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USDISTXND-324cv159d139654076e319-COMPLAINT Against Kubota North America Corporation
USDISTXND-324cv159d139654076e319-COMPLAINT Against Kubota North America Corporation
v.
Defendant.
Plaintiff, the United States of America, acting upon notification and referral from the
1. Plaintiff brings this action for Defendant’s violations of Section 5(a) of the FTC
Act, 15 U.S.C. § 45(a), and the Made in USA Labeling Rule (“MUSA Labeling Rule”), 16
C.F.R. Part 323. Defendant’s violations relate to the false labeling of millions of wholly-
imported products as “Made in USA.” For these violations, Plaintiff seeks relief, including a
permanent injunction, civil penalty, and other relief, pursuant to Sections 5(m)(1)(A), 13(b), and
19 of the FTC Act, 15 U.S.C. §§ 45(m)(1)(A), 53(b), 57b, and the MUSA Labeling Rule, 16
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2. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a),
3. Venue is proper in this District under 28 U.S.C. §§ 1391(b)(1), (b)(2), (c)(2), and
PLAINTIFF
4. Plaintiff brings this action, which was referred by the FTC pursuant to Section
16(a)(1) of the FTC Act, 15 U.S.C. § 56(a)(1). The FTC is an independent agency of the United
States Government created by the FTC Act. 15 U.S.C. §§ 41–58. The FTC enforces Section
5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or
affecting commerce. The FTC also enforces the MUSA Labeling Rule, 16 C.F.R. Part 323,
which prohibits unqualified “Made in USA” claims on labels on products unless the products are
DEFENDANT
Incorporated/LandPride, is a Delaware corporation with its principal place of business within the
Dallas Division of this District, at 1000 Kubota Drive, Grapevine, TX 76051 (which is a location
within the portion of Grapevine that lies within Dallas County). Kubota transacts or has
transacted business in this District and throughout the United States. At all times relevant to this
Complaint, acting alone or in concert with others, Kubota has advertised, marketed, distributed,
or sold products, including lawn tractors, mowers, utility vehicles, backhoes, loaders, agricultural
COMMERCE
course of trade in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act,
15 U.S.C. § 44.
Kubota subsidiary Kubota Tractor Company (“KTC”) violated Section 5(a) of the FTC Act, 15
U.S.C. § 45(a) (“Section 5”), by falsely advertising certain lawn and garden tractors
incorporating significant imported parts as “Made in the United States” (“MUSA”) (Exhibit 1,
8. According to the KTC Complaint, by claiming certain lawn and garden tractors
were MUSA, KTC “represented, expressly or by implication, . . . that all, or virtually all, of the
component parts of the [tractors are] made in the United States, and that all, or virtually all, of
the labor in manufacturing the [tractors] is performed in the United States.” KTC Complaint at
¶¶ 8, 11, 17.
9. Thus, the KTC Complaint alleged KTC’s MUSA claims were false or misleading
in violation of Section 5 because the relevant models “contain[] significant foreign parts and
therefore [are] not all or virtually all made in the United States.” KTC Complaint at ¶¶ 9, 12, 18.
10. Also on January 19, 1999, the FTC announced the parties had reached a
settlement and published an Agreement Containing Consent Order signed in 1998 by KTC’s
then-President Shohei Majima and then-General Counsel Richard O. Briggs (Exhibit 2, the
“KTC Agreement”).
11. The KTC Agreement contained a provision enjoining KTC’s deceptive claims,
allowing KTC to advertise affected products as MUSA only “so long as all, or virtually all, of
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the component parts of such product, or of all products in such product line, are made in the
United States and all, or virtually all, of the labor in manufacturing such product, or of all
products in such product line, is performed in the United States.” KTC Agreement, Section I.
Docket No. C-3863, the FTC adopted the substance of the KTC Agreement through issuance of a
final Decision and Order resolving all matters then in dispute (Exhibit 3, the “KTC Order”).
13. The KTC Order, which bound KTC, its successors and assigns, and its officers,
agents, representatives, and employees, including through any corporation, subsidiary, or other
device, prohibited KTC from misrepresenting the extent to which lawn or garden tractors or
14. Consistent with the KTC Agreement, the KTC Order stated that lawn or garden
tractors or product lines could be advertised as MUSA only if “all, or virtually all, of the
component parts of such products in such product line, are made in the United States and all, or
virtually all, of the labor in manufacturing such product, or of all products in such product line, is
15. Section III of the KTC Order required KTC to deliver copies of the KTC Order to
all current and future officers and directors, and all current and future employees, agents, and
representatives having responsibilities with respect to the subject matter of the Order.
