Chocolate Class Actions Show Limits Of Food Label Claims

Recent orders granting motions to dismiss in three separate putative class action cases against some of the world’s largest chocolate makers in the U.S. District Court for the Northern District of California may indicate that we have reached the outer bounds of the types of claims challenging the content of food and beverage labels that judges in that jurisdiction are willing to entertain.

The lawsuits, Laura Dana et al. v. The Hershey Co. et al., case number 3:15-cv-04453; Robert Hodson, et al. v. Mars Inc. et al., case number 3:15-cv-04450; and Elaine McCoy, et al. v. Nestle USA Inc. et al., case number 3:15-cv-04451, each alleged that consumers were misled, not by information on the labels of chocolate bars, but rather by the companies’ failure to include information on those labels about the manner in which certain ingredients may have been sourced. Plaintiffs claimed that information about the potential use of child or slave labor in the harvesting of cocoa beans was something consumers would want to know when making a purchasing decision and alleged that the failure to put the information on the candy wrapper constituted consumer deception.

The suits asserted claims under California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200 et seq.; Consumers Legal Remedies Act (CLRA), Cal. Civ. Code § 1750 et seq.; and, False Advertising Law (FAL), Cal. Bus. & Prof. Code §17500 et seq., and alleged that California’s Transparency in Supply Chains Act of 2010 imposed an affirmative duty on the companies to disclose on their labels whether any of their suppliers had used child or slave labor in any stage of the harvesting or production of the chocolate. Each of the three cases was dismissed with prejudice because, according to the courts, there is no U.S. Food and Drug Administration regulation or any other authority requiring the disclosure.

As articulated by Judge Richard Seeborg in his order dismissing the Hodson case, “to be actionable [an] omission must be contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose.” The dismissal of these cases sends the clear signal that while suits can challenge the alleged deceptiveness of affirmative claims manufacturers print on their packaging, absent some regulation requiring the inclusion of information on a label, there is no right to sue for the omission of information consumers allegedly might like to know.

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