Yesterday, the Federal Trade Commission (“FTC”) filed suit against Electrowarmth Products, LLC and its owner, Daniel W. Grindle alleging that they falsely claimed some of their products were made in USA when they were actually made in China. We previously posted about the FTC’s new labeling rule on products that allege to be “Made in USA”, which you can read here.
Electrowarmth is an Ohio based company that sells heated mattress pads for truck bunks. The FTC’s complaint alleges that before 2019, Electrowarmth used U.S.-made textiles for their mattress pads. However, in an effort to cut costs, Electrowarmth stopped using U.S.-made textiles and moved their production to China, while still advertising that their mattress pads were “Made in USA”, “Made in the USA since 1939,” and “made-in-America products.”
In its complaint, the FTC alleges that Grindle and Electrowarmth violated both the Textile Act and the FTC Act, by falsely labeling and advertising the origin of the textiles used in their products as the United States. In its proposed order, the FTC sets out several requirements that Electrowarmth must meet before claiming its products are “Made in USA.” Additionally, the order imposes an $815,809 monetary judgment, which is fully suspended due to Grindle’s and Electrowarmth’s inability to pay. This amount will immediately become due if the FTC concludes that Grindle and Electrowarmth made any misrepresentations on their sworn financial statements. This complaint is yet another warning to companies that the FTC is strictly enforcing its “Made in USA” labeling rule and brands must continue to ensure that their products comply with this rule. To read more about the complaint and order, see the FTC’s Press Release here.