[00:00:00] Speaker 02: We'll go on to the next argument on the calendar. [00:00:11] Speaker 02: Myers versus Starbucks, 22-55930. [00:00:56] Speaker 04: Good morning, Your Honors. [00:00:57] Speaker 04: May it please the court, Catherine Sweetser on behalf of Plaintiffs. [00:01:00] Speaker 04: I'd like to reserve five minutes for- I'm going to have a really hard time hearing you, I think. [00:01:02] Speaker 02: Oh, I'm so sorry. [00:01:03] Speaker 02: That's okay. [00:01:03] Speaker 04: If you could keep your voice up, that'd be helpful. [00:01:05] Speaker 04: Yeah, I'd like to reserve five minutes for a bubble if possible. [00:01:07] Speaker 04: Okay. [00:01:09] Speaker 04: This case concerns the ability of consumers to make ethical choices at the grocery store. [00:01:14] Speaker 04: Reasonable consumers have an interest in consuming products that are traceable, which the parties agree means capable of being traced. [00:01:22] Speaker 04: It is undisputed in this case that at the time of sale, [00:01:26] Speaker 04: None of the cocoa in the Dove Dark Chocolate products at issue was traceable or capable of being traced. [00:01:32] Speaker 04: It is also undisputed that the vast majority of the cocoa that Mars buys and uses for the Dove Dark Chocolate products is not certified or traceable at any point. [00:01:44] Speaker 04: It is likely, as alleged in paragraph 43 of our complaint, that a significant portion of this chocolate is produced using child labor. [00:01:53] Speaker 04: The language on the package that Mars puts on its packages, as alleged in the complaint, is we buy cocoa from Rainforest Alliance certified farms, traceable from the farms into the factory. [00:02:07] Speaker 04: The plaintiff has alleged adequately that this is an affirmative misrepresentation. [00:02:12] Speaker 01: Okay. [00:02:12] Speaker 01: Let me go through that one, sort of provision by provision. [00:02:17] Speaker 01: We buy cocoa from Rainforest Alliance certified TM farms. [00:02:22] Speaker 01: Is that correct? [00:02:23] Speaker 01: Yes. [00:02:24] Speaker 01: And that cocoa is traceable from the farm to our factory. [00:02:28] Speaker 01: Is that correct? [00:02:28] Speaker 04: To the factory, yes. [00:02:30] Speaker 01: So the statement is literally true. [00:02:32] Speaker 04: It is literally true, yes. [00:02:33] Speaker 01: So you're arguing then, but somehow it is misleading. [00:02:36] Speaker 01: Correct. [00:02:36] Speaker 01: And under California law, something that is literally true, but misleading, can violate California law. [00:02:44] Speaker 01: Yes. [00:02:45] Speaker 01: So tell me why this is misleading, such as to trigger a violation of California law, even though it is literally true. [00:02:54] Speaker 04: Yes. [00:02:55] Speaker 04: Thank you, Your Honor. [00:02:57] Speaker 04: The statement gives rise to a reasonable inference on the part of the reasonable consumer that the ingredients in the product are in fact traceable and certified. [00:03:07] Speaker 04: Saying that the cocoa is traceable from the farms into the factory, a reasonable consumer would not assume that, OK, then they stopped tracing it. [00:03:16] Speaker 04: There might not be any certified cocoa in this product. [00:03:21] Speaker 04: That once it's in their control in the factory, that all of a sudden it is mingled with this other cocoa that is the majority of their cocoa that is, in fact, produced with child labor. [00:03:31] Speaker 04: The reasonable consumer in the grocery store is not going to think, OK, this product must have [00:03:38] Speaker 04: non-certified, non-traceable cocoa, but in fact that's what happens. [00:03:42] Speaker 04: Moreover, Mars only labeled some of the products and not others. [00:03:45] Speaker 01: At this stage in the litigation, do we have any consumer evidence in terms of how consumers are understanding this? [00:03:52] Speaker 04: No, we're at the motion to dismiss stage here. [00:03:55] Speaker 04: And in fact, under California law, which is very, very clearly set out in Colgan versus Leatherman tools, no extrinsic evidence is required, even at the summary adjudication stage. [00:04:04] Speaker 04: So plaintiffs would put forward. [00:04:07] Speaker 01: So I'm just supposed to decide on my own. [00:04:09] Speaker 01: If I were a consumer, would I be misled? [00:04:11] Speaker 04: No, in fact, that's, I think, where the district court erred. [00:04:15] Speaker 04: The question is whether a reasonable consumer would make this inference, and it only need be plausible at this stage. [00:04:26] Speaker 04: You know, at the summary judgment phase or at trial, plaintiffs do intend to do a consumer survey and to get additional expert evidence. [00:04:33] Speaker 01: But at the motion to dismiss stage, it only needs to be plausible that someone could be misled. [00:04:37] Speaker 01: Precisely. [00:04:38] Speaker 01: A majority of people plausibly misled? [00:04:40] Speaker 01: How many? [00:04:41] Speaker 01: I mean, I can mislead. [00:04:44] Speaker 01: If you give me 10 people, I can mislead at least one of them by the most preposterous statement. [00:04:49] Speaker 04: The standard under California law is actually just that any reasonable consumer could be misled by this. [00:04:55] Speaker 04: The defendants have the burden to show that no reasonable consumer would be misled by their statement. [00:05:00] Speaker 01: Okay, yeah. [00:05:02] Speaker 01: So there are no surveys at this point, okay. [00:05:05] Speaker 04: No, we haven't put a survey into the complaint, but we have put some statistics on whether consumers care about these statements, and that's in paragraph seven of our complaint. [00:05:15] Speaker 00: So that's what I wanted to go to. [00:05:18] Speaker 00: So what is it that you're saying that a reasonable consumer cares about here, or I guess Ms. [00:05:26] Speaker 00: Myers maybe, but what do they care about? [00:05:29] Speaker 04: The reasonable consumer cares about whether this cocoa is traceable and monitored in the supply chain. [00:05:35] Speaker 04: They would care about whether Mars knows where and how they produced it. [00:05:37] Speaker 00: Why do they care about traceable as an end in itself, or why do they care about traceability? [00:05:41] Speaker 04: