FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

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.

No. 16-15444

D.C. No.

3:15-cv-04450 RS

OPINION

Appeal from the United States District Court

for the Northern District of California

Richard Seeborg, District Judge, Presiding

Argued and Submitted December 7, 2017

Pasadena, California

Filed June 4, 2018

Before: A. Wallace Tashima, William A. Fletcher,

and Marsha S. Berzon, Circuit Judges.

Opinion by Judge Tashima
2 HODSDON V. MARS, INC.

SUMMARY*

California Law

The panel affirmed the district court’s dismissal of

plaintiff’s consumer protection claims in a putative class

action alleging that Mars, Inc., a chocolate manufacturer, had

a duty to disclose on its labels the labor practices that may

have tainted its supply chain.

Concerning plaintiff’s duty to disclose claims, the panel

held that California consumer protection laws did not obligate

Mars, Inc. to label its goods as possibly being produced by

child or slave labor. The panel further held that in the

absence of any affirmative misrepresentations by the

manufacturer, the manufacturer did not have a duty to

disclose the labor practices in question, even though they

were reprehensible, because they were not physical defects

that affected the central function of the chocolate products. 

The panel concluded that, absent a duty to disclose, plaintiff’s

Consumers Legal Remedies Act, Unfair Competition Law,

and False Advertising Law claims were foreclosed.

The panel held that plaintiff’s claims failed under the

unfair prong of the Unfair Competition Law under either the

Cel-Tech test, Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel.

Co., 973 P.2d 527, 540 (Cal. 1999), or the South Bay test,

outlined in S. Bay Chevrolet v. Gen. Motors Acceptance

Corp., 85 Cal. Rptr. 2d 301, 316 (Ct. App. 1999).

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
HODSDON V. MARS, INC. 3

COUNSEL

Steve W. Berman (argued), Hagens Berman Sobol Shapiro

LLP, Seattle, Washington; Elaine T. Byszewski, Hagens

Berman Sobol Shapiro LLP, Pasadena, California; for

Plaintiff-Appellant.

Stephen D. Raber (argued), Richmond T. Moore, and Joelle

Perry Justus, Williams & Connolly LLP, Washington, D.C.,

for Defendants-Appellees.

Tina Charoenpong, Deputy Attorney General; Michele Van

Gelderen, Supervising Deputy Attorney General; Nicklas A.

Akers, Senior Assistant Attorney General; Office of the

Attorney General, Los Angeles, California; for Amicus

Curiae State of California.

OPINION

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, and

manufacturers 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
4 HODSDON V. MARS, INC.

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 defendantsappellees had a duty to disclose because Wilson stands for the

premise that plaintiffs in pure omission cases must plead 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.
HODSDON V. MARS, INC. 5

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff-appellant Robert Hodsdon (“Plaintiff”) is a

California citizen who purchased defendants-appellees’

(together, “Mars”) chocolate products at retail stores and

viewed the labeling. Hodsdon alleges he would not have

bought the chocolate or would not have paid as much for it if

the manufacturer had disclosed, on the label itself, the

existence of child and slave labor in its supply chain.

The Ivory Coast (or Côte d’Ivoire) is the world’s largest

producer of cocoa beans, the raw ingredient for chocolate. 

Like most chocolate manufacturers, Mars sources at least

some cocoa beans from the Ivory Coast. Some cocoa beans

from the Ivory Coast are produced using what the

International Labor Organization (“ILO”) calls “the worst

forms of child labour.” The Bureau of International Labor

Affairs of the U.S. Department of Labor describes the

situation in the Ivory Coast as follows:

[C]hildren . . . are working under conditions

of forced labor on Ivoirian cocoa farms . . . . 

Some children are sold by their parents to

traffickers, some are kidnapped, and others

migrate willingly but fall victim to traffickers

who sell them to recruiters or farmers, where

they end up in conditions of bonded labor

. . . . Some children are forced to perform

dangerous tasks . . . .

Mars recognizes that its supply chains may be infected by

the worst forms of child labor, but does not disclose this on

its product labeling. However, in compliance with the

California Transparency in Supply Chains Act of 2010
6 HODSDON V. MARS, INC.

