18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 623 § 1589 unambiguously protected labor performed in work programs in federal immigration detention facilities, the "judicial inquiry is complete." Id . Kashef, et al. v. BNP Paribas SA, 2021 U.S. Dist. LEXIS 28436 (S.D.N.Y. Feb. 16, 2021). Plaintiffs, a group of victims of the Sudanese government’s human rights abuses, filed a class action alleging that Defendant, a French financial institution, improperly assisted the Sudanese government in avoiding U.S. economic sanctions. Id. at *2-3. The government of Sudan engaged in devastating acts of genocide and other human rights violations beginning in 1997. In response, the U.S. government passed the Sudan Peace Act, labeled Sudan as a state sponsor of terrorism, and imposed economic sanctions on the country. Around this same time, Defendant became the primary bank of the Sudanese government, and according to Plaintiffs, “Defendant created several schemes to avoid the sanctions, including removing information from financial documents identifying that a Sudanese entity was one of the parties . . . and using satellite banks in the United States through which to funnel money.” Id. at *4. Plaintiffs filed suit against Defendant asserting a number of causes of action, including six counts of conspiracy and six counts of aiding and abetting, in addition to claims for negligence, outrageous conduct causing emotional distress, and negligent infliction of emotional distress. Defendants filed a motion to dismiss for failure to state a claim, which the Court granted in part and denied in part. The Court noted that Swiss law governed this case. Pursuant to Swiss law, the Court divided Plaintiffs’ claims into those involving primary tort liability and those based in secondary tort liability. As to the primary tort liability claims, i.e. , Plaintiffs’ negligence-based claims, the Court found that Article 41 of the Swiss Code of Obligations controlled. Since Plaintiffs failed to allege that Article 41 applied to any of their claims, the Court dismissed Plaintiffs’ negligence, outrageous conduct causing emotional distress, and negligent infliction of emotional distress claims. In terms of secondary tort liability, the Court found that Article 50.1 of the Swiss Code of Obligations governed these claims. To state a claim under Article 50.1, Plaintiffs must show that “‘ (1) a main perpetrator committed an illicit act, (2) the accomplice consciously assisted the perpetrator and knew or should have known that he was contributing to an illicit act, and (3) their culpable cooperation was the natural and adequate cause of the plaintiff’s harm or loss.’” Id. at *8. The parties stipulated that element one was satisfied, and regarding element two, the Court noted that an accomplice is liable if the accomplice “‘intentionally or unintentionally assists the illicit act of the perpetrator who himself is also at fault.’” Id. at *15. The Court found Plaintiffs’ allegations to be sufficient because, in light of the heavily publicized Sudanese atrocities and Defendant’s actions to conceal its business dealings with Sudan, Plaintiffs showed that Defendant at least should have known that its conduct contributed to Sudan’s human rights violations. The Court also highlighted internal communications from Defendant’s senior officials in which they expressly recognized the human rights abuse in Sudan. Id. at *17. Finally, as to the third element under Article 50.1, the Court likened “natural and adequate cause” to the American concepts of “but for” and “proximate” causation. To that end, Plaintiffs alleged that Defendant directly contributed to Sudan’s human rights violations by assisting the Sudanese government’s cycle of accessing U.S. dollars, profiting from the country’s oil industry, and using those profits to fund the Sudanese military. Additionally, since issues of proximate cause were typically not determined at the motion to dismiss stage, the Court rejected Defendant’s arguments that it was not the cause of Plaintiffs’ injuries. For these reasons, the Court granted in part and denied in part Defendant’s motion to dismiss. Walker, et al. v. Nestle USA, Inc., 2021 U.S. Dist. LEXIS 61210 (S.D. Cal. March 30, 2021). Plaintiff filed a consumer class action alleging that statements on Defendant’s chocolate product were deceptive because they falsely led consumers to believe that the products were produced in accordance with environmentally and socially responsible standards, and that such labelling was undertaken in violation of the .California Consumer Legal Remedies Act ("CLRA") and the Unfair Competition Law. Plaintiff asserted that the cocoa ingredients were made with child labor and enslaved labor from Africa. Defendant filed a motion to dismiss for failure to allege claims with the specificity required by Rule 9(b). The Court granted the motion. The Court reasoned that Plaintiff’s claims were premised on Defendant’s alleged deceptive labeling, and were thereby "grounded in fraud” under Rule 9(b). Id . at *5. The Court explained that under Rule 9(b), fraud allegations must be "specific enough to give Defendants notice of the particular misconduct…so that they can defend against the charge and not just deny that they have done anything wrong." Id . Defendant argued that Plaintiff failed to alleged which products she purchased and when, what label statements she saw, and why she relied on them. Id . The Court agreed. It ruled that Plaintiff failed to meet the requirements of Rule 9(b). The Court held that Plaintiff’s complaint failed to allege the actual labels on the actual products she was purchasing misled her. Accordingly,