17. Because none of the exceptions detailed in Section VI occurred, the KTC Order
18. Through the KTC Complaint, Agreement, and Order, Kubota has had actual
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notice since at least 1998 that it is a violation of Section 5 to advertise or label a product as
MUSA unless “all, or virtually all, of the component parts of such product, or of all products in
such product line, are made in the United States and all, or virtually all, of the labor in
manufacturing such product, or of all products in such product line, is performed in the United
States.”
19. In addition to selling finished tractors, mowers, utility vehicles, and construction
and agricultural equipment, Kubota sells replacement parts for those products.
20. Since at least 2021, Kubota has labeled thousands of replacement parts as MUSA
21. In many instances, Kubota has incorrectly recorded “USA” as the origin of
wholly-imported parts in its sales databases, leading its systems to generate MUSA labels for
those products.
Made In USA 1
1'1111 No 23 2308
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PAf<T Nl<Mt
BELT, MULTI 112
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22. In other instances, Kubota has failed to update package designs that incorporated
RTV400, RlVSOO
R1Vll00. R'TV1140,
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111111111,,
23. Because of these systems failures, Kubota has sold millions of wholly-imported
24. Kubota’s express or implied representations that wholly-imported parts are all or
virtually all made in the United States are false and/or unsubstantiated.
25. Based on the facts and violations of law alleged in this Complaint, the FTC has
reason to believe Defendant is violating or is about to violate laws enforced by the Commission
because, among other things: Defendant has engaged in its unlawful acts repeatedly over a
period of at least three years, despite being sued by the FTC previously for the same violations;
Defendant has earned significant revenues from participating in these unlawful acts and
practices; and Defendant only has ceased its unlawful activities after learning of the FTC’s
26. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts
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Count I
FTC Act Violation – MUSA Claims for Imported Parts
28. In numerous instances since at least January 2021, in connection with the
advertising, marketing, promotion, offering for sale, or sale of replacement parts and other
products, Defendant has represented, directly or indirectly, expressly or by implication, that such
29. In fact, in numerous instances in which Defendant has made the representations
described in Paragraph 28, Defendant’s replacement parts and other products are not all or
virtually all MUSA because they are wholly imported or incorporate significant imported
materials.
misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act,
15 U.S.C. § 45(a).
31. Effective August 13, 2021, the Made in USA Labeling Rule, 16 C.F.R. Part 323
(“MUSA Labeling Rule”), prohibits marketers from labeling products as MUSA unless: (1) “the
final assembly or processing of the product occurs in the United States;” (2) “all significant
processing that goes into the product occurs in the United States;” and (3) “all or virtually all
ingredients or components of the product are made and sourced in the United States.” 16 C.F.R.
§ 323.2.
32. The MUSA Labeling Rule also provides, to the extent any mail order catalog or
mail order promotional material includes a seal, mark, tag, or stamp labeling a product MUSA,
such label must comply with the requirements of 16 C.F.R. § 323.2. 16 C.F.R. § 323.3.
33. For purposes of the MUSA Labeling Rule, MUSA is defined as “any unqualified
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of U.S. origin, including, but not limited to, a representation that such product or service is
34. A violation of the MUSA Labeling Rule constitutes an unfair or deceptive act or
practice in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a).
Count II
MUSA Labeling Rule Violations
35. In numerous instances since August 13, 2021, Defendant has labeled replacement
36. In fact, in numerous instances in which Defendant has labeled the products
described in Paragraph 35, such products are not MUSA because they are wholly imported or
CONSUMER INJURY
38. Consumers are suffering, have suffered, and will continue to suffer substantial
injury as a result of Defendant’s violations of the FTC Act and the MUSA Labeling Rule.
Absent injunctive relief by this Court, Defendant is likely to continue to injure consumers and
CIVIL PENALTIES
39. Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A), authorizes this
Court to award civil penalties for each violation of the MUSA Labeling Rule.
