U.S. Supreme Court Justices Challenge Human Rights Claims Against Nestlé, Cargill

On Tuesday, U.S. Supreme Court justices appeared reluctant to ban lawsuits against U.S. companies for alleged human rights violations overseas, but signaled they could dismiss a case accusing Cargill and a subsidiary of Nestlé SA for knowingly helping to perpetuate slavery on cocoa plantations in Côte d’Ivoire.

The two companies are asking the nine judges to overturn a lower court ruling that allowed the lawsuit, brought on behalf of former child slaves from Mali who worked on the farms, brought against them in 2005.

The case concerns a US law of 1789 called the Alien Tort Statute which allows non-US citizens to seek damages in US courts in certain cases. The business community has long sought to limit corporate liability under this law.

Some judges questioned whether the lawsuit made it clear that company officials knew the farms involved were using child slavery.

“After 15 years, is it too much to ask that you specifically allege that the accused … who are before us here specifically knew that forced child labor was used on the farms or agricultural cooperatives with which they did business?” asked conservative judge Samuel Alito.

The lawsuits targeted the US subsidiary of Nestlé, the world’s largest food producer, based in Switzerland, and commodity trader Cargill, one of the largest private US companies.

The plaintiffs accused the companies of aiding and abetting human rights abuses by actively participating in the purchase of cocoa from Côte d’Ivoire and turning a blind eye to the use of labor slave in the farms while they were aware of this practice in order to keep cocoa prices low.

A Los Angeles Federal District court has twice dismissed the lawsuit, the last in 2017. The court ruled that the claims were barred by recent Supreme Court rulings that made it more difficult for plaintiffs to sue companies before US courts for alleged violations abroad.

The San Francisco-based 9th U.S. Circuit Court of Appeals in 2018 revived the allegations, citing allegations that companies provided “pocket money” to local farmers to secure the cheapest source of cocoa. The 9th Circuit found that the payments amounted to bribes and that the low price of cocoa depended on the labor of child slaves.

The US Chamber of Commerce and other business interests have backed both companies in the deal, as has the administration of President Donald Trump.

Supreme Court cases in 2013 and 2018 limited the ability of plaintiffs to sue companies in U.S. courts under the Alien Tort Statute for human rights violations abroad. The court said in those decisions that there must be a close connection between the alleged behavior and the actions that took place in the United States. But the court did not definitively rule that companies can never be sued under this law.

Since the 2018 ruling, which was 5 to 4, the court has moved further to the right with President Donald Trump’s appointment of Tory Justices Brett Kavanaugh and Amy Coney Barrett.