Litigation Over Made in USA Claims Heats Up in 2025 as FTC and Consumers Target False Advertising
Made in USA labels carry powerful marketing weight, and in 2025, they come with serious legal risks. Federal regulators and class action attorneys are cracking down on misleading origin claims, forcing major brands to pay millions in penalties.
From household names like Williams-Sonoma to industrial giants like Kubota, companies are being held accountable for labeling products as American-made when they fall short of the FTC’s strict “all or virtually all” standard.
The FTC has returned millions to consumers since 2021, with enforcement reaching new highs in 2023. Now, in 2025, both regulators and private plaintiffs are reshaping how companies can advertise domestic manufacturing. This article breaks down the latest cases, legal theories, and compliance standards shaping the future of Made in USA marketing.
Understanding Made in USA Claims in 2025
The Federal Trade Commission (FTC) considers the "Made in USA" label a powerful statement that must meet specific legal requirements in 2025. Companies that want to market their products as American-made must direct their efforts to meet these strict standards. Failure to comply could result in hefty penalties and legal action.
What Qualifies As “Made In Usa”
Products need to meet the FTC's exact standard of being "all or virtually all" made in the United States to legally display an unqualified "Made in USA" label. This label means more than just a symbol, it stands as a factual statement that proves domestic origin of components and significant processing.
The FTC now enforces these claims through its Made in USA Labeling Rule, finalized in August 2021. This rule put into law the long-established standards for product labels. The rule's ability to impose civil penalties makes compliance a vital concern for manufacturers and marketers.
The “All Or Virtually All” Standard Explained
The "all or virtually all" standard requires three things:
- Final assembly or processing must occur in the United States
- All significant processing must take place domestically
- All or virtually all ingredients or components must be made and sourced in the U.S.
Products with this designation should contain only "negligible" foreign content. The FTC doesn't specify an exact percentage test, but manufacturers must keep "competent and reliable evidence" to back their claims.
The distance between foreign content and the finished product matters too. Even small-cost imported components might disqualify a product from unqualified claims if they play a vital role in the product's function.
Qualified vs. Unqualified Claims
Companies can still make qualified Made in USA claims when their products don't meet the strict "all or virtually all" standard. These claims clearly state the limits of domestic origin.
Some examples of qualified claims include:
- "60% U.S. content"
- "Made in USA of U.S. and imported parts"
- "Couch assembled in USA from Italian Leather and Mexican Frame"
The difference between qualified and unqualified claims has become more relevant with recent lawsuits. Major brands like Goya Foods, PepsiCo, and McCormick face legal challenges because they allegedly made unqualified claims while using key ingredients from other countries.
Companies must be extra careful with their product lines. They can't claim an entire line is "Made in USA" unless each product meets the full standard. This need for precision matters even more now as class action lawsuits targeting big consumer brands over their origin claims continue to rise.
The Rising Tide of False Advertising Litigation
Class action lawsuits against big brands making false "Made in USA" claims have exploded in 2025. Consumers are more aware of domestic origin requirements, and enforcement has become stricter.
Class Action Lawsuits Against Major Brands
Reynolds Consumer Products now faces several class actions. The company's "Foil Made in USA" claim has come under fire because "substantially all bauxite in Reynolds' foil comes from outside the United States". A federal judge let this case move forward in March 2024. The judge ruled that the plaintiff "plausibly alleged she paid more than she would have but for the 'Foil Made in USA' label".
New Balance reached a settlement with customers who said their shoes weren't American-made, despite names like "Made in USA 990v2". Olaplex also solved its legal troubles over hair products that customers claimed were falsely labeled "Made in the USA" because they "included numerous foreign-made ingredients".
Legal Theories Being Advanced
We based these cases on the FTC's "all or virtually all" standard. This rule says companies can't make unqualified origin claims unless "final assembly or processing and all significant processing takes place in the U.S., and that all or virtually all ingredients or components of the product are made and sourced in the U.S.".
The legal landscape includes several frameworks:
- State consumer protection laws (especially in California and New York)
- Federal Lanham Act claims for false advertising
- Breach of express warranty theories
The Tenth Circuit took an interesting stance by rejecting FTC guidance in one case. They found the term "made" too ambiguous to be false since it "could refer either to the origin of the components or to the assembly of the product itself”.
Damages Sought By Plaintiffs
The financial stakes keep growing. The FTC can impose civil penalties up to $50,120 per Made in USA Rule violation, and settlements often reach millions. Bates Accessories paid $191,481 for false claims.
Class actions usually ask for big damages: Reynolds faces demands of "at least $5 million". Plaintiffs say consumers "paid premium prices" for products they thought were American-made.
Companies don't just worry about money. One attorney called this "a publicity nightmare". This shows why brands should verify compliance carefully before making unqualified "Made in USA" claims.
High-Profile Legal Scrutiny Reshaping the Landscape
Made in USA compliance has changed dramatically due to recent landmark penalties. Big brands now face intense scrutiny over their origin claims, which sets new standards for enforcement.
