John Doe v. Nestle United States, Inc.

• Decision Date: 04 September 2014
• Docket Number: No. 10–56739.,10–56739.
• Citation: 766 F.3d 1013
• Parties: John DOE I; John Doe II; John Doe III, individually and on behalf of proposed class members; Global Exchange, Plaintiffs–Appellants, v. NESTLE USA, INC.; Archer Daniels Midland Company; Cargill Incorporated Company; Cargill Cocoa, Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

766 F.3d 1013

John DOE I; John Doe II; John Doe III, individually and on behalf of proposed class members; Global Exchange, Plaintiffs–Appellants,

v.NESTLE USA, INC.; Archer Daniels Midland Company; Cargill Incorporated Company; Cargill Cocoa, Defendants–Appellees.

No. 10–56739.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 2, 2013.

Filed Sept. 4, 2014.

Paul Hoffman (argued), Schonbrun DeSimone Seplow Harris Hoffman & Harrison, LLP, Venice, CA; Terrence Patrick Collingsworth, Conrad & Scherer, LLP, Washington, D.C., for Plaintiffs–Appellants.

Andrew John Pincus (argued), Mayer Brown LLP, Washington, D.C.; Craig A. Hoover and Christopher Todd Handman, Hogan Lovells U.S. LLP, Washington, D.C.; Julie A. Shepard, Jenner & Block, LLP, Los Angeles, CA; Jonathan H. Blavin and Kristin Linsley Myles, Munger Tolles & Olson, LLP, San Francisco, CA; Brad D. Brian and Daniel Paul Collins, Munger Tolles & Olson, LLP, Los Angeles, CA; Lee H. Rubin, Mayer Brown LLP, Palo Alto, CA, for Defendants–Appellees.

Susan Hannah Farbstein, International Human Rights Clinic, Harvard Law School, Cambridge, MA, for Amici Curiae Professors of Legal History.

Marco Simons, Earthrights International, Washington, D.C., for Amicus Curiae Earthrights International.

Jennifer M. Green, Director, Human Rights Litigation and International Advocacy Clinic University of Minnesota Law School, Minneapolis, MN, for Amici Curiae Nuremberg Scholars.

David J. Scheffer, Northwestern University School of Law Bluhm Legal Clinic, Center for International Human Rights, Chicago, IL, for Amicus Curiae David J. Scheffer.

Peter Bowman Rutledge, Athens, GA, for Amici Curiae Chamber of Commerce of the United States of America and the National Foreign Trade Council.

Meir Feder, Jones Day, New York, NY, for Amici Curiae National Association of Manufacturers and Professors of International and Foreign Relations Law and Federal Jurisdiction.

James Evan Berger and Charlene Sun, King & Spalding, LLP, New York, NY; Rebecca Kelder Myers, Vandenberg & Feliu LLP, New York, NY; Todd Tyler Williams, Paul Hastings LLP, New York, NY, for Amicus Curiae United States Council for International Business.

William Aceves, California Western School of Law, San Diego, CA, for Amicus Curiae International Law Scholars.

Jonathan Massey, Massey & Gail LLP, Washington, D.C., for Amicus Curiae Nuremberg Historians and International Lawyers.

Appeal from the United States District Court for the Central District of California, Stephen V. Wilson, District Judge, Presiding. D.C. No. 2:05–CV–05133–SVW–JTL.

Before: DOROTHY W. NELSON, KIM McLANE WARDLAW, and JOHNNIE B. RAWLINSON, Circuit Judges.

ORDER

The order filed December 19, 2013, and appearing at 738 F.3d 1048, is withdrawn, Carver v. Lehman, 558 F.3d 869, 878–79 (9th Cir.2009), and is replaced by the opinion filed concurrently with this order. Our prior order may not be cited as precedent to any court. Moreover, with the original order withdrawn, we deem the petition for rehearing and rehearing en banc moot. The parties may file a petition for rehearing and rehearing en banc with respect to the opinion filed together with this order.

IT IS SO ORDERED.

OPINION

D.W. NELSON, Senior Circuit Judge:

The plaintiffs in this case are former child slaves who were forced to harvest cocoa in the Ivory Coast. They filed claims under the Alien Tort Statute (ATS) against defendants Nestle USA, Inc., Archer Daniels Midland Company, Cargill Incorporated Company, and Cargill Cocoa, alleging that the defendants aided and abetted child slavery by providing assistance to Ivorian farmers.

The district court dismissed their complaint, finding that the plaintiffs failed to state a claim upon which relief can be granted. We reverse, vacate, and remand for further proceedings.

