Nestle USA v. Doe I and the Future of Corporate Accountability

An estimated 168 million children between the ages of 5-17 are presently engaged in some form of child labor or enslaved labor globally, with millions subjected to bonded labor, child soldiering, or sexual exploitation. [1] Though this atrocity occurs within many spheres, the chocolate industry is an infamous perpetuator. Between 2013 and 2017, over 1,000 children working in cocoa agriculture in areas of medium and high cocoa production were victims of forced labor at the hands of someone outside their family. [2] And this number fails to account for the hundreds of children forced to labor by their parents and other relatives. Working on plantations that annually supply 60% of all cocoa to transnational companies such as Nestle and Cargill, children in Ghana and Cote d’Ivoire are overworked, brutally treated, and deprived of their education. [3]

In 2001, the Harkin-Engel Protocol sought to incrementally reduce these human rights violations by way of a collaboration with major stakeholders in the cocoa industry. Eight major chocolate companies – including Hershey Food Corporation and Nestle Chocolate and ConfectionsUSA– pledged to assume primary responsibility for eradicating the worst forms of child labor from cocoa production and to remove the use of child labor from their supply chains by 2005. [4] The Protocol followed in the footsteps of the 1999 International Labor Organization’s (“ILO”)  Convention C182, a largely ineffective measure which ordered member nations like the United States to remove children from laborious situations, assist with rehabilitation, and provide free basic education. [5] Yet nearly 20 years after the Protocol’s signing, the task of eradicating the use of child labor from the chocolate industry remains far from finished. Multiple factors have contributed to the shortcomings of the global movement against child labor, such as a failure to report cases and the lack of clear geographical constraints to each country’s responsibility. But the primary factor, inaction amongst ILO member nations, can be primarily attributed to the fact that there is no clear way to hold a country accountable to international law. Additionally, legal loopholes set by company policies continue to absolve U.S. corporations from responsibility for child labor that may have occurred overseas. However, Supreme Court case Nestle USA v. Doe I (consolidated with Cargill v. Doe I), set to be heard in December of 2020 [at the time of writing], has the potential to change this.

The issue of Nestle USA v. Doe I began in 2010, when a group of anonymous Malian citizens living in the United States sued Cargill, Inc. and Nestle USA under the Alien Tort Statute (“ATS”) for child slavery they endured while working on cocoa farms affiliated with the American companies in the Cote d’Ivoire. [6] The ATS gives federal courts jurisdiction over tort claims brought by foreign nationals on domestic entities for violations of US treaties or international law, yet the statute has never been successfully used by foreign nationals to prosecute US corporations for their involvement in human rights violations. [7] As such, the US District Court for the Central District of California initially dismissed the case. According to the court, Nestle USA and Cargill, Inc. had not done anything outside of “ordinary” business transactions with the cocoa farms in question, and it could not be proven that the companies had acted with the intention of perpetuating child slavery. [8] Additionally, the District court cited Sosa v. Alvarex-Machain, holding that unless the plaintiff is able to prove overwise, international law typically prohibits ATS complaints towards corporate defendants. [9] This decision was later reversed by the US Court of Appeals for the 9th Circuit on the grounds that ATS claims were, in fact, able to be brought against the defendants due to this case’s connection to “well defined” child labor laws, as outlined in John Roe I v. Bridgestone Corp. [10] The claimants filed an amended complaint in 2016, which was again dismissed by the district court on remand. This time, the lower court ruled that due to the extraterritorial nature of the claim, Nestle and Cargill could not be held liable under the ATS. The court of appeals again vacated the lower court’s decision, stating that the claims were “sufficiently” focused in the US, and in 2019, defendants Nestle USA and Cargill, Inc. petitioned for an appeal to the US Supreme Court. [11] The 2020 hearing will concern two main questions: Are US courts able to hold domestic corporations liable under the Alien Tort Statute? And can a domestic corporation be held liable for a claim against an action that occurred under unidentified foreign entities and that cannot be traced back to that corporation? [12]

Since the late 20th century, the ATS has been used by non-US Citizens to attempt to hold individual perpetrators of human rights violations accountable within the United States. However, in the 1990s, these cases began to expand and question corporate accountability. [13] The 2013 case, Kiobel v. Royal Dutch Petroleum, was arguably the first Supreme Court example of this. After lower courts ruled that The Shell Petroleum Development Company of Nigeria, Ltd. could not be prosecuted for their complicity in the Nigerian government’s unlawful detention, torture, and exilement of civilians, the respondent petitioned the Supreme Court for a hearing. And though the Court unanimously ruled in favor of the defendant, the opinion specified that this decision did not pertain to whether corporations could be held accountable under the ATS. Rather, the Court affirmed the lower court’s ruling on the basis of extraterritoriality, citing that US courts did not have jurisdiction over atrocities that occurred under foreign governments in foreign territories. [14] Thus, given that the case of Nestle USA v. Doe I does not involve the actions of a foreign government and concerns domestic corporations rather than international ones, the rulings of Kiobel v. Royal Dutch Petroleum likely would not apply.

Corporate liability was revisited by the Court in Jesner et. al. v. Arab Bank, PLC (2018), a case where claimants sued Arab Bank, PLC for financing and enabling acts of terror against Israeli citizens. This time, the Court expressed in a 5-4 majority that since the ATS was aimed at facilitating foreign-relations issues involving international law through holding individuals accountable, it could not be used in lawsuits against foreign corporations. [15] However, the opinion mainly referenced the potential impacts of this case on foreign policy and the strains that it could potentially put on US diplomatic relations with the Jordanian government. Justice Gorsuch wrote in concurrence that for claims under the ATS, federal courts must require a domestic defendant. [16] As such, the question of whether an individual is able to sue a domestic corporation for an overseas violation of human rights, as presented in Nestle USA v. Doe I, has remained untouched. 

Given that the Court has yet to rule in favor of a plaintiff in any case that navigates corporate accountability and human rights, the decision is likely to be in favor of the defendant. Regardless, the ruling of Nestle USA v. Doe I will set a precedent for corporate accountability in the United States. If it is ruled that the ATS is applicable towards domestic corporations, an added layer of responsibility would be placed on both US corporations to follow and the US government to enforce international law as it is currently unenforceable. Additionally, Nestle USA v. Doe I could potentially create a way for disenfranchised foreign people to finally find justice through the Alien Tort Statute - those held under oppressive systems sustained by US corporations would have a means of retribution inaccessible to them before.

For too long, large corporations have been able to avoid legal culpability in unethical practices by resorting to passive pledges for change while perpetuating the very systems that allowed those injustices to occur in the first place. In the writ of certiorari, the petitioner repeatedly pointed to Nestle’s past statements condemning child slavery and the company’s “extensive efforts” to counteract it as a reason for why Nestle USA should be absolved of guilt. [17] However, if the Harkin-Engel Protocol and ILO Convention 182 are any indication, international human rights violations at the hands of large corporations will not cease unless companies are legally held accountable. What would a world post-corporate accountability look like? For the chocolate industry, consumers can expect slightly higher prices, but this increase is not without reason. In conjunction with other initiatives aimed at ending child labor, up to millions of children who are currently deprived of an education and made to work under a dangerous environment would potentially be able to leave those conditions in pursuit of a better future. But beyond that, international law would be made enforceable towards any US corporation that is complicit in the suffering of millions.

Edited by Summer Oh

[1] “More about Child Labour.” UNICEF, n.d. https://www.unicef.org/csr/child-labour-portal_more.html. 

[2] “Cocoa.” Global Slavery Index. The Minderoo Foundation Pty Ltd., n.d. https://www.globalslaveryindex.org/2018/findings/importing-risk/cocoa/. 

[3] id

[4] “Protocol For the Growing and Processing of Cocoa Beans and Their Derivative Products In a Manner That Complies with IOL Convention 182 Concerning the Prohibition and Immediate Action For the Elimination of the Worst Forms of Child Labor.” Cocoa Initiative. Chocolate Manufacturers Association, September 19, 2001. https://cocoainitiative.org/wp-content/uploads/2016/10/Harkin_Engel_Protocol.pdf. 

[5] International Labour Organization. Worst Forms of Child Labour Convention, 1999 (No. 182). International Labour Organization. https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C182.

[6] Nestle USA, Inc. v. Doe I, U.S. ___ (2020)

[7] “The Alien Tort Statute.” The Center for Justice and Accountability, n.d. https://cja.org/what-we-do/litigation/legal-strategy/the-alien-tort-statute/. 

[8] Nestle USA, Inc. v. Doe I, U.S. ___ (2020)

[9] id at 4

[10] Doe v. Nestle, S.A. (C.D. Cal. 2010). 

[11] Nestle USA, Inc. v. Doe I, U.S. ___ (2020)

[12] id at i

[13] “The Alien Tort Statute.” The Center for Justice and Accountability, n.d. https://cja.org/what-we-do/litigation/legal-strategy/the-alien-tort-statute/. 

[14] Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013)

[15] Jesner v. Arab Bank, PLC, 584 U.S. ___ (2018)

[16] id

[17] Nestle USA, Inc. v. Doe I, U.S. ___ (2020)