LITIGATION TRENDS 2025 | 57 T O C E M P E S G A N T I I P C A P R O W C S P O R T C O N T A C T I N T A P P P A T C C L S E C CROSS-PRACTICE FOCUS Environmental, Social & Governance M P S the pods could be successfully sorted, two large recycling companies, accounting for more than a third of national recycling facilities, informed Keurig that they would not recycle the pods for commercial feasibility reasons. Keurig’s annual disclosures reported that it had conducted extensive testing to validate that its pods could be recycled and that it was on track to make all its pods recyclable, but did not share that the two major recycling companies would not recycle the pods. The SEC asserted that Keurig’s failure to disclose the negative feedback made its annual reports “incomplete and inaccurate.” Keurig agreed to pay a $1.5 million civil penalty and accept a ceaseand-desist order. Keurig was not alone in finding itself in the cross-hairs of the SEC’s focus on “greenwashing.” The SEC also took enforcement action against investment advisory firms, including WisdomTree Asset Management Inc., for allegedly including misleading statements in marketing materials relating to ESG investment strategies. The WisdomTree action resulted in a $4 million settlement. As we look ahead to 2025, we anticipate that the arrival of a new administration may drive the focus on alleged “greenwashing” away from the federal level and perhaps more to the state level where sustainability remains a leading priority. Increased Scrutiny of Supply Chain Labor Conditions In recent years, there has been a marked increase in the scrutiny of labor conditions within global supply chains, with particular attention paid to the responsibilities and liabilities of parent companies. Legal developments in England suggest a heightened risk of parent company liability and liability in the wider value chain, particularly when key management and decision-making processes take place in that jurisdiction. The recent Court of Appeal ruling in Limbu & Ors v Dyson Technology Ltd & Ors [2024] EWCA Civ 1564 is a striking example of how English courts are approaching jurisdictional issues in cases involving alleged human rights abuses in overseas supply chains. In this case, a group of migrant workers brought claims against three Dyson companies (D1, D2 and D3). The claimants alleged that they had been trafficked to Malaysia, subjected to conditions of forced labour, exploitative and abusive working and living conditions and, for some, detention, torture and beating. In November 2023, the High Court declined to exercise jurisdiction, finding that Malaysia was the “centre of gravity of the case” and therefore the appropriate forum. This was overturned by the Court of Appeal in December 2024. In coming to that conclusion, Popplewell LJ emphasised the need to “look holistically” at the question of the appropriate forum. Amongst key factors, he stressed the relevance of the defendants’ domicile. The primary claim was against D1 and D2 – domiciled in England – and, although D3 was a group company domiciled in Malaysia, the litigation would be conducted by officers and employees of Dyson UK. Similarly, whilst the claimants suffered damage and loss in Malaysia, policies relating to the working and living conditions of Dyson workers were promulgated in, and implemented from, Dyson UK’s headquarters, evidencing its ultimate control over the supply chain. This was further supported by evidence of Dyson UK having been notified of the abuse and failing to react accordingly. The balance of convenience also pointed in favour of England, because: (i) the key documentation relating to the alleged abuse was predominantly located at Dyson UK’s headquarters; and (ii) England guaranteed equivalent standards of representation as the claimants would be unable to attend and give in-person evidence in Malaysia, thereby minimising the risk of “inequality of arms.” The Court of Appeal also disagreed with the High Court’s finding that the claimants’ inability to afford legal proceedings in Malaysia would be tempered by Dyson’s undertakings to pay for their reasonable and necessary 56 | Weil, Gotshal & Manges LLP
RkJQdWJsaXNoZXIy MTI5NDgyMg==