(“Supply Chains Act”), Mars does disclose on its website its

efforts to combat slavery and labor abuses in its supply

chain.1

Plaintiff brought this action under California’s Consumers

Legal Remedies Act (“CLRA”), Unfair Competition Law

(“UCL”), and False Advertising Law (“FAL”), alleging that

Mars has a duty to disclose on its labels the labor practices

that may taint its supply chain. Plaintiff’s CLRA claim is that

Mars misrepresented the source, characteristics, and standard

of the chocolate products by omitting information about labor

practices on its label. See Cal. Civ. Code § 1770(a)(2), (5),

(7). As to the UCL, Plaintiff claims that Mars’ conduct came

within the UCL’s prohibition on “any unlawful, unfair or

fraudulent business act or practice” by: (1) violating the

“unlawful” prong based on its violation of the CLRA;

(2) violating the “fraudulent” prong because it omitted

information about the forced labor at the point of sale; and

(3) violating the “unfair” prong because the omission

contravened legislative policy against child and slave labor,

1

 The Supply Chains Act, Cal. Civ. Code § 1714.43, was enacted in

2010. The California Attorney General later described the requirements

of the Act:

This Act requires large retailers and manufacturers

doing business in California to disclose on their

websites their “efforts to eradicate slavery and human

trafficking from [their] direct supply chain for tangible

goods offered for sale.” . . . Companies subject to the

Act must post disclosures on their Internet websites

related to five specific areas: verification, audits,

certification, internal accountability, and training.

KAMALA D. HARRIS, CAL. DEP’T OF JUSTICE, THE CALIFORNIA

TRANSPARENCY IN SUPPLY CHAINS ACT: A RESOURCE GUIDE, i (2015).
HODSDON V. MARS, INC. 7

or because Mars’ “participation in a supply chain involving

[slave labor] is immoral, unethical, oppressive, unscrupulous

and injurious to consumers.” See Cal. Bus. & Prof. Code

§ 17200. Finally, Plaintiff’s FAL claim also is based on

Mars’ alleged failure to disclose its labor practices on its

label. See id. § 17500.

The district court dismissed the complaint for failure to

state a claim. Fed. R. Civ. P. 12(b)(6). Plaintiff has timely

appealed.

II. JURISDICTION AND STANDARD OF REVIEW

The district court had jurisdiction under 28 U.S.C.

§ 1332(a). We have jurisdiction under 28 U.S.C. § 1291, and

review de novo the district court’s dismissal for failure to

state a claim. See Hinojos v. Kohl’s Corp., 718 F.3d 1098,

1103 (9th Cir. 2013).

III. ANALYSIS

A. Duty to Disclose

Plaintiff does not allege any affirmative misstatement and

relies solely on an omission theory of consumer fraud. 

Omissions may be the basis of claims under California

consumer protections laws, but “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).

Mars argues that to establish a duty to disclose, under the

Ninth Circuit’s interpretation of California law, Plaintiff must
8 HODSDON V. MARS, INC.

always allege that the undisclosed information “caused an

unreasonable safety hazard.” Wilson, 668 F.3d at 1143. 

Plaintiff urges us to rule that Wilson is no longer good law

after more recent California Courts of Appeal opinions, and

to apply the tests for duty to disclose from those cases. While

the recent California cases do cast doubt on whether Wilson’s

safety-hazard requirement applies in all circumstances, we

have no occasion in this case to consider whether the later

state-court cases have effectively overruled Wilson. This is

true because even applying Plaintiff’s proposed tests, derived

from his reading of the more recent California decisions, he

cannot state a claim. Specifically, Plaintiff has not

sufficiently alleged that the defect in question—the existence

of child labor in the supply chain—affects the central

functionality of the chocolate products. Therefore, without

either relying on or overruling Wilson, we hold that Plaintiff

has not established that Mars had a duty to disclose the labor

practices on its labels.

The primaryCalifornia cases on which Plaintiff relies are

Collins v. eMachines, Inc., 134 Cal. Rptr. 3d 588 (Ct. App.

