Thursday, June 17, 2021
Today the Supreme Court issued its decision in Nestlé USA, Inc. v. Doe (covered earlier here). The plaintiffs brought claims under the Alien Tort Statute (ATS) against two American companies—Nestlé USA and Cargill—that “purchase, process, and sell cocoa. They did not own or operate farms in Ivory Coast. But they did buy cocoa from farms located there. They also 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 “are six individuals from Mali who allege that they were trafficked into Ivory Coast as child slaves to produce cocoa” and that the defendants’ arrangements with those cocoa farms aided and abetted child slavery.
The Supreme Court concludes that the plaintiffs “improperly seek extraterritorial application of the ATS.” It’s quite a fractured opinion, however:
THOMAS, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I and II, in which ROBERTS, C. J., and BREYER, SOTOMAYOR, KAGAN, GORSUCH, KAVANAUGH, and BARRETT, JJ., joined, and an opinion with respect to Part III, in which GORSUCH and KAVANAUGH, JJ., joined. GORSUCH, J., filed a concurring opinion, in which ALITO, J., joined as to Part I, and in which KAVANAUGH, J., joined as to Part II. SOTOMAYOR, J., filed an opinion concurring in part and concurring in the judgment, in which BREYER and KAGAN, JJ., joined. ALITO, J., filed a dissenting opinion.
A majority of the Court joins Part II of Justice Thomas’s opinion, which recognizes based on the Court’s earlier case law that courts “cannot give ‘extraterritorial reach’ to any cause of action judicially created under the ATS.” Therefore, ATS plaintiffs “must establish that ‘conduct relevant to the statute’s focus occurred in the United States.’” The plaintiffs here did not satisfy this requirement:
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. The Ninth Circuit nonetheless let this 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.” App. 314. But allegations of general corporate activity—like decisionmaking—cannot alone establish domestic application of the ATS.
As we made clear in Kiobel, a plaintiff does not plead facts sufficient to support domestic application of the ATS simply by alleging “mere corporate presence” of a defendant. 569 U. S., at 125. Pleading general corporate activity is no better. Because making “operational decisions” is an activity common to most corporations, generic allegations of this sort do not draw a sufficient connection between the cause of action respondents seek—aiding and abetting forced labor overseas—and domestic conduct.
Beyond this holding, here’s a quick headcount on where the justices come out on other issues relating to the ATS:
Justices Thomas, Gorsuch, and Kavanaugh argue that the federal judiciary lacks the authority even to recognize a cause of action for the kind of claim asserted here. Justices Breyer, Sotomayor, and Kagan argue against this position.
Justices Breyer, Alito, Sotomayor, Kagan, Gorsuch, and Kavanaugh all agree that domestic corporations are not categorically immune from suit under the ATS.
Justice Alito indicates some sympathy with the Thomas/Gorsuch/Kavanaugh view about the judiciary’s authority to recognize new ATS claims (“To be sure, Part III of JUSTICE THOMAS’s opinion and Part II of JUSTICE GORSUCH’s opinion make strong arguments that federal courts should never recognize new claims under the ATS”), but he states that “this issue was not raised by petitioners’ counsel, and I would not reach it here.” Justice Alito also disagrees with the Court deciding the case on extraterritoriality grounds, stating instead that he would “reject petitioners’ argument on the question of corporate immunity, vacate the judgment below, and remand these cases for further proceedings.”