Well, for Ms. [00:05:42] Speaker 04: Myers, she does care about the ethical production of the cocoa. [00:05:45] Speaker 00: What does that mean? [00:05:46] Speaker 00: That's a really vague term. [00:05:48] Speaker 00: Ethical production, what does that mean? [00:05:50] Speaker 04: In this case, it would mean produced without using this type of child labor, slave labor, forced labor in the supply chain. [00:05:57] Speaker 00: So Ms. [00:05:58] Speaker 00: Myers and your reasonable consumer cares about whether or not this is produced without child labor. [00:06:03] Speaker 00: So if all of the cocoa in these bars came from Rainforest Alliance certified farms, would that mean that it was produced without child labor? [00:06:18] Speaker 04: We can't make that strong of a statement. [00:06:21] Speaker 04: However, the case law does not require it. [00:06:23] Speaker 00: Well, that's what I'm trying to figure out, because it seems to me that if that's what they care about, if that's what they care about is child labor-free cocoa. [00:06:31] Speaker 00: And it seems to me that, I mean, that's what you say in your complaint. [00:06:35] Speaker 00: But if Rainforest Alliance certified cocoa isn't child labor free, or you don't make any allegations about that in your complaint, then that's a kind of a missing, it's a kind of critically missing important link in your argument. [00:06:52] Speaker 00: Because consumers don't just care about traceability in itself, do they? [00:06:58] Speaker 04: Well, there's, I think, two different responses to that. [00:07:02] Speaker 04: One is the legal, the case law argument, and one is the factual argument. [00:07:05] Speaker 04: So let me make the case law argument first. [00:07:07] Speaker 04: In Kwikset, which is the leading California Supreme Court case on this, there was a discussion of the Made in America requirement. [00:07:14] Speaker 04: And they distinguished between the motive, the ultimate motive of consumers, and the factual [00:07:20] Speaker 04: allegations made by the company. [00:07:22] Speaker 04: So in Kwikset, they said, you know, when you're saying that something's made in America, consumers may ultimately care because they're patriots. [00:07:29] Speaker 04: They may ultimately care because they want labor practices to be good. [00:07:31] Speaker 04: They may ultimately care because they want environmental practices to be good. [00:07:35] Speaker 00: There might be a range of motivations. [00:07:36] Speaker 00: So what have you provided to us in your complaint or even in your briefing, I suppose, [00:07:40] Speaker 00: that explains to us why consumers care about traceability to Rainforest Alliance certified farms that's not related to the child labor issue. [00:07:51] Speaker 00: I understand that maybe there'd be other reasons they would care, but I'm trying to figure out where that is at in this case. [00:08:00] Speaker 04: In paragraph eight of our complaint, we state very simply that consumers care where and how their products are made. [00:08:05] Speaker 04: They care that the company has control over the process. [00:08:08] Speaker 02: A sort of related follow-up question. [00:08:11] Speaker 02: Are we looking at the, or should be as a matter of law, be looking at the universe of reasonable consumers out there, or are we looking at the universe of reasonable consumers who are willing to pay a premium for this chocolate? [00:08:26] Speaker 02: I think your complaint alleges that this particular logo and representation on this label doesn't appear on all of the defendant's products. [00:08:34] Speaker 02: Correct. [00:08:34] Speaker 02: And that this product is a little more expensive. [00:08:37] Speaker 04: But you should correct me if I've got that wrong. [00:08:38] Speaker 04: No, that's correct. [00:08:39] Speaker 04: I do think that the relevant reasonable consumers who are misled by the product are the ones who are purchasing the product because they wanted to purchase an ethical product. [00:08:48] Speaker 04: The reasonable consumer standard assumes the consumer read the label and saw the label. [00:08:54] Speaker 02: Well, but to follow up on Judge Van Dyke's point, I can imagine that some consumers [00:08:59] Speaker 02: wouldn't care about this at all. [00:09:01] Speaker 02: They just really liked Dove chocolate or whatever kind of chocolate. [00:09:04] Speaker 02: And I could imagine other sort of more discerning folks who do read the labels and care. [00:09:10] Speaker 02: We have some case law recognizing this distinction. [00:09:14] Speaker 02: And I think it's the Manuka honey case that is apparently, who knew, a special kind of honey. [00:09:24] Speaker 02: And then that might be a slightly different standard. [00:09:26] Speaker 02: And I just wanted to give both of you a chance to speak to that. [00:09:29] Speaker 04: Yes, I think the consumer that you're looking at is, in fact, the consumer that has these interests that is looking for an ethical product. [00:09:35] Speaker 04: So the reasonable consumer, again, we don't have to prove about every reasonable consumer that this is the only interpretation. [00:09:43] Speaker 04: Under Moore and Williams, the question is just, would some reasonable consumers have this interpretation? [00:09:47] Speaker 04: And I think the reasonable consumer looking for an ethical product would care that it's traceable to the certified farms, that some certification scheme is... So you think it doesn't matter? [00:09:59] Speaker 02: if I conclude that some consumers wouldn't care about this at all. [00:10:03] Speaker 04: Is that right? [00:10:04] Speaker 04: No, it has no bearing on the reasonable consumer test at all. [00:10:07] Speaker 04: There's many different types of consumers, but not every consumer has to have the same interests. [00:10:15] Speaker 01: In a way, there are two reasonable consumers here at issue. [00:10:19] Speaker 01: Number one, how would a reasonable consumer interpret this statement? [00:10:24] Speaker 01: And then the other kind of reasonable consumer is, who cares enough about what's [00:10:28] Speaker 01: at issue to change their buying habits. [00:10:32] Speaker 01: Right, sure. [00:10:32] Speaker 01: Yes. [00:10:33] Speaker 02: And my question about the allegation