Re: Dkt. No. 16
I. INTRODUCTION
“The use of child slave labor in the Ivory Coast is a humanitarian tragedy.” Doe I v. Nestle USA, Inc.,
This is a putative class 'action in which Plaintiff Elaine McCoy claims that Defendant Nestlé USA, Inc. (“Nestlé”) violated California’s Unfair Competition Law (“UCL,” Cal. Bus. & Prof. Code §§ 17200-17210), Consumers Legal Remedies Act (“CLRA,” Cal. Civ. Code §§ 1760-1784), and False Advertising Law (“FAL,” Cal. Bus. & Prof. Code §§ 17600-17509) by failing to disclose on the packaging of Nestlé’s chocolate products that some of the cocoa used therein originated at farms in Cóte d’Ivoire (also known as the Ivory Coast) that use slave labor and the worst forms of child1 labor. Nestlé moves to dismiss all. claims. The Court held a hearing on March IS, 2016.
II. BACKGROUND
A. Allegations of the Complaint
Cóte d’Ivoire is the world’s largest producer of cocoa beans, the raw ingredient for chocolate, and supplies 40% of global cocoa production .and 47% of total imports to the United States. Compl. (dkt. 1) ¶¶ 20, 51. Slave labor and the worst forms of child labor are common ,in Ivorian cocoa production, as is well documented .by United States government agencies, academic studies, nonprofit organizations, investigative journalists, and former laborers. Id. ¶¶ 5-9, 24-26, 33-47. Children are frequently injured in the course of dangerous work involving machetes, chemicals, and heavy loads, and workers (both children and adults) may be beaten, whipped, and locked in to prevent escape. Id. ¶¶ 24-26. The Ninth Circuit has also acknowledged the existence of such conditions. Id. ¶ 27; Doe I,
Nestlé is one of the largest food companies in the United States and sells a number of popular chocolate products. Id. ¶ 3. In 2001, members if the United States chocolate industry including Nestlé signed a voluntary protocol, negotiated by Representative Eliot Engel and Senator Tom Harkin, to develop standards for certifying chocolate produced without labor abuses. Id. ¶ 28. After failing to meet the initial 2005 deadline, the industry extended the self-imposed deadline to 2008, then to 2010, and then to.2020. Id. ¶¶ 30-32.
Despite adopting “Corporate Business ■Principles” that require ethical business
McCoy “has purchased Nestlé Chocolate Products at various retail stores including Sam’s Club and Safeway in and around Vacaville, and Fairfield, California from 2011 through present.” Id. ¶ 14. Citing studies showing that consumers' will pay a premium for ethically produced coffee, clothing, and seafood, id. ¶¶ 67-71, McCoy alleges that she and other customers “would not have purchased Nestlé’s Chocolate Products or paid as much for them” if Nestlé had disclosed labor violations on the product labels. Id, ¶ 11, see also id. ¶¶ 14, 49, 78, 93,107,118.
The Complaint includes three claims, under the UCL, the CLRA, and the FAL, respectively. The UCL claim is based on three separate theories arising from Nes-tlé’s failure to disclose labor abuses in its supply chain on the packaging of its chocolate products: (1) the omission is “unlawful,” because it violates the CLRA, id. ¶ 86; (2) the omission is “unfair,” because the abusive labor practices themselves are immoral and the failure to disclose them impairs competition and prevents consumers from making informed decisions, id. ¶ 87; and (3) the omission is “fraudulent” because it is likely to deceive a reasonable consumer and the true facts would be material to reasonable consumer, id. ¶ 88. The CLRA claim asserts that Nestlé’s failure to disclose labor abuses in its supply chain constitutes a misrepresentation of the “source, characteristics, and standard” of the products. Id. ¶ 103, see also id. ¶¶ 100-02 (citing Cal. Civ. Code § 1770(a)(2), (5), (7)). The FAL claim asserts that. Nestlé had a duty to disclose the labor abuses in its supply chain because it had superior knowledge as compared to customers, and because it made “partial representations and/or misrepresentations to the contrary.” Id. ¶ 114. In .her Opposition, McCoy .disclaims any theory of an obligation to disclose arising from partial misrepresentations. Opp’n at 12 n.64.
