The U.S. Court of Appeals for the Ninth Circuit on Tuesday revived a long-running lawsuit claiming that Nestle SA and agribusiness company Cargill Inc. aided and abetted child slavery on cocoa farms in the Côte d’Ivoire.
The ruling gives new life to the lawsuit brought in 2005 under the Alien Tort Statute on behalf of former child slaves who were kidnapped and forced to work on cocoa farms in the Côte d’Ivoire for up to 14 hours a day without pay. U.S. District Judge Stephen V. Wilson of the Central District of California last year found that the plaintiffs’ claims didn’t “touch and concern” the United States in such a way that would overcome the presumption against extraterritorial application of the ATS.
But on Tuesday, a three-judge Ninth Circuit panel found that the plaintiffs’ aiding and abetting allegations, essentially that the U.S.-based defendants depended on, and orchestrated, a slave-based supply chain from their headquarters, had sufficient domestic ties to survive the defendants’ motion to dismiss.
“Defendants were well aware that child slave labor is a pervasive problem in the Ivory Coast,” wrote Ninth Circuit Judge Dorothy Nelson in Tuesday’s 15-page opinion. “Nonetheless, defendants continued to provide financial support and technical farming aid, even though they knew their acts would assist farmers who were using forced child labor, and knew their assistance would facilitate child slavery.”
Concluded Nelson: “In sum, the allegations paint a picture of overseas slave labor that defendants perpetuated from headquarters in the United States.”
Paul Hoffman of Schonbrun Seplow Harris & Hoffman in Los Angeles, who argued the case at the Ninth Circuit for the plaintiffs, said in a phone interview Tuesday that the victory is significant, especially in light of rulings from the U.S. Supreme Court from the past five years that have narrowed the reach of the ATS. But, Hoffman added, he thinks the case illustrates that domestic activity of U.S. companies that contributes to human rights violations abroad is “an area where some very significant international human rights litigation can still take place.”
The plaintiffs’ victory at the Ninth Circuit comes even as the defendants hired an all-star lineup of appellate counsel. Theodore Boutrous Jr. of Gibson, Dunn & Crutcher argued the case for Nestle, and the company also had Boutrous’ partner Theodore Olson and Neal Katyal of Hogan Lovells on the briefs. Cargill, meanwhile, was represented by a Mayer Brown team that included Andrew Pincus. The Washington Legal Foundation submitted an amicus brief backing the defendants.
Boutrous forwarded a request for comment to Nestle. A company spokesman said forced child labor is “unacceptable and has no place in our supply chain” and that it is working “to combat this global social problem.” The spokesman, however, noted that the district court has twice dismissed the case below and that the company is still considering its appellate options.
“Plaintiffs’ counsel should not be given a fourth opportunity to try to manufacture a case against Nestlé USA after having failed to do so for more than a decade,” the spokesman said. “Regrettably, in bringing such lawsuits, the plaintiffs’ class action lawyers are targeting the very organizations trying to fight forced labor.”
A Cargill spokesman, likewise, said the company was considering its options. “We will not let these legal proceedings deter us from working actively every day to protect human rights, with an unwavering commitment to treating people with dignity and respect in the workplace and the communities where we do business,” the spokesman said. “We expect our suppliers and partners to stand with us in prioritizing the safety, well-being and dignity of all individuals.”
Hoffman, the lawyer for the plaintiffs, said Tuesday he thinks that the chocolate companies ”essentially control the market” in cocoa-producing countries such as the Côte d’Ivoire and they have the power to stop child slave labor if they want. “If they end the practices, we’d dismiss and go away in a minute,” he said.
Nelson was joined in her opinion by Circuit Judge Morgan Christen. U.S. District Judge Edward F. Shea of the Eastern District of Washington, sitting by designation on the three-judge Ninth Circuit panel, concurred in the result.