I think is in this complaint, that this representation doesn't appear on all of the defendant's products. [00:10:41] Speaker 02: It appears on a product that costs a bit more. [00:10:44] Speaker 04: Yes, that's correct. [00:10:45] Speaker 04: It appears only on the DoveDark chocolate product line, which is part of what is so deceptive about the representation. [00:10:51] Speaker 01: So if I were a chocolate consumer who cared about this issue, the idea is [00:10:58] Speaker 01: I would be more inclined to buy the Dove product rather than our Three Musketeers, because the Three Musketeers doesn't have that. [00:11:05] Speaker 04: Absolutely. [00:11:06] Speaker 04: There are absolutely consumers out there who refuse to buy M&Ms because of the child labor issue, but would buy the Dove Dark Chocolate product. [00:11:12] Speaker 00: That kind of brings me back to my question. [00:11:13] Speaker 00: I'm trying to figure out, so this consumer that actually cares about it, because I agree that it makes sense that that would be our group of reasonable consumers. [00:11:20] Speaker 00: I think earlier you said if one reasonable, if one consumer was misled, but I don't think that's the case law. [00:11:24] Speaker 00: I think the case law says it has to be, in our Becerra case, this has to be a significant portion. [00:11:29] Speaker 00: It requires more than a mere possibility that it might conceivably be misunderstood by a few consumers. [00:11:34] Speaker 00: So it has to be, I agree it doesn't have to be all of them, maybe not even most of them, but it has to be a quote, significant amount. [00:11:40] Speaker 00: Would you agree with that? [00:11:42] Speaker 00: One doesn't. [00:11:44] Speaker 00: One person isn't enough. [00:11:46] Speaker 04: If it's only one person out of all the consumers, that probably is not reasonable, but it's not the majority of consumers. [00:11:53] Speaker 00: It's not necessary. [00:11:54] Speaker 00: Let's just say it's a significant number. [00:11:57] Speaker 00: What evidence is there at all, or what even pleadings is there, that a significant number would read [00:12:03] Speaker 00: Rainforest Alliance, that Beans came from Rainforest Alliance, as showing that there's not child labor involved. [00:12:13] Speaker 00: That's what I'm trying to find out. [00:12:14] Speaker 00: I think you keep saying, well, they just care about ethical and all that stuff, but that's very vague. [00:12:21] Speaker 00: Where's the tie to the actual thing that they care about, the child? [00:12:24] Speaker 04: If I can answer that by going back a little bit to the factual answer to your question rather than the legal answer, sorry, which is there are three different time periods at issue, which I think is the defendants are conflating, which is first there's the point of time of sale. [00:12:40] Speaker 02: So what? [00:12:40] Speaker 04: There's the point of time of sale where Ms. [00:12:43] Speaker 04: Myers bought the chocolate. [00:12:45] Speaker 04: At that time, she thought the certification was meaningful, that someone was monitoring this chocolate. [00:12:50] Speaker 00: But how? [00:12:51] Speaker 00: What does she think meaningful is a vague? [00:12:53] Speaker 00: What do you mean by meaningful? [00:12:55] Speaker 00: What did she actually think it was guaranteeing to her? [00:12:58] Speaker 04: that they were using ethical standards in producing the chocolate. [00:13:01] Speaker 00: But that's still kind of vague, because ethical means different things to different people. [00:13:04] Speaker 00: Did she actually think at the time that it meant that there was no child labor involved in making the beans and that chocolate? [00:13:10] Speaker 00: Is that what you're saying? [00:13:11] Speaker 04: I think she believed that it was being monitored for child labor violations. [00:13:14] Speaker 02: Can I ask you whether you alleged that? [00:13:16] Speaker 04: I think in paragraph 15 of our complaint. [00:13:20] Speaker 02: I don't want to interrupt the answer to Judge Van Dyke's question. [00:13:24] Speaker 02: I'm going to have the same question for you about whether you, and maybe you could answer it when you come back, whether you ever allege a price premium theory. [00:13:32] Speaker 02: Do you use the phrase price premium? [00:13:34] Speaker 04: We did not use the phrase price premium in the complaint. [00:13:36] Speaker 02: You've got the facts in there, but that's what I'm trying to figure out. [00:13:38] Speaker 04: No, the basic fact that we allege was that she would not have bought the chocolate if she knew that it was not traceable and certified. [00:13:44] Speaker 02: Okay, so you answered, I don't want to, getting back to Judge Van Dyke's question, you said there are three points in time we should consider the purchase time and what were the other two times quickly? [00:13:52] Speaker 04: Yes, so defendants say that she's conceded that the Rainforest Alliance is meaningless. [00:13:57] Speaker 04: That was our initial allegation. [00:13:59] Speaker 04: And then in our reply brief, we pointed out that Rainforest Alliance has actually upgraded its practices since the First Amendment complaint was filed. [00:14:05] Speaker 04: That's part of the reason we dropped that argument. [00:14:08] Speaker 04: So we're not making that allegation as to Rainforest Alliance at the given time. [00:14:13] Speaker 04: But in paragraph 15, you can see that in the time of sales, she said that she thought it was traceable. [00:14:18] Speaker 04: that she wanted to make sure that her product was not produced off the backs of Taliban slave labor, and that she would like to buy them in the future if they were traceable to ethical farms. [00:14:27] Speaker 02: Okay, you want to say the balance of your time? [00:14:29] Speaker 02: Yes, thank you. [00:14:30] Speaker 02: You bet. [00:14:38] Speaker 03: Good morning, Honors. [00:14:39] Speaker 02: Good morning. [00:14:41] Speaker 03: May it please the court, David Forkner of Williams & Connelly on behalf of Mars Wrigley Confectionary U.S. [00:14:46] Speaker 03: LLC. [00:14:48] Speaker 03: Judge Van Dyke, you had it exactly right. [00:14:51] Speaker 03: The issue here is she is assuming a theory of deception, which is that this package of dove bars