B. Procedural History
McCoy filed this action on September 28, 2015, seeking to represent herself and other similarly situated consumers who purchased Nestlé chocolate products in the last four years. See generally Compl. McCoy’s counsel also represents plaintiffs who filed similar actions against tw;o other large chocolate manufacturers, Mars and Hershey. See Hodsdon v. Mars, Inc., No. 3:15-cv-04450-RS (N.D.Cal.); Dana v. The Hershey Company, No. 3:15-cv-04453 (N.D.Cal.). Defendants moved to dismiss in all three cases. Judge Seeborg granted the motion to dismiss in Hodsdon, as discussed in detail below. The undersigned heard argument on Hershey’s motion in Dana concurrently with Nestlé’s motion in the present case.
Nestlé argues that the case must be dismissed for several reasons, starting with the safe harbor doctrine, which provides that plaintiffs cannot use California’s consumer protection laws to pursue relief that is foreclosed by other, more specific statutes. Mot. (dkt. 16) at 8-11. According to Nestlé, the California Transparency in Supply Chains Act of 2010 (the “Supply Chains Act”) bars McCoy’s claims because it regulates disclosures related to labor abuses in supply chains and does not require the disclosures McCoy seeks. Id. McCoy responds that the Supply Chains Act does not specifically permit Nestlé’s omissions or bar McCoy’s claims, and that the labor violations addressed by that statute (slavery and human trafficking) do not encompass all of the violations at issue here (which also include dangerous but non-slave child labor). Opp’n at 8-8.
Nestlé also argues that the Court should dismiss the case based on the doctrine of equitable abstention, because: (1) the economic policies at issue are better suited for resolution by legislative bodies or administrative agencies; (2) enforcement of injunc-tive relief would be unduly burdensome for the Court due to the need to monitor foreign labor conditions; and (3) the foreign relations issues implicated by McCoy’s claims require a uniform federal policy and should be entrusted to the legislative or executive branch. Mot. at 11-13. McCoy argues that the subject matter of the case falls within the experience and competence of the Court, and that overseeing an injunction requiring Nestlé to change its labeling would not be unduly burdensome. Opp’h at 8-10.
Next, Nestlé argues that it has no duty to disclose labor conditions in its supply chain because the information at issue does not relate to product.safety, and because Nestlé did not have exclusive knowledge, actively conceal the information, make misleading partial representations, or have a fiduciary relationship with McCoy. Mot. at 14-18. Nestlé contends that all of McCoy’s claims fail because, as a matter of law, reasonable consumers are not likely to be deceived by the omission'of something that Nestlé had no duty to disclose — and even if it were legally possible, McCoy has hot adequately alleged that consumers expect supply chains to be entirely free of labor abuses. Id. at 18-19. McCoy responds that the limitation of the duty to disclose to safety issues only applies in post-warranty product defect cases, which this .is not, and that a duty arises from Nestlé’s superior (albeit not actually exclusive) knowledge of labor abuses in its supply chain. Opp’n at 10-14. She “does not here contend that Nestlé’s partial disclosures give rise to its duty to disclose.” Id. at 12 n. 64. McCoy also argues that she has adequately pled that, absent disclosure to the contrary, consumers would expect that chocolate is not produced using slave labor or the worst forms of child labor, and that reliance is at least a question of fact. Id. at 14-16.
Nestlé argues that McCoy’s CLRA claim fails because omissions regarding labor abuses do not fall within the statutory provisions she invokes — which govern representations regarding the “source, characteristics, and standard” of the chocolate, see Compl. ¶ 103 — and that she therefore also cannot proceed on a UCL claim for “unlawful” conduct based on her CLRA claim. Mot. at 17-18. McCoy contends that “Nestlé’s failure to disclose that its supply chain is not child and slave free is likely to deceive a reasonable consumer regarding the chocolate’s source (from plantations using child and slave labor) and characteristics/standard (produced by child and slave labor).” Opp’n at 17.
