Commentary: Misleading or incomplete disclosures about cos' corporate social responsibility can expose them to consumers' lawsuits
Author: Stephen E. O'Day, Edward A. Ezekiel, Smith Gambrell & Russell LLP via mondaq, Published on: 8 June 2018
"Corporate Social Responsibility Disclosures: Fodder for Class Action Lawsuits?", 7 June 2018
Claims and investigations based on corporate social responsibility ("CSR") disclosures are becoming increasingly common in the U.S. and internationally. Numerous theories are advanced in claims asserted for allegedly untrue, misleading or incomplete reports and disclosures about a company's social responsibility initiatives and accomplishments...The CTSCA [California Transparency in Supply Chains Act 2010] requires retail sellers and manufacturers to "disclose to what extent, if any," they take steps to "eradicate slavery and human trafficking from [their] direct supply chain for tangible goods offered for sale."...The CTSCA does not expressly include a private right of action...Even so, numerous lawsuits have been filed in California alleging that covered companies' disclosures under the CTSCA were incomplete, misleading, and/or deceptive in violation of other California consumer protection statutes...[I]n Melanie Barber, et. al. v. Nestle USA...Nestle...did not disclosure on its Fancy Feast products that some of the seafood used to make Fancy Feast was likely produced by forced labor in Southeast Asia...The plaintiffs...argued that Nestle was obligated to make additional disclosures...Consumers alleged that they would not have purchased the product if they realized that some of the seafood...may have been sourced from forced labor...The CTSCA "does not mandate that business implement new measures to ensure that their product supply chains are free from human trafficking and slavery."...Instead, "the law only requires that covered businesses make the required disclosures – even if they do little or nothing at all to safeguard their supply chains."...
Related companies: Nestlé