Hodsdon v. Mars, Inc.
162 F. Supp. 3d 1016
N.D. Cal.2016Background
- Mars, Inc. sells popular chocolate products that use some cocoa from Cote d’Ivoire, where reports document child and forced labor in cocoa harvesting.
- Mars’s typical retail labels do not disclose that its cocoa "may" be sourced from farms using child/forced labor; some corporate statements and a Dove label reference certification/traceability for certain products.
- Hodsdon sued under California consumer-protection statutes (UCL, CLRA, FAL), seeking to require point-of-sale disclosures that Mars’s chocolate may contain cocoa harvested with child/forced labor.
- Hodsdon alleged he would not have bought, or would have paid less for, Mars products had packaging disclosed this information (economic injury and reliance theory).
- Mars moved to dismiss, arguing lack of duty to disclose such supply-chain information, FAL claims require statements not mere omissions, and that statutory safe-harbor and First Amendment issues also counsel against liability.
- The court granted Mars’s motion: found Hodsdon has standing but held that (1) the FAL claim fails because it alleges only an omission with no false statement, (2) CLRA/UCL claims fail because California law does not impose a duty to disclose non-safety supplier practices on labels, and (3) the alleged omission is not "unfair" under the UCL; amendment would be futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue under UCL/CLRA/FAL | Hodsdon: paid more or would not have purchased absent nondisclosure; thus economic injury and reliance exist | Mars: cannot trace products to specific offending farms; didn’t rely on any affirmative label statement | Court: Hodsdon has standing—alleged overpayment and that he saw labeling supports reliance and injury in fact |
| Viability of FAL claim based on omission | Hodsdon: omission of supplier labor facts renders advertising misleading | Mars: FAL prohibits untrue or misleading statements, not pure omissions where no affirmative statement exists | Court: FAL requires an actual statement; pure omission claim fails and is dismissed without leave to amend |
| Duty to disclose under CLRA/UCL (unlawful/fraudulent prongs) | Hodsdon: Mars had exclusive knowledge; omission was material and deceived consumers | Mars: California law confines disclosure duties to safety risks or product defects; no duty to disclose distant supply-chain labor practices | Court: No duty to disclose non-safety supplier information; CLRA and UCL unlawful/fraudulent claims fail |
| UCL "unfair" prong | Hodsdon: nondisclosure of likely child/forced labor is immoral and injures consumers’ purchasing choices | Mars: consumers can learn supplier info elsewhere; omission is not substantially injurious or tethered to a specific law/policy | Court: Under both balancing and ‘‘tethering’’ tests, omission not unfair; UCL unfair claim fails |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard requiring plausibility)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (economic injury and standing under UCL/FAL by overpayment theory)
- Hinojos v. Kohl’s Corp., 718 F.3d 1098 (9th Cir. 2013) (clarifying standing under UCL/CLRA/FAL)
- In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009) (reliance standard for UCL/false advertising claims)
- Daugherty v. American Honda Motor Co., 144 Cal.App.4th 824 (Cal. Ct. App. 2006) (duty to disclose limited; safety/defect context)
- Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012) (rejecting broad duty to disclose absent safety risk)
- Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (Cal. 1999) (limits on UCL unfair prong; need for tethering to public policy)