As for “unfair” conduct under the. UCL, Nestlé contends that McCoy cannot succeed under any of the tests that courts have used, because she has not identified a legislative policy against Nestlé’s non-disclosure, nor has she plausibly alleged that the harm caused was “substantial” or that it outweighed the utility of Nestlé’s conduct. Mot. at 19-21. McCoy argues that the labor abuses in Nestlé’s supply chain contravene legislatively declared policies in the form of United Nations prohibitions of forced labor and the worst'forms of child labor that the United States has ratified, and that those abuses are immoral and unethical. Opp’n at 18-19. She also contends that the harm of deceiving consumers outweighs the cost to Nestlé of chang-ings its product labeling. Id. at 19. Nestlé notes in reply that the United Nations sources that McCoy cites relate only to labor practices, not product labeling. Reply (dkt. 27) at 12.
According to Nestlé, McCoy lacks both Article III and statutory standing to bring any of-her claims because she cannot trace the cocoa' used in the specific chocolate products she bought back to a specific plantation, and thus cannot know whether the' products she bought' were produced with slave or child labor. Mot. at 21-22. Nestlé contends that without that knowledge, whether the’ products McCoy bought were misrepresented (even under McCoy’s theory of misrepresentation by omission) is uncertain; and if they were not, McCoy has not suffered any co'gnizable injury. Id. McCoy responds that her' injury' and standing arise from misrepresentation of the 'supply chain for the chocolate, and if Nestlé had better' disclosed the labor abuses in the supply chain, she would not have bought the products regardless of whether she knew the origin of the cocoa in a specific item. Opp’n at 19-21. McCoy relies on case law holding that a consumer who purchased or paid more for a product based on misrepresentations has both constitutional and statutory standing to bring claims under California’s consumer protection laws. Id. at 20-21. (citing Hinojos v. Kohl’s Corp.,
Nestlé also argues that McCoy lacks standing because she has not adequately alleged reliance on any misrepresentation. Mot. at 22. According to Nestlé, McCoy has not alleged that she. saw or relied on any misleading affirmative - representations, nor that she would have read the disclosure she seeks on Nestlé’s product packaging. Id. McCoy contends that her claim is based only on omission of material facts and that her Complaint adequately alleges that she would not have bought Nestlé products if the packaging had disclosed severe-labor abuses in Nestlé’s supply chain. Opp’n at 20-21.
Finally, Nestlé argues that requiring, the labeling McCoy seeks would compel speech in violation of the First , Amendment. Mot. at 23-25. McCoy contends that laws against misleading advertising are constitutional, and that a mere rational basis is required to support laws compelling affirmative factual product labeling to avoid misleading consumers. Opp’n at 23-25 (citing, e.g., Zauderer v. Office of Disciplinary Counsel,
D. Hodsdon v. Mars, Inc.
In Hodsdon, Judge Seeborg granted a motion by chocolate manufacturer Mars, Inc. to dismiss claims very similar those in the case at hand. Hodsdon v. Mars, Inc.,
With respect to the FAL claim, the court reconciled cases holding that omissions were not actionable with others that allowed FAL claims based on omissions to proceed, ultimately determining that omissions accompanying misleading incomplete statements are actionable, but omissions with no corresponding statements are not. Id. at 579-80,
Next, the court turned to the plaintiffs CLRA claim and his claim under the “unlawful” prong of the UCL, which was based on the purported CLRA violation. Id. at 580-81,
The plaintiff, also brought UCL claims based on the “fraudulent” and “unfair” prongs of the statute. The court followed two California appellate decisions holding that omissions cannot satisfy the “fraudulent” prong unless there was a duty'to disclose, and therefore dismissed that claim. Id. at 581,
Because the plaintiff failed to state a claim for the reasons summarized above, the court did not reach Mars’s argument that the Supply Chains Act creates a safe harbor, but expressed- doubt that any such harbor is as broad as Mars contended. Id, at 582-85,
III. ANALYSIS
A. Legal Standard
