The Federal Trade Commission has issued an order staying the administrative proceeding raising allegations that New Balance Athletic Shoes, Inc. made deceptive "made in USA" claims for its footwear. The trial was set to begin on July 17. In doing so, the FTC is requiring both New Balance and FTC complaint counsel to show cause why the FTC's complaint detailing the allegations, and notice order outlining the relief the FTC would seek if the charges are upheld, should not be amended or dismissed.
The Commission order staying the proceedings requires the parties to file briefs with the Commission on these issues within 30 days. The Commission will then determine whether the complaint and notice order should be amended to address only those allegations that New Balance misrepresented:
-- that all of its footwear is made in the United States, when in fact, a substantial amount of its footwear is wholly made in foreign countries; and
-- that New Balance annually exports to Japan hundreds of thousands of pairs of its athletic shoes that are made in the United Sates, when in fact, fewer than 10,000 pairs of its athletic shoes made in the United States are exported to Japan.
Alternatively, the Commission may determine to dismiss the administrative proceeding against New Balance.
Today's FTC action in the New Balance matter coincides with an announcement in which the FTC said it would conduct a comprehensive review of consumers' perceptions of "made in USA" claims.
The Commission vote to issue the order to stay the proceedings and show cause why the complaint should not be amended or dismissed was 4-1, with Commissioner Roscoe B. Starek, III, dissenting for the reasons set forth in his statement explaining his vote in Hyde Athletic Industries, Inc.
Copies of the Commission's order staying the New Balance proceedings and the order to show cause are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov
(FTC Docket No. 9268)