On Tuesday, October 23, 2018, the Ninth Circuit Court of Appeals issued an important opinion reviving a decade-old Alien Tort Claims Act (ATS) suit based on alleged aiding and abetting slave labor in cocoa farms on the Ivory Coast. Doe 1 v. Nestle, et al., No. 17-55435, 2018 WL 5260852 (9th Cir. Oct. 23,
Notable Ruling: Supply Chain Opinion for Mars
On Monday, June 4, 2018, the Ninth Circuit Court of Appeals issued an important opinion, Hodson v. Mars, Inc., holding that food manufacturers do not have any independent obligation under California consumer protection laws to disclose on their labels the possibility of alleged harmful labor practices occurring in the downstream supply chain of the manufacturer’s products. Affirming the district court’s dismissal of an action against Mars demanding such labeling, the Ninth Circuit confirmed that consumer protection laws do not impose this requirement, as California law limits such affirmative disclosures to circumstances where there is an “unreasonable safety hazard” associated with the product—a condition that was admittedly not present in the Mars case.
Plaintiff had appealed the district court’s dismissal of the action, asking the Ninth Circuit to adopt a more open-ended standard that would require affirmative disclosures concerning issues like supply chain practices, even where no “safety hazard” was present. In a unanimous decision, the Ninth Circuit affirmed, rejecting plaintiffs’ position and holding that California’s consumer protection laws do not require such disclosures. The panel also noted that the relevant information regarding slave and child labor is published on Mars’ website, in compliance with California’s Transparency in Supply Chains Act (CTSCA).
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New Human Rights Case Alleging Deception of Consumers Filed Against Food Companies (This Time on the East Coast)
In the wake of the 2016 dismissal of human rights cases filed against food companies in California, a new class action case was filed on February 26, 2018 in Massachusetts federal court (Tomasella v. Hershey Co.) alleging human rights violations associated with cocoa farming and processing. At its core, the complaint is premised on a theory of unjust enrichment in violation of the Massachusetts Consumer Protection Law—namely, that the defendants, by failing to disclose trafficking and child labor in their supply chains (and in fact asserting in their disclosures that they had “zero tolerance” for such activities), caused consumers to purchase their products when they never would have done so had they known about the purported trafficked and child labor taint in the products’ supply chains.
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Palm Oil Supply Chain Abuses Reported by Amnesty International: Steps to Mitigate Legal Risk
Amnesty International recently released a report alleging that supply chains for production of palm oil—a common ingredient in many consumer products—are tainted by forced and child labor. In the nearly 150-page report titled “The Great Palm Oil Scandal: Labour Abuses Behind Big Brand Names,” Amnesty International accuses several major brand-name consumer goods companies of sourcing palm oil from suppliers that operate plantations where the alleged abuses took place.
The report has already received substantial media attention, including articles published by Forbes, The Washington Post, Reuters and Yahoo News. Although the accuracy of the report’s assertions have not been tested, it nonetheless emphasizes the growing importance of proper diligence in supply chain management and compliance with associated legal obligations for a company’s disclosures about its supply chain practices.