A complaint , may be dismissed for failure to state a claim on which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. “The purpose, of a motion to dismiss under Rule 12(b)(6) is to test the legal sufficiency of the complaint.” N. Star Int’l v. Ariz. Corp. Comm’n,
In ruling on a motion to dismiss under Rule 12(b)(6), the court analyzes the complaint and takes “all allegations of material
Rule 9(b) of the Federal Rules of Civil Procedure sets a heightened pleading standard for claims based on fraud. “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). The Ninth Circuit has held that in order to meet this standard, a “complaint must specify such facts as the times, dates, places, benefits received, and other details of the alleged fraudulent activity.” Neubronner v. Milken,
Nestlé also moves to dismiss under Rule 12(b)(1) on the basis that the Court lacks jurisdiction because McCoy lacks Article III standing.’ See Mot. at 8. Where,,as here, a jurisdictional challenge is based on the allegations of a plaintiffs complaint rather than on extrinsic' evidence, courts “assume [the plaintiffs] allegations to be true and draw all reasonable inferences in his favor.” Wolfe v. Strankman,
B. Standing
Nestlé argues that McCoy lacks Article III and statutory standing to pursue these claims because she does not and cannot allege that the specific products she purchased were made from cocoa produced with the labor abuses at issue in this case — slave labor or the worst forms of child labor — and therefore fails to allege an actual, particularized injury. Mot. at 21-22. The parties agree that Nestlé currently cannot trace the cocoa used in a particular Nestlé chocolate product to a specific plantation, and there is thus no way to know what' labor practices were used in its production. See Compl. ¶ 11; Mot. at 22. McCoy argues that she has standing because she would have either not purchased or paid less for Nestlé’s products if she had known that the supply chain involved the labor abuses at issue, regardless of where the cocoa in a particular chocolate bar originated. Opp’n at 20-21. Judge Seeborg held that the plaintiff in Hodsdon had standing under similar circumstances, and the Court agrees that McCoy has standing here. See Hodsdon,
The issue of Article III standing is straightforward. “[W]hen, as here, ‘Plaintiffs contend that class members paid more for [a product] than they otherwise would have paid, or bought it when they otherwise would not have done so’ they have suffered an Article III injury in fact.” Hinojos v. Kohl’s Corp.,
McCoy also has standing under the California statutes at issue. The UCL and FAL require that private plaintiffs “háfy'e] suffered injury in fact and ha[ve] lost money or property as a result of the unfair competition” or false advertising. Hinojos,
In both Kwikset, where the defendant marketed locks as “Made in U.S.A.” despite some foreign components and assembly work, and Hinojos, where the defendant allegedly advertised its normal prices as “reduced,” plaintiffs who relied on those representation had standing to sue under the UCL and FAL. Id. at 1107; Kwikset,
The Ninth -Circuit’s decision in Birdsong v. Apple, Inc.,
Nestlé argues, essentially, that a UCL claim based on misrepresentation of labor practices can only succeed where a plaintiff is certain that the objectionable practice was used to produce the specific item that the plaintiff purchased. See Mot; at 21-22. -Stepping back from the fact- pattern of this case, that argument would dictate that even if Nestlé had — hypothetically— concealed Ivorian labor conditions from its customers, falsely labeled all of its chocolate as certified to be free of child labor, and run a fraudulent national ad campaign touting its child-labor-free chocolate, a, customer who relied on that false promotion would lack standing to sue for fraudulent business practices and false advertising so long'as some fraction of Nestles cocoa met those descriptions and the customer was unable to tell what labor, conditions produced the cocoa in the actual product he or she purchased. Such a result would underline the.holding of Hinojos and Kwikset. The difference between that hypothetical scenario and McCoy’s allegation of mere omission is critical to the outcome- of the present motion, as discussed in the sections- below, but it is a difference relevant to the merits of the claims, not to standing.
