California’s Made-in-USA bill involves small parts, but it’s no small matter

by Dan Walters, Sacramento Bee

Superficially, Assembly Bill 858 is one of the legislative session’s more mundane measures, one seemingly so innocuous that it’s being carried by a freshman Republican assemblyman, Brian Jones of Santee, and didn’t receive a single dissenting vote in the Assembly last year.

However, AB 858 embodies an important conflict ‘ whether the state’s go-it-alone attitude on regulation is damaging its already battered economy. And having drawn heavyweight opposition, it faces a much tougher path in the Senate.

It’s all about the words "Made in USA." The Federal Trade Commission says that products can carry those words if they are "all or virtually all" manufactured in the country.

But California law says the words cannot be used "when the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States."

Last year, the state Supreme Court upheld lower court judgments against Kwikset Corp., a major maker of door locks and similar products, for false advertising by using the "Made in USA" on products assembled in Mexico of mostly U.S.-made parts.

That raised the hackles of California-based manufacturers, who said the conflict between federal and state law means that products with a few foreign-made parts could be sold with that label in 49 other states, but not in California.

The poster child for that contention is 700-worker Mag Instrument Co. of Ontario, which makes heavy-duty Maglite flashlights, but no longer labels them "Made in USA" after being sued for using a few foreign-made parts.

"Even a single minuscule foreign part in an otherwise 100 percent domestic good makes an actionable case under California law," Mag Instrument founder Anthony Maglica told Gov. Jerry Brown in a letter.

Maglica, an 82-year-old refugee from postwar Europe who founded the firm for $125 in 1955, said in an interview that California is "the worst place in the world" for business.

AB 858 would adopt the Federal Trade Commission’s definition of "Made in USA" for California.

However, the bill is stalled in the Senate Judiciary Committee due to opposition from the Consumer Federation of California, which says it would create "a vague standard that invites mislabeling," and Consumer Attorneys of California, which contends that California is best served by having its own, higher standard.

California’s "Made in USA" law is one of many instances of state rules that are unique or at least unusual ‘ its air quality laws being the most conspicuous example. But business leaders say that in doing that, California is rendering itself uncompetitive and hampering its emergence from the worst recession since the Great Depression.

It involves small parts, but it’s no small matter.