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Hershey, Nestle, Mars Beat Appeals in Child Labor Label Suits

June 16, 2020, 9:11 PM

Nestle, Mars, and Hershey can’t be held liable under Massachusetts consumer protection law for allegedly failing to disclose that their chocolate is made with child slave labor, the First Circuit said Tuesday.

Danell Tomasella alleged in separate cases that the companies’ nondisclosure of the use of child labor in their West Africa cocoa supply chains violates the Massachusetts Consumer Protection Act, and that the defendants were unjustly enriched. The would-be class suits were consolidated for appeal.

Tomasella failed to state a plausible claim that the omission was deceptive or unfair under the Massachusetts law, the U.S. Court of Appeals for the First Circuit said. It affirming dismissals against Nestlé USA Inc., Mars Inc., and Hershey Co.

The exploitation of children in the supply chain from which U.S. confectionery corporations continue to source the cocoa beans that they turn into chocolate is a humanitarian tragedy, the appeals court said.

But the court considered only “the very narrow question” whether the alleged failure to include information on the packages regarding upstream labor abuses constitutes an unfair or deceptive business practice within the meaning of the state law.

The omissions aren’t deceptive under the law because they lack the requisite capacity to mislead consumers, the court said.

And Tomasella hasn’t shown the packaging omissions are “unfair” under the law, the court said.

The nondisclosures don’t “fall within the penumbra of any established concepts of unfairness,” the court said.

Nor does Tomasella provide any basis on which to conclude that the companies tricked consumers, or took advantage of their assumptions for capital gain, it said.

The companies have repeatedly made information about the prevalence of the worst forms of child labor in their supply chains publicly available through their websites and other media, the court said.

This mitigates the concern raised that their omission at the point of sale is unethical under the consumer law regardless of whether Tomasella or the putative class members were, or should have been, cognizant of the website disclosures, the court said.

The court also affirmed dismissal of her unjust enrichment claims.

Judge Juan R. Torruella wrote the opinion, joined by Judges Sandra L. Lynch and William J. Kayatta Jr.

Hagens Berman Sobol Shapiro LLP represented Tomasella. White & Case LLP represented Nestlé. Williams & Connolly LLP represented Mars. Belknap Webb & Tyler LLP represented Hershey.

The case is Tomasella v. Nestle USA, Inc., 1st Cir., No. 19-01130, 6/16/20.

To contact the reporter on this story: Julie Steinberg in Washington at jsteinberg@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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