worsening child labor problem makes falsity of Nestle's socially responsible cocoa claims plausible

Walker v. Nestle USA, Inc., 2022 WL 901553, No. 3:19-cv-723-L-DEB (S.D. Cal. Mar. 28, 2022)

Walker alleged that Nestle’s product labels falsely lead consumers to believe that the products were produced in accordance with environmentally and socially responsible standards, including references to the “NESTLÉ® Cocoa Plan,” “UTZ” (a certifier), sustainable sourcing, and representations that Nestle supports cocoa farmers or helps improve their lives. E.g., “Supporting farmers for better chocolate. The NESTLÉ® Cocoa Plan works with UTZ to help improve the lives of cocoa farmers and the quality of their products.” In fact, Walker alleged, Nestle sources its cocoa from West African plantations which rely on child labor and child slave labor, contribute to deforestation, and use other practices harmful to the environment. According to Nestle’s own alleged statements, the child labor conditions have worsened rather than improved since the inception of the “NESTLÉ® Cocoa Plan”: from 2017 to 2019, the number of children working on cocoa farms nearly doubled.

Walker alleged CLRA and UCL violations.

The court found deception plausible:

The statements on Defendant’s products that the cocoa is “sustainably sourced” based on the “NESTLÉ® Cocoa Plan,” which is said to “help improve” the lives of farmers and “support” them, are at odds with the fact that the child labor problem the Nestlé Cocoa Plan is said to address has grown more, and not less, severe. The addition of the UTZ certification enhances the advertising statements by suggesting they are true because they were approved by a third party.

Article III standing: Walker alleged that she bought Nestle’s hot cocoa mix and morsels products, in reliance on the statements on product packaging, and wound not have purchased the products has she known that the statements were false. (She also alleged that she would like to purchase the products in the future “if and when they [are] produced as advertised[, but] can no longer rely on the accuracy of the representations ... in deciding whether to purchase these products, and ... cannot readily determine whether the misrepresentations have been corrected.” That was enough to allege Article III standing for herself and as a putative class representative. What other products could be covered in the class was a question for the class certification stage.