The International Business Transactions Blog

Supreme Court to Hear Whether ATCA Permits Corporate Defendants

By Aaron Fellmeth
Dennis S. Karjala Professor of Law, Science & Technology
Arizona State University, Sandra Day O’Connor College of Law

In 2018, the Supreme Court ruled in Jesner v. Arab Bank PLC that the Alien Tort Claims Act, also known as the Alien Tort Statute (ATS), does not provide jurisdiction over foreign corporations that are allegedly complicit in human rights violations committed against non-U.S. persons outside the United States.  The majority believed that the question of foreign corporate liability should be decided by Congress.

The potential liability of U.S. corporations was not before the Court.  In 2018, the Ninth Circuit decided that federal courts do have jurisdiction under the ATS over U.S. corporations that allegedly aid and abet human rights violations against non-U.S. persons.  In Doe v. Nestlé, S.A., 929 F.3d 623 (9th Cir. 2018) (amended July 5, 2019), the court held that former child slaves at the cocoa plantations in Côte d’Ivoire could sue the U.S. subsidiaries of Nestle SA, as well as Cargill Inc. and Archer Daniels Midland Co. (both U.S. agribusinesses) for allegedly knowingly aiding and abetting child slavery on the plantations.

Such allegations “touch and concern” the United States under Kiobel, the Ninth Circuit found, because they are “perpetuated from headquarters in the United States.” Jenser did not expressly foreclose liability against U.S. corporations, so the Ninth Circuit applied its own jurisprudence, finding based on its precedent in Sarei v. Rio Tinto, PLC, 671 F.3d 736 (9th Cir. 2011) that “norms that are ‘universal and absolute,’ or applicable to ‘all actors,’ can provide the basis for an ATS claim against a corporation.” Doe, 929 F.3d at 639, quoting Sarei, 671 F.3d at 764-65. Because international law’s prohibition on slavery is “universal,” the Ninth Circuit held, the case could proceed.

Today, the U.S. Supreme Court granted certioriari. Nestlé USA, Inc. v. Doe I, No. 19-416 (S. Ct., July 2, 2020).