In In re African-American Slave Descendants Litigation, ___ F.3d ___ (7th Cir. Dec. 13, 2006), the Seventh Circuit (Judges Easterbrook, Posner and Manion) upheld, at the pleading stage, a UCL claim predicated on the defendants' failure to disclose to consumers their past involvement in slavery. In the opinion, Judge Posner writes:
The second qualification [to the court's holding that certain other claims are legally barred] concerns a claim, rather buried in the complaint but not forfeited, that in violation of state fraud or consumer protection law members of the plaintiff classes have bought products or services from some of the defendants that they would not have bought had the defendants not concealed their involvement in slavery. This claim has nothing to do with ancient violations and indeed would be unaffected if the defendants’ dealings with slaveowners had been entirely legal. It is a complaint of consumers’ being deceived because sellers have concealed a material fact. The injury is the loss incurred by buying something that one wouldn’t have bought had one known the truth about the product.
It is true that under no consumer protection law known to us, whether a special statute or a doctrine of the common law of contracts or torts, has a seller a general duty to disclose every discreditable fact about himself that might if disclosed deflect a buyer. To fulfill such a duty he would have to know much more about his consumers than he possibly could. But the plaintiffs are charging the defendants with misrepresenting their activities in relation to slavery. A seller who learns that some class of buyers would not buy his product if they knew it contained some component that he would normally have no duty to disclose, but fearing to lose those buyers falsely represents that the product does not contain the component, is guilty of fraud. An example would be a manufacturer who represented that his products were made in the United States by companies that employ only union labor, whereas in fact they were made in Third World sweatshops. See Kasky v. Nike, Inc., 45 P.3d 243, 248 (Cal. 2003); Price v. Philip Morris, Inc., 848 N.E.2d 1, 19 (Ill. 2005); Oliveira v. Amoco Oil Co., 776 N.E.2d 151, 154-55 (Ill. 2002); Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1185 (3d Cir. 1993).
We do not offer an opinion on the merits of the consumer protection claims, but merely reject the district court’s ruling that they are barred at the threshold.
Slip op. at 14-15 (emphasis added). The citation of Kasky v. Nike, a UCL case, is very significant here, as Consumer Law & Policy Blog explains in more detail. Please visit that blog for more about the decision and the underlying actions, including clarification that the underlying state consumer protection claims included a UCL claim.