For those who like to buy American-made goods, products from Lithionics Battery LLC appear to be an attractive option. According to the FTC, Lithionics and General Manager Steven Tartaglia used phrases and images of the American flag to convey the “Made in the USA” marketing message for its batteries, battery modules and battery management system products. But don’t wave the old glory just yet.As the FTC’s first action under the new regulations Made in USA labeling rules It is claimed that the lithium-ion batteries used by Lithionics are actually made in China. The proposed settlement includes a $105,319.56 civil penalty and requires the company to change the way it handles “Made in the USA” claims.
Lithionics sells battery products for recreational vehicles, marine applications and similar uses. The defendants labeled their merchandise with a flag image surrounded by the words “Made in the USA,” and sometimes they added the phrase “Proudly Designed and Made in the USA.” The defendants doubled down on these statements on the Lithionics website, mail order catalogs, and social media. For example, the complaint cites YouTube videos of Tartaglia and company employees putting “Made in the USA” labels on Lithionics products. Other marketing materials also provide a chart comparing the “benefits”[s] Lithium-ion battery system” was changed to the so-called “imported”.
under Made in USA labeling rules, prohibits marketers from labeling a product as “Made in the USA” unless all or substantially all ingredients or components are made and sourced in the United States. What’s more, final assembly or processing—as well as all significant processing in the product—must occur in the United States.
But according to the U.S. Federal Trade Commission, lithium-ion batteries and battery module products use lithium-ion batteries made in China, and the lithium-ion battery management system includes a large number of imported parts. That’s why the FTC calls defendants’ “Made in the USA” claims deceptive.
The complaint names both Lithionics and Tartaglia, alleging violations of the Made in America rule and Section 5 of the Federal Trade Commission Act. In addition to the $105,319.56 civil penalty authorized under the new rules, the proposed settlement includes injunctive provisions that would change the way defendants conduct business going forward.For example, the order prohibits them from making not qualified Claims of U.S. origin unless they have evidence that the final assembly or processing of the product (and all significant processing) occurred in the U.S. and that all or substantially all of the ingredients or components were manufactured and sourced in the U.S.
The order further requires any qualified Made in the USA claims include explicit disclosure of the extent to which a product contains foreign parts, ingredients or components, or involves foreign processing. Finally, if a defendant represents that a product was assembled in the United States, they must ensure that the last substantial modification of the product was performed in the United States, that its principal assembly occurred in the United States, and that the U.S. assembly operations are substantial.
If your company makes a “Made in the USA” claim, this case provides two important compliance instructions.
- Review the rules and make sure your statements are red, white, and true. If you make a “Made in the USA” claim, do they qualify? Made in USA labeling rules? New civil penalty remedies could make violations costly.
- Please take care to verify your claim if necessary. IIf the “Made in the USA” claim you make is “unqualified” (in FTC terms, this means a claim without modification or restriction), you must comply with “all or substantially all” of the standards. If you make a “claim of qualification” (a statement that contains a warning or explanation), you have a legal responsibility to ensure that consumers are clearly advised of these qualifications.Federal Trade Commission Enforcement Policy Statement Regarding U.S. Origin Claims Provides additional guidance on Made in the USA claims.