Tuesday, June 5, 2018
Foreign Labor Conditions Need Not Be Disclosed on Labels
Opinion Says California Consumer Protection Laws Cannot Be Used to Force Mars, Inc. To Advise That Cocoa Beans Are Picked on Farms Using Slave, Child Labor
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday affirmed the dismissal of a putative class action against Mars, Inc., brought under California consumer protection statutes, seeking to require the candy-maker to disclose on its labels that the chocolate might be derived from cocoa beans grown on farms using child or slave labor.
The plaintiff, Robert Hodsdon, sued the Delaware corporation under California’s False Advertising Law (“FAL”), Unfair Competition Law (“UCL”), and the Consumer Legal Remedies Act (“CLRA”). He contended he would not have purchased Mars products, or at least would not have paid as much for them as he did, if he had known of the labor practices in the West African nation of Côte d’Ivoire, where many of the cocoa beans are picked.
These products include M&Ms. Snickers, and Milky Way bars.
Hodsdon’s action was dismissed Feb. 17. 2016, by U.S. District Court Judge Richard Seeborg of the Northern District of California.
“That children and forced laborers pick cocoa beans on a daily basis is indisputably an international tragedy.” Hodson wrote, but declared:
“The terrible reality of labor practices in the cocoa fields of Côte d’Ivoire notwithstanding, the FAL, UCL, and CLRA do not require the disclosure Hodsdon seeks. While Hodsdon has shown he has standing to bring these claims, the FAL does not provide the relief he requests, the claim accordingly may not proceed. Because Mars has no duty to disclose this information at the point of sale, Hodsdon’s claims under the CLRA and the ‘unlawful’ and ‘fraudulent’ prongs of the UCL similarly may not advance.”
A three-judge Ninth Circuit panel yesterday affirmed. Circuit Judge A. Wallace Tashima wrote:
“In this action, the putative class plaintiff alleges that California consumer protection laws require certain food manufacturers to disclose, on their products’ labels, that the products’ supply chain may involve child or slave labor. Regrettably, despite some efforts to eradicate the practices, child labor and slave labor are modem-day scourges, and manufacturers that source materials from around the world may benefit from that illicit labor. This issue has gained public attention in recent years such that many consumers now consider in their purchasing decisions the labor practices behind household products. In fact, some manufacturers have decided to market their products as free of unsavory labor.
“Nonetheless, the California consumer protection laws do not obligate the defendants-appellees to label their goods as possibly being produced by child or slave labor. In the absence of any affirmative misrepresentations by the manufacturer, we hold that the manufacturers do not have a duty to disclose the labor practices in question, even though they are reprehensible, because they are not physical defects that affect the central function of the chocolate products.”
Hodsdon argued that Mars was committing consumer fraud by not disclosing that the manufacturing of its goods can be traced back to inhumane practices in West Africa, a fact which he said was material to consumers’ decisions whether to purchase the products.
Tashima responded that a “crucial element” in duty-to-disclose cases is “that the defect must relate to the central functionality of the product.” He said:
“…Plaintiff has not sufficiently alleged that the defect in question—the existence of child labor in the supply chain—affects the central functionality of the chocolate products.”
The case is Hodsdon v. Mars, Inc., No. 16-15444.
Seeborg’s 2016 opinion elaborates on the conditions in Côte d’Ivoire, saying:
“Mars markets and distributes chocolate products in the United States and abroad. Some of the cocoa beans used to make Mars’s chocolate come from Cote d’lvoire. where children and forced laborers wield dangerous tools, transport heavy loads, and face exposure to toxic substances. Children often arrive at these Ivoirian farms having been sold to, or kidnapped by, traffickers. The working conditions on the farms are deplorable. Laborers often do not receive pay, sleep in locked quarters, and fear corporal punishment.
“American and international organizations have identified and documented these abuses extensively. Mars and many other chocolate manufacturers have acknowledged that their products may contain cocoa harvested by children. Indeed, in 2001. Mars signed an agreement with other chocolate manufacturers to develop and to implement certification procedures to eradicate the worst forms of child labor on cocoa farms. The group hoped to achieve this goal by 2005. but to date. Mars and the other signatories have not been able to establish such a system. Mars twice acknowledged its failure to achieve a certification system and asserts that, by 2020. it hopes to purchase all cocoa from certified sources. According to the most recent reports, the number of children working on cocoa farms has increased since 2005. As of 2014, ‘[o]nly 36% of [Mars’s] cocoa was certified.’ ”
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