represents that there is no deforestation or child and slave labor because it was sourced from Rainforest Alliance Farms. [00:15:09] Speaker 01: I think that's an overstatement of what she's claiming. [00:15:11] Speaker 03: Well, she's specifically talking about West Africa. [00:15:13] Speaker 03: You said none. [00:15:14] Speaker 03: You said none. [00:15:15] Speaker 03: Well, she says in paragraph 15 specifically, had she known it contained, she would not have bought. [00:15:20] Speaker 01: Yeah, that's a very different thing from what you just said. [00:15:22] Speaker 03: Right. [00:15:22] Speaker 03: She also says in paragraph 19 that these, there were three defendants at the time, that the defendants could have purchased with slave free. [00:15:30] Speaker 01: Again, that's different from what you just said. [00:15:33] Speaker 03: Well, the bottom line, Judge Fletcher, is she can't get there through Rainforest Alliance certified farms. [00:15:39] Speaker 00: Let me see if that, because I'm looking at 15 here, and she says she would not have bought their products if she would have known that they were produced off the backs [00:15:49] Speaker 00: of child and slave labor. [00:15:50] Speaker 00: So it does seem to me, actually, child and slave labor, in her allegations, is an on-off switch. [00:15:57] Speaker 00: If she knows something involves any child labor, she doesn't want it. [00:16:01] Speaker 00: And so that leads to the question, they do really hammering traceability. [00:16:05] Speaker 00: And I think that your claim about traceability is a little squishy on this. [00:16:12] Speaker 00: But what I'm struggling with is how do they [00:16:18] Speaker 00: How does the reasonable consumer or Ms. [00:16:21] Speaker 00: Myers conclude from the fact that something was, even assuming it had come, all the chocolate had come from Rainforest Alliance certified farms, that that would mean that it was not quote, I'll quote her thing, that it was not produced off the backs of child and slave labor. [00:16:36] Speaker 00: And I'm trying to figure out what the link is between those things. [00:16:39] Speaker 00: And I guess what matters is what the link is in her complaint. [00:16:42] Speaker 03: Correct. [00:16:42] Speaker 03: And I'm not seeing it. [00:16:44] Speaker 03: And there is no such link, and there's a couple of reasons why there's no such link that she can plausibly make out here. [00:16:48] Speaker 03: So first of all, if you look on PACS specifically, like affirmative representations, it says nothing about West Africans, slave labor, sustainability, ethical. [00:16:56] Speaker 03: Like in these other types of cases, you'll see someone claim sustainable chocolate, and they'll couple it with like an UTS certification. [00:17:02] Speaker 03: And those kind of cases have moved past the 12b6 standard. [00:17:05] Speaker 03: Here, it just says, rainforest alliance certified. [00:17:07] Speaker 03: So the question then is begged, what does that mean? [00:17:11] Speaker 03: And so we argued in before the district court, two different district court judges, we argued six different reasons why plaintiffs fails to give meaning to the Rainforest Alliance certification seal, why Mars makes no representations about Rainforest Alliance specifically, why even if you go to judicial notice and start looking at Rainforest Alliance websites, they're not making any promises [00:17:34] Speaker 03: of actual output, like that it guarantees anything. [00:17:37] Speaker 03: They're making an effort, promise, which would be a puffery in any event. [00:17:41] Speaker 03: We argue that those kind of statements by a third party certification entity wouldn't bind Mars anyway because they're not on PAC and other reasons. [00:17:49] Speaker 03: So we outline six reasons in the record. [00:17:52] Speaker 03: They don't respond to them in the district court at all. [00:17:54] Speaker 03: We then take the appeal. [00:17:56] Speaker 03: They don't respond to those six criticisms of rainforest imbuing this sustainability, slave-free deforestation messaging. [00:18:04] Speaker 03: They don't bring that up in their opening brief. [00:18:06] Speaker 03: We then put in our answering brief the exact same six, and we actually add a seventh, on a waiver claim. [00:18:12] Speaker 03: They don't respond to that in their reply brief. [00:18:14] Speaker 03: So we have a situation where they have waved all along the way an argument that Rainforest Alliance actually stands for, to the reasonable consumer, whether it's one or a dozen or a thousand, that it actually promises, to your point Judge Van Dyke, anything about chocolate that is slave-free or even better than, I mean they certainly make efforts and they're out there as an NGO, they're a non-profit company, [00:18:40] Speaker 03: We specifically say they only cite rainforest alliance in two paragraphs of their complaint and that their conclusory paragraphs at best. [00:18:47] Speaker 03: We made that argument in the first amended complaint motion to dismiss. [00:18:51] Speaker 03: They didn't fix it. [00:18:52] Speaker 03: We made it in the second motion to dismiss complaint. [00:18:54] Speaker 03: They didn't fix it. [00:18:55] Speaker 03: They don't fix it on appeal. [00:18:57] Speaker 02: Did the district court think that the complaint was not actionable because it was literally true or wasn't false? [00:19:05] Speaker 03: Now, so I think the court did not only that step, Your Honor, but more. [00:19:08] Speaker 03: So the court recognized, and there's two different opinions, that it is in fact true. [00:19:13] Speaker 03: The question then is what inferences can be made. [00:19:16] Speaker 02: Well, or whether reasonable consumer would be misled. [00:19:19] Speaker 02: And she does allege that this [00:19:23] Speaker 02: representation doesn't appear on your other products. [00:19:25] Speaker 02: You heard me ask these questions, right? [00:19:27] Speaker 02: I want to make sure you have a chance to respond. [00:19:28] Speaker 02: But it does appear on your somewhat more expensive product. [00:19:32] Speaker 02: So I don't think I'm looking at the universe of consumers. [00:19:35] Speaker 02: I have the same question Judge Van Dyke has, which is, how do we know they