On June 20, the Washington D.C. Superior Court dismissed Corporate Accountability Lab’s (CAL) consumer protection suit against The Rainforest Alliance, Inc. (Rainforest Alliance), an eco-social certifier, for lack of personal jurisdiction. In the same order, the judge refused to grant The Hershey Company’s (Hershey) motion to dismiss the case against them as co-defendants. This decision means that CAL’s litigation against Hershey may proceed, while the case against Rainforest Alliance will not. This post discusses the mixed decision and the significance of the dismissal of claims against Rainforest Alliance.
Nearly two years ago, CAL sued Hershey and Rainforest Alliance for “false and deceptive marketing representations of Hershey’s Rainforest Alliance certified chocolate products.” We brought the suit under the Washington, D.C. Consumer Protection Procedures Act (CPPA), which allows public interest organizations like CAL to sue on behalf of consumers in D.C. for misleading marketing practices. We alleged that the Rainforest Alliance seal, which indicates that Hershey’s chocolates are sustainably and ethically produced, misleads consumers. Investigations by CAL and other organizations have in fact documented unfair working conditions, below-poverty wages, and cases of child labor throughout the cocoa farms that Hershey relies upon and that Rainforest Alliance certifies.
The Rainforest Alliance certification scheme reportedly covers over two million farmers. The organization sets standards for farms and performs audits that purport to ensure cocoa suppliers are employing sustainable practices free of child labor and other abuses. In this way, the organization claims to be plotting a path towards a “more resilient and inclusive future.” In exchange, companies like Hershey that source these certified products are licensed to display the Rainforest Alliance seal on their packaging, allegedly amplifying and reinforcing “the beneficial impacts of responsible choices, from farms and forests all the way to the supermarket check-out.”
This sounds lovely. And the resulting belief that brands sporting Rainforest Alliance’s seal are ethical is likely to make consumers more open to purchasing their products. Unfortunately, however, that belief may well be misplaced. Rainforest Alliance and certification schemes like it are known to overstate the benefits they bring, and human rights abuses persist in the supply chains of major brands that proudly rep the Rainforest Alliance logo.
CAL has written extensively about the weaknesses of these voluntary accountability measures, which often amount to little more than a “marketing pitch” intended to make consumers feel good about purchasing a particular product at an elevated price. In reality, these certification schemes can involve only infrequent and haphazard auditing as well as flexible standards that leave serious violations of human rights unaddressed in supply chains. The proliferation of these certification schemes suggests that brands believe certifications are credible enough to influence consumers’ purchasing decisions. Nevertheless, there is little evidence that the implementation of voluntary accountability measures schemes actually improves conditions for the communities producing the goods.
Grounds for Dismissing Claims against Rainforest Alliance
The ruling from June 20 means that CAL will not be able to challenge Rainforest Alliance for misleading consumers, as the judge found that the Superior Court could not lawfully assert personal jurisdiction over that entity.
Personal jurisdiction limits the reach of a court over individuals, preventing tribunals from exercising power over persons or entities who have no relationship with the state where the case is brought. Courts usually have personal jurisdiction over a party when that party has certain “minimum contacts” where it is being sued. When an out-of-state defendant is sued in state court, its contacts with the forum are analyzed and deemed sufficient for personal jurisdiction only if they consist of actions purposefully directed at the state where the court is located and relate to the underlying facts of the suit itself. The District of Columbia’s long-arm statute codifies conditions - such as the defendant transacting business or contracting to provide services in the District - under which these requirements may be met for suits initiated in DC.
In his order, Judge Edelman decided that neither the constitutional due process requirements of personal jurisdiction nor the conditions of DC’s long arm statute were met for Rainforest Alliance. He ruled that the placement of Rainforest Alliance’s certification on products sold in the District does not constitute either “an act” contemplated by DC’s long-arm statute or a minimum contact by the certifier purposefully directed at the District that would justify enabling that certification scheme to be hauled into DC court. This decision is not necessarily consistent with DC precedent under which the long arm statute is coextensive with Fourteenth Amendment requirements and a single act alone, even one performed out of state with consequences in the District, can satisfy the requirements of personal jurisdiction.
Accountability Gaps: Why the Rainforest Alliance Dismissal Matters
This dismissal underscores what has historically been a general pattern of impunity associated with the certification model, a pattern that CAL seeks to upend. Rainforest Alliance enjoys benefits from the sale in DC of products bearing the Rainforest Alliance logo. In particular, it profits reputationally from the spread of its seal as a symbol of sustainability. As a third-party certifier found to have no formal business or contracts in the District, however, it may well be unaccountable in DC for misleading claims made to consumers by means of its certifications.
Rainforest Alliance certifies Hershey’s supply chain as ethically sourced. And it explicitly makes the claim that certified Hershey’s products “are grown and harvested on farms and forests that follow sustainable practices.” Yet under the theory of personal jurisdiction affirmed by the Court, it has become far more difficult to hold Rainforest Alliance and similar certification schemes accountable for misleading consumers about abuses in corporate supply chains. Courts must have personal jurisdiction even to consider legal issues, so this decision keeps the real issues out of court.
Following the reasoning in this dismissal order, the arm's-length nature of certification schemes - in which certifiers license brands to use their seal of approval without getting involved further in marketing or sales - means that it is unlikely that any court in the country, outside of the state where the certifier is registered, would be able to assert personal jurisdiction over these types of actors. The implication of this decision going forward is that certification schemes may not be held accountable for misrepresentations that in effect mask grievous abuses in corporate supply chains.
While CAL’s suit against Rainforest Alliance will not proceed, our case against Hershey is ongoing. Judge Edelman’s ruling means that at the end of the day, Hershey may be forced to answer for grievous labor abuses in its West African cocoa supply chain.
Percy Metcalfe is a CAL Legal Intern and rising 3L at Georgetown University Law Center. Vikram Ramaswamy is a CAL Intern and a rising junior at the University of Chicago.
