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Costco Slave Labor Suit Dismissed

If you purchased some bulk shrimp from Costco last summer, it's possible that your shrimp cocktail included seafood that was "derived from a supply chain that depends upon documented slavery, human trafficking, and other labor abuses" -- at least according to a lawsuit against the company.

A California woman sued the retailer last August, alleging that the company's Thailand-sourced shrimp were produced with slave labor, despite its supplier code of conduct which prohibits human rights abuses. That's false advertising, Monica Sud argued in her putative class action.

But it turns out, Sud had never purchased Thai shrimp from Costco, slavery-sourced or otherwise. Her suit was dismissed last Friday for lack of standing.

Something Smells Fishy

Monica Sud's suit was based on the fact that Costco sells shrimp from Thailand. Thailand is the world's third largest exporter of seafood, but its massive seafood industry is also includes gross human rights violations. The State Department's 2015 human trafficking report, for example, highlighted forced labor in Thailand's fishing industry and determined that "some Thai officials are complicit in trafficking crimes."

According to Sud's suit, Costco knowingly sold prawns that were produced with slave labor and fed using "the product of pirate fishing and the use of 'ghost ships.'" Such alleged practices would contradict the company's public statements that its suppliers do not engage in human rights abuses.

That contradiction, Sud alleged in her federal class action lawsuit, violates California's unfair competition and false advertising laws. "Human suffering cannot be ignored to enhance a company's economic bottom line," Sud's lawyer said at the time. "California consumers are unknowingly supporting slave labor."

But There's a Catch

Except Sud wasn't one of those consumers, it turns out. Since Costco is a membership-based wholesaler, restricting its bulk goods to those who buy in to its retail warehouses, all purchases require a Costco card -- and Costco keeps track of what you buy.

Despite Sud's declarations that she and her mother purchased Thai prawns from Costco, the company produced her purchase history from January 1, 2011, through October 25, 2015. In over four years, Sud had purchased prawns sourced from Vietnam and Indonesia, but not Thailand.

The Northern District of California dismissed her suit for lack of standing, but did give Sud the opportunity to amend, meaning Costco's shrimp worries may not be over just yet.

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