropriate correction, repair, replacement, or other remedy
is given, or agreed to be given within a reasonable time, to
the consumer within 30 days after receipt of the notice.
(Civil Code Section 1782 (b).)
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2)Prohibits, under the CLRA, any action for damages upon a
showing by a person alleged to have employed or committed
methods, acts, or practices declared unlawful by the CLRA that
all of the following exist:
a) All consumers similarly situated have been identified,
or a reasonable effort to identify such other consumers has
been made.
b) All consumers so identified have been notified that upon
their request the person shall make the appropriate
correction, repair, replacement, or other remedy of the
goods and services.
c) The correction, repair, replacement, or other remedy
requested by the consumers has been, or, in a reasonable
time, shall be, given.
d) The person has ceased from engaging, or if immediate
cessation is impossible or unreasonably expensive under the
circumstances, the person will, within a reasonable time,
cease to engage, in the methods, act, or practices. (Civil
Code Section 1782 (c).)
1)Allows, under the CLRA, an action for injunctive relief to be
commenced without compliance with 8), above, and allows a
consumer to amend his or her complaint without leave of court
to include a request for damages 30 days after the
commencement of an action for injunctive relief after
compliance with 8), above. (Civil Code Section 1782 (d).)
2)Specifies that attempts to comply with the CLRA by a person
receiving a demand shall be construed to be an offer to
compromise and shall be inadmissible as evidence pursuant to
Section 1152 of the Evidence Code, but that such attempts to
comply with a demand shall not be considered an admission of
engaging in an act or practice declared unlawful by the CLRA
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and that evidence of compliance or attempts to comply with
this section may be introduced by a defendant for the purpose
of establishing good faith or to show compliance with the
CLRA. (Civil Code Section 1782 (d).)
3)Makes it unlawful to represent that a product is made in
California, by using a specified "Made in California" label,
unless the product complies with the requirements of the Made
in California Program established by the Governor's Office of
Business and Economic Development and registers for the
program. (Government Code Section 12098.10.)
Existing Federal Law:
1)Authorizes the Federal Trade Commission to regulate country of
origin claims pursuant to authority granted to it under the
Federal Trade Commission Act, which prohibits "unfair or
deceptive acts or practices." (15 U.S.C. Sec. 45.)
2)Requires that a "Made in U.S.A." label be consistent with
orders and decisions of the Federal Trade Commission. (15
U.S.C. Sec. 45 (a).)
3)Provides that a product may be labeled as "Made in U.S.A." if
the product is all or virtually all made in the United States,
however a product using such a label may contain-in a
negligible amount-components made outside of the United
States. (Federal Trade Commission, Enforcement Policy
Statement on U.S. Origin Claims, 62 Fed. Reg. 63756, 63765
(Dec. 2, 1997).)
FISCAL EFFECT: As currently in print this bill is keyed
non-fiscal.
COMMENTS: The Legislature has long considered consumer
protection to be a matter of high public importance. State law
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is replete with statutes aimed at protecting California
consumers from unfair, dishonest, or harmful market practices.
The CLRA (Civ. Code Sec. 1750 et seq.), for example, was enacted
"to protect the statute's beneficiaries from deceptive and
unfair business practices," and to provide aggrieved consumers
with "strong remedial provisions for violations of the statute."
(Am. Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1,
11.) The CLRA defines a number of generic acts as "unfair
methods of competition and unfair or
deceptive acts or practices" including "[m]isrepresenting the
source, sponsorship, approval, or certification of goods or
services" (Civil Code Section 1770(a)(2), as well as a number
of specific acts, such as violating, the Made in California
labeling law (Id, at (a)(27)). Similarly, California's Unfair
Practices Act (BPC Section 17000 et seq.) has protected
California consumers from "unlawful, unfair or fraudulent
business act[s] or practice[s]" for over 70 years. (BPC Section
17200.)
Until January 1, 2016, California was the only state in the
nation that required product manufacturers to source 100 percent
of their products domestically before using the "Made in USA" or
"Made in America" label. This requirement applied to all
components and subcomponents. Thus, the entire supply chain was
required to be located within the United States. California
departed from this historic and unique labeling requirement when
it enacted Senate Bill 633 ((Hill), Chapter 238, Statutes of
2015) which relaxed the standards for use of the labels. SB 633
allows a manufacturer to use the Made in the U.S.A. label if 95
percent of its product is domestically-produced, or 90 percent
if the remaining content could not be made or obtained within
the United States.