2011), and Rutledge v. Hewlett-Packard Co., 190 Cal. Rptr.

3d 411 (Ct. App. 2015). Plaintiff has not sufficiently alleged

that Mars has a duty to disclose under these cases.

In Collins, the plaintiffs were a putative class of

consumers that purchased eMachine computers. 134 Cal.

Rptr. 3d at 591. The plaintiffs complained that a floppy disk

controller defect, which manifested itself during the warranty

period, caused critical data corruption of the hard drive. Id.

at 591–92. Citing the four-prong test from LiMandri v.

Judkins, 60 Cal. Rptr. 2d 539 (Ct. App. 1997), the plaintiffs

asserted that eMachines had a duty to disclose the defect. 

Collins, 134 Cal. Rptr. 3d at 593. The court explained:
HODSDON V. MARS, INC. 9

A failure to disclose a fact can constitute

actionable fraud or deceit in four

circumstances: (1) when the defendant is the

plaintiff’s fiduciary; (2) when the defendant

has exclusive knowledge of material facts not

known or reasonably accessible to the

plaintiff; (3) when the defendant actively

conceals a material fact from the plaintiff; and

(4) when the defendant makes partial

representations that are misleading because

some other material fact has not been

disclosed.

Id. (citing LiMandri, 60 Cal. Rptr. 2d at 543). The plaintiffs

in Collins argued that eMachines had a duty to disclose based

on either prong (2) or (3). Id. at 593.

The court held that the plaintiffs had stated a CLRA claim

under prong (2). Id. at 594. The fact of the defect was

material because a “reasonable consumer would deem it

important in determining how to act in the transaction at

issue,” id. at 593 (internal quotation and alterations omitted),

and “according to the complaint, eMachines knew of this

defect while plaintiffs did not, and, given the nature of the

defect, it was difficult to discover.”2Id. at 594 (alteration

omitted). Further, Collins emphasized that the failure to

disclose the defect at issue supported a CLRA claim because

the defect “was central to the function of a computer as a

computer.” Id. at 595. In so holding, Collins distinguished

Daugherty—on which Wilson is based—by noting that the

2 The court also determined that plaintiffs’ complaint alleged that

eMachines actively concealed the defect. Collins, 134 Cal. Rptr. 3d at

594.
10 HODSDON V. MARS, INC.

defect in the case before it, unlike the defect in Daugherty,

resulted in damage to the computers during the warranty

period. See id. at 595. Collins, therefore, stands for the

premise that a manufacturer has a duty to disclose only

physical defects—not the means by which a product is

produced—that relate to a product’s central function and arise

during the warranty period.

The second case that Plaintiff relies upon is Rutledge,

another case involving computers. The plaintiffs there

alleged that Hewlett Packard (“HP”) actively concealed and

did not disclose that its laptops contained defective inverters

that would cause the screens to dim and darken during the

warranty period. Rutledge, 190 Cal. Rptr. 3d at 418. The

plaintiffs further alleged that HP made misrepresentations in

its press releases, that the plaintiffs relied on these statements,

and that the laptop screen is central to the function of the

laptop. See id. at 420–422. On summary judgment, the court

held that there was a triable issue about whether HP had a

duty to disclose the inverter defect. Id. at 422.

The court’s reasoning in Rutledge, however, is far from

clear. First, the court did not apply the LiMandri factors, as

Collins did, to determine whether defendants had an

obligation to disclose. Further, the section of the opinion on

the duty to disclose ultimately concludes that there is “a

triable issue of fact as to the nature of HP’s [affirmative]

representations, and whether that triggered a duty to disclose

the defect.” Id. at 422 (emphasis added). The opinion is thus

somewhat inconclusive on whether there was a duty to

disclose independent of HP’s affirmative representations

about its product. Finally, Rutledge seems to cite favorably

the holding in Collins that manufacturers have a duty to
HODSDON V. MARS, INC. 11

disclose a defect when it affects the central functionality of a

product. See id. at 421.

