What Nestle & Cargill v. Doe Means for International Corporate Responsibility

Michelle Mealer

Vol. 42 Associate Editor

Examples abound of US companies either directly or indirectly abetting human rights violations within their products’ supply chains.[1] Despite these violations, regulating multinational corporations and their supply chains is challenging to the international legal frameworkbecause international law is premised on states’ centrality. While international legal frameworks may have general goals and ideals, enforcement is usually placed primarily on the state. Since many developing countries are either unwilling or unable to enforce international legal norms like human rights, there is no enforcement mechanism to regulate US multinationals’ behavior in a host country.[2] . Voluntary initiatives have, thus far, been the only way to encourage companies to respect human rights. As a result, companies are free to wash their hands of responsibility and create deniability of their involvement in human rights abuses down their supply chains;[3] they are rarely the ones who pull the trigger. With the international legal framework falling short of policing multinational companies’ behavior, it falls on individual nations to provide legal recourse for international claimants. In the US, the Alien Tort Statute (ATS) gives survivors of human rights abuses, no matter where they occur, the right to sue the perpetrators in the US.[4] The ATS provides district courts with jurisdiction for “any civil action by an alien for a tort only, committed in violation of the law of nations or by a treaty of the United States.”[5] It was designed to ensure that foreigners could seek justice on US soil for crimes against “the law of nations.”[6] ATS cases have comingled international norms and standards with domestic torts,[7] and claims have been brought against both individuals and corporate actors.[8] For decades, survivors of human rights crimes used the ATS to seek redress against both corporations and individuals responsible for their abuse whenever the perpetrators were based in the US;[9] however, the scope of the ATS was narrowed considerably in 2013 when the US Supreme Court held that it does not apply to human rights violations committed in other countries unless there is a strong connection to the US. The Justices unanimously agreed that a multinational corporation’s mere presence on US territory was not a strong enough connection.[10] Despite the ATS’s curtailment, the Court is reconsidering this act’s scope in Nestle & Cargill v. Doe. In this case, anonymous Malian citizens filed a class-action lawsuit under the ATS against multinational cocoa suppliers, including Cargill, Inc. and Nestlé USA. The lawsuit alleged that when the claimants were children, they were forced to work on cocoa farms in Côte d’Ivoire.[11] In 2016, the Central District of California dismissed the complaint, holding that the claimants’ focus was extraterritorial. On appeal, the Ninth Circuit reversed the district court’s judgment, “holding that (1) corporations can be sued under the ATS and (2) the claimants’ complaints had a sufficient US focus.”[12] A key question before the Court is whether “aiding and abetting” (as opposed to mere presence) constitutes sufficient US focus to trigger liability under the ATS and whether general corporate activity in the US can overcome the presumption against extraterritorial application of US law.[13] Nestlé USA and Cargill challenged the holding by the Court of Appeals for the Ninth Circuit that US corporations can be held liable under the ATS for aiding and abetting human rights violations abroad as a result of their corporate conduct in the US.[14] The Supreme Court heard oral arguments on the case on December 1, 2020, but has yet to issue a ruling. The Court’s decision on the subject could either close the door on decades of plaintiffs’ attempts to use the ATS to assert international law claims against US companies or open it further as a credible basis for such claims. The outcome of this case may present a watershed moment for protecting human rights, restoring the US as a world leader on international legal norms, and encouraging global corporate responsibility of US companies through a renewed risk of tortious liability.

[1] See e.g., Anna Fifield, China compels Uighurs to Work in Shoe Factory That Supplies Nike, Wash. Post (Feb. 29, 2020), https://www.washingtonpost.com/world/asia_pacific/china-compels-uighurs-to-work-in-shoe-factory-that-supplies-nike/2020/02/28/ebddf5f4-57b2-11ea-8efd-0f904bdd8057_story.html; Matthew Lavietes, Tesla, Apple Among Firms Accused of Aiding Child Labor in Congo, Thomson Reuters Found. (Dec. 17, 2019), https://news.trust.org/item/20191216225255-v0a83; Peter Whoriskey, Supreme Court Weighs Child-Slavery Case Against Nestlé USA, Cargill, Wash. Post (Dec. 1, 2020), https://www.washingtonpost.com/business/2020/12/01/cocoa-supreme-court-child-labor/. [2] Simon Chesterman, Oil and Water: Regulating the Behavior of Multinational Corporations Through Law, 36 N.Y.U. J. Int’l L. & Pol. 307, 307-08 (2004). [3] Human Rights in Supply Chains, Hum. Rts. Watch (May 30, 2016), https://www.hrw.org/report/2016/05/30/human-rights-supply-chains/call-binding-global-standard-due-diligence#. [4] The Alien Tort Statute, Ctr. Just. & Acct’ability, https://cja.org/what-we-do/litigation/legal-strategy/the-alien-tort-statute/ (last visited Jan. 30, 2021). [5] 28 U.S.C. § 1350 (2012). [6] Corporate Crime and Punishment, Hum. Rts. Watch (May 30, 2016), https://www.hrw.org/news/2012/02/28/corporate-crime-and-punishment. [7] See Régis Bismuth, Mapping A Responsibility of Corporations for Violations of International Humanitarian Law: Sailing Between International and Domestic Legal Orders, 38 Denv. J. Int’l L. & Pol’y 203, 225 (2010). [8] See Harmen van der Wilt, Corporate Criminal Responsibility for International Crimes: Exploring the Possibilities, 12 Chinese J. Int’l L. 43, 49 (2013). [9] Human Rights Watch, supra note 6. [10] Kiobel V. Sell, Ctr. Just. & Acct’ability, https://cja.org/what-we-do/litigation/amicus-briefs/kiobel-v-shell/ (last visited Dec. 23, 2020). [11] Nestlé USA v. Doe I, Ballotpedia, https://ballotpedia.org/Nestl%C3%A9_USA_v._Doe_I (last visited Jan. 30, 2020). [12] Id. [13] U.S. Supreme Court to Consider Scope of the Alien Tort Statute, ALLEN & OVERY (Oct. 2, 2020), https://www.allenovery.com/global/-/media/allenovery/2_documents/news_and_insights/publications/2020/10/us_supreme_court_to_consider_scope_of_the_alien_tort_statute.pdf. [14] See Brief for Petitioner, Nestlé USA, Inc. v. Doe I, No. 19-416, 2020 WL 5498509. The views expressed in this post represent the views of the post’s author only.