Despite the relaxed labeling standards, consumer protection
regarding country of origin labeling is a matter of important
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public policy. California consumers who care about truthful
labels suffer an economic loss when they purchase a product they
would not otherwise have purchased, had not the label accurately
stated the product's origins. Further, California's "Made in
U.S.A." law protects domestic businesses and the market value of
the "Made in America" label by ensuring that companies cannot
gain a competitive advantage through false or misleading
advertising.
The value of a "Made in America" label in the manufacturing
sector is substantial. Studies show that Americans will pay a
premium to purchase products exclusively manufactured in the
United States and that consumers rely on the "Made in USA" or
"Made in America" label to guide their purchases. Manufacturers
seem to understand the value of these labels to consumers, as
demonstrated by the fact that California's largest corporation,
Apple Inc., recently shifted production of its Mac Pro personal
computer line to the United States as part of a "$100 million
'made in the USA' push." (Burrows, Apple Kicks Off "Made in
USA" Push with Mac Pro (Dec. 18, 2013) The San Francisco
Chronicle
(as of January 4, 2014).)
Announcing the company's shift to domestic production, Chief
Executive Officer Tim Cook said "[w]e don't want to just
assemble the Mac Pro here, we want to make the whole thing here.
This is a big deal." (Ibid.) Apple's decision reflects the
market reality that products advertised or labeled as "Made in
U.S.A." have a decisive marketplace advantage over their foreign
counterparts. Indeed, an April 2013 Gallup poll found that 45
percent of Americans surveyed had made a recent special effort
to buy products that were made in the U.S.A., and that 64
percent of those surveyed would pay more to buy an American-made
product than a similar product made in another country. (Jones,
Patriotism, Jobs Primary Motivations for 'Buying American' (Apr.
30, 2013) Gallup Economy <
http://www.gallup.com/poll/162110/patriotismjobs-primary-motivati
ons-buying-american.aspx> (as of January 5, 2014).)
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Author's Stated Need for the Bill. The author claims that at
least one attorney has been busy in the five months since SB 633
was enacted, stating that within days of SB 633 taking effect,
"hundreds" of demand letters were sent out. The letters demand
that the companies do the following: (1) cease and desist sales;
(2) initiate a corrective action advertising campaign; and (3)
pull all products off the shelves and refund purchases. The
author further states that complying with these egregious
demands would put the companies out of business. Further,
although the letter invites companies to "enter into discussions
to resolve the demands," the author asserts that many companies
view this as a shakedown.
Further, the author has given the Committee an example of a
lotion manufacturer in his district whose principle market is
overseas that was sued because its label complied with foreign
labeling rules, but not California's "Made in the U.S.A." laws.
The author of this bill also states that SB 633 was not intended
to require companies to pull all their products off the shelves.
Rather, the intent of SB 633 was to "help promote manufacturing
in California, to encourage the establishment of small
businesses, and to help create jobs in the state and to make the
"Made in U.S.A." or "Made in California" labeling standard
consistent with the "all or virtually all" standards used by all
49 other states and the federal government."
Author's Proposed Amendments. In response to the Committee's
concerns with the language of this bill as now in print, the
author proposes to delete the content of the bill in its
entirety and instead amend the CLRA by adding the following
paragraph to subdivision (a) of Section 1770:
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(28) Representing that a product is made in the United States
by using "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 United States, unless
the product complies with Section 17533.7 of the Business and
Professions Code.
It is noteworthy that paragraph (27) of subdivision (a) of
Section 1770, added to the CLRA in 2013, as discussed below,
addresses violations of the "Made in California" labeling law.
Section 1770 (a)(27) provides as follows:
(27) Representing that a product is made in California by
using a Made in California label created pursuant to Section
12098.10 of the Government Code, unless the product complies
with Section 12098.10 of the Government Code.
It is also possible that Made in the U.S.A. violations are
already governed by the CLRA, which lists "[m]isrepresenting the
source, sponsorship, approval, or certification of goods or
services" as an unfair method of competition and an unfair or
deceptive act or practice. (Civil Code Section 1770 (a)(2).)