Rutledge, therefore, could be read as a case that stands for

any of the following propositions: (1) there is a duty to

disclose in light of affirmative representations; (2) there is a

duty to disclose defects that go to the central function of the

product; or (3) there is a duty to disclose defects that go to the

central function of the product and which arise during the

warranty period. Plaintiff cannot state a claim under any of

these interpretations.

While Collins and Rutledge are somewhat vague about

the test for determining whether a defendant has a duty to

disclose, they sanction a UCL omission claim when: the

plaintiff alleges that the omission was material; second, the

plaintiff must plead that the defect was central to the

product’s function; and third, the plaintiff must allege one of

the four LiMandri factors. See Collins, 134 Cal. Rptr. 3d at

593–95. Plaintiff argues that Mars had a duty to disclose

because information about labor practices is material to

consumers and—relying on the second prong of

LiMandri—because Mars had “superior knowledge” about

labor issues in its supply chain. Plaintiff, however, omits a

crucial element that Collins and Rutledge emphasize—that

the defect must relate to the central functionality of the

product.3

3 Plaintiff also cites Rubenstein v. Gap, Inc., 222 Cal. Rptr. 3d 397

(Ct. App. 2017). The plaintiffsinRubenstein alleged that Gap violated the

consumer protection laws “based on Gap’s alleged misrepresentation in

using the Gap and Banana Republic brand names for [factory store] items

that had never been sold in traditional Gap and Banana Republic stores

and/or were of lesser quality, and also on Gap’s failure to disclose these

facts to consumers. Id. at 401. The court rejected the plaintiffs’ claims,
12 HODSDON V. MARS, INC.

First, we assume without deciding that the existence of

slave or child labor in a product’s supply chain is material to

consumers.

Second, however, Plaintiff fails to allege that the

existence of slave or child labor in the supply chain affects

the product’s central function. In Collins and Rutledge, the

plaintiffs were required to plead that the allegedly concealed

physical defect was central to the product’s function.4 Here,

reasoning that the plaintiffs did not “allege facts showing that the sales

history of factory store items is material to reasonable consumers.” It

further held that “any quality issues with factory store merchandise were

not in Gap’s exclusive knowledge.” Id. at 405.

Additionally, after oral argument in this case, the California Court of

Appeal, Fifth District, decided Gutierrez v. CarMax Auto Superstores

Cal., 228 Cal. Rptr. 3d 699 (Ct. App. 2018). In Gutierrez, the defendant

car dealer did not disclose that the car that the plaintiff purchased was

subject to a safety recall relating to the car’s braking and lighting systems. 

The court held that the omitted information was material because it related

to safety concerns—which would be important to the reasonable

consumer. Id. at 705. Further, the court concluded that the car dealer had

a duty to disclose the recall because “CarMax made partial

representations about the vehicle’s braking and lighting systems and those

representations were likely to mislead for want of communication of the

facts about the recall.” Id. at 722–23. As Gutierrez is a partial

misrepresentation case, it does not affect the outcome of this purely

omissions-based case.

4 Neither Rubenstein nor Gutierrez mentions the “central

functionality” test, but their facts are consistent with requiring that the

alleged defect be physical and important to the product’s function. In

Gutierrez, the alleged omission related to a physical defect that created a

safety hazard. 228 Cal. Rptr. 3d at 723. In Rubenstein, the court

concluded that there were no “facts showing that the sales history of

factory store items is material to reasonable consumers.” 222 Cal. Rptr.

3d at 405.
HODSDON V. MARS, INC. 13

the alleged lack of disclosure about the existence of slave

labor in the supply chain is not a physical defect at all, much

less one related to the chocolate’s function as chocolate. 

