US Companies win aiding and abetting ATS case in US Supreme Court; but ATS not dead yet.

Nestle Inc v Doe & Others. Certiorari to the US Court of Appeals for the Ninth Circuit. 17 June 2021. Slip opinion.

Six individuals from Mali claimed that they were trafficked into Ivory Coast as child slaves to produce cocoa. They sued Nestlé USA and Cargill, U.S.-based companies that purchase, process, and sell cocoa. The companies did not own or operate farms in Ivory Coast, but did buy cocoa from farms located there as well as provided those farms with technical and financial resources—such as training, fertilizer, tools, and cash—in exchange for the exclusive right to purchase cocoa. The plaintiffs alleged that this constituted a violation of the law of nations under the Alien Tort Statute, in that the companies had thereby aided and abetted slavery in that they “knew or should have known” that the farms were exploiting enslaved children yet continued to provide those farms with resources and also had economic leverage over the farms but failed to exercise it to eliminate child slavery. Although the resource distribution and the alleged slavery occurred outside the United States, it was argued that suit under the ATS was possible because the companies allegedly made all major operational decisions from within the United States.

Justice Thomas gave the majority opinion in Part I & II of his judgment. Even if all these disputes were resolved in respondents’ favour, their complaint would impermissibly seek extraterritorial application of the ATS. Nearly all the conduct that they say aided and abetted forced labor—providing training, fertilizer, tools, and cash to overseas farms—occurred in Ivory Coast. Although the Ninth Circuit let the suit proceed because respondents pleaded as a general matter that “every major operational decision by both companies is made in or approved in the U. S.” allegations of general corporate activity—like decision making—cannot alone establish domestic application of the ATS.

Justice Thomas also gave an alternative reason for his judgment in Part III by finding federal courts should not recognize private rights of action for violations of international law beyond the three historical torts identified in Sosa. He was joined by Justices Gosruch and Kavanaugh.

 Justices Sotomayor, Breyer, and Kagan agreed with Justice Thomas in Parts I & II of his judgment but not as regards Part III.

Justice Alito agreed with Part I of Justice Soyomayor’s judgment that if a particular claim may be brought under the ATS against a natural person who is a United States citizen, a similar claim may be brought against a domestic corporation. dissented because the complaint sought extraterritorial application of the ATS, a question tied to the question whether the plaintiffs should be allowed to amend their complaint so as to reach the question of extraterritoriality. Justice Alito would vacate the judgment below, and remand these cases for further proceedings in the District Court.

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Professor Simon Baughen

Professor Simon Baughen was appointed as Professor of Shipping Law in September 2013 (previously Reader at the University of Bristol Law School). Simon Baughen studied law at Oxford and practised in maritime law for several years before joining academia. His research interests lie mainly in the field of shipping law, but also include the law of trusts and the environmental law implications of the activities of multinational corporations in the developing world. Simon's book on Shipping Law, has run to seven editions (soon to be eight) and is already well-known to academics and students alike as by far the most learned and approachable work on the subject. Furthermore, he is now the author of the very well-established practitioner's work Summerskill on Laytime. He has an extensive list of publications to his name, including International Trade and the Protection of the Environment, and Human Rights and Corporate Wrongs - Closing the Governance Gap. He has also written and taught extensively on commercial law, trusts and environmental law. Simon is a member of the Institute of International Shipping and Trade Law, a University Research Centre within the School of Law, and he currently teaches at Swansea on the LLM in:Carriage of Goods by Sea, Land and Air; Charterparties Law and Practice; International Corporate Governance.

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