Supreme Court Clarifies Scope of Alien Tort Statute
In Nestlé USA, Inc. v. Doe, 593 U. S. ____ (2021), the U.S. Supreme Court clarified when plaintiffs can seek redress in U.S. courts for human rights abuses that occur overseas. By a vote of 8-1, the Court held that to plead facts sufficient to support a domestic application of the Alien Tort Statute, 28 U.S.C. § 1350, plaintiffs must allege more domestic conduct than general corporate activity.
Facts of the Case
The case was brought by six individuals from Mali who allege that they were trafficked into Ivory Coast as child slaves to produce cocoa. U.S.-based companies Nestlé USA, Inc., and Cargill, Inc, do not own or operate cocoa farms in Ivory Coast, but they do buy cocoa from farms located there and provide those farms with technical and financial resources.
The respondents filed suit against Nestlé, Cargill, and others alleging that this arrangement aided and abetted child slavery. The respondents brought the suit under the Alien Tort Statute (ATS), which provides federal courts jurisdiction to hear claims brought “by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” The suit specifically alleged that petitioners Nestlé USA and Cargill “knew or should have known” that the farms were exploiting enslaved children yet continued to provide those farms with resources. They further contended that the petitioners had economic leverage over the farms but failed to exercise it to eliminate child slavery. Although the resource distribution and respondents’ injuries occurred outside the United States, respondents maintained that they could sue in federal court because petitioners allegedly made all major operational decisions from within the United States.
Because respondents’ injuries occurred overseas and the only domestic conduct alleged by respondents was general corporate activity, the District Court dismissed the suit as an impermissible extraterritorial application of the ATS under Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013). The Ninth Circuit held that respondents had pleaded a domestic application of the ATS, as required by Kiobel, because the corporations’ major operational decisions originated in the United States.
Supreme Court’s Decision
The Supreme Court reversed. Justice Clarence Thomas delivered the opinion of the Court, concluding that respondents here improperly seek extraterritorial application of the ATS.
As Justice Thomas explained, the Court’s two-step framework for analyzing extraterritoriality issues first presumes that a statute applies only domestically and asks “whether the statute gives a clear, affirmative indication” that rebuts the presumption. In Kiobel, the ATS does not rebut the presumption of domestic application, finding that the ATS does not expressly “regulate conduct” at all, much less “evince a ‘clear indication of
extraterritoriality.’” Where the statute does not apply extraterritorially, plaintiffs must establish that “the conduct relevant to the statute’s focus occurred in the United States . . . even if other conduct occurred abroad.”
In this case, the Court found the 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,” Justice Thomas wrote. “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.’ But allegations of general corporate activity—like decision-making—cannot alone establish domestic application of the ATS.”
Citing Koibel, Justice Thomas emphasized that a plaintiff does not plead facts sufficient to support domestic application of the ATS simply by alleging “mere corporate presence” of a defendant. “Pleading general corporate activity is no better,” he wrote. “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.”
In Part III of the opinion, which was joined by Justices Neil Gorsuch and Brett Kavanaugh, Justice Thomas cited another reason for dismissing the suit. “Respondents’ suit failed for another reason, which does not require parsing allegations about where conduct occurred: We cannot create a cause of action that would let them sue petitioners. That job belongs to Congress, not the Federal Judiciary,” he wrote.
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Congress of the United States begun and held at the City of New-York, on Wednesday the fourth of March, one thousand seven hundred and eighty nine.
THE Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent ends of its institution.