Chinese Nets and Bolts Ensnare Basketball Hoops in Litigation

October 02, 2014


A pile of rims that didn't pass a quality inspection. Grant Hindsley for The Wall Street Journal


Chinese Nets and Bolts Ensnare Basketball Hoops in Litigation

And there's the rub. Those few foreign-made items have ensnared Lifetime in lawsuits over its "Made in USA" labels.

"It's kind of crazy," says the company's chief executive, Richard Hendrickson. "If you can't call what we do 'Made in USA,' what is?"

Federal Trade Commission guidelines say an unqualified "Made in USA" label can go on any goods that are "all or virtually all" made domestically. But the FTC doesn't define what "virtually" means. Some companies use a rule of thumb that if 70% or more of the value of a product is made domestically, it qualifies as American made.(New Balance shoe materials aren't all U.S. made.)

But that's a problem in California, which has the strictest guidelines in the country. If even one rivet in a larger product is foreign, state law says it amounts to false advertising to call it U.S. made.

The result: A host of consumer lawsuits against manufacturers, including two against Lifetime in which people complained they had been duped by the company's labeling. Makers of everything from door locks to hand tools have been sued in recent years. A maker of helium tanks designed to be used at children's parties was sued because it started packing imported balloons with the equipment. Another case involved Mag Instruments, a California company that produces Maglite flashlights. It was sued for using small rubber rings and light bulbs from abroad.

The remainder of the article can be found on the WSJ site.

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