(CN) - The 9th Circuit gave new life Thursday to claims by three Malians who say they were trafficked into slave labor on Ivory Coast plantations that supplied Nestle with cocoa.
The plaintiffs, named as John Does in a first amended complaint filed against Nestle USA and others in 2009 in Los Angeles, claimed that they were forced as children to work long days without pay, enduring whippings and beatings.
They said Nestle knew about and supported the conditions in the name of profit.
Joined by the human rights organization Global Exchange, the Does said they filed in the Northern District of California because Mali lacks basic laws and the Ivory Coast's courts are "notoriously corrupt."
U.S. District Judge Stephen Wilson dismissed the case in 2010 for failure to state a claim, finding that corporations may not be sued under the Alien Tort Statute. A divided three-judge appeals panel vacated Wilson's dismissal on Thursday, concluding the opposite.
"In light of intervening developments in the law, we conclude that corporations can face liability for claims brought under the Alien Tort Statute," the unsigned order states.
Among several rulings related to the ATS in recent years, the panel cited the U.S. Supreme Court's recent resolution of Kiobel v. Royal Dutch Petroleum, in which the high court found a "presumption against extraterritoriality" in the statute. Noting that the ruling also suggests that "corporations may be liable under ATS so long as presumption against extraterritorial application is overcome," the 9th Circuit remanded the case to give the plaintiffs a chance to do just that.
Wilson, the lower court judge, was also wrong to require the plaintiffs to show "specific intent" on Nestle's part, according to the ruling.
In a partial dissent, Judge Johnnie Rawlinson arguing that "plaintiff must plead that the defendants acted with specific intent to violate the norms of international law."
Human rights groups and legal scholars have watched the case closely.
In one of several amicus briefs in favor of the plaintiffs, "nine of the world's leading legal experts in the field of international law and human rights" challenged Judge Wilson's interpretation of the ATS.
"Amici are concerned that, by creating a law-free zone for corporations, the District Court has charted an unprecedented and unjustified course that effectively immunizes juridical entities that commit serious human rights violations," the brief states. "International law would not protect a corporation that operated as a front for piracy on the high seas, or engaged in the slave trade, or produced the contemporary equivalent of Zyklon B for the destruction of Jews in concentration camps. The District Court's conclusion on corporate liability would allow governments to privatize their way around their international law obligations and is, therefore, radically inconsistent with the requirement of states to provide a remedy for human rights violations."
Siding with Nestle, the U.S. Chamber of Commerce argued that the plaintiffs' theory would discourage investment in developing countries by holding U.S. companies liable for "mere commercial relationships with foreign partners."
The plaintiffs' attorney, Terrence Collingsworth of the Washington, D.C., firm Conrad & Scherer, did not immediately return a request for comment. Nestle's lawyers, Craig Hoover and Christopher Handman of Hogan Lovells US LLP, also in Washington, likewise has not returned a request for comment.
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