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Dissenting Statement of Commissioner Noah Joshua Phillips 

Made in the USA Labeling Rule – Notice of Proposed Rulemaking 

Matter No. P074204 

June 22, 2020 

At a time when Americans are asking questions about supply chain resiliency and international 

trade, the appeal of adopting a rule to add civil penalties to the Federal Trade Commission’s 

“Made in the U.S.A.” enforcement program cannot be gainsaid. We have clear statutory 

authority to issue such a rule. But the notice of proposed rulemaking that the Commission issues 

today proposes one that, I believe, exceeds that authority; so, I respectfully dissent. 

The FTC’s Made in the U.S.A. enforcement program is built on Section 5 of the FTC Act, which 

governs deceptive acts and practices in commerce.1

It applies to a host of advertising and other 

claims about the U.S. origin of products. In 1994, Congress codified Section 5a, titled “Labels on 

products”.

2 As that title makes clear, Section 5a applies to “a product with a ‘Made in the 

U.S.A.’ or ‘Made in America’ label”.

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It requires that any such “label” – representing that the 

product was in whole or substantial part of domestic origin – be consistent with decisions and 

orders of the FTC issued pursuant to our Section 5 unfairness and deception authority.4 Relevant 

here, Section 5a also grants the FTC authority to use Administrative Procedures Act (APA) 

rulemaking to promulgate rules to effectuate this specific purpose. The FTC may seek civil 

penalties for violations of such rules.5

Rather than propose a rule concerning the “[l]abels on products” contemplated by Section 5a, 

however, a majority of the Commission today proposes to regulate: 

“materials, used in the direct sale or direct offering for sale of any product or 

service, that are disseminated in print or by electronic means, and that solicit the 

purchase of such product or service by mail, telephone, electronic mail, or some 

other method without examining the actual product purchased” that “include[] a 

seal, mark, tag, or stamp labeling a product Made in the United States”.

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1 15 U.S.C. § 45.

2 Pub. L. 103-322, title XXXII, §320933 (Sept. 13, 1994), 108 Stat. 2135.

3 Section 5a is more limited than Section 5 and does not apply to all Made in the U.S.A. claims covered by Section 

5. That is why, to this day, we routinely rely on Section 5 in our Made in the U.S.A. enforcement. See, e.g., In re

Williams-Sonoma, Inc., File No. 2023025 (Mar. 30, 2020),

https://www.ftc.gov/system/files/documents/cases/202_3025_williams-sonoma_consent_agreementdecision_order.pdf, In re Sandpiper of Cal., Inc. et al., Docket No. C-4675 (Apr. 17, 2019),

https://www.ftc.gov/system/files/documents/cases/sandpiper_order_4-17-19.pdf.

4 15 U.S.C. § 45a.

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Id. The statute provides that violations of any rule promulgated pursuant to Section 45a “shall be treated by the 

Commission as a violation of a rule under section 57a [of the FTC Act] regarding unfair or deceptive acts or 

practices.” For violations of rules issued pursuant to 15 U.S.C. § 57a, the Commission may commence civil actions 

to recover civil penalties. 15 U.S.C. § 45(m)(1)(A).

6 See proposed § 323.3, in conjunction with proposed § 323.1(b).
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That goes well beyond “[l]abels on products”, to include advertising claims appearing in catalogs 

and online.

Despite the clear text of Section 5a, Commissioner Chopra argues that the Commission has

discretion to interpret the term “label” consistent with the Commission’s Wool and Textile rules, 

which require certain disclosures in mail order advertising. But those rules were promulgated 

under statutes very different from Section 5a, and which were specifically amended to address 

such “advertising”.7 To the extent those other rules, passed under other statutes, provide any 

guidance, they indicate that the scope of Section 5a does not reach as far as the rule proposed by 

the Commission.

Commissioner Chopra is not wrong to be concerned about deceptive online Made in the U.S.A. 

labeling. I am, too, which is why I supported the substantial monetary relief the Commission 

assessed in the Williams-Sonoma case. But that is a policy argument; and here the question is the 

scope of our authority, as determined by the statute.

As I have said before, when entrusted with APA rulemaking authority, it is imperative that the 

Commission work to effectuate congressional intent.8 As Justice Antonin Scalia wrote, “[t]he 

best evidence of that purpose is the statutory text adopted by both Houses of Congress and 

submitted to the President”.9 That our collective policy preference may be to go further is beside 

the point. At a time not only when the Commission itself has requested APA rulemaking 

authority for privacy and data security,10 but also when other members of the Commission are 

 

7 See 15 U.S.C. § 68b; 15 U.S.C. § 70b.

8 See, e.g., Opening Keynote of Commissioner Noah Joshua Phillips: Privacy Regulation: Why, What, and When?, 

The Free State Foundation (June 26, 2019), 

https://www.ftc.gov/system/files/documents/public_statements/1531340/phillips_-

_free_state_foundation_keynote_6-26-19_0.pdf; Remarks of Commissioner Noah Joshua Phillips at FTC 

