U.S. Supreme Court rules for Cargill, Nestle in lawsuit over child slavery in cocoa production

The U.S. Supreme Court on Thursday threw out a lawsuit accusing Cargill Inc. and a Nestle SA subsidiary of knowingly helping perpetuate slavery at Ivory Coast cocoa farms, but sidestepped a broader ruling on the permissibility of suits accusing American companies of human rights violations abroad.

The 8-1 ruling authored by Justice Clarence Thomas reversed a lower court decision that had allowed the lawsuit — brought on behalf of former child slaves from Mali who worked at the farms and filed against the companies in 2005 — to proceed.

The court ruled the claim could not be brought under the Alien Tort Statute, which lets non-U.S. citizens seek damages in American courts in certain instances, because the plaintiffs did not show that any of the relevant conduct took place within the United States.

"Nearly all the conduct that they say aided and abetted forced labor — providing training, fertilizer tools, and cash to overseas farms — occurred in Ivory Coast," Thomas wrote.

The plaintiffs had argued that the corporations had made these supply chain decisions from their U.S. headquarters. Cargill is based in Minnetonka.

The business community has long sought to limit corporate liability under this law.

"The Supreme Court's ruling today affirms Cargill's analysis of the law and confirms this suit has no basis to proceed," a Cargill spokeswoman said in an e-mail.

"Regardless," she added, "Cargill's work to keep child labor out of the cocoa supply chain is unwavering. We do not tolerate the use of child labor in our operations or supply chains and we are working every day to prevent it."

Nestle said in a statement the company "never engaged in the egregious child labor alleged in this suit, and we remain unwavering in our dedication to combating child labor in the cocoa industry."

The justices split on some of the details of the case, stopping short of definitively deciding the question of whether U.S. companies can ever be sued under the Alien Tort Statute, written in 1789, one of the first laws ever passed in the United States. Cargill and Nestle had asked the court to bar such lawsuits in all circumstances.

"I would hold that if a particular claim may be brought under the ATS against a natural person who is a United States citizen, a similar claim may be brought against a domestic corporation," Justice Samuel Alito wrote in his dissent. "Corporate status does not justify special immunity."

Terry Collingsworth, executive director of International Rights Advocates and the plaintiffs' lead lawyer, said in a statement, "Out of this divided opinion, we still hold hope that plaintiffs will get their day in court."

The case was remanded to trial court, where Collingsworth said they will attempt to amend their complaint in a way that satisfies the standard outlined in the majority opinion of the Supreme Court.

The lawsuits targeted the U.S. subsidiary of Swiss-based Nestle, the world's biggest food producer, and commodities trader Cargill, one of the largest privately held companies in the United States.

The plaintiffs accused the companies of aiding and abetting human rights violations through their active involvement in buying Ivory Coast cocoa and turning a blind eye to the use of slave labor on the farms.

A federal district court in Los Angeles dismissed the lawsuit twice, most recently in 2017. That court found that the claims were barred by recent Supreme Court decisions that made it harder for plaintiffs to sue corporations in U.S. courts for alleged violations overseas.

The San Francisco-based 9th U.S. Circuit Court of Appeals in 2018 revived the claims, citing the allegations that the companies provided "personal spending money" to local farmers to guarantee the cheapest source of cocoa. The 9th Circuit found that the payments were akin to kickbacks and that the low price of cocoa depended upon the child slave labor.

The U.S. Chamber of Commerce and other business interests backed the two companies in the case.

The Supreme Court in 2013 and 2018 cases limited the ability of plaintiffs to sue corporations in U.S. courts under the Alien Tort Statute for overseas human rights violations. The court said in those rulings that there needed to be a strong connection between the alleged conduct and actions that took place in the United States.

A recent U.S. Labor Department survey found that nearly 1.5 million children in Ghana and the Ivory Coast were exposed to hazardous conditions in cocoa production during the 2018-2019 harvest.

Star Tribune staff writer Kristen Leigh Painter contributed to this report.