The Supreme Court on Thursday reversed a lower-court ruling that had allowed six men to sue Nestle USA and Cargill over claims they were trafficked as child slaves to farms in the West African nation of Ivory Coast that supply cocoa to the two giant food companies.
Justice Clarence Thomas, writing for the 8-1 majority, said the U.S. Court of Appeals for the 9th Circuit erred in allowing the suit on the grounds that Nestle and Cargill had allegedly made “major operational decisions” in the United States.
Thomas said the six plaintiffs, who are from the nation of Mali, improperly sought to sue under the Alien Tort Statute for conduct that occurred outside the United States.
Thomas also said that the plaintiffs had failed to establish that the conduct relevant to the ATS “occurred in the United States … even if other conduct occurred abroad.”
Paul Hoffman, a lawyer for the men who sued, said during a media briefing on the decision that “obviously we’re disappointed” by the ruling, but also called it “the narrowest possible loss we could have had in this instance.” He noted that a majority of justices in the decision agreed that corporations can be sued under the Alien Tort Statute.
Hoffman also said it is “our intention that we will file an amended complaint” which he said he believes “can satisfy the court’s standards” for making a claim under the ATS.
He said Nestle and Cargill control every aspect of what goes on in the production of cocoa in Ivory Coast, “and they should be held accountable for abetting a system of child slavery.”
The six men who sued claimed that those companies aided and abetted child slavery because they “knew or should have known” that the farms were using enslaved children.
While neither company owns or operates farms in Ivory Coast, they had bought cocoa from them, and also provided the farms with technical and financial resources in exchange for exclusive rights to their crops.
The plaintiffs claimed the companies had economic leverage over the farms, “but failed to exercise it to eliminate child slavery,” Thomas noted in his opinion.
A U.S. district court had originally dismissed the lawsuit after the Supreme Court ruled that the Alien Tort Statute does not apply extraterritorially.
While the plaintiffs were appealing that dismissal, the Supreme Court ruled that courts cannot create new causes of action under the ATS against foreign corporations.
The 9th Circuit appeals court then ruled in the Nestle and Cargill cases that the Supreme Court’s ruling “did not foreclose judicial creation of causes of action against domestic corporations.” The 9th Circuit also ruled that the plaintiffs had properly claimed the ATS applied in the cases because “financing decisions … originated” in the U.S.
But Thomas in his opinion wrote that nearly all of the conduct alleged in the lawsuit “occurred in Ivory Coast.”
He also wrote that a claim of “general corporate activity” in the United States is not sufficient to link to conduct abroad for a claim under the ATS.
“To plead facts sufficient to support a domestic application of the ATS, plaintiffs must allege more domestic conduct than general corporate activity common to most corporations,” the opinion said.
A Nestle spokesperson in a statement on the ruling said: “Child labor is unacceptable. That is why we are working so hard to prevent it.”
“Nestlé never engaged in the egregious child labor alleged in this suit, and we remain unwavering in our dedication to [combating] child labor in the cocoa industry and to our ongoing work with partners in government, [nongovernmental organizations] and industry to tackle this complex, global issue,” the spokesperson said.
“Access to education and improving farming methods and livelihoods are crucial to fighting child labor in cocoa production. Addressing the root causes of child labor is part of the Nestlé Cocoa Plan and will continue to be the focus of our efforts in the future.”
Cargill in a statement said, “The Supreme Court’s ruling today affirms Cargill’s analysis of the law and confirms this suit has no basis to proceed.”
“Regardless, Cargill’s work to keep child labor out of the cocoa supply chain is unwavering. We do not tolerate the use of child labor in our operations or supply chains and we are working every day to prevent it,” the privately held company said. “We will continue to focus on the root causes, including poverty and lack of education access. Our mission is to drive long-lasting change in cocoa communities and to lift up the families that rely on cocoa for their income.”