Reynolds Faces Class Action Over Alleged Misleading 'Made in USA' Label

Reynolds Consumer Products (NASDAQ: REYN), the maker of Reynolds Wrap aluminum foil, must face a proposed class action lawsuit over claims it misled consumers by labeling its foil as "Made in USA." U.S. District Judge Andrew Carter in Manhattan ruled that plaintiffs could proceed with allegations that Reynolds violated New York consumer protection laws by using misleading packaging.

The lawsuit, filed by Anaya Washington of Bronx, New York, argues that Reynolds' claim is deceptive because most of the bauxite used in its foil originates outside the U.S., with much of it processed overseas. Washington claims she bought Reynolds Wrap at Target and other stores, trusting the brand’s reputation, and wouldn’t have purchased it if she had known the materials’ origins.

Reynolds sought to dismiss the case, calling it a "lawyer-driven class action" and arguing Washington did not prove actual harm. However, the judge ruled that she plausibly alleged financial damages, as she paid more due to the "Made in USA" label. The lawsuit seeks at least $5 million in damages.

Many companies face lawsuits over misleading product labels that influence consumer spending, particularly with appeals to patriotism. In 2021, the U.S. Federal Trade Commission introduced the Made in USA Labeling Rule to prevent deceptive marketing regarding product origins.

The case, Washington v. Reynolds Consumer Products LLC, is being heard in the U.S. District Court, Southern District of New York, under case number 24-02327. Reynolds and its legal team have not yet responded to the ruling.