Tomasella v. Nestlé USA, Inc.
Tomasella v. Nestlé USA, Inc.
Opinion of the Court
In this putative class action, Plaintiff Danell Tomasella filed suit against Defendant Nestlé USA, Inc. ("Nestlé") alleging a violation of Mass. Gen. Laws ch. 93A ("Chapter 93A") (Count One) and a claim for unjust enrichment (Count Two) based on Nestlé's failure to disclose on its product packaging that its chocolate products likely contain cocoa beans farmed by child and slave labor. [See ECF No. 1 (hereinafter "Complaint" or "Compl.") ].
It is beyond dispute that the use of child and slave labor in the production of cocoa in Côte d'Ivoire (also known as the Ivory Coast) is widespread, reprehensible, and tragic. Moreover, "[t]he fact that major international corporations source ingredients for their products from supply chains involving slavery and the worst forms of child labor raises significant ethical questions." McCoy v. Nestlé USA, Inc.,
I. BACKGROUND
Plaintiff's Complaint alleges the following relevant facts, which the Court accepts as true for purposes of this motion. Nestlé is one of the largest and most profitable food manufacturers in the United States. Compl. ¶ 2. Nestlé markets and distributes chocolate products that are made with cocoa beans sourced from West Africa, including Nestlé Crunch, 100 Grand, Baby Ruth, Butterfingers, Nestlé Toll House, Nestlé Hot Cocoa Mix, Nestlé Milk Chocolate, and Nestlé seasonal confections. Id. ¶ 2. Some of the cocoa beans that Nestlé sources from West Africa come from Côte d'Ivoire, where children and forced laborers engage in dangerous tasks while harvesting cocoa, including burning and clearing fields with machetes, spraying pesticides, using sharp tools to break open cocoa pods, and carrying heavy loads of cocoa pods and water. Id. ¶¶ 1-2, 5-6. Some children become laborers after being sold by their parents to traffickers, while others are kidnapped and then sold into conditions of bonded labor. Id. ¶ 6. The children who labor on cocoa farms in Côte d'Ivoire are frequently not paid for their work, forced to work long hours, held against their will on isolated farms, and punished by their employers with physical abuse. Id.
The abuses suffered by children and forced laborers in Côte d'Ivoire are well-documented, and Nestlé has acknowledged that it sources cocoa in areas where such practices occur. Id. ¶¶ 7-9, 21-23, 25-49. In 2001, Nestlé and other chocolate manufacturers signed the Protocol for the Growing and Processing of Cocoa Beans and Their Derivative Products in a Manner that Complies with ILO Convention 182 Concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labor ("Harkin-Engel Protocol"). Id. ¶ 29. The Harkin-Engel Protocol sought to develop and implement a public certification program to eliminate the worst forms of child labor in the growing of cocoa beans and their derivative products by July 1, 2005, but to date, Nestlé and the other signatories have not yet established this system. Id. ¶¶ 29, 31-33. In 2009, Nestlé launched the Nestlé Cocoa Plan to help eliminate the use of child and slave labor in the Ivorian cocoa industry. Id. ¶ 23. In 2012, Nestlé partnered with the Fair Labor Association to investigate whether children were working on cocoa farms that supplied Nestlé's factories. Id. ¶ 39. After the Fair Labor Association determined that children were, indeed, working on cocoa farms in its supply chain, Nestlé pledged to create a robust monitoring and remedy scheme to eradicate child labor in its supply chain. Id. A 2015 audit by the Fair Labor Association, however, demonstrated that Nestlé has not yet achieved this goal, and that child and forced laborers continue to work at farms connected to Nestlé. Id. ¶ 48.
Nestlé does not disclose any information about the child and slave labor practices in its supply chain on its chocolate product packaging at the point of sale. Id. ¶¶ 23, 54-56. On some of its products, Nestlé includes information about the Nestlé Cocoa Plan that states, "[t]he Nestlé Cocoa Plan works with UTZ Certified to help improve the lives of cocoa farmers and the quality of their products, www.nestlecocoplan.com." Id. ¶¶ 55-56. Plaintiff, who purchased Nestlé's chocolate products from various retail stores including Stop & Shop in Plymouth, Massachusetts from 2014 through the present, claims that she and other consumers would not have purchased or paid as much for Nestlé's products *31had it disclosed the truth about the child and slave labor in its supply chain. Id. ¶¶ 15, 102. The Complaint alleges that Nestlé's omissions are deceptive and unfair under Chapter 93A, and that Nestlé has been unjustly enriched by its conduct. Id. ¶¶ 98-99, 105.
