Advertising law specialist Proskauer says Nestlé has won a court case regarding non-disclosure of alleged child and slave labour issues on its packaging.
A Massachusetts federal court found that not mentioning the issues on its packaging was not ‘deceptive or unfair.’
Lawyers at Proskauer said that although child and slave labour is “widespread, reprehensible, and tragic,” the court in the District of Massachusetts found it was not deceptive for Nestlé to omit from product labels that those practices (allegedly) exist in its supply chain.
In granting defendant Nestlé’s motion to dismiss, the court, after assuming that plaintiff’s allegations are true, found that reasonable consumers would not be misled when manufacturers omit such information at the point of sale (the case was: Tomasella v. Nestlé, No. 18-cv-10269 (2019)).
“In this putative class action – one of a trio of similar lawsuits against chocolate manufacturers – the plaintiff, who purchased various Nestlé products, claimed the company’s omissions were deceptive and unfair, and violated Massachusetts consumer protection laws,” the law firm reported. “The plaintiff claimed she would not have bought, or paid as much for, Nestlé’s products had she known that child and slave labour allegedly existed in its products’ supply chain.”
The court examined whether Nestlé deceived customers by failing to disclose alleged child and slave labour practices in its supply chain on product packaging. Citing FTC administrative precedent, the court characterized Nestlé’s omission as a ‘pure omission,’ involving a subject as to which the seller has said nothing, in a circumstance that does not give any meaning to that silence.
Specifically, the court noted that plaintiff did not allege Nestlé made any false statements about child or slave labour on its packaging, “or that Nestlé’s omissions turned an affirmative representation into a misleading half-truth.” By selling chocolate, Nestlé is implying “the product is fit for human consumption.” This implication, the court reasoned, “does not on its own give rise to any misleading impression about how Nestlé or its suppliers treat their workers.”
The court therefore found it was not reasonable for a consumer to “affirmatively form any preconception about” Nestlé’s supply chain, “let alone make a purchase decision based on any such preconception.” Because the labelling would not mislead consumers “acting reasonably under the circumstances, to act differently,” plaintiff failed to state a claim for deceptive conduct.
Proskauer also reported that the court also held Nestlé’s failure to disclose alleged child and slave labour practices in its supply chain did not constitute unfair trade practices under Massachusetts law, and plaintiff did not point to any authority that defined such nondisclosure as unfair.
The law firm said the Tomasella decision echoes a line of other federal cases in which putative class actions were filed alleging similar labour practices in the supply chains of other retailers and manufacturers. These cases, including several brought under California’s consumer protection laws, also found there was no affirmative duty to disclose these types of supply chain labour practices.