The Chocolate Dispute: Corporations and the Alien Tort Statute

By Tanner Bowen

Tanner Bowen is a rising sophomore at the University of Pennsylvania studying business.

Chocolate has essentially become a staple food of Western culture. With the world’s sweet tooth steadily rising, pressure has been placed upon chocolate producers to cut costs and increase supply. Efforts to keep up with this exponentially increasing industry have given rise to allegations of child slavery throughout the cocoa industry in countries such as the Ivory Coast and Ghana where over 70% of the world’s cocoa is produced. [1]

Fortunately, former child laborers have not kept quiet. Three former victims of child slavery filed a lawsuit in 2013 under the Alien Tort Statute (ATS) protesting their treatment. The ATS states that, “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.” [2] Formed approximately twenty years after the founding of the United States, this law has been rarely utilized until recently. Now, numerous foreign citizens are using this statue against American corporations for aiding in crimes against humanity conducted overseas. Employing the power of the ATS, the plaintiffs alleged that chocolate giants Nestlé and Cargill Incorporated were guilty of abetting and promoting child slavery in the Ivory Coast by doing business with farmers who enslaved numerous children. [3] They brought the case John Doe v. Nestle USA, Inc. (2013) to the Ninth Circuit Court of Appeals. [4]

In the particular case of Doe vs. Nestle the Ninth Circuit addressed three particular questions: Is a corporation liable under the ATS? What is the proper mens rea analysis? Can there be an extraterritorial application of federal law under the ATS?

Regarding the question of liability of a corporation under the ATS, the Court ruled that there is no categorical rule for corporate immunity or liability. Rather, building upon the Ninth Circuit’s earlier opinion in Sarei v. Rio Tinto (2000), the analysis rests on a combination of international and domestic tort law. [5] In particular, the court should look to established international law and from there and determine whether corporations are liable. Afterwards, the court should look to domestic tort law to see whether recovery may be awarded.  By the Ninth Circuit’s reasoning, the prohibition against slavery is considered a universal right, and international tribunals such as the International Criminal Tribunals for Rwanda and the former Yugoslavia have broadly condemned “persons responsible” for these crimes. In this situation, corporations are considered as “persons.”

In deciding the proper mens rea analysis, the Ninth Circuit put itself in an ideological split with other federal appeals courts by giving favor to the standard for determining liability that rests on the corporation’s knowledge of such actions rather than its purposeful intent. Although the Ninth Circuit determined that Nestlé purposefully aided and abetted the enslavement of children, there still does not seem to be a clear indication on which is the proper standard for analysis.

Finally, the US Supreme Court’s decision in Kiobel v. Dutch Royal Petroleum Co. (2013) ruled out the possibility for extraterritoriality whenever actions take place completely outside the United States. [6] However, some ambiguity in the majority opinion seems to have left the Ninth Circuit divided over when to apply this new “touch and concern” test for determining extraterritorial application of federal law as compared to the original “focus” test set out in Morrison v. National Australia Bank Ltd (2010). [7] Now it would be up to the plaintiffs to amend their complaint to show that Nestlé has violated international law within US borders.

The Ninth Circuit recently denied a request for rehearing en banc. [8] This will undoubtedly give rise to more complexities involving the ATS that need to be resolved before the case can be decided. Issues concerning the prevention of conflicts with international law and the treatment of corporations as persons for liability purposes will most likely fall under the jurisdiction of the Supreme Court.  With a relatively conservative American court system and the ambiguous Alien Tort Statute, the issue of globalization and chocolate could continue to put American corporations in an interesting position in the international arena.  


[1] "Cocoa Market Update." World Cocoa Foundation. March 1, 2012. Accessed June 24, 2015.
http://worldcocoafoundation.org/wp-content/uploads/Cocoa-Market-Update-as-of-3.20.2012.pdf
[2] Posner, Eric. “The United States Can’t Be the World’s Courthouse.” Slate, April 24, 2013. http://www.slate.com/articles/news_and_politics/view_from_chicago/2013/04/the_supreme_court_and_the_alien_tort_statute_ending_human_rights_suits.html.
[3] “Nestlé, Cargill, Archer Daniels Midland Lawsuit (re Côte d’Ivoire) | Business & Human Rights Resource Centre.” Accessed June 30, 2015. http://business-humanrights.org/en/nestl%C3%A9-cargill-archer-daniels-midland-lawsuit-re-c%C3%B4te-divoire.
[4] “John Doe I v. Nestle, USA, - CourtListener.com.” CourtListener. Accessed June 30, 2015. https://www.courtlistener.com/opinion/2802981/john-doe-i-v-nestle-usa/.
[5] “Rio Tinto Lawsuit (re Papua New Guinea) | Business & Human Rights Resource Centre.” Accessed June 30, 2015. http://business-humanrights.org/en/rio-tinto-lawsuit-re-papua-new-guinea.
[6] “Kiobel v. Royal Dutch Petroleum Co. 569 U.S. ___ (2013).” Justia Law. Accessed June 30, 2015. https://supreme.justia.com/cases/federal/us/569/10-1491/.
[7] “Morrison v. National Australia Bank.” SCOTUSblog. Accessed June 30, 2015. http://www.scotusblog.com/case-files/cases/morrison-v-national-australia-bank/.
[8] “John Doe I v. Nestle, USA, - CourtListener.com.”

Photo Credit: Flickr User Yvonne

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