I. Background ¹

The use of child slave labor in the Ivory Coast is a humanitarian tragedy. Studies by International Labour Organization, UNICEF, the Department of State, and numerous other organizations have confirmed that thousands of children are forced to work without pay in the Ivorian economy. Besides the obvious moral implications, this widespread use of child slavery contributes to poverty in the Ivory Coast, degrades its victims by treating them as commodities, and causes long-term mental and physical trauma.

The plaintiffs in this case are three victims of child slavery. They were forced to work on Ivorian cocoa plantations for up to fourteen hours per day six days a week, given only scraps of food to eat, and whipped and beaten by overseers. They were locked in small rooms at night and not permitted to leave the plantations, knowing that children who tried to escape would be beaten or tortured. Plaintiff John Doe II witnessed guards cut open the feet of children who attempted to escape, and John Doe III knew that the guards forced failed escapees to drink urine.

Though tarnished by these atrocities, the Ivory Coast remains a critical part of the international chocolate industry, producing seventy percent of the world's supply of cocoa. The defendants in this case dominate the Ivorian cocoa market. Although the defendants do not own cocoa farms themselves, they maintain and protect a steady supply of cocoa by forming exclusive buyer/seller relationships with Ivorian farms. The defendants are largely in charge of the work of buying and selling cocoa, and import most of the Ivory Coast's cocoa harvest into the United States. The defendants' involvement in the cocoa market gives them economic leverage, and along with other large multinational companies, the defendants effectively control the production of Ivorian cocoa.

To maintain their relationships with Ivorian farms, the defendants offer both financial assistance and technical farming assistance designed to support cocoa agriculture. The financial assistance includes advanced payment for cocoa and spending money for the farmers' personal use. The technical support includes equipment and training in growing techniques, fermentation techniques, farm maintenance, and appropriate labor practices. The technical support is meant to expand the farms' capacity and act as a quality control mechanism, and either the defendants or their agents visit farms several times per year as part of the defendants' training and quality control efforts.

The defendants are well aware of the child slavery problem in the Ivory Coast. They acquired this knowledge firsthand through their numerous visits to Ivorian farms. Additionally, the defendants knew of the child slave labor problems in the Ivorian cocoa sector due to the many reports issued by domestic and international organizations.

Despite their knowledge of child slavery and their control over the cocoa market, the defendants operate in the Ivory Coast “with the unilateral goal of finding the cheapest sources of cocoa.” The defendants continue to supply money, equipment, and training to Ivorian farmers, knowing that these provisions will facilitate the use of forced child labor. The defendants have also lobbied against congressional efforts to curb the use of child slave labor. In 2001, the House of Representatives passed a bill that would have required United States importers and manufacturers to certify and label their products “slave free.” The defendants and others in the chocolate industry rallied against the bill, urging instead the adoption of a private, voluntary enforcement mechanism. A voluntary enforcement system was eventually adopted, a result that, according to the plaintiffs, “in effect guarantee[d]the continued use of the cheapest labor available to produce [cocoa]—that of child slaves.”

The plaintiffs filed a proposed class action in the United States District Court for the Central District of California, alleging that the defendants were liable under the ATS for aiding and abetting child slavery in the Ivory Coast. The district court granted the defendants' motion to dismiss in a detailed opinion, which concluded that corporations cannot be sued under the ATS, and that even if they could, the plaintiffs failed to allege the elements of a claim for aiding and abetting slave labor. The plaintiffs declined to amend their complaint, and appeal the district court's order.

II. Standard of Review

“A dismissal for failure to state a claim is reviewed de novo. All factual allegations in the complaint are accepted as true, and the pleadings construed in the light most favorable to the nonmoving party.” Abagninin v. AMVAC Chem. Corp., 545 F.3d 733, 737 (9th Cir.2008) (internal citations omitted).

III. Discussion

The ATS, quoted in full, reads:

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.

28 U.S.C. § 1350. For nearly two hundred years, the ATS was almost never invoked. In Filartiga v. Pena–Irala, however, the Second Circuit breathed life into the statute by construing it to allow two Paraguayan citizens to bring a civil action against a Paraguayan police officer who had tortured and killed their son. 630 F.2d 876, 878 (2d Cir.1980); Sosa v. Alvarez–Machain, 542 U.S. 692, 724–25, 124 S.Ct. 2739, 159 L.Ed.2d 718 (2004) (describing Filartiga as “the birth of the modern line of [ATS] cases.”). The Second Circuit in Filartiga reasoned that the ATS was designed to “open[ ] the federal courts for adjudication of the rights already recognized by international law,” and thus permitted the plaintiffs to pursue their tort claim because torture is prohibited by international law. Filartiga, 630 F.2d at 885, 887–88. Filartiga concluded by observing that modern history had led the nations of the world to recognize the collective interest in protecting fundamental human rights, and commented that its holding was “a small but important step in the fulfillment of the ageless dream to free all people from brutal violence.” Id. at 890.

The Supreme Court...