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Supreme Court Will Consider New Curbs on Human-Rights Lawsuits

July 2, 2020, 1:40 PM

The U.S. Supreme Court will consider giving companies a broader shield against lawsuits by victims of overseas atrocities, agreeing to take up a case stemming from child slavery on cocoa farms in the Ivory Coast.

Nestle SA’s U.S. unit and Cargill Inc. are urging the court to end a suit that accuses them of complicity in the use of forced child labor in the African country. The Supreme Court said Thursday it will hear both companies’ appeals of that ruling.

The case will test a centuries-old law, the 1789 Alien Tort Statute, that had become a favorite tool of human-rights activists before 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.

But a federal appeals court said the allegations against Nestle and Cargill might have enough of a U.S. connection if the plaintiffs amended their lawsuit to provide more specifics.

“The allegations paint a picture of overseas slave labor that defendants perpetuated from headquarters in the United States,” the San Francisco-based appeals court said.

President Donald Trump’s administration joined the companies in urging the Supreme Court to take up the case.

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 suit alleges the companies were fully aware that child slavery was being used.

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

In its appeal, Nestle USA said the plaintiffs “have not even alleged that their injuries can be traced to the domestic conduct of a defendant.” The company said it “unequivocally condemns child slavery.”

Cargill said the plaintiffs “do not allege they worked on a farm from which Cargill purchased cocoa or to which Cargill provided any form of assistance.”

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

The justices will hear arguments and rule in the nine-month term that starts in October.

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

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

To contact the editors responsible for this story:
Joe Sobczyk at jsobczyk@bloomberg.net

Elizabeth Wasserman, Laurie Asséo

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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