Should foreigners be allowed to bring lawsuits in the US against corporations under the Alien Tort Statue

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Background

the U.S. Supreme Court heard consolidated oral arguments in Nestlé USA, Inc v. Doe I, Docket number 19-416 and Cargill, Inc v. Doe I, a consolidated case on U.S. corporations and liabilities for alleged child slave labor violations abroad.


The basic facts of what happened are beyond dispute: six Africans were trafficked out of Mali as children, where they were forced to work long hours on Ivory Coast cocoa farms and locked at night into shacks. Attorneys for the six Africans argued that the companies should have better monitored their cocoa suppliers in West Africa and have liability. The countries of the region grow about two-thirds of the world’s cocoa, and child labor is endemic.
Looking at the docket files for the case, one finds amicus briefs from Coca-Cola, Chevron, the U.S. Chamber of Commerce, and a joint filing for three trade associations (National Confectioners Association, the World Cocoa Foundation, and the European Cocoa Association), all in support of Cargill. As well, the Washington Legal Foundation and the Cato Institute filed amicus briefs in support of the corporations.


Cargill and Nestle selected a lawyer well-known to MSNBC aficionados to represent them: Neal Katyal, a former Acting Solicitor General of the United States, and the creator of an inspiring TED Talk. Both companies have strongly worded policies against child labor and human trafficking and the like. All of the amicus briefs stated that they abhor child slavery and the corporations actively take steps to eradicate such practices among their suppliers.

Nestle’s arguments

Plaintiffs’ (Nestle) brief confirms that all they have alleged (and can allege) is that Nestlé USA lawfully purchased some cocoa from Côte d’Ivoire and exercised some generalized supervision. The true wrongdoers are the Malian and Ivorian traffickers, farmers, and overseers who injured Plaintiffs in West Africa.

In other words, the practices of Nestlé, Cargill and, by extension, Chevron, Coca-Cola, and all multi-national corporations with dispersed supply chains are sufficient. The terms of their contracts are clear and exclude child labor, human trafficking, and all forms of modern slavery. Occasionally, they do audits of their suppliers. Isn’t that enough? How can a company be responsible for all the actions of their suppliers?
At issue, according to the briefs, is liability under the Alien Tort Statute, a part of the Judiciary Act of 1789. It has been enshrined in U.S. law for more than 230 years. To me, the most interesting exchange during the hearing was between Justice Elena Kagan and Katyal (pages 19-21 of the transcript):

JUSTICE KAGAN: Mr. Katyal, is child slavery, not aiding and abetting it but the offense itself, is that a violation of a specific universal and obligatory norm?

KATYAL: We’re — we’re not – yes, I think we’re not challenging that here. It’s just the aiding and abetting.


JUSTICE KAGAN: Okay. So, if that’s right, could a former child slave bring a suit against an individual slaveholder under the ATS?


KATYAL: So they — if it were – if it weren’t extraterritorial and it wasn’t a corporate action, yes.


JUSTICE KAGAN: Yeah, no problem extraterritorial, no problem aiding and abetting, just a straight suit.


KATYAL: Correct.


JUSTICE KAGAN: Okay. And could the same child — former child slave in the same circumstances bring a suit against 10 slaveholders?


KATYAL: You know, if they – if they met the — you know, the requirements under the — the law, yeah, sure. I mean, if they —

JUSTICE KAGAN: Okay. So if —
KATYAL: — if it was a plausible allegation.


JUSTICE KAGAN: — if you could bring a suit against 10 slaveholders when those 10 slaveholders form a corporation, why can’t you bring a suit against the corporation?


KATYAL: Because the corporation requires an individual form of liability under a norm, a specific norm, of — of – under international law, which doesn’t exist here. I think Sosa in Footnote —


JUSTICE KAGAN: I — I — I guess what I’m asking is, like, what sense does this make? This goes back to Justice Breyer’s question. What sense does this make? You have a suit against 10 slaveholders, 10 slaveholders decide to form a corporation specifically to remove liability from themselves, and now you’re saying you can’t sue the corporation?

Gorsuch reiterated this point a few minutes later. He complained to Hoffman that the plaintiffs are asking the court to infer a new cause of action under the ATS for aiding and abetting human-rights abuses. But why should the Supreme Court do that, Gorsuch asked, when it has declined to create causes of action elsewhere and Congress can do so?
Kavanaugh captured the argument in even clearer terms. This case, he told Hoffman, is “really about the proper role of the judiciary as compared to the proper role of Congress here in fleshing out” the ATS. And the role of the courts is limited, Kavanaugh emphasized.
In his rebuttal on Tuesday, Katyal characterized the plaintiffs’ complaint as “thin and accusatory” and urged the justices to “defer to Congress.” When the argument ended a few minutes later, it seemed likely that Nestlé and Cargill were likely to prevail, even if they may not ultimately achieve the sweeping victory that they seek. A decision in the case is expected by summer.

The Mali children’ arguments

The former child slaves are citizens of Mali. They allege that as children they were sold to cocoa plantations in Ivory Coast, where they were forced to work long hours without pay and were beaten if they didn’t work quickly enough. Nestlé and Cargill, they claim, aided and abetted this forced labor by buying their cocoa from, and providing other support to, plantations in Ivory Coast despite knowing that the plantations used child slavery. The U.S. Court of Appeals for the 9th Circuit allowed the youths’ lawsuit to go forward.

 

Other justices appeared to want to leave open the possibility that U.S. corporations could be held liable under the ATS. Justice Elena Kagan peppered Katyal with a series of questions that culminated in her asking why, if a child slave could bring a lawsuit under the ATS against 10 individual slave holders, he couldn’t also sue a corporation that the 10 slave holders formed to evade liability. She noted that after the transatlantic slave trade was abolished there was also a long history of imposing liability on ships – rather than individuals – that carried slaves, suggesting that there was a norm of holding entities liable in international law.


Justice Neil Gorsuch followed up, telling Katyal that he didn’t see anything in the text or the purpose of the ATS that would require the court to carve out an exemption for corporations. Moreover, Gorsuch added, we know that the ATS did permit the seizure of pirate ships. Why wouldn’t corporate liability, which didn’t exist at the time, flow from that?