The Alien Tort Statute1 (ATS) has a complicated history in federal courts. This centuries-old statute gives federal courts jurisdiction over torts “committed in violation of the law of nations.”2 In recent decades, litigators have used this language to bring claims for human rights violations.3 However, the Supreme Court has repeatedly narrowed the applicability of the ATS, most recently holding in Jesner v. Arab Bank, PLC4 that a foreign corporation cannot be sued under the statute.5 But in the Ninth Circuit, a domestic corporation still can be sued, and last year the circuit declined to change that by denying en banc rehearing of the ATS case Doe I v. Nestle, S.A.6 As the dissent from the denial of rehearing pointed out, the result leaves the circuit in tension with the spirit of the Supreme Court’s decision in Jesner,7 in which some Justices suggested that corporate liability generally is not the kind of universal norm required by the ATS.8 While domestic corporate ATS liability survives in the Ninth Circuit, the court failed to meaningfully engage with the implications of Jesner, and by declining to correct this failure the court may have merely condemned ATS plaintiffs to labor on hopelessly until the Supreme Court speaks again.
This case arose from the still-common practice of child slavery on cocoa plantations in Côte d’Ivoire.9 The plaintiffs were six former child slaves who alleged that, between the ages of twelve and fourteen, they were trafficked from Mali to cocoa plantations in Côte d’Ivoire, where they were forced to work without pay for twelve to fourteen hours a day, given inadequate food and shelter, and subjected to intimidation and torture.10 The defendant corporations, Nestlé and Cargill, did not own or directly operate these plantations, but the plaintiffs alleged that they exercised a high degree of control over the global cocoa industry and that they actively and knowingly facilitated the use of child slaves in order to keep cocoa prices low.11
The present litigation dates back to a complaint filed in the Central District of California in 2005.12 At that point, defendants included not only Nestlé USA, Inc. and Cargill, Inc., but also Nestlé, S.A. (Nestlé’s Swiss parent company) and the Ivorian and West African subsidiaries of Nestlé and Cargill, respectively.13 After a two-year stay,14 the district court dismissed the claim in 2010 in part because it found that the ATS did not allow for corporate liability.15 On appeal, however, the Ninth Circuit, in an opinion by Judge Dorothy Wright Nelson,16 reversed and remanded, holding that the ATS did allow claims against corporations.17 The Ninth Circuit based its reasoning on the principles laid out in circuit precedent18: that the scope of ATS liability proceeds norm by norm, that it does not depend on existing international precedent, and that it applies to all parties, including corporations, when the norm is “universal and absolute.”19 Rehearing en banc was denied20 over a dissent by Judge Bea, who argued that the panel had erred by not adopting a “restrained conception” of ATS liability as called for by the Supreme Court.21 On remand, the district court again dismissed the claim, this time on the grounds that the plaintiffs’ claim constituted an “impermissible extraterritorial application of the ATS.”22
On appeal, Judge Nelson23 again wrote for the Ninth Circuit and reversed the dismissal.24 Judge Nelson considered both the decision of the lower court and the questions posed by the Supreme Court’s intervening decision in Jesner.25 In addressing the lower court’s concern about extraterritorial applications of the ATS, the court looked to an earlier Supreme Court ATS case, Kiobel v. Royal Dutch Petroleum Co.26 Kiobel held that, in order to be remediable under the ATS, conduct must “touch and concern” the United States “with sufficient force to displace the presumption against extraterritorial application.”27 Unlike the district court, the Ninth Circuit held that this standard had been met because, while the slave labor had occurred overseas, plaintiffs alleged that it was “perpetuated from headquarters in the United States.”28
In light of Jesner, which held that foreign corporations may never be liable under the ATS,29 the Ninth Circuit ordered the plaintiffs to remove those defendant corporations that were not based in the United States.30 However, despite at least one defendant’s call to preclude domestic corporate liability,31 the panel instead returned to its own precedent in Nestle I that corporations could be liable for aiding and abetting slavery under the ATS.32 Nestle I held that the prohibition on slavery is a “universal and absolute” norm that applies to all parties, including corporate defendants,33 and though Jesner means that norm can no longer be enforced against foreign corporations using the ATS, the court in Nestle II declined to modify its precedent beyond that necessary minimum.34
Last year, the Ninth Circuit declined to rehear the case en banc, drawing a dissent written by Judge Bennett and joined in full or in part by seven other judges.35 Judge Bennett argued that the panel’s decision had been incorrect. He stated that the ATS was to be “narrowly construed and sparingly applied.”36 Specifically, Judge Bennett argued that the Ninth Circuit should have determined that corporations are not liable under the ATS in light of Jesner.37 Though he admitted that Jesner had “expressly left open” the question of domestic corporate liability,38 Judge Bennett nonetheless reasoned that the principles of judicial restraint reiterated in that case dictated that such liability should be denied.39 Moreover, Judge Bennett’s reading of Jesner’s plurality opinion and concurrences led him to conclude that “[f]ive Justices in Jesner strongly suggested that the ATS forecloses corporate liability.”40 In determining whether a cause of action is recognized under the ATS, Judge Bennett looked to another Supreme Court precedent, Sosa v. Alvarez-Machain,41 which held that in order for an ATS claim to succeed, (1) the claim must address a violation of a norm that is “specific, universal, and obligatory,”42 and (2) a court must determine that it is wise from a practical standpoint to make that violation a cause of action in America’s federal courts.43 He argued that “[c]orporate liability fail[ed] at both steps.”44
Judge Bennett also suggested that the claim should have been rejected as impermissibly extraterritorial.45 He pointed out that the plaintiffs’ enslavement had happened entirely within Côte d’Ivoire, at the hands of local slavers and farmers.46 He addressed the panel’s contrary conclusion that the plaintiffs had alleged sufficient corporate business conduct within the United States by pointing out that the defendants’ alleged payments to cocoa farmers and inspections of plantations would have in fact happened overseas.47 As for corporate decisions within the United States, Judge Bennett argued that these could not overcome the presumption against extraterritorial application lest that presumption be devoid of meaning.48
This case marks only the latest development in the ATS’s long and storied history,49 but the Ninth Circuit’s refusal to narrow ATS liability should not obscure the probability that that history is approaching its end. As the panel in Nestle II understood, the Court in Jesner did not require inferior courts to reject ATS liability for American corporations, and the Ninth Circuit was by no means required to rehear the case. However, as the dissent from denial pointed out, the Supreme Court did reason in a way that would make corporate liability difficult to justify, and it is likely only a matter of time before the Court makes the plaintiffs’ case untenable. The Ninth Circuit has shown how ATS litigation against corporations may proceed for the time being in courts inclined to allow it, but this model does little to undermine the reasoning, ratified by the Supreme Court in Jesner, that makes the end of ATS corporate liability probable. By allowing litigation to continue in the meantime, only for it to quite possibly be rendered moot at some later date, the Ninth Circuit may be sending human rights plaintiffs down a road that leads nowhere.