Workshop: The Future of the COPPA Rule (Oct. 7, 2019), 

https://www.ftc.gov/system/files/documents/public_statements/1547700/phillips_-_coppa_workshop_remarks_10-7-

19.pdf; Prepared Oral Statement of Commissioner Noah Joshua Phillips Before the Committee on Commerce, 

Science, Transportation Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security:

Oversight of the Federal Trade Commission (Nov. 27, 2018), 

https://www.ftc.gov/system/files/documents/public_statements/1423943/njp_oral_statement_112718.pdf (“The 

tradeoffs are not easy; and there are no simple answers. So, my third point is that, given the important value 

judgments that must be made, Congress is the place to make them. Broad delegations to an expert agency are a poor 

substitute for the lawmaking process our Founders created.”); Prepared Remarks of Commissioner Noah Joshua 

Phillips, Family Online Safety Institute 2018 Annual Conference: Taking Care: The American Approach to 

Protecting Children’s Privacy (Nov. 15, 2018), 

https://www.ftc.gov/system/files/documents/public_statements/1422695/phillips_-_taking_care_11-15-18_0.pdf. 

9 W. Va. Univ. Hospitals, Inc. v. Casey, 499 U.S. 83, 98 (1991).

10 See Prepared Statement of the Federal Trade Commission: Protecting Consumers and Fostering Competition in 

the 21st Century, Committee on Appropriations, Subcommittee on Financial Services and General Government, 

United States House of Representatives (Sept. 25, 2019), 

https://www.ftc.gov/system/files/documents/public_statements/1545285/appropriations_committee_testimony_0925

19.pdf.
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clamoring for rulemaking for a wide swath of other matters,11 our obligation – and our ability –

to follow the law is critical.

Commission regulatory overreach in decades past led Congress to impose special restrictions on 

our ability to make rules with respect to unfairness or deception, requiring, absent a specific 

congressional directive, that the FTC use the more stringent rulemaking procedures outlined by 

the Magnuson Moss Warranty-Federal Trade Commission Improvements Act.12 Section 5a is 

such a directive, and we could fashion a rule according to it. Or, we could use those Magnuson 

Moss Act procedures to cover a broader swath of Made in the U.S.A. claims. And, of course, 

Congress, which has expressed interest in our promulgating a “Made in the U.S.A.” rule,

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amend Section 5a to permit us to use the APA to go further. 

For now, however, our job is not to regulate beyond the lines Congress has drawn.

 

11 For example, Commissioner Chopra has called for a rulemakings with respect to, inter alia, auto loans, higher 

education accreditation, non-compete agreements, and endorsements and testimonials. See, e.g., Statement of 

Commissioner Rohit Chopra, In re Liberty Chevrolet d/b/a Bronx Honda, File No. 1623238 (May 27, 2020), 

https://www.ftc.gov/system/files/documents/public_statements/1576002/bronx_honda_final_rchopra_bronx_honda_

statement.pdf; Statement of Commissioner Rohit Chopra, In re University of Phoenix, File No. 1523231 (Dec. 10, 

2019), 

https://www.ftc.gov/system/files/documents/public_statements/1557180/152_3231_statement_of_commissioner_ro

hit_chopra_0.pdf; Commissioner Rohit Chopra, Comment Letter on Dep’t of Justice Initiative on Competition in 

Labor Markets (Sept. 18, 2019), https://www.ftc.gov/system/files/documents/public_statements/1544564/chopra_-

_letter_to_doj_on_labor_market_competition.pdf; and Statement of Commissioner Rohit Chopra, Regarding the 

Endorsement Guides Review, File No. P204500 (Feb. 12, 2020), 

https://www.ftc.gov/system/files/documents/public_statements/1566445/p204500_-

_endorsement_guides_reg_review_-_chopra_stmt.pdf. See also Statement of Commissioner Rebecca Kelly 

Slaughter, In re Liberty Chevrolet d/b/a/ Bronx Honda, File No. 1623238 (May 27, 2020), 

https://www.ftc.gov/system/files/documents/public_statements/1576006/bronx_honda_2020-5-

27_bx_honda_rks_concurrence_for_publication.pdf (calling for rulemaking in the auto loan market); and Prepared 

Remarks of Commissioner Rebecca Kelly Slaughter at Silicon Flatirons, Univ. of Colo. Law Sch.: The Near Future 

of Privacy (Sept. 6, 2019), 

https://www.ftc.gov/system/files/documents/public_statements/1543396/slaughter_silicon_flatirons_remarks_9-6-

19.pdf (requesting general consumer data privacy rule rulemaking).

12 15 U.S.C. § 2309. See also, 16 C.F.R. §§ 1.7 – 1.20. 

13 S. Rept. 116-111 at 71 (2019).