Costco cannot be held liable for selling products that may have been partially produced by slave labor, according to a ruling of the 9th U.S. Circuit Court of Appeals Friday.
The ruling stems from a 2015 lawsuit by Monica Sud. The lawsuit alleged that Costco buys farmed prawns from Thailand and other countries in Southeast Asia knowing that they are produced using workers on ships who are working as slave labor.
The retail giant only had a duty to disclose product defects that related to the central function of the product, the panel held. “Slave labor in a product’s supply chain does not relate to the central functionality of a food product such as the shrimp at issue here,” wrote the panel in non-precedential ruling.
The case had relied on California consumaer law but was dismissed by the trial judge.
Sud had claimed that Costco hid material facts from consumers, citing its supplier code of conduct on the company website, which states the company prohibits human rights abuses in its supply chain.
Much of the awareness in the US of slave labor came to light last year when the Associated Press won a Pulitzer Prize for its investigation into the widespread use of slave labor in Southeast Asia’s multibillion-dollar food industry.
Case: Sud v. Costco Wholesale Corp, No. 17-15307