High Court Signals Narrow Nestle Win on Human-Rights Suits (2)

U.S. Supreme Court justices suggested they might give companies a narrow victory in a clash over human-rights lawsuits, voicing skepticism about a lawsuit that accuses Nestle SA’s U.S. unit and Cargill Inc. of complicity in the use of child slavery on Ivory Coast cocoa farms.

Hearing arguments by phone, justices from across the court’s ideological spectrum questioned whether the allegations against the companies had enough of a U.S. connection to go forward. But even some of the court’s conservative members indicated reluctance to completely exempt U.S. companies from liability under a 1789 law used by activists to sue over overseas atrocities.

The upshot could be another incremental victory for corporations on the 231-year-old Alien Tort Statute, which was a favorite tool of human-rights advocates until the Supreme Court started scaling it back. The court ruled in 2013 that the law generally doesn’t apply beyond U.S. borders, and in 2018 that foreign corporations can’t be sued.

Justice Samuel Alito was among the conservatives who seemed unwilling to immunize domestic corporations as well. He said the companies’ arguments would prevent a U.S. business from being sued under the law for hiring agents to kidnap and enslave African children, telling Nestle’s lawyer that “many of your arguments lead to results that are pretty hard to take.”

But Alito also criticized what he saw as a lack of specificity in the long-running lawsuit against Nestle and Cargill.

“After 15 years, is it too much to ask that you allege specifically that the defendants who are before us here specifically knew that forced child labor was being used on the farms or farm cooperatives with which they did business?” Alito asked the lawyer pressing the suit.

Child Slaves

The case, filed by six former slaves who were kidnapped from their native Mali, has been moving up and down the federal court system since 2005. The companies are accused of aiding and abetting slave labor by giving Ivory Coast farmers financial assistance in the expectation that cocoa prices would stay low.

The ex-slaves say children were forced to work as long as 14 hours a day, given only scraps to eat, and severely beaten or tortured if they tried to escape.

The companies, who are backed by the Trump administration in the case, deny allegations of wrongdoing and say they condemn child slavery.

“Child labor in foreign countries is a complex, global social problem,” Nestle said in an emailed statement. “Nestle has explicit policies against it and is unwavering in our dedication to ending it.”

Cargill said in a statement it “does not tolerate the use of child labor in our operations or supply chains.” The company added: “Any instance of a child performing work that is dangerous or that might harm their health or education is one too many.”

The 33-word Alien Tort Statute, passed in reaction to an attack on a French diplomat in Philadelphia, lets federal courts handle suits by non-citizens over some violations of international law. The statute lay largely dormant for almost two centuries before being revived in the 1970s as a means of pursuing human-rights lawsuits.

Worldwide Impact

The lawyer pressing the suit, Paul L. Hoffman, told the justices Tuesday that “these corporations set up a supply chain where they know where cocoa beans are being made by means of child slave labor.”

That didn’t appear to satisfy Justice Stephen Breyer. He said he was worried the court would be setting a worldwide precedent by concluding that international law covers “aiding and abetting” wrongdoing. Doing so “could have very, very significant effects,” Breyer said.

Justice Amy Coney Barrett suggested she would leave the door open to lawsuits that alleged more direct wrongdoing by U.S. corporations. She described the hypothetical situation of a U.S. company or person who made phone calls and sent money for the specific purpose of facilitating the use of child slaves.

“Why isn’t that conduct that occurs in the United States?” she asked Justice Department lawyer Curtis Gannon.

Corporate Liability

Several justices indicated they were willing to leave U.S. corporations open to suit. Chief Justice John Roberts said that, unlike with previous cases involving non-U.S. corporations, no foreign government had objected to the suit against Minneapolis-based Cargill and Nestle’s Virginia-based U.S. unit.

“Why should we be cautious in terms of international relations in such a case?” Roberts asked Nestle’s lawyer, Neal Katyal. “And what objection would foreign countries have to ensuring that U.S. corporations follow customary international law?”

Justice Elena Kagan questioned the logic behind allowing suits against individuals but not corporations.

“If you could bring a suit against 10 slaveholders when those slaveholders form a corporation, why can’t you bring a suit against the corporation?” Kagan asked.

Multinational companies have faced dozens of Alien Tort Statute suits accusing them of playing a role in human rights violations, environmental wrongdoing and labor abuses.

The cases are Nestle USA v. Doe, 19-416, and Cargill v. Doe, 19-453.

(Updates with Cargill statement in 11th paragraph)

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Jon Morgan at jmorgan97@bloomberg.net

Elizabeth Wasserman, Joe Schneider

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