In order to clarify the law and given that the Made in
California labeling law is already incorporated into the CLRA,
it seems appropriate to also incorporate the "Made in the U.S.A.
" law, set forth in BPC 17533.7, into the CLRA. And it seems
particularly appropriate that the two similar provisions be
listed sequentially in the CLRA.
Right to Cure Violations in the CLRA are More Protective of
Consumers than Those of the bill in Print. Under existing law,
a consumer who suffers damage as a result of an unlawful
practice under the CLRA may bring a private right of action and
recover actual damages; an order to enjoin the unlawful act;
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restitution; punitive damages; or any other relief that the
court deems proper. (Civil Code Section 1780.) Notably,
pursuant to Civil Code Section 1782 (b), the potential defendant
has the ability to "cure" a violation within 30 days after
receipt of the consumer's claim seeking damages by correcting
the problem. However, a consumer can still file an action for
injunctive relief without having to wait the 30 days. Also,
after waiting the 30 days, the consumer can amend the complaint
to include a request for damages.
How does the "right to cure" provision in the CLRA adequately
serve the interests of consumers in a way that the "right to
cure" provision originally proposed in this bill did not?
First, the requirements for the defendant to demonstrate that a
violation has been "cured" are extensive and specific. Under
the CLRA, a consumer's claim for damages is only foreclosed upon
the prospective defendant's showing that all of the following
exist: (1) all consumers similarly situated have been
identified, or a reasonable effort to identify such other
consumers has been made; (2) all consumers so identified have
been notified that upon their request the person shall make the
appropriate correction, repair, replacement, or other remedy of
the goods and services; (3) the correction, repair, replacement,
or other remedy requested by the consumers has been, or, in a
reasonable time, shall be, given; and (4) the person has ceased
from engaging, or if immediate cessation is impossible or
unreasonably expensive under the circumstances, the person will,
within a reasonable time, cease to engage, in the methods, act,
or practices. (Civil Code Section 1782 (c).) Second, the CLRA
specifically allows actions for injunctive relief to be filed
without the notification requirement or the 30-day right to
cure. Finally, the consumer's civil action for damages is not
foreclosed in a case where the defendant has failed to comply
with all of the requirements, above. None of these requirements
or specifications is present in the bill as it is now in print.
This bill, as proposed to be amended, would add violations of
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the "Made in the U.S.A." law to the list of "unfair methods of
competition and unfair or deceptive acts or practices"
enumerated in the CLRA. By including the unlawful use of the
"Made in the U.S.A" law under the CLRA, this bill would provide
a private right of action for a consumer who suffers damage as a
result of a product being labeled with "Made in U.S.A.," "Made
in America," "U.S.A.," or similar words if all of the articles,
units, or parts of the merchandise obtained from outside the
United States constitute more than five percent (or 10 percent
in some cases) of the final wholesale value of the manufactured
product. But it would also give businesses the opportunity to
correct violations of the law within 30 days. Providing a
business with an appropriate method of rectifying an otherwise
mistaken use of the "Made in in the U.S.A" label under the
conditions articulated in the CLRA arguably provides an
appropriate balance between consumer protection and business
concerns regarding the potential for frivolous litigation.
Violations of the Made in California Labeling Law are Already
Incorporated into the CLRA. In 2013, violations of the Made in
California labeling law were added to the list of "unfair
methods of competition and unfair or deceptive acts or
practices" enumerated in the CLRA when SB 12 (Corbett, Ch. 541,
Stats. of 2013) was signed into law.
The analysis of SB 12 by the Senate Judiciary Committee quoted
the California Small Business Association, as follows, in
support of the bill:
We believe this bill will help small businesses be
competitive by promoting the production of goods in
California. We are proud to be Californians and should
promote products made in California. The more production
that takes place in California[,] the more jobs will be
available." While this bill aims to increase California
product promotion, it also seeks to protect consumers and
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California businesses from improper use of the Made in
California label. This bill would provide appropriate
consumer protection by including the unlawful use of the
Made in California label under the CLRA, and provide a
private right of action against businesses that improperly
utilize the label. Accordingly, businesses would be
incentivized to participate in the program since proper
compliance and usage of the Made in California label would
help these businesses improve sales.
