Laura Dana v. the Hershey Co.

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 10, 2018
• Docket: 16-15789
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION JUL 10 2018 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

LAURA DANA, on behalf of herself and No. 16-15789 all others similarly situated, DC No. CV 15-4453 JCS Plaintiff-Appellant,

v. MEMORANDUM*

THE HERSHEY COMPANY, a Delaware Corporation; HERSHEY CHOCOLATE & CONFECTIONERY CORPORATION, a Delaware Corporation,

Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Joseph C. Spero, Magistrate Judge, Presiding

Argued and Submitted December 7, 2017 Pasadena, California

Before: TASHIMA, W. FLETCHER, and BERZON, Circuit Judges.

Plaintiff-Appellant Laura Dana appeals the dismissal of her putative class

action lawsuit against Defendants-Appellees The Hershey Company and

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Hershey Chocolate & Confectionery Corporation (collectively, “Hershey”).1

Hershey is one of the world’s largest chocolate companies and sources some of its

cocoa beans from the Ivory Coast (or Côte d’Ivoire). The Bureau of International

Labor Affairs of the United States Department of Labor recognizes that cocoa

beans from the Ivory Coast are produced using “the worst forms of child labour.”

Therefore, Hershey’s supply chain may include child and forced labor, but the

company does not disclose this on its labels.

Dana argues that by not labeling its products, Hershey misled purchasers and

thereby violated California’s consumer protection laws. Specifically, Dana brings

suit under (1) California Civil Code §§ 1750, et seq., the Consumers Legal

Remedies Act (“CLRA”); (2) California’s Business & Professions Code §§ 17200,

et seq., the Unfair Competition Law (“UCL”); and (3) California’s Business &

Professions Code §§ 17500, et seq., the False Advertising Law (“FAL”).

The district court dismissed all of Dana’s claims. We review de novo,

Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1103 (9th Cir. 2013), and affirm.

1 This appeal is one of seven related cases that were consolidated for oral argument. For a more fulsome discussion of the issues in these appeals, please refer to the published opinion in Hodsdon v. Mars, Inc., __ F.3d __, No. 16-15444, 2018 WL 2473486 (9th Cir. Jun. 4, 2018). 2 1. Dana argues that Hershey had a duty to disclose, on its labels, the

existence of child labor in its supply chain. Plaintiff failed to allege that the

existence of child labor in the supply chain affects the chocolate products’ central

function. See Hodsdon, 2018 WL 2473486 at *6. Therefore, Hershey was under

no duty to disclose Id.2

2. “[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., 51 Cal.

Rptr. 3d 118, 126 (Ct. App. 2006) (emphasis added). Therefore, Hershey did not

violate the CLRA.

3. The UCL prohibits “any unlawful, unfair or fraudulent business act or

practice.” Cal. Bus. & Prof. Code § 17200. “Because Business & Professions

Code § 17200 is written in the disjunctive, it establishes three varieties of unfair

competition–acts or practices which are unlawful, or unfair, or fraudulent.” Cel-

Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527, 540 (Cal. 1999)

2 We assume for the purposes of this appeal that the existence of child labor in the supply chain is material to consumers. We do not reach whether Plaintiff sufficiently alleged that Defendant had the requisite exclusivity of knowledge over the consumer. 3 (citations and internal quotation marks omitted). Plaintiff claims that Hershey is

liable under all three varieties.

Hershey is not liable under the unlawful prong because Dana did not state a

claim under the CLRA. Likewise, Dana cannot state a claim under the fraudulent

prong because Hershey did not have a duty to disclose the forced labor. See

Berryman v. Merit Prop. Mgmt., Inc., 62 Cal. Rptr. 3d 177, 188 (Ct. App. 2007).

Finally, Dana cannot state a claim under the unfair prong pursuant to either of the

California tests. See Hodsdon, 2018 WL 2473486, at *7–8. Therefore, Dana did

not state a UCL claim.

4. For the purposes of the FAL, whether an advertisement is misleading

is determined by asking whether a reasonable consumer would likely be deceived.

See Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1162 (9th Cir. 2012). Dana’s

FAL claims fail because “a failure to disclose a fact one has no affirmative duty to

disclose is [not] ‘likely to deceive’ anyone.” See Daugherty, 51 Cal. Rptr. 3d at

128.

• ! •

The judgment of the district court is

4 AFFIRMED.3

3 Plaintiff has an outstanding motion to certify a question to the California Supreme Court; however, the question is not outcome determinative. See Cal. R. of Court 8.548(a)(1) (“The [California] Supreme Court may decide a question of California law if . . . [t]he decision could determine the outcome of a matter pending in the requesting court.”). We therefore deny the motion to certify. 5