Plaintiff filed this lawsuit on February 12, 2018, seeking to represent herself and all other consumers who purchased Nestlé's chocolate products in Massachusetts in the last four years. See generally Compl. Plaintiff also filed substantially similar actions against Mars, Inc., Mars Chocolate North America, LLC, the Hershey Company, and Hershey Chocolate & Confectionery Corp. [See Tomasella v. Mars, Inc., 18-cv-10359-ADB (D. Mass.) (hereinafter "Mars Action"), ECF No. 1; Tomasella v. The Hershey Co., 18-cv-10360-ADB (D. Mass.) (hereinafter "Hershey Action"), ECF No. 1]. On April 19, 2018, Defendants in all three cases filed motions to dismiss. [ECF No. 19; Mars Action, ECF No. 18; Hershey Action, ECF No. 20]. On June 14, 2018, Plaintiff filed her oppositions to Defendants' motions. [ECF No. 22; Mars Action, ECF No. 21; Hershey Action, ECF No. 23]. On July 13, 2018, Defendants in the instant action and the Mars Action filed their reply briefs, and on July 17, 2018, Defendants in the Hershey Action filed their reply brief. [ECF No. 26; Mars Action, ECF No. 25; Hershey Action, ECF No. 27]. On July 23, 2018, Plaintiff filed a sur-reply brief in all three cases. [ECF No. 29; Mars Action, ECF No. 28; Hershey Action, ECF No. 30].
II. STANDARD OF REVIEW
On a motion to dismiss for failure to state a claim, the Court accepts as true all well-pleaded facts in the complaint and draws all reasonable inferences in the light most favorable to the plaintiff. United States ex rel. Hutcheson v. Blackstone Med., Inc.,
When assessing the sufficiency of a complaint, the Court first "separate[s] the complaint's factual allegations (which must be accepted as true) from its conclusory legal allegations (which need not be credited)." Maddox,
III. DISCUSSION
A. Mass. Gen. Laws ch. 93A Claim
Nestlé seeks dismissal of Plaintiff's Chapter 93A claim. Section 2(a) of Massachusetts General Laws Chapter 93A prohibits "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." Mass. Gen. Laws ch. 93A, § 2(a). Although there is no static definition or precise test for determining whether conduct is unfair or deceptive, "Massachusetts courts have laid out a number of helpful guideposts." Hanrahran v. Specialized Loan Servicing, LLC,
Nestlé argues that the Court should dismiss Plaintiff's Complaint because she has not adequately pleaded that Nestlé engaged in deceptive or unfair conduct or alleged a cognizable injury under First Circuit and Supreme Judicial Court precedent, and because her proposed interpretation of Chapter 93A would regulate Nestlé's speech in violation of the First Amendment. [ECF No. 20 at 8-20]. Plaintiff responds that she has stated a claim for deception under Chapter 93A by alleging that Nestlé's failure to disclose child labor in its supply chain is likely to deceive consumers and that the use of such child labor is material to customers making purchasing decisions. [ECF No. 22 at 8-13]. Plaintiff also contends that she has adequately alleged that Nestlé's conduct is unfair under Chapter 93A because child labor and slavery fall within established international concepts of unfairness, and Nestlé's failure to disclose its use of such labor is unethical and substantially injurious to consumers. [Id. at 13-15]. Further, Plaintiff claims that the Complaint states a cognizable injury under Chapter 93A because it alleges that Nestlé's deceptive and unfair conduct caused its customers to receive a product worth less than the one for which they paid. [Id. at 4-8]. Finally, Plaintiff asserts that disclosure of the child and slave labor in Nestlé's supply chain is reasonably related to Chapter 93A's statutory purpose of preventing consumer deception, is not unduly burdensome, and is consistent with Supreme Court and First Circuit precedent concerning the regulation *33of commercial speech under the First Amendment. [Id. at 15-19].