Similarly, to use some of the examples given in Hinojos and Kwikset, it would be a bizarre result if sellers advertising food as halal or kosher, diamonds as conflict-free, or products as union-made could knowingly mix compliant and non-compliant products with impunity so long as there was no way for a buyer to trace the specific item he or she purchased back to the source. The Eighth Circuit has nevertheless adopted that rule. See Wallace v. ConAgra Foods, Inc.,
“ ‘For a significant segment of the buying public, labor practices do matter in making consumer choices.’” Kwikset,
Nestlé also argues that McCoy lacks standing because she has not sufficiently alleged reliance. Mot. at 22. The Court agrees with McCoy that, at least for the purpose of Article III standing, McCoy adequately pleads reliance by alleging that she saw the product labeling and would not have purchased the products if labor abuses in the supply chain had been disclosed. See Compl. ¶14; Whether Nestlé had a duty to disclose those conditions, see Mot. at 22, is relevant to whether the Complaint states a claim on which relief can be granted, but is not an issue of standing.
The CLRA prohibits certain enumerated “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer,” Cal. Civ. Code'§ 1770(a). McCoy argues that Nestlé’s failure to disclose labor abuses on its packaging violates subsection (a)(2) by “[misrepresenting the source” of the chocolate, subsection (a)(5) by “[r]epresenting that goods... have.,. characteristics. . .which they do not have,” and subsection (a)(7) by “[representing that goods... are of a particular standard.” Id. § 1770(a)(2), (5), (7); see Compl. ¶¶ 100-03; Opp’n at 17. In her Opposition, McCoy makes clear that these theories are based on “Nestlé’s omission of known' child and slave labor in its supply chain,”' and that shé “does not here contend that Néstlé’s partial misrepresentations give rise to its duty to disclose.” Opp’n at 12 n.64.
“[A]lthough a claim may be stated under the CLRA in terms constituting fraudulent omissions, to be actionable the omission must be contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose.” Daugherty v. Am. Honda Motor Co.,
At least one district court decision has limited Wilson to cases where a product was covered by a warranty that expired before the defect became apparent. Stanwood v. Mary Kay, Inc.,
The Court agrees with Judge Seeborg’s conclusion that the weight of authority limits a duty to disclose under the CLRA to issues of product safety, unless disclosure is necessary to counter an affirmative misrepresentation. See Hodsdon,
A duty to disclose under California law does not extend to all “information [that] may persuade a consumer to make different purchasing decisions.” Hodsdon,
Even if that were not so, the parties agree McCoy would still need to show one of the following to support a duty to disclose: (1) a fiduciary relationship between Nestlé and McCoy; (2) that Nestlé had “exclusive knowledge of material facts not known or reasonably accessible to” its customers; (3) that Nestlé actively concealed a material fact; or (4) that Nestlé had made misleading partial representations. Opp’n
Further, even if McCoy could adequately plead that Nestlé had a' duty to disclose the labor abuses in its supply chain on its product labels, it is far from clear that such information falls within the categories of representations governed by the CLRA. McCoy invokes provisions barring misrepresentation of the “source,” “characteristics,” and “standard” of a product," Opp’n at 17 (citing Cal. Civ. Code § 1770(a)(2), (5), (7)). While the CLRA provides that it “shall be liberally construed and applied to promote its underlying purposes” of consumer protection, Cal. Civ. Code § 1760, it does, not explicitly discuss representations regarding labor practices, see id. § 1770(a), and McCoy cites no authority holding that any of the enumerated categories she relies on are so broad as to encompass labor abuses. Because the Court holds that Nestlé did not have a duty to disclose labor abuses in its supply chain on its product labels, the Court declines to resolve whether misrepresentations .regarding. labor practices can fall within the scope of the CLRA.
D. UCL Claim
California’s UCL prohibits unfair competition, defined as “any unlawful, unfair, or fraudulent business act or practice.” Cal. Bus. & Prof. Code § 17200. McCoy brings her claim under ■ each of these prongs, and Nestle argues that each must be dismissed. •
The “unlawful” prong of McCoy’s Complaint is based solely on Nestlé’s purported violation of" the CLRA. Compl. ¶ 86. As discussed above, the Court holds that McCoy fails to state a CLRA claim. Nes-tlé’s Motion is therefore GRANTED as to this prong of McCoy’s UCL claim.
