Costco lawsuit (re slave labour in Thailand)
In August 2015, a consumer filed a class action lawsuit against Costco and its Thai seafood supplier, CP Foods, in a California court. The plaintiff alleged that Costco knew that some of the prawns it sold were fed with other fish products that were sourced using slave labour and victims of trafficking in Thailand, but did not disclose this to consumers. Costco had published statements on its website about its efforts to prevent human trafficking in its supply chain, as required by the California Supply Chain Transparency Act. The Act requires businesses to disclose information about the efforts they are making to eradicate human trafficking and forced labour in their supply chains. The plaintiff claimed that the statements on Costco’s website were misleading.
Costco argued that the claim was factually incorrect and that the court lacked subject matter jurisdiction. The plaintiff claimed she purchased prawns sourced from Thailand, but Costco provided evidence that the prawns were sourced from Vietnam and Indonesia.
On 15 January 2016, the case was dismissed as the plaintiff was unable to prove that she had purchased the affected prawns from Thailand. The court dismissed Costco’s request to prevent the defendant from “renewing the arguments” and allowed the plaintiff to amend her complaint. The lawsuit continued with a different plaintiff. In January 2017, a federal judge dismissed the lawsuit because the plaintiffs could not prove that Costco had an obligation to inform consumers about labour abuses in its supply chain on its products’ packaging. The judge dismissed the lawsuit with prejudice which means that it cannot be brought again.
- Retail giant Costco wins dismissal of prawn lawsuit over Thai forced labor, Sebastien Malo, Reuters, 25 Jan 2017
- Costco Shrimp Lawsuit Dismissed Because Plaintiff Didn’t Buy Affected Shrimp At Costco, Laura Northrup, Consumerist, 19 Jan 2016
- Costco Sued Over Claims Shrimp Harvested With Slave Labor, Erik Larson, Bloomberg, 19 Aug 2015
- Costco and CP Foods face lawsuit over alleged slavery in prawn supply chain, Felicity Lawrence, Guardian, 19 Aug 2015
- CP Foods reasserts its strong commitment to human rights and a sustainable supply chain, Kosit Lohawatanakul, CP Foods, 28 Aug 2015
Cotchett, Pitre & McCarthy, LLP (plaintiffs’ lawyer):
- Costco Taken to Court for Knowingly Selling Slave Labor Shrimp to Unsuspecting Californians, Cotchett, Pitre & McCarthy, LLP, 19 Aug 2015
- Class action complaint, Cotchett, Pitre & McCarthy, LLP, 18 Aug 2015
- Sud v. Costco. Order on Motions to Dismiss, Jeffrey S White, United States District Judge, 15 Jan 2016
All components of this story
Commentary: Recent decisions show willingness of Canadian courts to hold companies liable for overseas abuses of intl. human rights norms
Author: Michael G. Congiu, John Kloosterman, Stefan Marculewicz, Aaron Saltzman & Lavanga Wijekoon; Littler, on JD Supra (USA)
"Advancing Human Rights Claims Based on Global Supply Chain Activities: Recent Developments in California and Canada", 15 Feb 2017
Courts in California and Canada have emerged as testing grounds for advancing claims of forced labor in global supply chains...Over the past several years, non-Canadian plaintiffs have filed multiple civil actions in Canada against multinational companies that are based or incorporated in Canada on the theory that international norms...form a standard of care that, when violated, constitutes actionable negligence...In Nevsun and Garcia, Canadian courts have signaled a willingness to permit non-Canadian plaintiffs to pursue monetary damages against Canadian-based multinational companies based on violations that allegedly occurred on foreign soil...[T]he Nevsun opinion suggests that Canadian law could allow foreign plaintiffs to pursue private rights of action against Canadian companies based on violations of customary international law...[T]he Canadian cases suggest that it is increasingly important that multinational companies monitor their supply chains, or they could face litigation at home over alleged malfeasance...Plaintiffs will likely be heartened by these developments...and rely on them to further transform “soft law” into “hard law” in support of their efforts to impose international norms...as a standard of care for multinationals operating overseas.