1. Deceptive Conduct Under Chapter 93A
Deception liability under Chapter 93A is not limited to false or misleading affirmative statements. "A business may also violate [Chapter] 93A through an omission, as when it 'fails to disclose to a buyer or prospective buyer any fact, the disclosure of which may have influenced the buyer or prospective buyer not to enter into the transaction.' " Carlson v. The Gillette Co., No. 14-cv-14201-FDS,
Plaintiff alleges that Nestlé deceived consumers by failing to disclose the existence of child and slave labor in its supply chain on its product packaging at the point of sale. Compl. ¶¶ 62, 96-98. She therefore premises her theory of liability on the omission of facts that have nothing to do with the central characteristics of the chocolate products sold, such as their physical characteristics, price, or fitness for consumption. Moreover, Plaintiff does not claim that Nestlé has made any false statements about child or slave labor on its product packaging, or that Nestlé's omissions turned an affirmative representation into a misleading half-truth.
Neither Plaintiff nor Nestlé has cited any Massachusetts authority addressing whether pure omissions are actionable under Chapter 93A. In lieu of controlling case law, Plaintiff points to 940 Mass. Code Regs. § 3.16, which provides that:
an act or practice is a violation of M.G.L. c. 93A, § 2 if ... [a]ny person or other legal entity subject to this act fails to disclose to a buyer or prospective buyer any fact, the disclosure of which may have influenced the buyer or prospective buyer not to enter into the transaction.
Despite the broad language of this regulation, Massachusetts courts have observed that Section 3.16(2)"adds little, if anything, to the provisions of [Chapter 93A] ... itself," Underwood v. Risman,
Further, Section 2(b) of Chapter 93A mandates that courts, in construing which acts are deceptive under Chapter 93A, must be "guided by the interpretations given by the Federal Trade Commission and the Federal Courts to [the Federal *34Trade Commission Act (FTCA) ]," which similarly proscribes "unfair or deceptive acts or practices in or affecting commerce."
The Commission found that International Harvester's conduct was a pure omission and did not fall into either category of actionable omissions because, under the circumstances, the company's silence said nothing deceptive about fuel geysering. See
First, we could not declare pure omissions to be deceptive without expanding that concept virtually beyond limits. Individual consumers may have erroneous preconceptions about issues as diverse as the entire range of human error, and it would be both impractical and very costly to require corrective information on all such points. Second, pure omissions do not presumptively or generally reflect a deliberate act on the part of the seller, and so we have no basis for concluding, without further analysis, that an order requiring corrective disclosure would necessarily engender positive net benefits for consumers or be in the public interest.
If we were to ignore this last consideration, and were to proceed under a deception theory without a cost-benefit analysis, it would surely lead to perverse outcomes. The number of facts that may be material to consumers-and on which they may have prior misconceptions-is literally infinite. Consumers may wish to know about the life expectancy of clothes, or the sodium content of canned beans, or the canner's policy on trade with Chile. Since the seller will have no way of knowing in advance which disclosure is important to any particular consumer, he will have to make complete disclosures to all. A television ad would be completely buried under such disclaimers, and even a full-page newspaper ad would hardly be sufficient for the purpose. For example, there are literally dozens of ways in which one can be injured while riding a tractor, not all of them obvious before the fact, and under a simple deception analysis these would presumably all require affirmative disclosure.
*35The resulting costs and burden on advertising communication would very possibly represent a net harm for consumers.
Although the Court declines to hold that pure omissions as a matter of law are never actionable under Chapter 93A's deception prong, the Court finds the Commission's omissions framework to be instructive when considering whether a seller's nondisclosures have the potential to mislead Massachusetts consumers under Chapter 93A.
2. Unfair Conduct Under Chapter 93A
Plaintiff also alleges that Nestlé's conduct is unfair under Chapter 93A. Although the challenged omissions are not deceptive under Chapter 93A, they may nonetheless be unfair if they "1) [are] within the penumbra of some common law, statutory or other established concept of unfairness, 2) [are] immoral, unethical, oppressive or unscrupulous and 3) cause[ ] substantial injury to consumers, competitors or other business entities." President & Fellows of Harvard Coll. v. Certplex, Ltd., No. 15-cv-11747-NMG,
The Court finds that Plaintiff has failed to allege that Nestlé's omissions are within the penumbra of any common law, statutory or other established concept of unfairness. Plaintiff argues that Nestlé's conduct falls within "well-established international concepts of unfairness" because the United Nations' 1948 Universal Declaration of Human Rights, the United Nations' International Labor Convention No. 182, and the Tariff Act condemn child or slave labor. [ECF No. 22 at 13-14]. Plaintiff's Complaint does not allege that Nestlé violated Chapter 93A by utilizing child and slave labor, however. The crux of her claim is that Nestlé engaged in unfair conduct by failing to disclose the existence of child and slave labor in its supply chain on the packaging of its products. In other words, Plaintiff is complaining about this omission and not about the underlying conduct.
