Nestlé & Cargill v. Doe Series: Rethinking the Alien Tort Statute

[Editor’s Note: This article is part of a Just Security series on the consolidated cases of Nestlé USA, Inc. v. Doe I and Cargill Inc. v. Doe I, which was argued before the Supreme Court on Dec. 1. The introduction to the series and all other articles can be found here.]

This Term’s consolidated cases Nestlé USA v. Doe and Cargill v. Doe show how the Supreme Court has gone wrong in applying the Alien Tort Statute (ATS) and offer a chance for correction. The question – ostensibly – in these cases is whether there is federal jurisdiction over plaintiffs’ claims against the defendant companies for complicity in forced labor in the West African nation of Côte d’Ivoire (Ivory Coast). The answer to that question is obvious: of course there is. Plaintiffs are not U.S. citizens, the defendants are U.S.-incorporated corporations, and the amount in controversy exceeds $75,000. That is sufficient to establish federal jurisdiction under Article III, Section 2 of the Constitution and the alien diversity provision of 28 U.S.C. § 1332(a)(2). (There are some statutory exceptions but none appears to apply here).

The ATS is thus entirely unnecessary to the jurisdictional question. The complex issues discussed in the briefs – whether the claims are extraterritorial, whether corporations are a subject of international law, whether and in what circumstances international law recognizes aiding and abetting liability, whether the claims promote or interfere with U.S. foreign policy – need not be answered to establish jurisdiction.

The plaintiffs want this to be an ATS case (despite the complexities that raises) not to establish federal jurisdiction, which exists in any event under § 1332, but to establish a favorable federal cause of action. In a normal diversity jurisdiction case, once federal jurisdiction is established, the next question would be what source of law gives the plaintiffs a legal claim. On this question, the diversity jurisdiction statute is irrelevant. It only conveys jurisdiction, and the plaintiffs’ cause of action must be found elsewhere (most likely, in the law of Côte d’Ivoire, the place where the harm occurred).

The ATS should work in the same way. In its 2004 decision in Sosa v. Alvarez-Machain, the Court rightly said that the ATS is only a jurisdictional statute – specifically noting its “strictly jurisdictional nature” – that did not create a statutory cause of action. (Indeed, the Court quoted Professor William Casto’s observation that the contrary idea was “simply frivolous”). That is apparent from the ATS’s plain text (which speaks only of jurisdiction). It’s also apparent from the ATS’s statutory context. The statutory predecessors of the modern ATS and the modern alien diversity statute were both part of the same enactment, the Judiciary Act of 1789 (Section 9 and 11, respectively). By their text, both speak only to jurisdiction; there is no reason to think they were intended or understood to operate differently. And no one has ever thought that the alien diversity statute creates a federal cause of action.

Implying a Federal Cause of Action Under the ATS       

Unfortunately, the Court in Sosa went on to say that the ATS nonetheless may impliedly license the federal courts to create federal common law causes of action – although in Sosa itself the Court did not recognize such a cause of action for the plaintiff’s injury, and it similarly declined to do so in its subsequent ATS cases Kiobel v. Royal Dutch Petroleum Co. and Jesner v. Arab Bank. But Sosa opened the door to the claim the plaintiffs in the Nestlé/Cargill cases are making: that they should have a federal cause of action (not just federal jurisdiction) under the ATS.

This suggestion is wrong for multiple reasons. It is wrong as a matter of text, because as the Sosa Court itself held, the ATS speaks only to jurisdiction. It is wrong as a matter of enacting context, because the ATS’s language parallels that of the diversity jurisdiction statute, which was originally enacted at the same time and which does not license any federal-court-created common law causes of action. It is wrong as a matter separation of powers, because Congress, not federal courts, should make law in this area. Congress specifically has the constitutional power in Article I, Section 8, to “define and punish … Offenses against the Law of Nations.” If Congress thinks a federal cause of action to implement international law is warranted here, it can easily create one, as it did in the related Torture Victim Protection Act. Finally, the suggestion is wrong as a matter of policy, because (as later cases have shown) it involves the courts in a host of thorny questions courts are not well suited to answer, including whether corporate liability should be recognized, whether and to what extent aiding and abetting liability should be recognized, whether extraterritorial liability should be recognized, and whether U.S. foreign policy interests are advanced or threatened.

The Court in Sosa justified its suggestion with the odd argument that the enacting Congress would not have expected the ATS to lie dormant until a statutory cause of action was created by a later Congress. But that would not be the effect of holding the ATS to be purely jurisdictional. Just as with the alien diversity statute, the ATS would give federal jurisdiction to hear claims brought under other sources of law: foreign law, state law statutory or common law and (at the time of enactment) general common law. No one thinks the alien diversity statute lies dormant because it does not authorize federal courts to create federal causes of action.

Remedying Sosa’s Mistake

The Nestlé/Cargill cases show Sosa’s misstep. Federal jurisdiction obviously exists under the alien diversity statute. There is no reason to suppose (apart from Sosa) that finding jurisdiction under the ATS should lead to a radically different approach from finding jurisdiction under the alien diversity statute. For both provisions, jurisdiction is distinct from a cause of action. And although there might be various sources of a cause of action, the most obvious is, as with any private tort, the law of the place where the harm occurred. Whether or not a violation of international law occurred does not affect the analysis. The point of the ATS and the alien diversity statute as originally enacted was not to secure a federal cause of action; it was to secure a federal forum.