Presumably, the provisions of this bill, as it is proposed to be
amended, would provide appropriate consumer protection to the
public, by including the unlawful use of the words "Made in
U.S.A.," "Made in America," "U.S.A.," or similar words in the
CLRA while protecting both businesses and consumers from misuse
of those terms.
ARGUMENTS IN SUPPORT: In support of the bill as now in print,
the California Small Business Association, states that:
Small businesses respect the law and will continue to do
so. They have not intentally (sic) broken them but often
the interpretation is at odds as well as information on new
regulations not communicated to the small business owners.
However, many of our small businesses have been subject to
threats of frivolous lawsuits and shakedowns. This "right
to cure" is a giant step forward.
In support of the bill as it is now in print, the California
Manufacturers & Technology Association, states that:
Right-to-cure provisions represent a real, necessary
protection from predatory lawsuits that ultimately cost
California manufacturers to fight, win or lose.
The California Chamber of Commerce, states the following about
the bill in print:
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AB 2827 is a job creator as it will provide businesses with
a limited time period in which to resolve alleged labeling
violations regarding product "Made in the USA" or "Made in
California" without facing devastating litigation.
Consistent with other areas of the law, AB 2827 seeks to
limit litigation for alleged de minimums violations
regarding representation of where the product was made.
The Consumer Legal Remedies Act (CLRA) allows consumers to
pursue costly litigation against businesses for over 20
different "unfair methods of competition," including
deceptive representations as to the geographical source of
the good. This financial threat of litigation has created
an opportunity for attorneys to leverage businesses into
quick monetary settlements for alleged misrepresentations
on labels of goods that represent "Made in USA" or Made in
California" or even a specific location in California.
While certainly there are egregious examples of where a
company has misrepresented the geographical source of a
good, there are numerous examples of where all, or the
majority of all ingredients, components or parts of the
product are sourced in the geographical location identified
and yet the threat of litigation is still leveraged against
these businesses.
In support of the bill, as now in print, the Civil Justice
Association of California, states that:
The right to cure concept is already found in a number of
California statutes, including the Consumer Legal Remedies
Act (see Civil Code § 1782), Private Attorneys General Act
(PAGA) (see Labor Code § 26993(c)(2)), and Civil Code
sections dealing with construction-related accessibility
complaints (see Civil Code § 55.56.)
AB 2827 is necessary because California companies have
recently received demand letters alleging violations of the
California Government Code § 12098.10 and Business and
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Professions Code § 17533. These letters include demands
that many companies would find impossible to meet without
going bankrupt: the examples we have seen called for ending
the sale of all disputed products, full recalls, refunds,
and advertising campaigns to inform consumers of the "true
nature" of disputed products. Companies must choose
between meeting these unreasonable demands, settling out of
court and providing the plaintiff attorneys with a
financial windfall, or engaging in costly litigation to
defend their labels. AB 2827 is a practical way to protect
California manufacturers and businesses from abusive
litigation by allowing a company to cure an alleged
violation by including (but not limited to) changing the
label going forward.
By allowing a prospective label change and time to cure
prior to commencement of a civil action, this bill provides
a means to act on genuine concern about the accuracy of
information provided to consumers via origin labeling. At
the same time the bill removes the incentive for abusive
lawsuits intended to enrich litigators rather than protect
consumers.
ARGUMENTS IN OPPOSITION: The Animal Legal Defense Fund writes
the following in opposition to this bill now in print:
Giving businesses the right to "cure" errors on labels
would not only undermine consumer confidence that their
choices matter, it might also endanger the health of pets
in California, the more immediate threat to which I refer
above. You are likely aware that many pets died in 2007
after consuming adulterated products containing ingredients
imported from China. Many concerned pet owners and
guardians determined afterward to purchase only those
products labeled Made in the USA, which they believe to be
safer. While existing law enacted through S.B. 633 does
permit a producer to use the Made in the USA label even for
products in which 10% of the ingredients derive from
foreign sources, the threat to animals arising from that
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policy choice is considerably less severe than the threat
to animals that A.B. 2827 might create-namely, that
dishonest producers, armed with a free pass, will peddle
their products as American-made even while they might be
substantially derived from foreign sources. Indeed, several
lawsuits are currently working their way through federal
courts in California against major pet food retailers
alleged to have resorted to deceptive marketing. A.B. 2827
might enable these defendants to walk away, leaving the
injuries of the California consumer-plaintiffs unredressed.