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40. Defendant has violated the MUSA Labeling Rule with actual knowledge or
A. Enter a permanent injunction to prevent future violations of the FTC Act and the
B. Award monetary and other relief within the Court’s power to grant;
C. Impose civil penalties on the Defendant for every violation of the MUSA
D. Award any additional relief as the Court determines to be just and proper.
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LISA HSIAO
Assistant Director
Consumer Protection Branch
LEIGHA SIMONTON
United States Attorney
Brian W. Stoltz
Assistant United States Attorney
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JS44 (Rev.04/21)(TXND4/21)
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The JS 44 ctvtl cover &:~se :2 -cv~0015.9-
f'IVIL f'O:V! !
D01um nf'Fl Ie
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and ~ e m'iirmatton contain~ erem nelffier re~ ace nor supp ement e ng an service of ~dings or &her pape\l as required by law, except as
e .1 of Pa elD 30
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ONNEXT PAGE OF THIS FORM)
I. (a) PLAINTIFFS DEFENDANTS
United States of America
Kubota North America Corporation
(b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant Dallas CPI mty
(EXCEPT IN U.S. PLAINrIFF CASES) (IN U.S. PLAINTIFF CASF:S ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE 1HE LOCATION OF
1HE TRACT OF LAND INVOLVED.
(c) Attorneys (Firm Name, Address, and Telep/Jone Number) Attorneys (IfKnown)
Sean Saper, United States Department of Justice, Wrede H. Smith, 111, McGuireWoods LLP, 888 16th St NW,
Consumer Protection Branch Ste 500, Black Lives Matter Plaza, Washini:iton, DC 20006,
n. BASIS OF JURISDICTION (Placean ''X" inOneBoxOnly) Ill. CITIZENSHIP OF PRINCIPAL PARTIES (Place an "X" in One Box/or Plaintiff
(For Diversity Cases Only) and One Box/or Defendant)
Ii] 1 U.S. Government 0 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen ofThis State D1 D Incorporated or Principal Place D4 0 4
of Business In This Slate
D 2 U.S. Government 0 4 Diversity Citizen of Another State D2 D 2 Incorporated and Principal Place □ s Os
Defendant (Indicate Citizenship ofParties in Item Ill) of Business In Another Slate
D3 D 3 Foreign Nation
~
110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure 375 False Claims Act
120 Marine 310 Airplane D 365 Personal Injury - of Property 21 USC 881 376 Qui Tam (31 USC
130 Miller Act 315 Airplane Product Product Liability X 6900ther 3729(a))
140 Negotiable Instrument Liability D 367 Health Care/ 400 State Reapportionment
150 Recovery of Overpayment 320 Assault, Libel & Pharmaceutical l:::::--J~a.lii:D.lU..-;Ll;l..l.ll.--1--,1 410 Antitrust
& Enforcement of Judgmen Slander Personal Injury 430 Banlcs and Banking
~
230 Rent Lease & Ejectrnent 442 Employment 510 Motions 10 Vacate 870 Taxes (U.S. Plaintiff Act
240 Torts to Land 443 Housing/ Sentence or Defendant) 896 Arbitration
245 Tort Product Liability Accommodations 530 General 1--...,,,....,.....,...,.......,_ _-r-- 871 IRS-Third Party
290 All Other Real Property 445 Amer. w/Disabilities - 535 Death Penalty IMMIGRATI N 26 USC 7609 Act/Review or Appeal of
Employment Other: 462 Naturalization Application Agency Decision
446 Amer. w/Disabilities - 540 Mandamus & Other 465 Other Immigration 950 Constitutionality of
Other 550 Civil Rights Actions Slate Statutes
448 Education 555 Prison Condition
560 Civil Detainee -
Conditions of
Confinement
V. ORIGIN (Place an "X" in One Box Only)
Ii) I Original D 2 Removed from D 3 Remanded from D D
4 Reinstated or D
5 Transferred from 6 Multidistrict D 8 Multidistrict
Proceeding State Court Appellate Court Reopened Another Di strict Litigation - Litigation -
(s eci ~ Transfer Direct File
Cite the U.S. Civil Statute under which you are filing (Do not dtejurisdit:tional statutes un/es.• diversity):
VI. CAUSE OF ACTION """F""""""'
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Brief description of cause:
Kubota North America Corp . violated the Made In United States Rule In violation of the FTC Act.
VII. REQUESTED IN 0 CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:
COMPLAINT: UNDER RULE 23, F.RCv.P. JURY DEMAND: □ Yes @No
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