First Circuit Sours on Child-Labor Disclosure for Candy Bars

A worker holds dried cacao seeds at a plantation in Cano Rico, Venezuela, on Nov. 15, 2012. (AP Photo/Ariana Cubillos)

BOSTON (CN) – Unappetizing disclosures about the children who labor in West African cocoa fields are unlikely to be coming soon to a chocolate bar near you following oral arguments Tuesday at the First Circuit.

“I’m having trouble seeing a limiting principle,” said U.S. Circuit Judge William Kayatta Jr., an Obama appointee. “I can think of dozens of things that a consumer might want to know about – a company owner’s politics, whether the product was manufactured in a country that was Communist or followed Sharia law. … How big is the label going to have to be?”

The hearing in Boston follows an appeal by Danell Tomasella to revive her federal complaint against confectionary giants Nestle USA, Mars and Hershey under a consumer-protection law that prohibits unfair and deceptive trade practices.

Tomasella’s lawyer, Elaine Byszewski told the court that the companies had vowed to eliminate production related to the worst forms of child labor in 2001, but this type of labor has increased 46 percent since then. U.S. Department of Labor figures show that more than 2.1 million children worked between 2013 and 2014 in the cocoa sector of Côte d’Ivoire and Ghana, countries responsible for more than half of the world’s annual cocoa production.

Byszewski, a partner at Hagens Berman in Los Angeles, noted that the children are as young as 5, working all day either spraying pesticides, dragging heavy sacks or using machetes to cut bean pods. Many of the children were abducted from their families and sold into slavery. They work without pay and are often subject to harsh physical punishment. As opposed to children engaged in other agricultural work, those in the cocoa trade experienced higher rates of injuries, according to a 2015 study by Tulane University commissioned by the Labor Department.

At Tuesday’s hearing, the judges agreed that the conditions were appalling. What they found less clear, however, was how the candy companies deceive consumers in leaving such information off the wrapper.

“There’s no duty to talk about everything under the sun on a label,” said U.S. Circuit Judge Sandra L. Lynch, a Clinton appointee. “There’s not enough room.”

Byszewski said that unlike a fraud case, which involves misrepresentation, Massachusetts law imposes an affirmative duty to disclose material information.

“But why is it material?” Lynch asked. “Why, when someone is in a grocery store buying a candy bar, is it material to say that child labor is used in other parts of the world?”

Byszewski said this was a unique situation because there is a consensus that forced child labor is wrong. “It’s not like the company owner’s views on guns or birth control, where there’s no consensus,” she argued.

“So a consensus requires disclosure?” Lynch asked. “A label must disclose that there’s a problem if there’s a consensus that there’s a problem?”

Kayatta pressed further. “What if a product is made in a South Asian country with inadequate wages or bad factory conditions, or it poisons people’s drinking water?” he asked. “Is there a duty to disclose?”

Byszewski stood silently for a long time trying to formulate an answer.

“I’m having the same difficulty,” Kayatta finally said. “It’s a slippery slope.”

U.S. Circuit Judge Juan Torruella, a Reagan appointee, suggested that the problem was serious but that a lawsuit might not be the best forum in which to address it. But Byszewski replied that informed consumers could use the “power of the pocketbook” to make a difference.

Later, Lynch asked Hershey’s lawyer, Jonah Knobler of Patterson Belknap in New York, how to create a limiting principle under the law.

Knobler cited FTC guidelines and said information should be considered “material” if it pertains to a product’s fitness for its intended use or to a safety hazard. But he said the court didn’t have to come up with a grand scheme; it could resolve this case simply by holding that there is no duty to disclose information about “moral issues” on a product label.

Knobler was echoed by attorneys Bryan Merryman of White & Case in Los Angeles, who represented Nestle, and David Horniak of Williams & Connolly in Washington, D.C., who represented Mars.

In its brief, Nestlé claimed that it had spent $110 million since 2009 on improving labor conditions in West Africa and that it disclosed the risk of child labor on its website. It also argued that the plaintiff suffered no injury because she paid a fair price for the candy and that forcing the company to discuss child labor on its packaging would violate the First Amendment.

%d bloggers like this: