Nestlé & Cargill v. Doe Series: Judicial Activism, Corporate Exceptionalism, and the Puzzlement of Nestlé v. Doe

[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.]

In recent years, the story of the Alien Tort Statute (ATS) has been one of judicial activism and corporate exceptionalism. In Nestlé USA, Inc. v. Doe, the Supreme Court is preparing to write yet another chapter in this saga and may adopt a new set of “shadow amendments” to the ATS.

Judicial Activism and the Drafting of Shadow Amendments

 When the ATS was originally drafted in 1789 and included in the First Judiciary Act, the statute provided that the district courts,

shall also have cognizance, concurrent with the courts of the several States, or the circuit courts, as the case may be, of all causes where an alien sues for a tort only in violation of the law of nations or a treaty of the United States.

Subsequent legislative amendments to the ATS in 1873, 1911, and 1948 updated the text and reformatted its language to its current 33-word configuration.

The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.

These edits reflect the only times that Congress has amended the ATS. Every subsequent revision to the legislative text has occurred through the work of the Supreme Court. These judicial revisions—which I refer to as “shadow amendments” because they substantively and permanently alter the text of the statute with new conditions—have effectively rewritten the ATS.

In Argentine Republic v. Amerada Hess (1989), the Supreme Court began a slow but steady process of crafting shadow amendments to the ATS. This first shadow amendment excluded lawsuits filed against foreign States from ATS jurisdiction.

The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States [but not when the violation is committed by a foreign State].

 In Sosa v. Alvarez-Machain (2004), the Supreme Court added a second shadow amendment to the statute.

The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of [a specific, universal, and obligatory norm of] the law of nations or a treaty of the United States [but not when the violation is committed by a foreign State].

In Kiobel v. Royal Dutch Petroleum Co. (2013), the Court appended a new shadow amendment that addressed the statute’s extraterritorial reach:

The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of [a specific, universal, and obligatory norm of] the law of nations or a treaty of the United States [but only when the tort touches and concerns the United States with sufficient force to overcome the presumption against extraterritoriality] [and not when the violation is committed by a foreign State].

In 2018, the Supreme Court held in Jesner v. Arab Bank PLC (2018) that foreign corporations could not be subject to ATS jurisdiction, thereby amending the statute yet again:

The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of [a specific, universal, and obligatory norm of] the law of nations or a treaty of the United States [but only when the tort touches and concerns the United States with sufficient force to overcome the presumption against extraterritoriality] [and not when the violation is committed by a foreign State] [or when the violation is committed by a foreign corporation].

Today, the Court is being asked to amend the ATS for a fifth time. In Nestlé USA, Inc. v. Doe, the plaintiffs are victims of child slave labor who were forced to work at cocoa plantations in the Ivory Coast. They allege the two defendants, U.S. corporations Nestlé USA, Inc. and Cargill, Inc., are complicit in their mistreatment and that federal courts have jurisdiction over their claims pursuant to the ATS. The defendants are seeking dismissal of these claims, arguing the logic of Jesner extends to U.S. corporations. Thus, the Court is being asked to amend the statute yet again, taking the ATS from its original 33 words to a lengthy 83 words. If the Court agrees with defendants’ theory, the ATS would subsequently read:

The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of [a specific, universal, and obligatory norm of] the law of nations or a treaty of the United States [but only when the tort touches and concerns the United States with sufficient force to overcome the presumption against extraterritoriality] [and not when the violation is committed by a foreign State] [or when the violation is committed by a foreign] [or domestic corporation].

Corporate Exceptionalism

 This proposed fifth shadow amendment to the ATS would effectively immunize corporations for human rights abuses. While the Court’s belief in corporate exceptionalism is unsurprising in light of its prior decisions, its reasoning is still puzzling. In Jesner, the Supreme Court held that foreign corporations were not subject to the ATS because it was concerned about the foreign policy consequences of allowing jurisdiction against foreign corporations. It also suggested the assertion of jurisdiction would give rise to international disputes.

To the extent these are reasonable concerns with respect to lawsuits against foreign corporations, they are far less compelling with respect to domestic corporations. There are several reasons why jurisdiction over U.S. corporations is reasonable under the ATS—and why carving out immunity for them would constitute an extraordinary shadow amendment.

To begin with, international law unequivocally allows States to exercise jurisdiction over their citizens, including corporations, when they commit extraterritorial harms. The well-established active personality principle allows a State to assert jurisdiction over its citizens regardless of where they are located or operate. This extends to corporate activity that leads to extraterritorial harms, including conduct that corporations commit in their State of domicile but which results in injuries abroad. Indeed, numerous States have asserted jurisdiction over domestic corporations that allegedly committed extraterritorial human rights abuses or engaged in domestic conduct that caused injuries abroad. This point was raised by a group of foreign lawyers in their amicus submission to the Supreme Court in the Nestlé case. Citing the practice of several States, these amici noted that many countries assert jurisdiction over domestic corporations for conduct committed abroad or domestic conduct that causes harm abroad. In fact, Justice Kagan referenced this amicus submission during oral argument in a colloquy with the Deputy Solicitor General when she noted, “many of the countries around the world with the strongest rule of law systems do hold their own corporations civilly liable for the kinds of actions at issue here.” (An earlier article in this symposium reviewed the Canadian approach to jurisdiction over domestic corporations in cases of extraterritorial harms.)

When States assert jurisdiction over their nationals for wrongful conduct, they create an accountability network that spans the globe. This network ensures that no individual or corporation can escape accountability because the courts of their home State can always assert jurisdiction. Conversely, when States fail to hold their nationals accountable, they leave gaps in this accountability network that facilitate violations of the rule of law.

Moreover, the active personality principle ensures that no State’s nationals gain an unfair advantage by dodging accountability for abuses because all States have the right and ability to hold their nationals accountable.

In fact, the failure to hold nationals accountable may generate international conflict. When States allow their nationals to commit extraterritorial harms and then offer them protection from domestic proceedings, it effectively immunizes their nationals and leaves foreign victims without redress. Yet according to the Supreme Court’s historical analysis in Sosa and discussed during oral argument in Nestlé, this is precisely why the ATS was adopted in 1789—to ensure that an accountability mechanism is available when foreign nationals are harmed by U.S. nationals.

Finally, State assertions of jurisdiction over their nationals offer a degree of certainty to individuals and corporations that allow them to predict the jurisdictional consequences of their activities. Unlike other forms of jurisdiction, there are no surprises when States assert jurisdiction over their own nationals.

Conclusion

In the realm of the ATS, judicial activism through shadow amendments and corporate exceptionalism has raised a host of questions. What about non-corporate entities, such as partnerships, non-profit organizations, and unions?

Justice Breyer posed this question to the Deputy Solicitor General Curtis Gannon during oral argument in Nestlé, and Gannon struggled to provide a response. And if corporations are now immune from ATS jurisdiction, what about corporate officers?  In an ironic twist, Neal Katyal, who was arguing on behalf of both corporate defendants, suggested that liability could adhere to corporate officers and not the corporate entity itself.

In addition, Jesner and Nestlé focus on corporate activity that causes harm overseas. What about purely domestic harm? By its terms, Jesner would presumably immunize foreign corporations for even domestic activity in the United States. Is the Supreme Court prepared to immunize U.S. corporations under the ATS even when they commit harms in the United States?

Through these shadow amendments, the Court has generated unneeded complexity and moved the ATS far beyond its original 33-word configuration and understanding. It is worth noting that all the concerns the Court has raised with respect to ATS jurisdiction, and all the machinations it has generated in response to these concerns, could easily be resolved by well-established rules on personal jurisdiction as well as extant judicial doctrines, including the political question doctrine, forum non conveniens, and the act of state doctrine.

As reflected in the historical record, Congress is fully capable of amending the ATS. Indeed, it has done so on several occasions. It has also drafted new legislation, such as the Torture Victim Protection Act and the Trafficking Victims Protection Act to allow U.S. citizens to seek accountability for human rights abuses. Even if the Court truly disagrees with the ATS and what Congress originally drafted in 1789 and redrafted in 1873, 1911, and 1948, it would do well to heed its own advice: those who disagree with federal legislation should look to Congress and not the courts for relief.

Image: A picture taken on November 19, 2020 shows the world headquarters of Swiss food giant Nestle in Vevey, Switzerland. (Photo by FABRICE COFFRINI/AFP via Getty Images)

 

About the Author(s)

William J. Aceves

William J. Aceves is the Dean Steven R. Smith Professor of Law at California Western School of Law. He is counsel of record on an amicus brief filed on behalf of foreign lawyers in support of respondents in Nestlé USA, Inc. v. Doe I and Cargill Inc. v. Doe I.