Opinion ID: 4541789
Heading Depth: 3
Heading Rank: 2

Heading: Unfair Acts

Text: Tomasella also challenges the dismissal of her Chapter 93A unfairness claim. An act or practice may be 'unfair' within the statutory meaning [of Chapter 93A] without being deceptive or fraudulent. Mass. Farm Bureau Fed'n, Inc. v. Blue Cross of Mass., Inc., 532 N.E.2d 660, 664 (Mass. 1989). [A] practice or act will be unfair under [Chapter 93A], if it is (1) within the penumbra of a common law, statutory, or other established concept of unfairness; (2) immoral, unethical, oppressive, or unscrupulous; or (3) causes substantial injury to [consumers,] competitors or other business people. Heller Fin. v. Ins. Co. of N. Am., 573 N.E.2d 8, 12-13 (Mass. 1991). Under this rubric, the legality of the challenged act or practice is not dispositive of its unfairness. See Mechs. Nat'l Bank of Worcester v. Killeen, 384 N.E.2d 1231, 1237 (Mass. 1979). In Massachusetts, the finder of fact determines what constitutes an unfair trade practice, but its determination is nevertheless subject to [a -40- reviewing] court's . . . legal gate-keeping function. Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47, 69 (1st Cir. 2009). Tomasella disputes the district court's determination that she failed to plausibly plead any of the three prongs. With respect to established concepts of unfairness, Tomasella challenges the district court's unduly narrow reading of [her] claims as resting only on Defendants' omission of information on their product packaging about the use of cocoa supply chains with known child and slave labor and not also the actual utilization of the abusive supply chain[s]. By Tomasella's assessment, her unfair act claims necessarily encompass both practices, which in her view, go hand in hand. Tomasella further contends, relying on our decision in Cooper v. Charter Commc'ns Entm'ts I, LLC, 760 F.3d 103, 111 (1st Cir. 2014), that to fall within the penumbra of a statute's concept of unfairness, [the challenged practice] need not actually violate the statute. Accordingly, she clarifies that it is her position that Defendants' utiliz[ation] of supply chains with known child and slave labor together with their continued failure to implement the cocoa certification standards set forth in the Harkin-Engel Protocol puts their practice of nondisclosure squarely within the penumbra of the international intolerance of slavery and child labor abuses, as expressed by -41- the UDHR and ILO Convention No. 182. Even if a statutory violation were required to plausibly state a Chapter 93A unfairness claim, Tomasella submits that the Tariff Act, 19 U.S.C. § 1307, which prohibits the importation of goods from supply chains that rely on forced labor,16 provides the necessary hook when taken together with her allegations that Defendants import cocoa beans and paste from West Africa. The challenged conduct does not fall within the penumbra of any recognized concept of unfairness. The Chapter 93A claims at issue are not based on Defendants' conduct of sourcing cocoa beans from a supply chain rife with child labor abuses. While Tomasella undoubtedly pleads numerous facts relating to the abhorrence and prevalence of the worst forms of child labor in West African cocoa supply chains, as well as Defendants' knowledge of and profiting from that practice, functionally, Tomasella 16 In relevant part, the Tariff Act provides: All goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in any foreign country by convict labor or/and forced or/and indentured labor under penal sanctions shall not be entitled to entry at any of the ports of the United States, and the importation thereof is hereby prohibited, and the Secretary of the Treasury is authorized and directed to prescribe such regulations as may be necessary for the enforcement of this provision. 19 U.S.C. § 1307. -42- relies on these facts only as predicates for her consumer protection argument.17 Those allegations do not bring the omission within the penumbra of common-law unjust enrichment, as described in greater detail below. And, at any rate, the SJC has never upheld a Chapter 93A claim because its allegations made out a claim for unjust enrichment, much less because its allegations were in the penumbra of unjust enrichment. Next, we have reason to doubt that Massachusetts state law would look to broad notions of international law, much less to concepts of unfairness. Tomasella's arguments in this regard, even if countenanced, would nevertheless fail on their merits because she has not provided sufficient information in her pleadings to establish that such packaging disclosures fall within the penumbra of the UDHR or ILO Convention No. 182.18 17 By way of comparison, plaintiffs in another forum have challenged at least one of the Defendants' complicity in the underlying labor abuses directly. See Doe v. Nestlé, S.A., 929 F.3d 623, 637, 642 (9th Cir. 2018) (holding that defendants' perpetuation of overseas slave labor from their U.S. headquarters provided a sufficient domestic nexus for former child slaves trafficked into Côte d'Ivoire to proceed on their claims against defendants under the Alien Tort Statute, 28 U.S.C. § 1350, for aiding and abetting slave labor), petition for cert. filed, No. 19-416 (Sept. 27, 2019). 