The “fraudulent” prong fails for similar reasons. As Judge Seeborg noted in .Hods-don, California courts have held that “ ‘[a]bsent a duty to disclose, the failure to do so does not support a claim under the fraudulent prong of the UCL.’ ” Hodsdon,
That leaves the “unfair” prong, the test for which remains somewhat unsettled in the California courts. Courts previously held a practice to be “ ‘unfair”... when it
When a plaintiff who claims to have suffered injury from a direct competitor’s “unfair” act or practice invokes section 17200, the word “unfair” in that section means conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition. '
Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co.,
In the years since Cel-Tech, some courts have continued to use the South Bay test for cases brought by consumers, while others have followed Cel-Tech’s lead and “require[d] that the unfairness be tied to a ‘legislatively declared’ policy,” Lozano v. AT & T Wireless Servs., Inc.,
The "legislative policies” on which McCoy relies are the United Nations’ International Labor Convention No. 182 and the United Nations’ Universal Declaration of Human Rights — the former forbidding the worst forms of child labor, the latter forbidding slavery, and both having been ratified by the United States. Opp’n at 18-19. The crux of McCoy’s claim, however, is not that Nestlé utilized slave labor or the worst forms of child labor, but rather that Nestlé does not disclose the existence of those labor abuses in its supply chain on the packaging of its products. McCoy has not identified any legislatively declared policy requiring such disclosure,
Turning to the South Bay balancing test,-the distinction between the underlying labor practices and the failure to disclose once again undermines McCoy’s claim. The slave labor and child labor alleged in the Complaint would certainly qualify as . “immoral, unethical, oppressive, [and] unscrupulous.” See S. Bay,
The harm at issue here is that Hodsdon may not have purchased Mars’s chocolate products at all, or would have paid less for them, had he been aware of the prospect for child labor in Mars’s supply chain. Such information is, in fact, readily available to consumers on Mars’s website. Given that Hodsdon) liké any other consumer, has access to information about the source of Mars’s cocoa beans, the absence of such, information on the packaging is not “substantially injurious to consumers” or necessarily immoral. Granting that the labor practices at issue are immoral, there remains ah important distinction between them and the actual harm for which Hodsdon -seeks to recoyer, namely his purchase of Mars’s chocolate products absent any disclosure. Mars’s failure to disclose information it had no duty to disclose in the first plaee is not substantially injurious, immoral, or unethical, and Hods-don’s UCL claim may therefore not adr vanee.
Hodsdon,
E. FAL Claim
.The FAL makes it unlawful for any person “to make or disseminate or cause to be made or disseminated before the public ■.. ...any statement .... which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.” Cal. Bus. & Prof. Code § ,17500. The plain language of the statute — which prohibits making, disseminating, . .or causing- the dissemination of false or misleading statements — does not encompass omissions. Several cases have therefore held that “[tjhere can be no FAL claim where there is no.‘statement’ at all” — or in other words that an omission, even of material facts, does not violate the FAL. Norcia v. Samsung Telecomms, Am., LLC, No. 14-CV-00582-JD,
McCoy cites three federal district court cases and two California appellate cases that purportedly held to the contrary, allowing FAL-claims to proceed based on omissions. Opp’n at 16 nn.92 & 95. One of those cases actually dismissed the plaintiffs FAL -claim to the extent that it was
Although the Sony decision did not cite the alleged misrepresentations as the reason for allowing the plaintiffs’ omissions claim to proceed, the Court agrees with Judge Seeborg’s conclusion that the outcome is consistent with a requirement that there be at least some affirmative misrepresentation to support a- claim under the FAL. See Hodsdon,
In light of the holdings above that each of McCoy’s claims must be dismissed, the Court need not reach the parties’ arguments regarding Nestlé’s remaining defenses: that the California legislature has created a “safe harbor” against McCoy’s claims by enacting the Supply Chains Act, see Mot. at 8-11; that, the equitable abstention doctrine requires dismissal, id. at 11-13; that the Complaint falls short of the Rule 9(b) pleading standard, id. at 23; and that the relief McCoy seeks would compel Nestlé’s speech in violation of the First Amendment, id. at 23-25. Although this Order need not and does not resolve any of those issues, the Court briefly addresses the safe harbor argument.
