AB 890: Senate Judiciary Committee rejects “Made in USA” labels on products with Bangladesh content (2-year bill)

Update: June 25, 2013

AB 890 failed passage in the Senate Judiciary Committee on a vote of 2-5.  Assemblymember Jones’ bill is now a 2-year bill.

Update: June 19, 2013

AB 890 was amended last week, and now closely resembles SB 661 (Hill), which has been held in the Senate Judiciary Committee.

As amended, AB 890 deleted the requirement of California law that any product or product unit advertised for sale in California bearing a “Made in USA” or similar label must be substantially manufactured in the United States.  It replaces this truth-in-advertising standard with a new standard allowing a product to be lawfully offered for sale in our state bearing a “Made in USA” or ”Made in America” label if only 90% of the cost of the product’s content is domestic and if the final transformation of the product occurred in the USA.

This would represent a substantial weakening of California’s “Made in the USA” law, which requires products offered for sale in our state as “Made in America” or “Made in the USA” to meet stringent domestic content requirements. California’s law has protected consumers from bogus claims that products are made in the USA when, in fact they are partially made in the USA and include non-domestic content.

The bill will be up for a Senate Judiciary Committee vote as early as Tuesday, June 25.

May 31, 2013

The California Assembly approved legislation to weaken a truth in advertising law that currently protects California consumers who care about the origin of the products they buy. Should the bill become law, manufacturers and retailers would be free to sell products labeled “Made in USA” or “Made in America” even if a significant amount of the product was produced in Bangladesh, China, or other countries that are synonymous with worker oppression and environmental degradation.

AB 890 was introduced by Assembly member Brian Jones, R-Santee, and approved by the Assembly: 50 “Yes” votes to 18 “No” votes.  11 abstained, which is the same as voting “No.”

This legislation would allow businesses to lawfully offer for sale as “Made in USA” products that contain substantial imported content. Under a federal labeling standard that is the model for AB 890, shoe manufacturer New Balance boasts that it puts a “Made on USA” label on shoes that contain 30% non-USA content.

Considering the cheap labor costs in its factories in Vietnam and China (18 cents an hour at some New Balance factories, according to knowmore.org website) that 30% foreign cost could easily mean that the bulk of the “Made in USA” shoe’s materials are imported. Yet, the federal government turns a blind eye, refusing to enforce its weak domestic content labeling standard against New Balance and other scofflaws. AB 890 would legalize this type of deceptive labeling in California.

Consumer Federation of California (CFC) strongly opposes this attempt to overturn an important truth in labeling law.  In 2011 the California Supreme Court found that a consumer suffers economic harm if deceived into making a purchase relying an inaccurate “Made in USA” label, and affirmed:

Simply stated: labels matter. The marketing industry is based on the premise that labels matter, that consumers will choose one product over another similar product based on its label and various tangible and intangible qualities they may come to associate with a particular source.

“Made in USA” labels provide the manufacturer a marketplace advantage in appealing to large numbers of Californians who care about the origin of a product. If this were not the case, manufacturers would not display this label prominently in packaging and marketing materials. Current state law does not prevent a product from truthfully labeling the amount of USA content, such as labels that say “Assembled in USA of domestic and imported content,” “70% USA content,” or other similar claims, provided they are accurate.

Businesses that actually provide 100% American-made products rely on accurate labeling when they undertake campaigns to encourage consumers to buy their products. Accurate “Made in USA” regulations reward companies that pay higher wages for skilled American labor and honor our stronger environmental laws by manufacturing domestically. Without adequate enforcement of the “Made in USA” standard, some companies could mislead consumers into buying products loaded with inferior imported content without fear of liability.

Overturning California’s truth-in-advertising law does not benefit consumers – it benefits those manufacturers that want to use the label to deceive people into buying their products by mislabeling them “Made in USA.”

The Consumer Federation of California urges the Senate to reject AB 890 and stop this attempt to legitimize deceptive labeling.

The 50 Assembly members that voted against consumers and for deceptive labeling with ‘yes” votes on AB 890 include:

Katcho Achadjian
Luis A. Alejo
Travis Allen
Franklin Bigelow
Raul Bocanegra
Susan Bonilla
Rob Bonta
Steven Bradford
Joan Buchanan
Ian Calderon
Rocky Chavez
Connie Conway
Ken Cooley
Brian Dahle
Tom Daly
Tim Donnelly
Steve Fox
Beth Gaines
Jimmy Gomez
Richard Gordon
Jeff Gorell
Shannon Grove
Curt Hagman
Isadore Hall, III
Diane Harkey
Brian Jones
Marc Levine
Eric Linder
Dan Logue
Brian Maienschein
Allan Mansoor
Jose Medina
Melissa Melendez
Holly Mitchell
Mike Morrell
Kevin Mullin
Al Muratsuchi
Brian Nestande
Kristin Olsen
Richard Pan
Jim Patterson
Henry Perea
John Perez
Bill Quirk
Sharon Quirk-Silva
Anthony Rendon
Donald Wagner
Marie Waldron
Shirley Weber
Scott Wilk

Assembly members that voted for consumers and against AB 890 with “no” votes (or by abstaining which had the same result as voting “no”) include:

Tom Ammiano
Toni Atkins
Richard Bloom
Bob Blumenfield
Cheryl Brown
Nora Campos
Ed Chau
Wesley Chesbro
Roger Dickinson
Susan Talamantes Eggman
Paul Fong
Jim Frazier
Cristina Garcia
Mike Gatto
Lorena Gonzalez
Adam Gray
Roger Hernandez
Chris Holden
Reginald Jones-Sawyer, Sr.
Bonnie Lowenthal
Adrin Nazarian
V. Manuel Perez
Rudy Salas, Jr.
Nancy Skinner
Mark Stone
Philip Ting
Bob Weickowski
Das Williams
Mariko Yamada