Williams-Sonoma's $3.7 Million Penalty
Williams-Sonoma paid the biggest civil penalty ever in Made in USA enforcement valued at $3.17 million because they broke a previous FTC order. This 2024 action came after they already paid $1 million back in 2020. The company said their mattress pads were "Crafted in America from domestic and imported materials" when they were actually made in China. The FTC looked into this violation and found six more products with misleading USA claims.
Kubota's $2 Million Settlement
Kubota North America agreed to pay a $2 million civil penalty in January 2024. They had wrongly labeled thousands of replacement parts as Made in USA even though these parts came from overseas. Kubota kept using these labels after moving production to other countries. This wasn't their first run-in with the FTC, they faced similar charges in 1999 as well as 2019.
The Reynolds Wrap Aluminum Controversy
Reynolds Consumer Products faces a class action lawsuit about its "Foil Made in USA" claims. The main issue is that almost all bauxite in Reynolds Wrap comes from outside the United States. New York consumers want at least $5 million in damages. A federal judge rejected Reynolds' attempt to dismiss the case in March 2025, saying consumers might have paid premium prices because of false claims.
Beauty & Haircare Industry Violations
Beauty and haircare companies such as Mielle Organics and It’s a 10 Haircare came under fire throughout 2025 for their Made in USA claims. They used imported ingredients like Tea Tree Oil, Vitamin C/Ascorbic Acid, Shea Butter, Jojoba Seed Oil, Coconut Oil, Hydrolyzed silk, and silk amino acids.
These cases show stricter enforcement against products that use key foreign components, even if they're assembled in the U.S.
Food Product Mislabeling Cases
Five lawsuits have been filed recently against prominent food and personal care brands, alleging deceptive “Made in USA” marketing claims. The defendants: Goya Foods, Pepsico, McCormick & Company.
Some of the claims invoke California’s False Advertising Law (FAL), Unfair Competition Law (UCL), Consumer Legal Remedies Act (CLRA), and breach of express warranty all of which prohibit deceptive labeling practices.
Beyond Words: When Imagery Creates Legal Risk
Visual elements carry as much legal weight as written claims in marketing American-made products. Companies face more scrutiny these days over images that suggest domestic origin.
American Flags And Patriotic Symbols
American flags, U.S. maps, and patriotic imagery can make implied origin claims under FTC guidelines. These visual elements suggest products come from domestic sources, either on their own or with other marketing. A company that shows its employees at work in a U.S. factory with an American flag creates an implied claim of U.S. origin.
The FTC makes it clear that U.S. symbols or geographic references can suggest Made in USA claims "either by themselves, or in conjunction with other phrases or images".
Implied Origin Claims
"American Quality" headlines on U.S. imagery make origin claims without directly saying "Made in USA". References to U.S. headquarters or factory locations can also create legally binding origin claims. These claims must meet the FTC's "all or virtually all" standard.
The overall impression matters more than exact wording. The FTC guidance document states that "Implying a false Made in USA claim is just as illegal as making a false claim flat-out". Companies need to be just as careful with American imagery as they are with explicit claims.
The 10th Circuit's Interpretation
The U.S. Court of Appeals for the Tenth Circuit took a different view from FTC standards in a case with I Dig Texas advertisements. The court decided patriotic symbols were too ambiguous to be "literally false" under the Lanham Act. They stated that while symbols might suggest products are American-made, nobody can verify this objectively as true or false.
The court didn't want to apply FTC guidelines to Lanham Act claims. They noted that FTC policy "would not bind us when addressing false advertising under the Lanham Act". This created a key difference between FTC enforcement actions and private false advertising cases.
The Tenth Circuit's ruling ended up protecting advertising ambiguity. The court found that terms like "made" could "refer either to the origin of the components or to the assembly of the product itself". This might create new ways for advertisers to defend their claims.
What Comes Next?
Legal battles over "Made in USA" claims have soared to new heights and highlighted how companies market and rely on domestic manufacturing claims. Big brands now pay millions in penalties, while class action lawsuits target products from aluminum foil to beauty items.
These cases show the FTC's steadfast dedication to its "all or virtually all" standard. Companies must now inspect their manufacturing locations and their entire supply chains, right down to raw materials and components. Brands also need to review their use of American imagery because courts now see patriotic symbols as legally binding origin claims.
The legal world changes faster every day. Some courts, like the Tenth Circuit, have moved away from strict FTC interpretations. Yet, we see stronger enforcement and bigger financial risks for those who don't comply.
Companies should prepare for increased oversight of their "Made in USA" claims through 2025 and beyond. Winning strategies need solid supply chain records, smart use of marketing imagery, and strict compliance with federal rules. Brands that don't adjust might get caught in costly lawsuits and damage their reputation.
Rain Intelligence provides useful intel to help you monitor and detect any shifts regarding legal scrutiny against domestic origin claims, whether you represent plaintiffs or the industry.