“[T]he reach of the UCL is broad, but it is not without limit and may not be used to invade ‘safe harbors’ provided by other statutes.” Loeffler v. Target Corp.,
A plaintiff may thus not “plead around” an ‘absolute bar to relief simply “by recasting the cause of action as one for unfair competition.” (Manufacturers Life Ins. Co. v. Superior Court (1995)10 Cal.4th 257 , 283,41 Cal.Rptr.2d 220 ,895 P.2d 56 .) The rule does not, however, prohibit an action under the unfair competition law merely because some other statute on the subject does not, itself, provide for the action or prohibit the challenged conduct. To forestall an action under the unfair competition law, another provision must actually “bar” the action or clearly permit the conduct.
Cel-Tech,
. The Supply Chains Act requires certain large corporations to disclose on their websites their “efforts to eradicate slavery and human trafficking from [their] direct supply chain[s] for tangible goods offered for sale.” Cal. Civ. Code § 1714.43(a)(1). The statute does not “actually ‘bar’” any action. See Cel-Tech,
The Ninth Circuit very recently addressed the safe harbor doctrine in Ebner v. Fresh, Inc., a case alleging deception where a cosmetic product label .disclosed the net weight of the product contained in a tube but failed to disclose that “only 75%
The Cqurt recognizes that recent district court decisions have held that the Supply Chains Act creates a safe harbor against claims based on non-disclosure of labor abuses in a supply chain. Wirth,
IV. CONCLUSION
For the reasons stated above, McCoy’s claims under the CLRA, the UCL, and the FAL fail to state a claim on which relief may be granted, and are therefore DISMISSED. McCoy has made clear that she does not intend to pursue a claim based on affirmative misrepresentations. See Opp’h at 12 n.64. The Court therefore finds that leave to amend would be futile, and dismisses this action with prejudice,
IT IS SO ORDERED.
Notes
. The Court also heard argument in Dana v. The Hershey Company, No. 15-cv-4453, which involves different parties but substantially similar claims and arguments. A separate order has been published concurrently in that case.
. The parties have consented to the jurisdiction of the undersigned magistrate judge for all purposes pursuant to 28 Ú.S.C. § 636(c).
. McCoy’s allegations are taken as true in the context of a motion to dismiss.
. Four other cases based on nondisclosure of supply chain labor violations, brought, by plaintiffs who also share counsel with McCoy, have been- dismissed for failure to state a
. The CLRA allows a consumer who has suffered "any damage” to sue, and "any plaintiff who has standing under the UCL’s and FAL’s ‘lost money or property’ requirement will, a fortiori, have suffered ‘any damage’ for purposes of establishing CLRA. standing.” Hinojos,
. O’Shea v. Epson Am., Inc., No. CV 09-8063 PSG (CWx),
. Cirulli v. Hyundai Motor Co., No. SACV 08-0854 AG (MLGx),
. Wilson also acknowledges cases recognizing a broader duty of disclosure in the sale of services, rather than products. Wilson,
. While McCoy does not argue in the context of the "unfair" prong that either the CLRA or the FAL constitutes such a policy, her arguments that those statutes compel the disclosure she seeks could perhaps be transposed to this claim. For the reasons discussed above and below in the context of McCoy’s CLRA and FAL claims, the Court holds that neither statute represents a policy requiring the disclosure of labor abuses in a supply chain on product labels.
. Judge Seeborg similarly distinguished a Central District decision allowing a claim to proceed under the FAL where the defendants advertised their washing machines as "Xxtra Sanitary” and "high, efficiency,” but allegedly concealed that the machines developed mold and were not efficient. Hodsdon,
, Moreover, even if the FAL allowed claims based on omissions, McCoy has not established any duty to disclose the information at issue, as discussed above in the context of her CLRA claim.
. Appeals'of all of these cases are currently pending before the Ninth Circuit.