Nestle & Cargill v John Doe at the US Supreme Court. A further restriction of jurisdiction under ATS, with encouragement on corporate culpability as a pudding.

Update 8 September 2021 note the French Supreme Court’s less restrictive approach to ‘aiding and abetting’ in the (criminal law) judgment re Lafarge yesterday. It held complicity in a crimes against humanity case does not require hands-on assistance. As Philip Grant reports, in the view of the French SC it is necessary and sufficient to have had knowledge of the preparation or commission of such acts and that aid or assistance facilitated them; it is not necessary to belong to the criminal organization nor to subscribe to the conception or execution of the criminal plan.

A most late flag on Nestlé & Cargill v John Doe at the US Supreme Court, back in June. I reported on the case here and if you follow Lucas’ thread on the case, there is further interesting and impromptu analysis. Readers of the blog may know I have published on the issue before – search tag ‘ATS’ should give you all cases referred to below.

This case reconfirms the mood viz the Alien Tort Statute,  a popular (if not the only!) vehicle for corporate social responsibility litigation: since Kiobel, the USSC has seriously reigned in the scope of application of the ATS. In Nestlé, it would seem to impose a further squeeze on the ATS jurisdictional gateway. In Apartheid and Jesner Bank, ‘aiding and abetting’ by the US corporate headquarters of culpable conduct by their subsidiaries abroad, seemed to be a burden of proof claimants had to meet in order for the action to be admissible under the ATS. In Nestlé the Court in its current composition (sub III of the majority Opinion) suggests that aiding and abetting in that interpretation risks becoming a court-introduced (hence in its view noli sequi) action in tort.

Sub II, the Court is not at all clear what the jurisdictional hurdle might be, except that it is a very high one: ‘Nearly all the conduct that [claimants] say aided and abetted forced labor—providing training, fertilizer, tools, and cash to overseas farms—occurred in Ivory Coast… allegations of general corporate activity—like decisionmaking—cannot alone establish domestic application of the ATS.’ (Interesting contrast here with the UKSC in ia Vedanta).

Not only could one debate whether this decision represents the intention of the ATS (which, even if one applies it in limited fashion, did historically mean to catch at least in part activities outside of the US). One also immediately sees the most unattractive consequence of this judgment: as long as the dirty work is left for foreign affiliates to carry out overseas, one escapes the reach of ATS. As Lucas points out, it is not clear what kind of headquarter engagement could still trigger a suit under the ATS.

There is little solace in the indication that the Court (both in majority opinion and minority concurrence) accepts that corporations are not as such immune from suit under the ATS (which links to the issues currently discussed in Nevsun Resources). Update 8 September 2021 more on that issue by Doug Cassel here.

There will be more attempts to further refine the ATS scope. At the same time one imagines claimants will study in even greater detail than before, the possibility to bring the suit under more recent US federal laws with clear extraterritorial intent, such as in the field of corruption of export controls. As past (but now gone) ATS litigation shows, human rights and /or environmental suit need not necessarily label themselves as such.

Nomen non est omen. It is the end goal of human rights or environmental protection or, say, environmental justice which determines a suit’s character, no matter what prima facie subject matter the suit addresses. If one can advance these causes by suing under the by-laws of the World Philately Federation, say, one should have a good go at it.

Geert.

EU Private International Law, 3rd ed. 2021, Chapter 7.

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

Update 29 October 2020 Amicus curiae briefs are now coming thick and fast.  See e.g. this one of international lawyers and scholars, advocating for a broad interpretation of the ATS. Update 27 May 2020 thank you Russell Hopkins for flagging the US Government amicus curiae brief on this (and the Cargill) case.

Update 8 July 2019 for the latest in the Doe v Nestle case see the Court of Appeals for the Ninth circuit here. The majority held that held that plaintiffs allege concrete and redressable injury that was fairly traceable to the challenged conduct of one defendant, and their allegations against another defendant were sufficient to allow a final opportunity to replead. This gives them enough standing for the case to continue on the merits.

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.