Robert Hodsdon v. Mars, Inc.
891 F.3d 857
| 9th Cir. | 2018Background
- Hodsdon, a California consumer, bought Mars chocolate and alleges he would have paid less or not purchased had Mars disclosed on the product label that its cocoa supply chain may involve child or slave labor.
- Mars sources cocoa from the Ivory Coast, where U.S. and international reports document use of the worst forms of child labor; Mars discloses its supply-chain remediation efforts on its website under the California Transparency in Supply Chains Act but not on product labels.
- Hodsdon sued under the CLRA, UCL, and FAL based solely on an omission theory (no affirmative misrepresentation), claiming Mars had a duty to disclose labor practices at point of sale.
- The district court dismissed for failure to state a claim; the Ninth Circuit reviewed de novo.
- The panel assumed (without deciding) that labor-practice information is material to consumers but held Hodsdon failed to plead that the omission concerned a physical defect affecting the product’s central functionality or created a safety hazard—requirements drawn from California and Ninth Circuit precedent.
- The court affirmed dismissal with prejudice of the CLRA, UCL, and FAL claims and denied Hodsdon’s request to certify to the California Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mars had a duty to disclose labor practices on product labels (omission claim) | Hodsdon: Mars had superior knowledge and must disclose material information about child/slave labor at point of sale | Mars: No duty to disclose absent an affirmative misrepresentation; disclosure on website satisfies legal obligations | No duty to disclose on labels; omission not actionable because it is not a physical defect affecting central product function (and no safety hazard pleaded) |
| Applicability of Wilson v. Hewlett-Packard (safety-hazard pleading requirement) | Hodsdon: Wilson should be limited/overruled by later CA appellate decisions (Collins, Rutledge) | Mars: Wilson remains controlling as to omission claims that do not allege central functional defects | Court did not overrule Wilson but held the case need not decide tension because Hodsdon fails under Collins/Rutledge tests too |
| Whether omission supports CLRA/FAL/UCL fraudulent prong claims | Hodsdon: Omission of supply-chain labor facts misrepresents product source/characteristics/standard and is misleading | Mars: CLRA/FAL claims fail because no duty to disclose; omission alone not likely to deceive under precedent | CLRA and FAL claims dismissed; omission without duty cannot support fraudulent prong claims |
| Whether omission supports UCL "unfair" prong (Cel‑Tech vs. South Bay tests) | Hodsdon: Claim is tethered to public policy against slavery (UN/ILO instruments) and is immoral/unfair | Mars: No close nexus between international labor policy and labeling; Supply Chains Act provides alternative disclosure; failure to label is not substantially injurious or tethered | UCL unfair prong claim fails under both Cel‑Tech (no close legislative tether) and South Bay (not substantially injurious/immoral in context) |
Key Cases Cited
- Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012) (omission claims require pleading safety hazard in certain contexts)
- Collins v. eMachines, Inc., 134 Cal. Rptr. 3d 588 (Ct. App. 2011) (duty to disclose where a physical defect central to product function is known to manufacturer and not reasonably discoverable)
- Rutledge v. Hewlett-Packard Co., 190 Cal. Rptr. 3d 411 (Ct. App. 2015) (triable duty-to-disclose issue where alleged defect affected central function and affirmative representations were made)
- Daugherty v. Am. Honda Motor Co., 51 Cal. Rptr. 3d 118 (Ct. App. 2006) (omission actionable only when contrary to an actual representation or when defendant was obliged to disclose)
- Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527 (Cal. 1999) (definition of "unfair" requires close tether to legislatively declared policy or anticompetitive effects)