May 12, 2016

Consumer Litigation: California District Court Dismisses Child Slave Labor Disclosure Claims Against Chocolatiers

Consumer Protection Insights for Industry

US Magistrate Judge Joseph C. Spero granted motions to dismiss filed by two famous chocolatiers facing putative class actions for alleged unethical supply chain practices on March 29, 2016. The plaintiffs alleged Nestle USA Inc. and The Hershey Company failed to disclose on their products' labels that "child slaves" in the Ivory Coast harvested cocoa beans used in their products. The plaintiffs claimed that nondisclosure violated California's Unfair Competition Law, Consumers Legal Remedies Act, and False Advertising Law.

In two similar opinions, the court held that "[a] duty to disclose under California law does not extend to all information that may persuade a consumer to make different purchasing decisions" and that the defendants were only required to disclose "issues of product safety, unless disclosure is necessary to counter an affirmative misrepresentation." The plaintiffs also failed to state a claim under the False Advertising Law because they alleged "pure omissions," rather than false or misleading statements.

Earlier this year, Judge Richard Seeborg dismissed a similar suit brought against Mars, Inc.

© Arnold & Porter Kaye Scholer LLP 2016 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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