Nestlé USA, Inc. v. Doe
593 U. S. ____ (2021) (2021)
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Rule of Law:
The Alien Tort Statute (ATS) does not apply extraterritorially, and to establish a permissible domestic application, plaintiffs must allege more domestic conduct than general corporate activity or mere corporate presence when the alleged harm occurred overseas.
Facts:
- Six individuals from Mali (Respondents) allege they were trafficked into Ivory Coast as child slaves.
- The Respondents allege they were forced to produce cocoa on farms in Ivory Coast.
- Nestlé USA, Inc. and Cargill, Inc. (Petitioners) are U.S.-based companies that purchase cocoa from farms in Ivory Coast.
- Nestlé and Cargill provided these cocoa farms with technical and financial resources, including training, fertilizer, tools, and cash.
- Respondents allege that Petitioners knew or should have known about child slavery on the farms and failed to use their economic leverage to eliminate it.
- All alleged resource distribution to the farms and Respondents' injuries occurred outside the United States.
- Respondents contend that all major operational and financing decisions by Nestlé and Cargill related to these activities were made or approved in the United States.
Procedural Posture:
- Respondents sued Nestlé USA, Inc., Cargill, Inc., and other entities in federal District Court, alleging the companies aided and abetted child slavery under the Alien Tort Statute (ATS).
- The District Court dismissed the suit, reasoning it was an impermissible extraterritorial application of the ATS under Kiobel v. Royal Dutch Petroleum Co.
- Respondents appealed the District Court's dismissal to the Ninth Circuit.
- While the appeal was pending, the Supreme Court decided Jesner v. Arab Bank, PLC, holding that courts cannot create new causes of action against foreign corporations under the ATS.
- The Ninth Circuit reversed the District Court's dismissal in part, concluding that Jesner compelled dismissal of all foreign corporate defendants but did not foreclose judicial creation of causes of action against domestic corporations.
- The Ninth Circuit also held that respondents had pleaded a domestic application of the ATS, as required by Kiobel, because the corporations' 'financing decisions' and 'major operational decisions' originated in the United States.
- The Supreme Court granted certiorari to review the Ninth Circuit's decision.
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Issue:
Does the Alien Tort Statute (ATS) apply domestically when the only alleged U.S. conduct is general corporate activity, such as corporate decision-making, while the alleged aiding and abetting of forced labor and the resulting injuries occurred entirely overseas?
Opinions:
Majority - thomas, j.
No, the Alien Tort Statute (ATS) does not apply domestically when the only alleged U.S. conduct is general corporate activity like decision-making, while the alleged aiding and abetting of forced labor and the resulting injuries occurred overseas. Applying the two-step framework for extraterritoriality from RJR Nabisco, Inc. v. European Community, the ATS does not give a clear, affirmative indication of extraterritorial application (Kiobel v. Royal Dutch Petroleum Co.). Therefore, plaintiffs must establish that the 'conduct relevant to the statute’s focus occurred in the United States.' Even if aiding and abetting forced labor were recognized as an ATS cause of action and its focus could be broadly construed, nearly all the alleged aiding and abetting conduct—providing resources to overseas farms—occurred in Ivory Coast. General corporate activity, such as 'mere corporate presence' or making 'operational decisions' in the U.S., is insufficient to establish a domestic application because it does not draw a sufficient connection between the cause of action (aiding and abetting forced labor overseas) and domestic conduct, which would make the presumption against extraterritoriality a 'craven watchdog.'
Concurring - thomas, j.
Separately, the suit fails because federal courts cannot create a cause of action to let respondents sue petitioners; that job belongs to Congress. While Sosa v. Alvarez-Machain suggested limited judicial authority to create causes of action for historical international torts (violation of safe conducts, infringement of ambassador rights, piracy), subsequent precedents have 'substantially narrowed' this authority. The second step of the Sosa test, which assesses judicial discretion, is 'extraordinarily strict': courts must not create a private right of action if there is 'even one sound reason to think Congress might doubt the efficacy or necessity of the new remedy.' Inherent foreign-policy concerns in ATS litigation (beyond the three historical torts) and congressional activity (like the Trafficking Victims Protection Reauthorization Act) provide such 'sound reasons' to defer to Congress. Therefore, courts should not create new causes of action under the ATS for torts beyond the three historical ones, as the political branches are better suited to weigh such complex factors.
Concurring - gorsuch, j.
The Alien Tort Statute (ATS) does not provide corporations with special immunity from suit. Nothing in the statutory text or its original understanding suggests that a defendant's corporate status matters. Historically, tort actions were routinely brought against corporations, and the founding-era context of the ATS, which aimed to prevent foreign nations from having 'just cause for reprisals or war' due to unaddressed tortious conduct, suggests no distinction between individual and corporate perpetrators. Furthermore, the ATS nowhere authorizes the Judiciary to create new causes of action. The power to create new laws, including new rights and duties, belongs to Congress. Sosa 'should not have cracked' the door to judicial creation of ATS causes of action. Such judicial action involves 'delicate' and 'complex' foreign policy questions for which the Judiciary lacks 'aptitude, facilities nor responsibility,' risking international relationships. Congress, not courts, is vested with the power to 'define and punish... Offences against the Law of Nations' and 'regulate Commerce with foreign Nations.'
Concurring in part and concurring in judgment - sotomayor, j.
Yes, the Alien Tort Statute (ATS) does not apply domestically when the only alleged U.S. conduct is general corporate activity like decision-making, while the alleged aiding and abetting of forced labor and the resulting injuries occurred overseas. I join Parts I and II of the Court's opinion. However, the alternative reasoning offered by Justice Thomas (Part III) would effectively overrule Sosa v. Alvarez-Machain, which contravenes the text and history of the ATS. The First Congress enacted the ATS with the expectation that federal courts would identify and provide redress for international law violations to avoid diplomatic strife. Judicial discretion under Sosa is not 'extraordinarily strict' to the point of eliminating nearly all ATS causes of action beyond three historical torts. Foreign policy concerns can be addressed through existing doctrines like the presumption against extraterritoriality, personal jurisdiction limits, and comity, rather than a categorical bar. Congressional action like the TVPRA does not imply Congress 'doubts' the efficacy of ATS suits but rather demonstrates a commitment to combating human trafficking, which aligns with, rather than precludes, ATS claims.
Dissenting - alito, j.
I would hold that if a particular claim may be brought under the Alien Tort Statute (ATS) against a natural person who is a United States citizen, a similar claim may be brought against a domestic corporation; corporate status does not justify special immunity. I would not decide the extraterritoriality question at this juncture. To reach the extraterritoriality question, the Court must make numerous important assumptions, including whether new ATS claims can be recognized, whether aiding and abetting provides a basis for such a claim, and the requisite mental state for such liability. A decision requiring so many assumptions takes on the flavor of an advisory opinion.
Analysis:
This case significantly clarifies the extraterritorial reach of the Alien Tort Statute, particularly for corporate defendants. By explicitly stating that general corporate activity or mere corporate presence in the U.S. is insufficient to establish a domestic application, the Court raises the bar for plaintiffs seeking to bring ATS claims for abuses occurring abroad. The splintered nature of the Court regarding the judicial creation of ATS causes of action, particularly Justice Thomas's plurality opinion in Part III and Justice Sotomayor's robust defense of Sosa, indicates ongoing debate and uncertainty regarding the future scope of the ATS as a generator of common law remedies for international human rights violations. The majority's decision reaffirms a restrictive approach to ATS litigation in line with prior precedent, emphasizing congressional prerogative in defining remedies for such torts.
