The United States District Court for the Northern District of Texas ordered Kubota North America to pay an eye popping $2,000,000 fine for falsely labeling goods as having been made in the USA. Kubota sells tractors, mowers, utility vehicles, and construction and agricultural equipment. In addition to these finished products, Kubota sells replacement parts.
The complaint alleged that Kubota labeled thousands of wholly imported replacement parts as “Made in USA.” Kubota neither admitted nor denied the alleged violations, which led to the $2 million fine and several additional administrative burdens such as reporting and recordkeeping stipulations. Notably, the FTC had previously alleged that Kubota made false made in USA claims in 1999.
The previous incident and the number of false claims alleged in the recent complaint may have influenced the Court’s decision to impose such a large fine. The FTC also has been focused on enforcing made in the USA labeling requirements over the past couple years, which you can read more about here, here, and here. Labeling requirements, origin regulations, and substantial transformation can be difficult to navigate. Do not hesitate to contact an attorney at Barnes Richardson, & Colburn LLP if you have any questions.