Ninth Circuit Rejects “Omission Theory” for Challenges to Product Labels

On June 4, 2018, the U.S. Court of Appeals for the Ninth Circuit decided the case of Hodsdon v. Mars, Inc., and affirmed the District Court’s dismissal of the plaintiff’s claims that, under California law (the Consumer Legal Remedies Act, the unfair competition law, Bus. & Prof. Code §§ 17200, et seq., and the false advertising law, Bus. & Prof. Code §§ 17500, et seq.), the defendant chocolate maker had a duty to disclose on its product labels that its goods were possibly being produced by child or slave labor.

The Ivory Coast is the world’s largest producer of cocoa beans, the raw ingredient for chocolate, and it has been determined by some authorities that its cocoa farms use slave or child labor. However, the District Court determined that, repellant as these practices may be, California’s consumer protection laws do not obligate the defendant to label its products as demanded by the plaintiff. The plaintiff based his complaint on the “omission theory of consumer fraud” that is recognized under the California consumer laws. However, the Ninth Circuit concluded that since there was no claim of any physical defect in the product and no safety defect, the plaintiff could not establish that the defendant had a duty to label its products under this legal theory.