The Ninth Circuit did not meaningfully engage with Jesner in Nestle II. Instead it simply asserted that “Jesner did not eliminate all corporate liability under the ATS, and we therefore continue to follow Nestle I’s holding as applied to domestic corporations.”50 This reasoning ignores the Supreme Court’s application of the two-step Sosa analysis described in Judge Bennett’s dissent.51 While the Jesner Court’s analysis on step two, concerning the need for “judicial caution” due to the diplomatic implications of suing foreign corporations,52 need not apply to domestic corporations, the Court’s step-one analysis is less escapable. The Jesner plurality read international law as “counsel[ing] against” the existence of a universal norm of corporate liability — not merely foreign corporate liability.53
Jesner was the latest of three cases, along with Sosa and Kiobel, in which the Supreme Court narrowed ATS liability.54 While the Court has taken only incremental steps — creating a two-step framework for liability, barring extraterritorial application, and barring foreign corporate liability — some Justices have given strong hints that they will only go further. In his opinion in Jesner, Justice Kennedy employed an argument, previously adopted by the Second Circuit, that corporate liability generally was not a universal norm in international law and thus failed the Sosa test for ATS liability.55 For unclear reasons,56 Justice Kennedy limited his holding to foreign corporations, and so lawsuits like Nestle remain possible. Repeated proclamations of the ATS’s death have yet again proven premature.57 But that does not mean that the Court’s trend toward narrowing liability has stopped.
The Supreme Court’s current composition suggests that it will only take Jesner’s reasoning further, meaning it is likely a matter of time before the Court reverses the Ninth Circuit’s decision, or another one like it, on the grounds outlined in Judge Bennett’s dissent. Judge Bennett’s argument on corporate liability would be especially likely to prevail in the current Supreme Court: not only did much of Jesner’s reasoning apply to domestic as well as foreign corporations,58 but Justice Kavanaugh has replaced Justice Kennedy on the Court. While on the D.C. Circuit, then-Judge Kavanaugh echoed the same Second Circuit argument partially adopted in Jesner to assert that “the ATS does not apply to claims against corporations.”59
By refusing to pick up on the Supreme Court’s signals, the Ninth Circuit is inviting dubious and prolonged litigation against American companies from future plaintiffs. Particularly where there are other tools that can be developed further with robust litigation, the court may be giving plaintiffs false hope and delaying the inevitable. The history of this case shows the potential consequences of holding open avenues of ATS liability. As the panel in Nestle II acknowledged, “delay does not serve the interests of any party.”60 The parties have had no opportunity to present the merits of their cases since litigation began fifteen years ago, primarily because of shifting and unclear rules about who is a proper ATS defendant.61 With the Supreme Court poised to continue limiting ATS liability in general and to eliminate corporate liability in particular, it is likely only a matter of time before the case is dismissed again.
Ending domestic corporate ATS liability would not mean the end of all liability for human rights abuses committed abroad. There would remain political remedies, such as economic sanctions against states committing human rights abuses, with possible criminal consequences for corporations that aid them,62 and new legal remedies could be created.63 State law claims would remain viable as well.64 Individuals will also remain liable under the Torture Victim Protection Act65 (TVPA) insofar as they commit torts under color of law, and ATS individual liability will survive in the limited set of cases that satisfy both the two-part Sosa test and the Kiobel extraterritoriality requirement.66
Until relatively recently, the ATS provided human rights plaintiffs advantages not easily matched anywhere in the world,67 making it possible for American federal courts to adjudicate everything from Colombian intimidation of trade unions68 to Chinese restraints on expression.69 If any of the tools mentioned above are to take its place, advocates will need to develop them. While the continued viability of the ATS claims against corporations does not prevent plaintiffs from using other tools if they deem them more effective, those plaintiffs should recognize that the end of domestic corporate liability seems likely. By declining to reconsider this case, the Ninth Circuit has postponed that end to some indefinite point in the future, after some indefinite expenditure of time and money by plaintiffs, defendants, and the court system, but it has not made it less likely. In not bringing its precedent into line with the probable future trends in the Supreme Court’s jurisprudence, the Ninth Circuit, far from delivering a meaningful victory to ATS plaintiffs, may have only drawn out their struggle until the next grant of certiorari.