care? [00:19:39] Speaker 02: I think some people wouldn't care. [00:19:41] Speaker 02: I think some people would. [00:19:43] Speaker 02: And it does seem to me very likely that what she's got, what she's alleging, is really a price premium theory. [00:19:48] Speaker 02: that that subset of folks who are willing to pay more do care. [00:19:51] Speaker 02: So I just want to make sure I have your response to that, please. [00:19:53] Speaker 03: Okay. [00:19:54] Speaker 03: And so, Your Honor, I'm hearing three different questions ultimately. [00:19:56] Speaker 02: There's just one. [00:19:57] Speaker 03: Okay. [00:19:57] Speaker 03: Well, I'm going to unpack it. [00:19:59] Speaker 03: So to the extent that... I think she's got a price premium theory. [00:20:03] Speaker 02: Yes. [00:20:03] Speaker 02: Right? [00:20:04] Speaker 02: Yes. [00:20:04] Speaker 02: So I'm looking at people who are discerning consumers of chocolate. [00:20:08] Speaker 02: Correct. [00:20:09] Speaker 02: And I think what you're wanting me to say is that it's not plausible, and we've heard you to prevail here, it's not plausible that that group of folks [00:20:17] Speaker 02: would be misled by this label? [00:20:21] Speaker 03: I'm actually thinking a slightly different tact, Your Honor. [00:20:24] Speaker 02: All right. [00:20:24] Speaker 03: So let's assume whatever percentage of people don't care at all and just set them aside. [00:20:28] Speaker 02: OK. [00:20:29] Speaker 03: Now let's take the discerning people in the Manuka honey, people who really care about honey. [00:20:34] Speaker 03: Those people who are really caring, the question is, what is the pleaded theory of deception? [00:20:37] Speaker 03: What are they caring about? [00:20:39] Speaker 03: She pleads that they care about West African deforestation and slave labor. [00:20:44] Speaker 03: Right. [00:20:44] Speaker 03: Those highly discerning people then have to infer that from the capacity of what does Rainforest Alliance certified cocoa promise. [00:20:51] Speaker 03: That's before we get to traceability on down the line. [00:20:54] Speaker 03: Just what is the promise of Rainforest Alliance to those discerning people? [00:20:57] Speaker 03: And it's those discerning people who would realize that, and she doesn't plead what the certification means, that it doesn't promise any of that, that it's only aspirational. [00:21:08] Speaker 03: And so quite honestly, the discerning consumer would never buy her theory. [00:21:13] Speaker 02: I'm not sure you're right about that. [00:21:15] Speaker 02: It seems to me that discerning consumer might be the one who picks it up to look at the back or the side, wherever this representation is, and ask herself, it must mean something. [00:21:26] Speaker 02: There's a reason they put it on the label. [00:21:28] Speaker 02: Correct. [00:21:29] Speaker 02: So it must be trying to tell me something about the product. [00:21:31] Speaker 02: What would a reasonable person understand the message to be? [00:21:34] Speaker 03: Correct. [00:21:34] Speaker 03: The reasonable person would understand that it is a Reinforced Alliance certified. [00:21:38] Speaker 03: That's what it means. [00:21:39] Speaker 03: And the question is, what does that mean on top of that? [00:21:42] Speaker 03: And so what happens is, first we look at nothing on the pack tells them anything about that. [00:21:47] Speaker 03: So we're dragging inference upon inference now. [00:21:50] Speaker 03: So there's two implied inferences that they have to make according to the complaint. [00:21:55] Speaker 03: Inference one is that Rainforest Alliance certified cocoa, remember these are discerning consumers about West African slave labor and deforestation. [00:22:02] Speaker 03: That's the people she's identified. [00:22:04] Speaker 03: that they would have to be able to discern from rainforest alliance certification that this product is either free from or majority benefited by such that it doesn't really exist in that chocolate. [00:22:16] Speaker 03: And I'm telling you the first step, she can't get past that assumption. [00:22:20] Speaker 03: So it's like the Becerra Dr. Pepper case where [00:22:23] Speaker 03: You can't establish the diet in the first instance. [00:22:27] Speaker 03: If you don't get the diet, we don't get to the aspartame. [00:22:29] Speaker 00: What I'm struggling with is I just don't see anywhere in the complaint that she's tried to bridge that gap. [00:22:34] Speaker 00: Because what they do is they mentioned alliance certified, like you said, very briefly. [00:22:39] Speaker 00: And then the rest of it is the word ethical and some other word. [00:22:43] Speaker 00: I can't remember. [00:22:44] Speaker 00: But these sort of vague terms. [00:22:46] Speaker 00: But that doesn't. [00:22:51] Speaker 00: What do they need to do to bridge that gap? [00:22:54] Speaker 00: I guess they'd have to have factual allegations about what people think about what Rainforest Alliance certification means as far as the two things that they say they care about. [00:23:06] Speaker 03: I think other plaintiffs have tried to bridge this gap. [00:23:10] Speaker 03: What they have done empirically in the case law is they will say, [00:23:14] Speaker 03: Here's what the PAC says. [00:23:16] Speaker 03: And the PAC doesn't say anything about rainforest, West African, anything. [00:23:20] Speaker 03: So then they go to websites, and they look at rainforest alliance websites. [00:23:24] Speaker 03: And they say, OK, so what promises are actually being made by that third party NGO? [00:23:30] Speaker 03: And then they couple them together in a complaint. [00:23:33] Speaker 03: Now, the folly in that, I think historically, and now we're [00:23:37] Speaker 03: debating a fictitious complaint is that when you go to the websites and you go to these other representations, you get not only the platitudes of goals, but you get their clarifications. [00:23:47] Speaker 03: So if we had the websites here, we'd say exactly what Reinforced Alliance says with regard to cocoa in West Africa. [00:23:54] Speaker 03: And we put those together and you'd have like the Kerry gold butter case. [00:23:58] Speaker 03: which talked about grass-fed cows. [00:24:00] Speaker 03: And while the plaintiff said, oh, we