18Not even the United Nations' Guiding Principles on Business and Human Rights -- a set of guidelines delineating the corporate responsibility to respect human rights that references the UDHR and ILO Convention No. 182 -- extend to point-of-sale disclosures on products that implicate human rights violations. See Office of the U.N. High Commissioner on Human Rights, U.N. Guiding -43- As to statutory concepts of unfairness, Tomasella's argument that the challenged packaging omissions fall within the penumbra of the Tariff Act fare no better, even assuming arguendo that a violation of a federal statute could be a source of unfairness within the meaning of Chapter 93A. By its terms, the Tariff Act only regulates the importation of goods, and thus plainly does not extend to point-of-sale packaging disclosures -- not to mention that its enforcement is committed to the discretion of the Secretary of the Treasury. 19 See 19 U.S.C. § 1307. Defendants' packaging omissions do not fall within the penumbra of any established concepts of unfairness. Regarding the remaining unfairness prongs, Tomasella maintains on appeal that Defendants' nondisclosure is both immoral and substantially injurious to consumers who suffer Principles on Business and Human Rights: Implementing the United Nations Protect, Respect and Remedy Framework, 13-26, U.N. Doc. HR/PUB/11/04 (2011). Rather, the Guiding Principles encourage businesses to make publicly available a policy statement express[ing] their commitment to meet this responsibility, id. at 16-17, and when their operations . . . pose risks of severe human rights impacts to communicate this externally by report[ing] formally on how they address [the impacts], id. at 23-24. 19Even the one-of-its-kind California Transparency in Supply Chain Act, Cal. Civ. Code § 1714.43(a)(1), does not provide a statutory hook because it only goes so far as to require website disclosures about companies' efforts to eradicate slavery and human trafficking from [their] direct supply chain for tangible goods offered for sale. -44- economic loss and are made to unwittingly support abusive labor practices by buying chocolate products. Because Massachusetts law requires sellers to disclose material information absent an independent duty, and because reasonable Massachusetts consumers assume that major American companies do not tolerate internationally condemned labor abuses in their supply chains, Tomasella argues that it is therefore unethical to take advantage of [those] . . . assumptions and thereby trick consumers into becoming unwitting participants in the proliferation of child and slave labor. Along those lines, Tomasella disputes the district court's finding that it was neither immoral or substantially injurious to consumers for Defendants to omit information about their supply chain abuses on [their] actual product packaging when they had made such information readily available to consumers on [their] websites. Tomasella submits that consumers cannot be expected to conduct internet research on every item they purchase -- particularly inexpensive goods at the market, and therefore, absent a showing that she, or the putative class members, have actually seen any of Defendants' website disclosures, the onus should be on the seller to readily ensure exposure with a label disclosure. On balance, Tomasella has not persuaded us that the -45- nondisclosure of upstream labor conditions on product packaging at the point of sale is unscrupulous or substantially injurious to consumers within the meaning of Chapter 93A. Again, we must separate the undisputed immorality of the alleged underlying conduct, which we do not take lightly, from the challenged nondisclosures. Cf. Hodsdon, 891 F.3d at 867 (holding that while child labor is clearly immoral, the notion that omitting descriptions of those labor practices at the point of sale is immoral within the California consumer protection context is doubtful). The pleadings do not provide any basis on which to conclude that Defendants have tricked consumers or taken advantage of their assumptions for capital gain. And as to substantial injury, the hard truth with which society must reckon is that consumers actually benefit from the prevalence of forced child labor in cocoa bean supply chains because it makes chocolate cheaper. This is precisely why, as Tomasella herself acknowledges, consumers are willing to pay premiums for products that are certified with fair-trade labels. Indeed, the very existence of fair-trade labels, and their absence from Defendants' chocolate products, may well convey to consumes who care greatly about such matters that these products are not the result of fair-trade practices. Finally, the fact that Defendants have repeatedly made information about the prevalence of the worst forms of child labor -46- in their supply chains publicly available through their websites and other media mitigates the concern raised that their omission at the point of sale is unethical per Chapter 93A regardless of whether Tomasella or the putative class members were (or should have been) cognizant of Defendants' website disclosures. Otherwise the list of information that sellers would have to disclose on their product packaging would be lengthy indeed. See Int'l Harvester, 104 F.T.C. at 1059-60. Therefore, we hold that Tomasella has not plausibly stated a Chapter 93A unfairness claim. Accordingly, we affirm the dismissal of her Chapter 93A claims for failure to state a claim upon which relief can be granted.20