The debate over extraterritoriality illustrates this conclusion. In Kiobel, the Court held that the ATS does not apply extraterritorially. At first glance, this seems obviously wrong. The alien diversity jurisdiction statute and the rest of Section 1332’s jurisdictional provisions apply extraterritorially; no one thinks otherwise. Section 1332 uses the same general language as the ATS to convey federal jurisdiction and has since 1789. And, as David Golove argues here, given the purposes of the ATS there is no reason to think it had a territorial limit.

But the real question in Kiobel was not whether federal jurisdiction could apply to claims arising outside the United States. It was whether the Court should create a U.S.-law cause of action to govern claims arising outside the United States. And the answer to that question, as the Court rightly held, is no. The point of the ATS was only to create a federal forum. The federal forum would then apply the appropriate governing law, which (particularly at the time the ATS was adopted) would for a tort typically be the law of the place the harm occurred. If the harm occurred in the United States, that would be some form of U.S. law; if the harm occurred extraterritorially it typically would not be.

Returning to the Original, Narrow Scope of the ATS

Two questions remain about the ATS, but they are easily answered. First, if it is duplicative of the alien diversity statute, why was it enacted? The answer is that it is not duplicative: unlike the alien diversity statute, it does not have an amount-in-controversy requirement. Thus it served a narrow purpose in the design of the 1789 Judiciary Act: it allowed claims in federal court for torts in violation of international law where the claimed damages were less that the statutory minimum for diversity jurisdiction. (I develop this analysis in more detail here). Its narrow purpose may seem odd today, after it has become the subject of so many modern high-profile cases. But that narrow purpose accounts for its relative obscurity in its first two centuries.

Second, what about ATS cases in which alien diversity jurisdiction is lacking because the plaintiffs and defendants are all aliens? (Unlike modern alien diversity jurisdiction, the ATS on its face does not require a U.S. citizen party). Justice Neil Gorsuch answered this question in his concurrence in Jesner: in the 1789 Judiciary Act, alien diversity jurisdiction also did not require a U.S. citizen party, but in Mossman v. Higginson in 1800, the Court held that because Article III of the Constitution required a U.S.-citizen party, it would read the diversity provision to do so as well (Congress later amended the statute to conform to Mossman). The ATS – also part of the 1789 Judiciary Act – should be treated in the same way.

The Court in Nestlé/Cargill can point the ATS back to its intended narrow role by finding that alien diversity jurisdiction exists, and that it is therefore unnecessary to reach the ATS question. The plaintiffs should have the opportunity to plead a cause of action under applicable law, whatever that may be (although they may face additional procedural hurdles such as forum non conveniens).  But their cause of action should not be understood as an implied aspect of the ATS, which, as the Court said, is only jurisdictional.

Resolving Nestlé/Cargill under Sosa – and the Reasons to Avoid This Approach

As a final note, I joined an amicus brief of law professors submitted by Samuel Estreicher of NYU urging reversal in Nestlé/Cargill. The brief operates under the Sosa framework and argues that by Sosa’s standards the Court should not recognize an implied federal cause of action on the particular facts. Specifically, it argues that recognizing an ATS cause of action here would not serve the purposes of the ATS. As the Court stated in Jesner, Congress enacted the ATS to accomplish a specific and limited purpose: “to avoid foreign entanglements by ensuring the availability of a federal forum where the failure to provide one might cause another nation to hold the United States responsible for an injury to a foreign citizen.” The plaintiffs’ claims don’t involve a U.S. obligation to a foreign country and thus don’t implicate the ATS’s purpose of protecting U.S. diplomacy. Rather, because the alleged harm occurred within the territory of Côte d’Ivoire and the defendants are accused of aiding and abetting Côte d’Ivoire government officials in violating the law of nations, allowing this case to proceed is likely to cause conflict with an important diplomatic partner of the United States.

I think this is the right answer under Sosa, and it may be that applying Sosa’s standards the Court would rarely if ever recognize an ATS cause of action in the type of cases now typically brought under the ATS. But this piecemeal approach promotes uncertainty and seemingly endless litigation. It would be better to return the ATS to its original limited purpose and let cases such as Nestlé/Cargill proceed under the alien diversity statute. Federal jurisdiction obviously exists, and if plaintiffs can show a cause of action under Côte d’Ivoire law, there’s no reason the case should not go forward. But similarly, if plaintiffs cannot show a cause of action under Côte d’Ivoire law (or other applicable law), there is no need or authority for the federal courts to create one.

In sum, Nestlé/Cargill is about the alleged complicity of U.S. corporations in harms that occurred in Côte d’Ivoire. The claims thus typically should be governed by Côte d’Ivoire law. One way to get to that result is to say that the ATS does not apply to extraterritorial harms even if some incidental conduct occurred in the United States (and that seems to be the Court’s likely path after Kiobel). Plaintiffs could then claim federal jurisdiction under the alien diversity statute instead, with a cause of action under Côte d’Ivoire law. But the better path would be to say that while the ATS may provide jurisdiction even as to extraterritorial claims, it does not provide causes of action and so (in this case) it does not add anything. This is an alien diversity jurisdiction case; the ATS need not have become involved.

Image: MALABO, EQUATORIAL GUINEA – August 08: The cocoa bean packing warehouse sits empty in the Sampaka Farm on August 08, 2018 in Malabo, Equatorial Guinea. (Photo by David Degner/Getty Images).

 

About the Author(s)

Michael D. Ramsey

Hugh and Hazel Darling Foundation Professor of Law at the University of San Diego Law School