promised grass-fed cows, but the websites actually disclaimed that. [00:24:04] Speaker 03: And so that's when you would run into problems trying to bridge that gap, which is why I think plaintiffs keep standing on the concept of just on pack. [00:24:13] Speaker 03: But having stood on just on pack theory, they run into this problem that there are no such on pack affirmative misrepresentations or reasonable inferred ones, even amongst like the Manuka [00:24:28] Speaker 03: highly discernible consumers. [00:24:30] Speaker 03: Those consumers would actually know what rainforest does and does not say, none of which of course is pleaded in the complaint. [00:24:36] Speaker 03: So when you take out the waiver issues, again, [00:24:41] Speaker 03: They have not defended rainforest alliance at all. [00:24:43] Speaker 03: In the reply brief, they say, we have waived our claim about the efficacy of rainforest, true, but they have also waived any argument as to the representations made by rainforest, by Mars, by rainforest. [00:24:57] Speaker 03: So you have a complaint now devoid of any beneficial allegation on rainforest, and you're stuck with just traceability. [00:25:05] Speaker 03: And there, when we turn to that would be the second assumption, traceable from farm, [00:25:10] Speaker 03: all the way to bar argument. [00:25:12] Speaker 03: So they had started initially pleading in paragraph 47 of the second amended complaint that traceable itself meant some sort of environmental ethical standard. [00:25:21] Speaker 03: We pushed back on that in the district court, citing all the various dictionary definitions as to what traceable means. [00:25:28] Speaker 03: They don't dispute that. [00:25:29] Speaker 03: They have now accepted it. [00:25:30] Speaker 03: The traceable simply means capable of being traced. [00:25:34] Speaker 03: So inherent intracability, then how does that impact their claim? [00:25:37] Speaker 03: Well, now we have no environmental benefit claim whatsoever even inferred under the way that the case is presented to this court on this record. [00:25:45] Speaker 03: It's just traceable. [00:25:47] Speaker 01: And traceable simply means traceable from point A to point B. You're saying traceable means it's traceable, but we don't trace. [00:25:56] Speaker 03: No, that's not what I'm saying. [00:25:57] Speaker 03: I'm saying that significance to her pleaded theory of deception, which is slave labor and deforestation, is now broken. [00:26:03] Speaker 03: Traceable means capable of being traced. [00:26:05] Speaker 03: So if I trace my steps from the [00:26:08] Speaker 03: That chair to this lectern, that's where I've traced my steps. [00:26:11] Speaker 01: No, I'm asking a different question. [00:26:13] Speaker 01: And I might be misunderstanding the thrust of your argument. [00:26:17] Speaker 01: Traceable means it can be traced. [00:26:19] Speaker 01: Correct. [00:26:19] Speaker 01: Are you saying that this means only that it can be traced, not that it's a representation that it is traced? [00:26:26] Speaker 03: No, I'm actually saying neither of those. [00:26:27] Speaker 03: So it's my confusion, Your Honor. [00:26:30] Speaker 03: Plaintiffs admit that it is true that it can be traced from the farm to the factory. [00:26:37] Speaker 03: That's where we step. [00:26:38] Speaker 03: My argument was, and if you're a textualist, that's what says what it means. [00:26:43] Speaker 03: In fact, traceability has this inherent concept of point A to point B. It has a distance concept to it. [00:26:49] Speaker 01: Right, and so. [00:26:50] Speaker 01: And are you saying, you wanted me to interpret this as saying, it's traceable, but we're not guaranteeing that we are tracing it? [00:26:57] Speaker 01: No, not at all. [00:26:57] Speaker 01: So what are you saying that traceable means here in this context? [00:27:00] Speaker 03: I'm saying that the statement traceable from farm to factory means exactly that. [00:27:04] Speaker 01: I just asked you, what does that mean? [00:27:06] Speaker 01: And you just said it means exactly that. [00:27:08] Speaker 01: OK, what does exactly that mean? [00:27:09] Speaker 03: It means you can trace farm number 5,653 in Ghana. [00:27:16] Speaker 03: through the transportation system to the factory. [00:27:21] Speaker 01: I get that. [00:27:21] Speaker 01: But then I'm asking, are you also saying, do you want the consumer to understand that not only is it traceable, but that it is actually traced? [00:27:32] Speaker 03: And it is. [00:27:34] Speaker 03: That's our point. [00:27:35] Speaker 03: They admit the truth of it is traceable, and it is actually traced to factory. [00:27:39] Speaker 01: So you're saying traceable here means traced. [00:27:42] Speaker 03: Where we differ is traceable to what point? [00:27:47] Speaker 03: So they read traceable from factory through stages of production to end unit bar. [00:27:52] Speaker 03: If you look at the right case, which is a... Don't look at the right case. [00:27:57] Speaker 02: They read it that way and you read it how? [00:27:59] Speaker 03: I read it exactly as it says. [00:28:01] Speaker 03: It stops at the factory floor, or it stops at the factory. [00:28:03] Speaker 02: And the beans, I thought was uncontested. [00:28:05] Speaker 02: The beans are then mixed together and you can't tell. [00:28:09] Speaker 02: what winds up in a shock of ours. [00:28:12] Speaker 03: So I think we're a little bit different on that, Your Honor. [00:28:14] Speaker 03: That is the plaintiff's allegation that they get intermingled. [00:28:16] Speaker 03: What the clarification that they rely upon is on the web page for Mars, and the web page says that they don't guarantee traceability and segregation to bar, but traceability. [00:28:27] Speaker 02: What does that mean? [00:28:28] Speaker 02: I don't understand what you're saying. [00:28:30] Speaker 02: I really don't. [00:28:31] Speaker 02: I thought this was uncontested, and so now you've got a problem on your hands. [00:28:35] Speaker 02: Go back to traceability. [00:28:37] Speaker 02: Sure. [00:28:37] Speaker 02: I understand what your representation is about what the plaintiffs say. [00:28:40] Speaker 02: I just need to know what is your position about traceability. [00:28:43] Speaker 