Plaintiff contends that he has “no practical use” for the

products tainted by slave or child labor, but the central

functionality of the product is not based on subjective

preferences about a product. A computer chip that corrupts

the hard drive, or a laptop screen that goes dark, renders those

products incapable of use by any consumer; some consumers

of chocolate are not concerned about the labor practices used

to manufacture the product. Thus, Plaintiff fails to establish

that Mars has a duty to disclose the issues in its supply chain.5

Nonetheless, even though we apply the more recent

California Courts of Appeal decisions, doing so does not

deprive Wilson of all vitality. The recent California cases

show that Wilson’s safety hazard pleading requirement is not

necessary in all omission cases, but that the requirement may

remain applicable in some circumstances. In other words,

Collins and Rutledge are not necessarily irreconcilable with

Wilson because, where the challenged omission does not

concern a central functional defect, the plaintiff may still

have to plead a safety hazard to establish that the defendant

5 The parties also dispute whether Plaintiff sufficiently pleaded that

Mars had knowledge that Plaintiff did not about the existence of child or

slave labor in the supply chain. Plaintiff argues that Mars need only have

“superior” knowledge over the consumer to satisfy the Limandri prong,

whereas Mars contends that the test is “exclusive” knowledge. While we

need not reach the issue here, Mars appears to have the better reading of

California law.
14 HODSDON V. MARS, INC.

had a duty to disclose.6 For example, even though we offer

no binding opinion on the issue, Wilson may still apply where

the defect in question does not go to the central functionality

of the product, but still creates a safety hazard. For this

reason, we are not convinced that the California Supreme

Court would rule that a plaintiff need never plead a safety

hazard. See Muniz v. United Parcel Serv., Inc., 738 F.3d 214,

219 (9th Cir. 2013) (“Decisions of the six [California] district

appellate courts are persuasive but do not bind each other or

us. We should nevertheless follow a published intermediate

state court decision regarding California law unless we are

convinced that the California Supreme Court would reject

it.”) (citations omitted). But see In re Watts, 298 F.3d 1077,

1084–86 (9th Cir. 2002) (O’Scannlain, J., concurring)

(questioning this Circuit’s practice of revisiting panel

decisions based on subsequent state intermediate appellate

opinions, especially where state appellate courts have

independent districts that do not follow one another’s

precedent).

Therefore, we hold that in this pure omissions case

concerning no physical product defect relating to the central

function of the chocolate and no safety defect, Plaintiff has

not sufficiently pleaded that Mars had a duty to disclose on its

labels the labor issues in its supply chain.7 Absent a duty to

6 For example, even though we offer no binding opinion on the issue,

Wilson may still apply where the defect in question does not go to the

central functionality of the product but still creates a safety hazard.

7 Plaintiff has an outstanding motion to certify the following question

to the California Supreme Court: “Must a pure omission-based consumer

deception claimunder the UCL, FAL, and CLRA involve a safety concern

to be actionable?” Because Plaintiff cannot establish that Mars had a duty

to disclose, even if he is not required to plead a safety hazard, the answer
HODSDON V. MARS, INC. 15

disclose, Plaintiff’s CLRA, UCL and FAL claims are

foreclosed.

B. CLRA

Plaintiff alleges three separate violations of the CLRA,

namely that Mars’ failure to disclose on its labels information

about slave or child labor: (1) “[m]isrepresent[ed] the

source” of the products; (2) “[r]epresent[ed] that [the] goods

. . . have . . . characteristics . . . which they do not have”; and

(3) “[r]epresent[ed] that goods . . . are of a particular

standard.” Cal. Civ. Code § 1770(a)(2), (5), (7).

Again, “although 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, 51 Cal. Rptr. 3d at 126. 

As discussed above, Mars was not obliged to disclose issues

about its supply chain. Therefore, Mars did not violate the

CLRA.

C. UCL

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

to Plaintiff’s 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 the question.
16 HODSDON V. MARS, INC.

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). Plaintiff claims that

Mars is liable under all three of the varieties.

1. Unlawful Prong

Plaintiff links his unlawful prong claim to Mars’ alleged

violation of the CLRA. As discussed above, Mars did not

violate the CLRA; thus, it did not violate the unlawful prong

of the UCL.

2. Fraudulent Prong

“[A] failure to disclose a fact one has no affirmative duty

to disclose is [not] ‘likely to deceive’ anyone within the

meaning of the UCL.” Daugherty, 51 Cal. Rptr. 3d at 128;

see also Berryman v. Merit Prop. Mgmt., Inc., 62 Cal. Rptr.