In opposition of the bill, as now in print, the California
Teamsters Public Affairs Council states that:
This bill is premature given that California just enacted
laws dealing with these two labeling statutes and requiring
a new procedure to enforce them is not necessary. Further,
the "right to cure" violations expressed in the bill is
completely ambiguous. There is no definition of how a
company would "cure" what is in essence fraud on the
consumer.
In opposition of the bill, the Consumer Federation of California
(CFC) states about the bill in print:
On January 1, 2016, Senate Bill 633 (Hill) became law. SB
633 lowered the standard to allow a product containing as
much as 10% imported content to be lawfully offered for
sale in California bearing a "Made in USA" or "Made in
America" label. We believe the legislature should grant
this brand new law a reasonable time period to operate
before further weakening an important truth in advertising.
This bill would create a perverse incentive for certain
business to take advantage of a blanket immunity from
enforcement of a consumer protection law.
SIMILAR PRIOR LEGISLATION: AB 2624 (Medina, 2014) would have
made it unlawful to sell any product that contains the words
"Made in North America," "North American Made," or similar words
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on the product or its container unless all or virtually all of
the product was made in the United States, Canada, or Mexico.
This bill would have also added misrepresenting a product as
made in North America to the list of unfair methods of
competition and unfair or deceptive acts or practices actionable
under the Consumers Legal Remedies Act. This bill died on the
Senate Inactive File.
SB 661 (Hill, 2014) would have provided that merchandise made,
manufactured, or produced in the United States that has an
article, unit, or part from outside of the United States may be
labeled and sold in California as "Made in U.S.A." or "Made in
America" if the following requirements are met: (1) the
manufacturer of the merchandise certifies that it can neither
produce the article, unit, or part within the United States nor
obtain the article, unit, or part of the merchandise from a
domestic source; (2) the manufacturer's determination that the
article, unit, or part cannot be produced or obtained within the
United States from a domestic source is not based on the cost of
the article, unit, or part; and (3) the article, unit, or part
of the merchandise obtained from outside the United States
constitutes only a negligible part of the final manufactured
product. This bill failed passage out of the Senate Judiciary
Committee on a 2-5 vote.
AB 890 (Jones, 2013) would have provided that a product sold in
California could carry the label "Made in U.S.A." if it was
substantially made, manufactured, or produced in the United
States as measured by the following criteria: at least 90
percent of the components, parts, articles, or units of the
merchandise were manufactured in the United States; United
States manufacturing costs constitute at least 90 percent of the
total manufacturing costs for the merchandise; and the
merchandise was last substantially transformed or assembled in
the United States. This bill failed passage out of the Senate
Judiciary Committee on a 2-5 vote.
AB 858 (Jones, 2012) was substantially similar to SB 663 (Hill,
2015). This bill failed passage out of the Senate Judiciary
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Committee on a 2-3 vote.
ABX6 8 (Beall, 2010) identical to AB 858, this bill was
introduced in the Sixth Extraordinary Session but was never
referred to a policy committee.
SB 1004 (Holmdahl, Ch. 676, Stats. 1961) codified California's
"Made in the U.S.A." law, making it unlawful for any person,
firm, corporation, or association to sell or offer for sale any
merchandise that advertises itself as being made or manufactured
in the United States when any article, unit, or part of the
merchandise has been entirely or substantially made,
manufactured, or produced outside of the United States.
REGISTERED SUPPORT / OPPOSITION:
Support (for the bill as now in print)
California Chamber of Commerce
California Manufacturers & Technology Association
California Retailers Association
California Small Business Association
Civil Justice Associations of California
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Opposition (for the bill as now in print)
Animal Legal Defense Fund
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Teamsters Public Affairs Council
Consumer Federation of California
Engineers & Scientists of California, Local 20, IFPTE Local 20,
AFL-CIO
Professional & Technical Engineers, IFPTE Local 20, AFL-CIO
UNITE-HERE, AFL-CIO
Utilities Workers Union of America, Local 132, AFL-CIO
Analysis Prepared by:Alison Merrilees and Amanda Hall / JUD. /
(916) 319-2334
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