The US Supreme Court just granted Nestlé’s cert petition in a case based on forced child labor in Côte d’Ivoire. This post covers the significance of the decision for the plaintiffs–former child slaves– and the future of the Alien Tort Statute (ATS).
(fra https://corpaccountabilitylab.org/calblog/2020/7/2/more-trouble-ahead-for-the-ats-scotus-grants-cert-in-nestle-case):
Both the alleged facts in John Doe I et al v. Nestlé (forced child labor in the supply chains of giant chocolate brands) and the contours of the law under which Plaintiffs are suing (corporate liability for overseas abuses under the ATS) are significant. The cocoa industry notoriously uses child labor, and companies including Defendants Nestlé and Cargill have made ineffective voluntary commitments to address it for nearly twenty years. As for the law, the once-promising ATS, which gives non-US citizens the right to seek justice for violations of international law (including human rights abuse) in US courts, has been gutted over the years. The Supreme Court’s decision to review this case means that corporate accountability under the ATS may see more trouble.
Underlying facts
A group of former child laborers, represented by human rights attorneys at Schonbrun Seplow Harris & Hoffman, LLP and International Rights Advocates, filed this class action against Nestlé, Cargill, and Archer Daniels Midland in 2005. The plaintiffs allege that they were trafficked from Mali and forced to work without pay in the Côte d’Ivoire cocoa sector as children. They further allege that they were locked into rooms when not working and that overseers severely physically abused them. They argue that the defendant companies aided and abetted the forced labor and torture they endured by purchasing cocoa from farms and cooperatives that they knew or should have known used child labor and by providing logistical support to farms using child labor.
Defendants do not dispute that the treatment Plaintiffs suffered– forced labor and torture– violates international law (for which the ATS provides an implied cause of action) nor that forced child labor exists in their supply chains. Instead, they take issue with being held legally accountable for their role in perpetuating these abuses.
The law at issue
Plaintiffs filed suit under the ATS, the Trafficking Victims Protection Act, and California law, although only the ATS claims have endured. Over the last decade and a half, the case has ping-ponged between federal district court in California and the Ninth Circuit on appeal and remand related to corporate liability under the ATS.
The case has survived the Supreme Court rulings in Kiobel v. Royal Dutch Petroleum Co. and Jesner v. Arab Bank, which substantially limited the viability of ATS human rights suits against corporations. (Respectively, these decisions require that ATS claims be closely tied to US territory–with more than a defendant’s “mere corporate presence”– and exempt foreign corporations from liability.)
The Supreme Court is now poised to review the 2018 Ninth Circuit decision in the Nestlé case that upheld aiding and abetting as a theory of liability under the ATS (rejecting Defendants’ argument that the statute only applies to “principal offenses”); recognized ATS claims against domestic corporations under Jesner; and accepted Plaintiffs’ argument that Defendants’ alleged conduct in the US sufficiently overcomes the presumption against extraterritoriality.
Upon review of this case, the Supreme Court may further chip away at the ability for corporations to be sued for human rights abuses abroad under the ATS by eliminating aiding and abetting liability and/or corporate liability altogether.
Nestlé’s position
Unsurprisingly, Nestlé’s cert petition filed last September argued that conduct amounting to aiding and abetting should not be enough to overcome the presumption against extraterritoriality under the ATS, meaning that liability would require an actus reus more than a US company’s oversight of a foreign subsidiary. It also argued that unlike natural persons, corporations should not be subject to ATS liability at all.
(Defendants have been here before. The Supreme Court denied Nestlé’s 2015 cert petition requesting the Court intervene with respect to the Ninth Circuit’s views on similar liability questions under the ATS.)
The government’s new position
In May, the Solicitor General’s office (SG) filed an amicus brief on behalf of the Trump administration, arguing that the Court should grant cert and find that 1) domestic corporations are not subject to liability under the ATS; 2) there is no aiding and abetting liability under the ATS; and 3) even if domestic corporations are subject to liability and aiding and abetting liability holds, a US company’s oversight of a foreign subsidiary is too attenuated to constitute aiding and abetting under the ATS as a matter of law.
The government’s arguments mirror those in Nestlé’s petition and recycle stances Defendants have previously taken in this case (and that the Ninth Circuit has rejected and the Supreme Court declined to review).
The SG’s position is a complete about-face from the previous stance on corporate liability under the ATS it presented to the Court just three years ago. In its Jesner amicus, the SG argued that corporations could be sued under the ATS for torts in violation of international law.
Implications for Plaintiffs and the future of the ATS
Given the Supreme Court’s past decisions narrowing corporate liability under the ATS, the government’s switch in view, and the convervative leaning bench, the Court’s decision to review this case is deeply concerning for advocates and victims who look to the ATS as an accountability tool for US companies.
The Supreme Court’s framing of the questions presented in today’s cert decision is already troubling. On aiding and abetting liability, the Court presents the question as one where the “defendant intended to pursue a legitimate business objective while knowing (but not intending) that the objective could be advanced by the other person’s violation of international law” rather than framing aiding and abetting as a violation in its own right. Following the majority’s reasoning in Jesner, the Court frames the corporate liability question as one of the judiciary imposing liability on corporations based on an unclear international consensus on corporate liability for international law violations — rather than focusing on the international consensus around the prohibition of torture and forced labor and then looking to domestic liability frameworks that apply to all legal persons. Finally, one of the Court’s reasons for granting cert is that the Ninth Circuit’s decision on the means rea standard for aiding and abetting will have “significant adverse consequences” — meaning, for corporations.
Plaintiffs must now wait for the Supreme Court to decide these key issues. We join them in hoping that the Supreme Court will surprise us with clarifying that domestic corporations can be held liable under the ATS, including for aiding and abetting violations of international law, and domestic oversight of subsidiaries abroad is sufficiently connected to the US under Kiobel. However, given the statute’s trajectory and the current Supreme Court bench, we’re pushing forward with other strategies to hold US companies accountable for human rights abuses overseas.