3d 177, 188 (Ct. App. 2007) (“Absent a duty to disclose, the

failure to do so does not support a claim under the fraudulent

prong of the UCL.”). Plaintiff does not state a claim under

this prong.

3. Unfair Prong

Unlike the other two UCL prongs, the lack of a duty to

disclose does not necessarily dispose of claims under the

unfair prong. “The UCL does not define the term ‘unfair.’ In

fact, the proper definition of ‘unfair’ conduct against

consumers ‘is currently in flux’ among California courts.” 

Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1169 (9th

Cir. 2012) (quoting Lozano v. AT&T Wireless Servs., Inc.,

504 F.3d 718, 735 (9th Cir. 2007)). “Before Cel-Tech, courts

held that ‘unfair’ conduct occurs when that practice ‘offends
HODSDON V. MARS, INC. 17

an established public policy or when the practice is immoral,

unethical, oppressive, unscrupulous or substantially injurious

to consumers.’ ” Id. (citing S. Bay Chevrolet v. Gen. Motors

Acceptance Corp., 85 Cal. Rptr. 2d 301, 316 (Ct. App. 1999))

(“South Bay test”). The California Supreme Court, in CelTech, established a different, more concrete, definition of

unfair:

“[U]nfair” means “conduct that threatens an

incipient violation of an antitrust law, or

violates the policy or spirit of one of those

laws because its effects are comparable to or

the same as a violation of the law, or

otherwise significantly threatens or harms

competition.” It further required that “any

finding of unfairness to competitors under

section 17200 be tethered to some

legislatively declared policy or proof of some

actual or threatened impact on competition.”

Davis, 691 F.3d at 1169–70 (quoting Cel-Tech, 973 P.2d at

543–44) (emphasis added). The Cel-Tech test did not apply

to actions by consumers, but “some courts in California have

extended the Cel-Tech definition to consumer actions, while

others have applied the [South Bay test].” Id. at 1170; see

also Cel-Tech, 973 P.2d at 544 n.12. The parties here argue

under both the Cel-Tech and South Bay tests.

First, under the Cel-Tech test, Plaintiff contends that his

claims are “tethered” to the United Nations’ Universal

Declaration of Human Rights and the ILO’s Convention 182

(“Worst Forms of Child Labour Convention”)—the former

forbidding slavery and the latter forbidding the worst forms

of child labor. Plaintiff’s theory is that these international
18 HODSDON V. MARS, INC.

declarations demonstrate the “legislatively declared policy”

against child and slave labor. To determine whether

something is sufficiently “tethered” to a legislative policy for

the purposes of the unfair prong, California courts require a

close nexus between the challenged act and the legislative

policy. See Cel-Tech, 973 P.2d at 544 (holding that for an act

to be “unfair,” it must “threaten[]” a violation of law or

“violate[] the policy or spirit of one of those laws because its

effects are comparable to or the same as a violation of the

law”).

For example, in Gregory v. Albertson’s, Inc., 128 Cal.

Rptr. 2d 389 (Ct. App. 2002), the plaintiffs alleged that the

defendants violated the unfair prong of the UCL when the

defendant grocery store chain closed one location, but held

the lease and kept the property empty to prevent a competitor

from moving in. Id. at 395. Plaintiffs tried to tether

defendants’ actions to a policy against urban blight. See id.

(“[B]y keeping off the market the chief retail store in the

shopping center, the [defendants] have put in motion a

process of deterioration affecting the entire shopping center

that will inevitably produce the kind of blight that Health and

Safety Code section 33035 condemns . . . .”). The court

rejected plaintiffs’ argument that defendants’ decision to hold

onto one lease was sufficiently tethered to the policy against

community blight in § 33035. Id. at 395–96. Instead, the

court reasoned that § 33035 was part of a broader Community

Redevelopment Law, which established procedures for public

participation in the redevelopment of blighted areas, but did

not “call[] for a private remedy affecting a single parcel of
HODSDON V. MARS, INC. 19

property under the unfair competition law.” Id. at 395.8In

other words, the challenged action was too far removed from

the legislative policy, as stated in the Community

Redevelopment Law, to be the tether for a claim under the

unfair prong. Id.; see also Scripps Clinic v. Superior Court,

134 Cal. Rptr. 2d 101, 117 (Ct. App. 2003) (holding that

plaintiffs did not state a claim under the unfair prong where

defendant medical center’s practice of not continuing to treat

patients who sued the center did not affect plaintiffs’

constitutional right to redress in court).

