On June 17, 2021, the U.S. Supreme Court reviewed whether to hold corporations liable for human rights violations under the Alien Tort Statute (ATS) in Nestlé v. Doe. In previous cases, the Court had narrowed the jurisdictional scope of the ATS significantly, reversing circuit court decisions allowing the use of the ATS by foreign plaintiffs to sue corporate defendants for alleged human rights violations occurring outside the United States. However, rather than resolving whether the companies could be liable, the 8-1 decision merely reaffirmed the Court’s 2013 decision in Kiobel v. Royal Dutch Petroleum that an ATS case cannot be brought if most of the conduct occurs outside of the United States.

Factual History 

The suit originally began as a class-action by a group of cocoa farmers against producers, processors, buyers, and sellers of cocoa beans. The farmers had allegedly been kidnapped from Mali and enslaved as children, and subjected to intolerable working conditions in the Ivory Coast (now Côte d’Ivoire). For example, they were forced to work fourteen-hour days without pay. The farmers claimed the companies, including Nestlé and Cargill Inc., were aware of the child labor violations and continued to support the businesses that enslaved them. 

This action began in the U.S. District Court for the Central District of California, which granted the defendants’ motion to dismiss on the grounds that the plaintiffs had insufficient evidence of the defendants aiding and abetting. The plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit. This court reversed the prior decision and eventually found that the alleged conduct fell within the limits of the ATS.

Precedent 

The ATS, 28 U.S.C. § 1350, was adopted in 1789 and allows non-United States citizens to bring tort claims in United Stated federal courts based on violations of international law binding on the United States. In 1980, U.S. circuit courts began recognizing that alleged human rights violations fall within the scope of the ATS, but in Kiobel v. Royal Dutch Petroleum Co., the Supreme Court determined ATS claims require the tort to “touch and concern” U.S. territory (without, however, specifying to what extent), halting litigation based entirely on foreign conduct. Five years later, the Supreme Court determined that neither the ATS nor U.S. common law provided a basis for claims against foreign corporations. Jesner v. Arab Bank, PLC, 138 S.Ct. 1386 (2017). 

Holding and Implications of Nestlé

Defendants Nestlé USA and Cargill, Inc. are U.S. corporations, so they are not protected by the Jesner decision. Moreover, relevant conduct, such as corporate decision-making to use child slave labor, was allegedly made in the United States. Nonetheless, the Nestlé decision, penned by Justice Thomas, focused on the extraterritorial effect on the plaintiffs. The court found the companies’ alleged tort of aiding and abetting the enslavement of child laborers occurred in Ivory Coast, because the training, supply of tools, and monetary benefit was directed abroad, rather than to the United States. “Mere” general activity in the United States, such as planning and approving human rights violations in a foreign jurisdiction, did not fall within the scope of the ATS, according to the majority decision. Nestlé thus further limited the scope of the ATS without resolving several fundamental questions, including whether a private actor “aiding and abetting” a human rights violation constituted a tort under international law.