Reversing a Los Angeles federal judge’s dismissal of a proposed class action brought by six anonymous plaintiffs who were forced to work as slaves on Ivory Coast cocoa plantations, the unanimous three-judge panel ruled the plaintiffs’ claims for aiding and abetting slavery abroad may be adjudicated in the United States under the Alien Tort Statute (ATS) if the challenged conduct occurred in the United States.
“[T]he allegations paint a picture of overseas slave labor that defendants perpetuated from headquarters in the United States,” Senior U.S. Circuit Judge Dorothy Nelson wrote for the panel, referring to allegations the defendants gave slave masters personal spending money despite their use of child slaves. “We thus hold that [the] foregoing narrow set of domestic conduct is relevant to the ATS’s focus.”
The plaintiffs, identified in the lawsuit only as John Doe, were kidnapped from Mali as children in the 1990s and forced to work on Ivory Coast cocoa plantations for up to 14 hours per day, six days per week. They say they were given only scraps of food to eat and beaten and whipped with tree branches.
Children who tried to escape were forced to drink urine or had their feet cut open and pepper rubbed into the wounds, they say. They also claim representatives from Nestle and Cargill visited the farms several times each year and knew farmers used child slave labor.
U.S. District Judge Steven Wilson dismissed the case in March 2017, finding the plaintiffs hadn’t shown sufficient domestic conduct to sue under the Alien Tort Statute.
He found the provision of spending money, along with advance payments, equipment and training, and exclusive purchasing deals were “activities that ordinary international businesses engage in.”
But Nelson called the money “akin to ‘kickbacks'” under Mastafa v. Chevron Corp., a 2014 decision by the Second Circuit, and “outside the ordinary business contract and given with the purpose to maintain ongoing relations with the farms so that defendants could continue receiving cocoa at a price that would not be obtainable without employing child slave labor.”
Nelson also noted the companies’ employees routinely inspected the plantations and reported back to headquarters in the United States, where financing decisions originated.
The panel ordered the plaintiffs to drop the defendants’ foreign parent companies from the suit because they can’t be sued under the Alien Tort Statute in light of the Supreme Court’s decision earlier this year in Jesner v. Arab Bank, and to specify which domestic company is potentially liable for what culpable conduct.
“We are mindful that this case has lingered for over a decade, and that delay does not serve the interests of any party,” Nelson wrote of the remand. “But we cannot conclude that amendment would be futile.”
Plaintiffs’ attorney Paul Hoffman, of Schonbrun Seplow Harris & Hoffman in Los Angeles, agreed with Nelson about the delay.
“The former child slaves have waited too long for justice in this case,” Hoffman said by email, but added his clients were pleased with the panel’s decision.
Wilson first dismissed the case in 2010, reasoning a corporation couldn’t be sued under the Alien Tort Statute.
In 2014, a divided Ninth Circuit reversed in part and held the violation of universal norms may be a basis for an Alien Tort Statute claim against a corporation.
The ruling created a circuit split between the Fourth and Ninth Circuits and the Second and Fifth Circuits.
A year later, the Ninth Circuit denied en banc review over the dissent of U.S. Circuit Judge Carlos Bea and seven other judges, who accused their colleagues of “substitut[ing] sympathy for legal analysis.”
The Supreme Court also denied review.
U.S. Circuit Judge Morgan Christen and U.S. District Judge Edward Shea, sitting by designation from the Eastern District of Washington, joined Nelson on the panel.
Nestle USA, represented by Theodore Boutrous Jr. of Gibson, Dunn & Crutcher in Los Angeles, says it may appeal yet again to the Supreme Court.
“Plaintiffs’ counsel should not be given a fourth opportunity to try to manufacture a case against Nestle USA after having failed to do so for more than a decade,” the company said in an emailed statement.
“Regrettably, in bringing such lawsuits, the plaintiffs’ class action lawyers are targeting the very organizations trying to fight forced labor,” the company said, adding, “Forced child labor is unacceptable and has no place in our supply chain. We have explicit policies against it and are working with other stakeholders to combat this global social problem.”
Cargill also says it may fight the decision.
“We are disappointed the Ninth Circuit rejected the district court’s well-reasoned dismissal of the plaintiffs’ claims, and intend to consider all legal options, including appeal, to continue to defend against these unproven allegations,” the company said in an emailed statement. “We continue to strongly refute the unsubstantiated claims, as we do not tolerate the use of human trafficking, forced labor or child labor in our operations or supply chains.”
Andrew Pincus of Mayer Brown in Washington represents Cargill. He had no immediate comment Tuesday morning.