California Transparency in Supply Chains Act

As this space has addressed before (see here and here), the California Transparency in Supply Chain Act (Civ. Code section 1714.43), enacted in 2010, requires large retailers and manufacturers (those with worldwide sales in excess of $100 million) doing business in California to disclose on their websites their efforts to eradicate slavery and human trafficking from their direct supply chain for tangible goods offered for sale.

In Hodsdon v. Mars, a putative class action, the plaintiff alleged that this California consumer protection law required Mars, Inc. (of Mars Chocolate fame) to disclose on its products’ labels that the products’ supply chains may involve slave labor. The trial judge dismissed the complaint, and on June 4, 2018 the Ninth Circuit affirmed the trial court’s decision, holding that the California consumer protection laws do not obligate Mars to label its goods as possibly being produced by child or slave labor. The court explained that, in the absence of any affirmative misrepresentations by the manufacturer, 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. Continue Reading Where No Misrepresentation, Ninth Circuit Does Not Require Labels Disclosing Slave Labor

Barber v NestleWe recently blogged about a new wave of class action litigation related to California’s Transparency in Supply Chains Act.  In December, Nestlé USA won the dismissal of a complaint against it alleging that the company was “obligated to inform consumers that some proportion of its cat food products may include seafood which was sourced from forced labor.”  See Barber v. Nestle USAThe question was whether Nestlé had a duty to disclose on its packaging the possibility that some of its suppliers or suppliers’ suppliers used illegal labor practices, particularly when it is virtually impossible to trace such practices directly to their food products.  The Central District of California found that the law recognizes a “safe harbor” and that Nestlé complied with the law by providing a limited disclosure to its customers regarding the company’s efforts to ensure compliance with labor laws on its website.

It turns out that fish used in cat food is not the only product that may include sourcing from forced labor.  Suppliers of cocoa used to make chocolate may be using forced labor and child labor in cocoa fields.  Continue Reading Another California Dismissal of Proposed Class Action Regarding Disclosure of Forced Labor in the Supply Chain

The first round goes to the industry: on December 9, 2015, the Central District of California dismissed the complaint in Barber v. Nestle USA, a key bellwether case in a new wave of class action litigation related to California’s Transparency in Supply Chains Act. The Barber plaintiffs’ theory was that Nestle had violated California’s panoply of consumer protection statutes by failing to disclose that “some proportion of its cat food products may include seafood [that] was sourced from forced labor.”

Judge Cormac McCarthy disagreed, finding instead that Nestle’s disclosures under the Supply Chains Act were protected under California’s “safe harbor” doctrine. And as the details of the decision make clear, this is no one-off victory: the court’s reasoning sets the blueprint for companies defending against similar suits going forward.

Continue Reading Knockout in Round One: Court Dismisses California Supply Chains Act Class Action