Author: Sebastien Malo, Reuters (USA)
"Retail giant Costco wins dismissal of prawn lawsuit over Thai forced labor", 25 Jan 2017
A U.S. federal judge has dismissed a lawsuit claiming that retailer Costco Wholesale Corp. had knowingly sold frozen prawns, the farming of which involved forced labor in Thailand. Judge Jeffrey White ruled that the plaintiffs failed to establish that the world's second largest retail chain was bound to inform customers that modern-day slavery could be part of its supply chain. The lawsuit, filed in 2015, claimed U.S.-headquartered Costco was aware the prawns it bought from its Southeast Asian producers came from a supply chain dependent on ships involved in human trafficking and labor abuses..."[P]laintiffs fail to allege (Costco) had a duty to disclose the information about labor abuses in the supply chain ... on its product packaging," he added...Exporter C.P. Food...and its parent company...were also named as defendants...Sud along with fellow Costco customers alleged that Costco purchased farmed prawns, also known in the industry as shrimp, from the Southeast Asian seafood producers despite knowing they used ships manned by slave laborers...[I]n dismissing the lawsuit, the judge said the plaintiffs could not trace the prawns they bought to the suppliers in question. Judge White dismissed the lawsuit with prejudice, meaning that it cannot be brought again...
Author: Laura Northrup, Consumerist
Disgusted at reports that some shrimp sold in the United States may have been caught by people working under slavery-like conditions, a woman in California filed a class-action lawsuit against Costco, the store where she purchased her shrimp. The problem: Costco, as a members-only warehouse, knows exactly what she has purchased, and says she didn’t actually buy any of the affected shrimp. The lawsuit claimed that the plaintiff and her mother purchased prawns that came from two specific suppliers based in Thailand. Disturbing recent news reports have exposed the treatment of workers in the seafood industry in that country, who are recruited from poorer Asian countries and forced to work long hours under slavery-like conditions. The problem is that there’s no proof that the lead plaintiff bought any affected seafood. She may have, but Costco’s records for her account and for her mother’s don’t show that she purchased that shrimp...The case has been dismissed, but if the attorneys can find a different plaintiff who actually purchased Thai farmed shrimp from those suppliers, it can continue.
Author: Kosit Lohawatanakul, CP Foods
CP Foods condemns, in the strongest possible terms, all aspects of human trafficking and slavery, and we take this opportunity to reassert our strong commitment to human rights and a sustainable supply chain the company said in a statement on 24 August…In light of a recent lawsuit filed in California…CP Foods would like to provide further details on the actions we have been taking to ensure traceability and humane and sustainable practices throughout our shrimp supply chain. We believe that the lawsuit against CP Foods is entirely without merit, and we have taken significant measures to ensure that the practices that it describes are not a part of our business…The allegations relate to fishmeal – a small and diminishing ingredient of the feedstock that we feed to the shrimp at our shrimp farms. We are committed to and have implemented steps to allow us trace the origin of the fishmeal that we buy back to individual fishing vessels…
Author: Felicity Lawrence, Guardian (UK)
Three California law firms are seeking an injunction to stop the US retail chain Costco selling prawns unless they are labelled as the produce of slavery. The firms have filed a class action lawsuit against Costco and its Thai seafood supplier, alleging that Costco knowingly sold prawns from a supply chain tainted by slavery. The claim, lodged in the federal court in San Francisco on Wednesday, alleges that Costco has for several years bought and resold farmed prawns from the leading Thai food group CP Foods…that have sourced the raw material for their feed from ships manned by slaves…Costco said in a statement: “…Costco Wholesale has been working with and will continue to work with various stakeholders…to address the issues that have surfaced…[A]ll of our customers know that if they are dissatisfied with any purchase…they can return the item for a full refund.”…CP Foods said last year that it condemned all trafficking and slavery in the strongest possible terms…
Author: Cotchett, Pitre & McCarthy, LLP
According to a complaint filed in the U.S. District Court this morning, the product of slave labor has found its way onto the dinner plates of California consumers who buy frozen farmed prawns and frozen meals from Costco and from Costco’s supplier CP Foods…The complaint charges that Costco is aware that the farmed prawns it purchases from Southeast Asian producers, including Defendant CP Foods, and then resells to California consumers, is derived from documented slavery, human trafficking and other illegal labor abuses…The Complaint seeks injunctive relief to prevent Costco and CP Foods from continuing to import and sell Thai frozen farmed prawns in California as long as the supply chain continues to be tainted by human rights abuses as well as restitution to customers who bought the tainted products. [Also refers to CP (Charoen Pokphand)]
Author: Cotchett, Pitre & McCarthy, LLP
[Full text of the complaint]