Furthermore, the Court finds that Plaintiff has failed to allege that the challenged omissions are immoral, unethical, oppressive or unscrupulous, or that Nestlé caused substantial injury to its customers. In her Complaint, Plaintiff claims that she and other consumers were injured by Nestlé's conduct because they would not have purchased nor paid as much for its chocolate products had they known the truth about its labor practices. Compl. ¶ 102. She concedes, however, that Nestlé has repeatedly disclosed that its supply chain likely is tainted by child and slave labor. See, e.g., Compl. ¶¶ 21, 23, 39, 49. Where Nestlé has made such information readily available to consumers on its websites, the absence of such information on its actual product packaging is not immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers. See Hodsdon v. Mars, Inc.,
Thus, the Complaint does not state a claim for unfair conduct upon which relief could be granted under Chapter 93A.
*37B. Unjust Enrichment Claim
Count Two alleges a claim for unjust enrichment. "Unjust enrichment is defined as 'retention of money or property of another against the fundamental principles of justice or equity and good conscience.' " Santagate v. Tower,
Nestlé argues that Plaintiff's unjust enrichment claim must be dismissed because she has an adequate remedy under Chapter 93A and, under Massachusetts law, a plaintiff who has an adequate remedy at law cannot maintain a parallel claim for unjust enrichment, even if that remedy is not viable. [ECF No. 20 at 20]. The Court agrees. See Shaulis v. Nordstrom, Inc.,
IV. CONCLUSION
For the foregoing reasons, Nestlé's motion to dismiss Plaintiff's claims for a violation of Mass. Gen. Laws ch. 93A (Count One) and unjust enrichment (Count Two) is GRANTED.
SO ORDERED.
Unless otherwise indicated, ECF citations refer to the electronic docket in Tomasella v. Nestlé USA, Inc., 18-cv-10269-ADB (D. Mass.).
As described supra at 30-31, some of Nestlé's products contain a certification about its "Cocoa Plan" that states that "[t]he Nestlé Cocoa Plan works with UTZ Certified to help improve the lives of cocoa farmers and the quality of their products." Compl. ¶¶ 55-56. Plaintiff does not allege these affirmative representations regarding the Nestlé Cocoa Plan are false or misleading half-truths, however.
The Court "need only be guided by, and not strictly adhere to" the Federal Trade Commission's interpretations of the term "deceptive" under Federal law. Aspinall,
Under Massachusetts law, to survive dismissal, Plaintiff must plausibly allege the potential deception of reasonable consumers. Aspinall,
A reasonable consumer might find information about Nestlé's labor practices important. However, "the law sensibly does not require sellers to disclose all information that a consumer might find important," as "there is a potentially enormous amount of information that at least some consumers might wish to know when deciding whether to purchase or use" any given product. Statement of Acting Chairman Maureen K. Ohlhausen, In the Matter of Lenovo, Inc. (Sept. 5, 2017), https://www.ftc.gov/public-statements/2017/09/statement-acting-chairman-maureen-k-ohlhausen-matter-lenovo-inc (citing In re Int'l Harvester,
The underlying conduct may fall within the penumbra of the concepts of unfairness established by the United Nations' 1948 Universal Declaration of Human Rights, the United Nations' International Labor Convention No. 182, and the Tariff Act, but that is distinguishable from whether Nestlé's omissions about such conduct are within the penumbra of any common law, statutory or other established concept of unfairness.
As Plaintiff has failed to allege that Nestlé's conduct is deceptive or unfair, the Court declines to address whether Plaintiff's Complaint states a cognizable injury under Chapter 93A or whether the First Amendment bars her claim.
Reference
- Full Case Name
- Danell TOMASELLA, on Behalf of Herself and All Others Similarly Situated v. NESTLÉ USA, INC., a Delaware Corporation
- Cited By
- 7 cases
- Status
- Published