03: Our position is that Mars does not promise to or guarantee, which is the clarification, ensures the actual statement on the website, traceability past the factory door to an individual bar. [00:28:58] Speaker 02: I think that's what I just said, and you corrected me. [00:29:00] Speaker 03: What I think is the significance of it is what we're debating amongst the plaintiff and Mars. [00:29:08] Speaker 03: So we say that that to be a true fact. [00:29:10] Speaker 02: I've taken yes for an answer. [00:29:11] Speaker 03: OK, well, I guess I'm overthinking it, Your Honor. [00:29:13] Speaker 03: But the significance is, again, has nothing to do with slave labor, deforestation, no promises like that. [00:29:19] Speaker 02: Because you don't think that it really, it has nothing to do with traceability, has nothing to do with slavery or deforestation. [00:29:27] Speaker 02: Her whole argument is that that is the implication. [00:29:30] Speaker 02: What's your best response to that, that discerning consumers would not understand that meaning from that verb? [00:29:36] Speaker 03: Right. [00:29:36] Speaker 03: My best argument on that is you have to obtain that understanding from it being Rainforest Alliance certified. [00:29:43] Speaker 02: Okay. [00:29:44] Speaker 02: So this goes back to it's true. [00:29:47] Speaker 02: I think it's contesting, I think that's the first question Judge Fletcher asked. [00:29:50] Speaker 02: Is it true? [00:29:50] Speaker 02: The statement's true. [00:29:51] Speaker 02: Correct. [00:29:51] Speaker 02: Or at least it's not false. [00:29:53] Speaker 02: Yep. [00:29:53] Speaker 02: Right. [00:29:53] Speaker 02: And so the question, I think from day one in this case, we're talking about is it misleading? [00:29:58] Speaker 02: Correct. [00:29:58] Speaker 02: All right. [00:29:58] Speaker 02: And I've told you why I tend to think this would be the discerning customer. [00:30:03] Speaker 02: Correct. [00:30:03] Speaker 02: And you think the concerning customer would [00:30:05] Speaker 02: get nothing from that package, no message, and then would go look at the website and would understand something different. [00:30:14] Speaker 02: So I think they would only get- I am looking for, sorry, is your response to what I think is her argument, which is from that package, her consumer group would take a message, would likely be misled. [00:30:26] Speaker 02: And I think her position is that's a question of fact. [00:30:28] Speaker 02: And I just would really like to get your response on that point. [00:30:31] Speaker 03: Right. [00:30:31] Speaker 03: My response to that is they waived all six challenges to the Rainforest Alliance giving any such message. [00:30:37] Speaker 03: All right. [00:30:37] Speaker 03: And so, including the pleading, the plausibility, it's all in our brief, but they literally have waived it multiple times over. [00:30:44] Speaker 01: You know, obviously your client puts this on the Dove line of chocolates for a reason. [00:30:51] Speaker 01: Understood? [00:30:52] Speaker 01: Do you agree? [00:30:53] Speaker 03: I understand they support Rainforest for some products and not others. [00:30:55] Speaker 03: Correct. [00:30:57] Speaker 01: That's not quite what I said. [00:30:59] Speaker 01: They put it on for a reason. [00:31:02] Speaker 01: And it is a reason, I think, that they think that if they put that on there, they can get more money. [00:31:09] Speaker 01: Because this is a higher priced product among the Mars line. [00:31:12] Speaker 01: So they have to think that it means something to some consumers. [00:31:16] Speaker 01: It's just that it turns out that it doesn't mean what the consumers seem to think it means. [00:31:22] Speaker 01: So what am I supposed to do with that? [00:31:24] Speaker 03: So I think it, and I know I'm over time here, so I'll try to be brief. [00:31:28] Speaker 03: What it means is that Mars, for some products, supports the rainforest by buying product volume. [00:31:36] Speaker 03: And in other products, they do not. [00:31:39] Speaker 03: And that is a laudable goal on a normative function to encourage non-profit organizations to try to get out there and do good things. [00:31:46] Speaker 03: And when you're comparing, when you're looking at the comparison cases, your honor, those are totally different cases. [00:31:51] Speaker 03: Those are trying to find contextual meaning from one affirmative misrepresentation to another. [00:31:55] Speaker 03: So extra strength versus regular strength. [00:31:59] Speaker 03: They're looking at rapid release versus regular release. [00:32:03] Speaker 03: This is for some product lines, and it's more expensive to Mars, by the way. [00:32:08] Speaker 03: It's not the record. [00:32:08] Speaker 03: It's more expensive than Mars to buy Rainforest Alliance certified cocoa. [00:32:13] Speaker 03: The idea is Rainforest Alliance then passes on some of those benefits through farmers, education, training, and the like. [00:32:19] Speaker 03: It's a nonprofit. [00:32:20] Speaker 03: It's a good thing. [00:32:21] Speaker 03: And so, one, Rainforest Alliance isn't probably big enough to make all of Mars products Rainforest Alliance, right? [00:32:28] Speaker 03: I mean, they make M&Ms and Milky Ways and all of this kind of stuff. [00:32:32] Speaker 03: You're not looking at the Milky Way to discern the meaning of the Rainforest Alliance seal. [00:32:36] Speaker 03: They're totally unrelated. [00:32:38] Speaker 03: You're simply saying, we support, when you buy, Judge, if you go buy Dove, and just because you love it, let's assume that you're not a Manuka Honey buyer. [00:32:48] Speaker 03: You are supporting the Rainforest Alliance because you're driving demand for Rainforest Alliance cocoa. [00:32:55] Speaker 03: And when you drive demand, [00:32:57] Speaker 03: economics, you drive price. [00:32:59] Speaker 03: And when you drive price, you can pass that price on. [00:33:03] Speaker 03: Farmers can earn more. [00:33:04] Speaker 03: So it has promised benefit. [00:33:06] Speaker 03: It's an economic kind of demand pull model of an NGO. [00:33:11] Speaker 03: But what it doesn't guarantee and what plaintiff have waived that it guarantees multiple times over is slave-free, child-free, deforestation-free, gender