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Hodsdon v. Mars, Inc.

United States Court of Appeals for the Ninth Circuit

December 7, 2017, Argued and Submitted, Pasadena, California; June 4, 2018, Filed

No. 16-15444

Opinion

 [*859]  TASHIMA, Circuit Judge:

In this action, the putative class plaintiff alleges that California consumer protection laws require certain food manufacturers to disclose, on their products' labels, that the products' supply chain may involve child or slave labor. Regrettably, despite some efforts to eradicate the practices, child labor and slave labor are modern-day scourges,  [*860]  and manufacturers [**3]  that source materials from around the world may benefit from that illicit labor. This issue has gained public attention in recent years such that many consumers now consider in their purchasing decisions the labor practices behind household products. In fact, some manufacturers have decided to market their products as free of unsavory labor practices, and some legislatures have attempted to further educate the public about modern-day slavery.

Nonetheless, the California consumer protection laws do not obligate the defendants-appellees to label their goods as possibly being produced by child or slave labor. In the absence of any affirmative misrepresentations by the manufacturer, we hold that the manufacturers do not have a duty to disclose the labor practices in question, even though they are reprehensible, because they are not physical defects that affect the central function of the chocolate products.

One of the key issues in this case is the continued viability of Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012). Defendants-appellees rely on Wilson to argue that plaintiff-appellant has not alleged that defendants-appellees had a duty to disclose because Wilson stands for the premise that plaintiffs in pure omission cases must plead [**4]  that the undisclosed information created a safety hazard. Plaintiff-appellant acknowledges the holding in Wilson, but urges us to deviate from that precedent, arguing that intervening California Courts of Appeal cases render our interpretation of California law incorrect. It is true that recent state-court cases have cast doubt on the breadth of this Circuit's precedent about the duty to disclose, but the facts before us today do not compel us to reexamine that precedent in this case. This is so because, even applying the tests from the intervening California cases, Plaintiff cannot state a claim. We therefore affirm the district court's order of dismissal.

I. FACTUAL AND PROCEDURAL BACKGROUND

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891 F.3d 857 *; 2018 U.S. App. LEXIS 15013 **; 2018 WL 2473486

ROBERT HODSDON, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. MARS, INC., a Delaware corporation; MARS CHOCOLATE NORTH AMERICA LLC, a Delaware company, Defendants-Appellees.

Prior History:  [**1] Appeal from the United States District Court for the Northern District of California. D.C. No. 3:15-cv-04450 RS. Richard Seeborg, District Judge, Presiding.

Hodsdon v. Mars, Inc., 162 F. Supp. 3d 1016, 2016 U.S. Dist. LEXIS 19268 (N.D. Cal., Feb. 17, 2016)

Disposition: AFFIRMED.

CORE TERMS

duty to disclose, chain, prong, unfair, consumer, labels, disclose, omission, labor practice, chocolate, products, slave labor, cases, manufacturers, child labor, failure to disclose, fraudulent, tethered, safety hazard, immoral, blight, courts, warranty period, functionality, decisions, violating, slave, worst

Antitrust & Trade Law, Consumer Protection, Torts, Fraud & Misrepresentation, Nondisclosure, Elements, Commercial Law (UCC), Sales (Article 2), Contract Provisions, Warranties, Business Torts, Unfair Business Practices, Consumer Protection, False Advertising, State Regulation