It seems simple enough: To be labeled as "Made in America," a product sold in California must include only components manufactured and assembled in this nation.

But that's a tougher standard than elsewhere in the country, where small amounts of foreign parts don't invalidate the label. And now it's touched off a debate among business interests and consumer rights groups, as state lawmakers consider lowering the threshold included in the state's 52-year-old labeling law.

Richard Russell, chairman of the board of Russell's Furniture, is opening a new store in San Mateo on Feb. 1 that he originally planned to call "Made in America."

Dylan Sievers, CEO of Bulldog LED Lighting, with some his products in Burlingame, Calif., on Wednesday, Dec. 18, 2013. (John Green/Bay Area News Group)
Dylan Sievers, CEO of Bulldog LED Lighting, with some his products in Burlingame, Calif., on Wednesday, Dec. 18, 2013. (John Green/Bay Area News Group) ( JOHN GREEN )

But he changed the name to "Russell's Furniture American Pride/Bringing Jobs Back Home" after his suppliers -- including Amish craftspeople from Ohio -- could not guarantee that every single component originated in America, which would meet the California standard for labeling a product Made in America.

"We've seen plant after plant shuttered and I want to support American manufacturing and bring jobs back to America," Russell said. "But I don't want to get sued. It blows me away that I can't say 'Made in America.' It gets me upset."

The idea of watering down California's standard bothers Richard Holober, executive director of the Consumer Federation of California, which opposed an earlier draft of the bill that would have allowed products to carry a "Made in America" label if 90 percent of the parts were made and assembled in the United States.


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"It's about truth in advertising," Holober said. "The California standard is clear and you don't get into the problem of subjectivity. What's wrong with being honest? Why is it such a problem to simply say, '90 percent Made in the USA?' "

Businesses counter that they're punished in the marketplace for trying to comply with California's law because many of their competitors ignore it and label their products American made and sell them in California even when they contain foreign parts.

Labels on boxes of Bulldog LED Lighting products in Burlingame, Calif., on Wednesday, Dec. 18, 2013. (John Green/Bay Area News Group)
Labels on boxes of Bulldog LED Lighting products in Burlingame, Calif., on Wednesday, Dec. 18, 2013. (John Green/Bay Area News Group) ( JOHN GREEN )

Nationally, the Federal Trade Commission oversees guidelines that are less restrictive than California's, saying that a product claiming to be made in the USA "must be all or virtually all" made in America, said Julia Solomon Ensor, an attorney in the enforcement division of the FTC's bureau of consumer protection.

"On the one hand, of course we think it's important for companies to promote the good work they're doing in the USA," she told this newspaper. "On the other hand, our primary goal is to prevent consumer deception."

The national standard of "all or virtually all" leaves plenty of wiggle room for interpretation. The FTC will suggest ways for companies to comply, but the decision on what meets the FTC guidelines is left to the nation's civil courts, just as California civil courts determine whether a product meets the state standard.

In California, it's against state law to include a "Made in America" or "Made in the USA" label when any part of the product "has been entirely or substantially made outside of the United States."

That means every single part essentially has to be made and assembled in the United States to carry a "Made in the USA" label in California. But representatives for business say it's a standard that's virtually impossible to meet in today's global market.

A proposed revision of the law, SB 661, would allow goods containing foreign-made parts to be advertised as "Made in America" or similar phrases -- as long as the parts cannot be found in the United States and as long as the foreign parts constitute a "negligible part" of the final product.

The law was enacted in 1961 to push back against foreign companies that were employing deceptive "Buy America promotions," according to a legislative analysis of SB 661, which would amend the law.

The author of SB 661, state Sen. Jerry Hill, D-San Mateo, said his proposed changes would still be the most restrictive in the country.

"You should not be allowed to claim 'Made in the USA' if parts are available in the U.S. but you choose not to buy them," Hill said. "But it will make California businesses as competitive as the rest of the businesses in all of the other 49 states."

For consumers, Hill said, the new standard would let them know "that every effort was made to manufacture 100 percent in the United States except for just one small part that could not be made here."

Circuit boards used in the Bulldog LED lights, in Burlingame, Calif., on Wednesday, Dec. 18, 2013. (John Green/Bay Area News Group)
Circuit boards used in the Bulldog LED lights, in Burlingame, Calif., on Wednesday, Dec. 18, 2013. (John Green/Bay Area News Group) ( JOHN GREEN )

San Carlos-based Bulldog LED Lighting cannot get U.S.-made LEDs for its vehicle lighting systems. So Bulldog buys two separate packaging labels: One simply marked "MADE IN U.S.A." for the rest of the country and an 11-word version for California that reads, "Made in the USA CA: contains global parts not domestically available."

The wordier label has not hurt sales in California, which account for about 20 percent of Bulldog's business, according to Lisa Sievers, Bulldog's director of operations. Asked why Bulldog doesn't simply use its California label for the rest of the country, Sievers said it puts her company at an unfair disadvantage against competitors who advertise that their products are "Made in the USA" across the country.

"A few years ago, I believed every word of 'Made in the USA.' Now I know differently," Sievers said. "Now when I see the label, I think, 'There's no way. I know for a fact that wasn't 100 percent made in the USA.' "

Two separate polls by Harris and Gallup found overwhelming support among U.S. consumers who said they would pay more to buy products labeled "Made in the USA" to support American manufacturing, U.S. jobs and to push back against foreign competition.

But neither poll asked whether respondents understood that products marked "Made in America" actually are allowed to contain foreign parts.

Joel Joseph, founder and chairman of the Los Angeles-based Made in the USA Foundation, insists that savvy shoppers know that something labeled "Made in the USA" probably isn't 100 percent American made -- even in California.

Joseph called California's current standard "ridiculous" and said it's being protected by lawyers who see opportunities to take violators to court.

"Because it's so easy to prove a violation, it's the lawyers who want it -- not the consumers," Joseph said. "A lot of companies are violating California's law, which makes it a hot bed for lawsuits."

SB 661 faces a deadline of midnight Jan. 17 to get out of the Senate Judiciary Committee. If not, it's dead.

In the meantime, Bulldog moved much of its operations to Texas in July, partly to reduce shipping costs and partly out of anger at California's resistance to changing the standard. Even though part of its operation is now in Texas, Bulldog still must meet the California labeling standard to sell its lights here.

"We're fighting to keep American factories in business," Sievers said. "But we're also trying to be honest with our labeling in California. Unfortunately, not everyone's playing on a level playing field."

Contact Dan Nakaso at 408-271-3648. Follow him at Twitter.com/dannakaso.