equity-free, and any other [00:33:25] Speaker 03: CO2 emission-free issues. [00:33:29] Speaker 03: And if we challenge Rainforest Alliance and say, look, Rainforest Alliance, if you put that on your product, you're making promises, right? [00:33:36] Speaker 03: And that Rainforest Alliance doesn't deliver, that's the end of Rainforest Alliance. [00:33:42] Speaker 03: Because they don't promise that they can deliver. [00:33:44] Speaker 03: It's just an NGO dealing with incredibly complicated socioeconomic and environmental problems. [00:33:50] Speaker 03: They're just one part of the solution, hopefully. [00:33:53] Speaker 03: So for those reasons, we submit. [00:33:55] Speaker 02: Thank you. [00:34:06] Speaker 04: I think the consumer does not need to let the perfect be the enemy of the good. [00:34:10] Speaker 04: The consumer has a real interest in ensuring that companies monitor their supply chains and make efforts to produce a product that is not using child labor. [00:34:20] Speaker 04: And I think what my colleague has argued is that there's no guarantee that [00:34:24] Speaker 04: any product is 100% free of bad practices, but there's a segment of consumers here that really care that the company is making an effort to monitor the supply chain. [00:34:34] Speaker 02: His argument is that that discerning group of consumers are exactly the kind of people you would expect to go look at the website for Rainforest Alliance. [00:34:40] Speaker 02: What is your response to that? [00:34:42] Speaker 02: Please. [00:34:42] Speaker 04: The case law is clear that the consumers do not need to go look at the website. [00:34:45] Speaker 04: Consumers make decisions in the grocery store. [00:34:47] Speaker 04: They don't have to look something up as they're shopping. [00:34:50] Speaker 04: They can rely on the on-pack language. [00:34:52] Speaker 04: And I don't think that my colleague is actually making that argument in his briefs. [00:34:55] Speaker 02: His first argument is that you waived us. [00:34:57] Speaker 02: So do you want to speak to his waiver point? [00:35:00] Speaker 04: I don't believe that we have waived anything regarding the materiality of the consumer concerns. [00:35:07] Speaker 02: Do you hear his waiver argument? [00:35:09] Speaker 04: I'm not totally sure I understand what he thinks that we have waived, because we did waive contesting that rainforest alliance. [00:35:15] Speaker 00: Let me see if I can expand so you can respond. [00:35:17] Speaker 00: Because you say in your complaint in paragraph 15, it says, you say she suffered injury, Meyer suffered injury, because she would not have bought the products if she had known that they were dot, dot, dot produced off the backs of child and slave labor. [00:35:34] Speaker 00: And there's nothing in the complaint or it even sounds like in the real world that would indicate that just because something is Rainforest Alliance certified, that means that it doesn't involve any child labor or slave labor, unfortunately. [00:35:50] Speaker 00: If that's what your complaint is, is that I wouldn't have bought it if I thought it had any child labor. [00:35:56] Speaker 00: And the certification that you're focusing on traceability, but even assuming that you're able to trace it to that, that wouldn't actually help demonstrate the child labor thing. [00:36:05] Speaker 00: You've got a big gap. [00:36:07] Speaker 00: And I think his argument is, as to the waiver point, is that you've never tried to fill that gap in with anything. [00:36:13] Speaker 00: You don't do it in your complaint when they pointed it out. [00:36:17] Speaker 00: in their answering brief. [00:36:18] Speaker 00: You didn't do it in your opening brief. [00:36:19] Speaker 00: That's, I think, what he's saying is waiver. [00:36:22] Speaker 00: So why have you not waived that? [00:36:23] Speaker 04: I think this goes back to the time period issue. [00:36:29] Speaker 04: So at the time of sale, Ms. [00:36:32] Speaker 04: Myers did not know about the child labor that was present in Mars' supply chain, correct? [00:36:37] Speaker 04: And so she wouldn't have bought this product if she'd known that she was buying uncertified, untraceable cocoa that was traced back to this region. [00:36:44] Speaker 04: At the current time, Ms. [00:36:46] Speaker 04: Myers has alleged, and that's, I'm sorry, hold on. [00:36:52] Speaker 04: But we have specifically alleged that she would buy the product if the products were actually traceable to ethical farms as advertised by Mars. [00:37:00] Speaker 02: So she has an idea that she didn't know when she bought it, but she's discerning. [00:37:04] Speaker 02: And so now she's been deceived. [00:37:07] Speaker 04: She was deceived when she bought it. [00:37:09] Speaker 04: Yeah, she was deceived when she bought it. [00:37:10] Speaker 04: And I think that it overstates the [00:37:13] Speaker 04: The burden on consumers to say that, well, a discerning consumer would have done a lot of research about chocolate before caring about ethics. [00:37:20] Speaker 04: I think there are a lot of consumers out there. [00:37:22] Speaker 04: We've alleged 64% of global consumers do care about these issues. [00:37:25] Speaker 04: Not all of those consumers are going to do a deep dive into every company's supply chain. [00:37:29] Speaker 04: The question is, what do the companies put on their packs that make the consumers think that they're buying from a company that's monitoring their supply chain? [00:37:35] Speaker 04: and that is tracing their chocolate. [00:37:38] Speaker 04: And what Mars here did was put a statement on the packs that was meaningful to the consumer to induce them to buy the product that, in fact, was not true. [00:37:46] Speaker 04: It created this deception that, OK, I'm buying this product. [00:37:50] Speaker 04: I get traceable cocoa in this product. [00:37:52] Speaker 04: When, in fact, they're intermingling their beans, they're giving the consumer something with no meaningful difference from the other products. [00:38:00] Speaker 04: Absolutely no meaningful difference. [00:38:01] Speaker 02: You're well over your time, so I'll thank you for your argument, both of you. [00:38:04] Speaker 02: And we'll take that case under advisement.