Doe v Nestle and Tiffany v China Merchants Bank et al: The concertina effect of the Alien Torts Statute

I may yet have to insert a special category ‘ATS’ in the ‘Categories’ on the right hand side of this blog. Distinguishing, and precedent application alike keep on stretching cq enforcing the USCC’s decision in Kiobel.

On the precedent side of the debate,  Tiffany v China Merchants Bank et al , the US Second Circuit Court of Appeals took the application of Kiobel in Daimler as cue for a refusal of the recognition of Asset Restraints and Discovery Orders against a Bank with merely branch offices in New York. The Bank’s sites of incorporation and principal places of business are all outside of the US. With reference to Daimler, the Court held that there is no basis on which to conclude that the Bank’s contacts in New York are so ‘continuous and systematic’ judged against their national and global activities, that they are ‘essentially at home’ in the State.

The Ninth Circuit Court of Appeals in Doe v Nestle reversed the lower court’s decision to dismiss ATS claims and arguably indeed adopted an extensive view of ‘aiding and abetting’ within the context of ATS: ‘Driven by the goal to reduce costs in any way possible, the defendants allegedly supported the use of child slavery, the cheapest form of labor available. These allegations explain how the use of child slavery benefitted the defendants and furthered their operational goals in the Ivory Coast, and therefore, the allegations support the inference that the defendants acted with the purpose to facilitate child slavery.’ : these allegations were considered to even meet the supposedly stricter ‘purpose’ test. Defendant’s market power and control over operations abroad seemed to have played an important role.

Applicants have now been allowed to re-plead given the intervening judgments by the USSC (the Doe v Nestle case has been running for a while)- watch this space, yet again.

Geert.

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