As the plaintiffs in Gregory pointed to a general policy

against urban blight, so too, Plaintiff here highlights a general

policy against child or slave labor. However, like in Gregory,

there is not a close enough nexus between the policy at

issue—here a policy against certain labor practices— and the

challenged action—here not placing disclosures on consumer

labels. Just as leaving one building empty may eventually

lead to blight, so too not labeling chocolate bars may

indirectly exacerbate slave labor in the supply chain;

however, the labeling of products is too far removed from the

U.N. and ILO policies to serve as the basis for a UCL claim. 

As such, the U.N. Convention and the Worst Forms of Child

Labour Convention do not provide a tether here. Further,

requiring Mars to place labels on its products could arguably

impinge on the Supply Chains Act, which addresses

disclosure of labor abuses, but does not require labels on the

products themselves. Plaintiff cannot state an unfairness

prong claim under the Cel-Tech test.

8 Gregory also rejected plaintiffs’ tethering claim because “it would

impinge on a separate state policy favoring freedom of contract by the

parties to commercial real property leases.” 128 Cal. Rptr. 2d at 395

(quotation marks omitted).
20 HODSDON V. MARS, INC.

Plaintiff’s claims also fail under the South Bay test. 

Mars’ failure to disclose information it had no duty to

disclose in the first place is not substantially injurious,

immoral, or unethical. See Bardin v. DaimlerChrysler Corp.,

39 Cal. Rptr. 3d 634, 643–44 (Ct. App. 2006) (holding that

the use of less expensive tubular steel exhaust manifolds did

not violate public policy because the defendant made no

representation about the composition of the manifolds and the

plaintiffs did not allege a safety concern or a violation of the

warranty). Plaintiff’s allegation that Mars’ participation in a

supply chain involving slave labor is “immoral” does not

suffice here, because Plaintiff is challenging the failure to

disclose. While the labor practices themselves are clearly

immoral, it is doubtful that failing to disclose on the label that

a product may be tainted by such labor practices is itself 

immoral, especially when there is no specific duty to disclose

this information and the information is otherwise disclosed

under the Supply Chains Act. Further, the failure to disclose

is not substantially injurious because, as mentioned above,

information about slave and child labor is public knowledge,

accessible on Mars’ website—pursuant to the Supply Chains

Act. Therefore, under either test for the unfair prong of the

UCL, Plaintiff’s claims fail.

D. FAL

“California’s False Advertising Law makes it unlawful

for any person to ‘induce the public to enter into any

obligation’ based on a statement that is ‘untrue or misleading,

and which is known, or which by the exercise of reasonable

care should be known, to be untrue or misleading.’ ” Davis,

691 F.3d at 1161 (quoting Cal. Bus. & Prof. Code § 17500). 

Whether an advertisement is misleading is determined by

asking whether a reasonable consumer would likely be
HODSDON V. MARS, INC. 21

deceived. See id. at 1162. Plaintiff’s FAL claims fail

because “a failure to disclose a fact one has no affirmative

duty to disclose is [not] ‘likely to deceive’ anyone.” 

Daugherty, 51 Cal. Rptr. 3d at 128.9

IV. CONCLUSION

For the foregoing reasons, we affirm the judgment of the

district court dismissing Plaintiff Hodsdon’s CLRA, UCL,

and FAL claims with prejudice.

AFFIRMED.

9 Because we hold that Plaintiff has not pleaded a claim under the

CLRA, UCL, or FAL, we need not, and do not, reach any of Mars’ other

arguments in support of affirmance.