John Doe I v. Nestle

• Citation: 748 F.Supp.2d 1057
• Decision Date: 08 September 2010
• Docket Number: No. CV 05–5133 SVW (JTLx).,CV 05–5133 SVW (JTLx).
• Parties: John DOE I, Individually and on behalf of Proposed Class Members; John Doe II, Individually and on behalf of Proposed Class Members; John Doe III, Individually and on behalf of Proposed Class Members; Global Exchange, Plaintiffs,v.NESTLE, S.A.; Nestle U.S.A.; Nestle Ivory Coast; Archer Daniels Midland Co.; Cargill, Inc.; Cargill Cocoa; Cargill West Africa, S.A.; and Corporate Does 1–10, Defendants.
• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California

748 F.Supp.2d 1057

John DOE I, Individually and on behalf of Proposed Class Members; John Doe II, Individually and on behalf of Proposed Class Members; John Doe III, Individually and on behalf of Proposed Class Members; Global Exchange, Plaintiffs,

v.NESTLE, S.A.; Nestle U.S.A.; Nestle Ivory Coast; Archer Daniels Midland Co.; Cargill, Inc.; Cargill Cocoa; Cargill West Africa, S.A.; and Corporate Does 1–10, Defendants.

No. CV 05–5133 SVW (JTLx).

United States District Court, C.D. California.

Sept. 8, 2010.

Michael S. Morrison, Paul L. Hoffman, Schonbrun Desimone Seplow Harris & Hoffman, Venice, CA, Natacha Thys, Terry Collingsworth, Conrad & Scherer, Washington, DC, Robert F. Childs, Jr., Robert L. Wiggins, Jr., Wiggins Childs Quinn and Pantazis, Birmingham, AL, for Plaintiffs.Daniel M. Petrocelli, O'Melveny and Myers LLP, Brad D. Brian, Daniel Paul Collins, Munger Tolles & Olson LLP, Julie A. Shepard, Hogan and Hartson, Los Angeles, CA, Robert C. Troyer, Hogan and Hartson, Denver, CO, Jonathan H. Blavin, Kristin Linsley Myles, Munger Tolles and Olson LLP, San Francisco, CA, Craig A. Hoover, Hogan Lovells LLP, Andrew J. Pincus, Mayer Brown, Washington, DC, Lee H. Rubin, Mayer Brown, Palo Alto, CA, for Defendants.

ORDER GRANTING DEFENDANTS ARCHER–DANIELS–MIDLAND CO., NESTLE U.S.A., AND CARGILL INC.'S MOTION TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(6) FOR FAILURE TO STATE A CLAIM

STEPHEN V. WILSON, District Judge.I. INTRODUCTION

On July 14, 2005, Plaintiffs John Doe I, John Doe II, John Doe III, and Global Exchange (collectively “Plaintiffs”) ¹ filed this class action for damages and injunctive relief. On July 10, 2009, Plaintiffs filed a first amended complaint. The amended complaint asserts causes of action under the Alien Tort Statute, 28 U.S.C. § 1350; the Torture Victim Protection Act, Pub. L. 102–256, 106 Stat. 73 (1992); state-law unjust enrichment; and Cal. Bus. & Prof. Code §§ 17200 et seq.²

Defendants are Nestle, S.A. (based in Switzerland), Nestle, U.S.A., and Nestle Cote d'Ivoire, S.A. (collectively “Nestle”); Cargill, Incorporated (“Cargill, Inc.”), Cargill Cocoa (based in the United States), and Cargill West Africa, S.A. (collectively “Cargill”); and Archer Daniels Midland Company (“Archer Daniels Midland”) (collectively “Defendants”).³

Defendants Nestle U.S.A., Cargill Inc., and Archer Daniels Midland have filed a Motion to Dismiss the First Amended Complaint for failure to state a claim upon which relief can be granted.

II. LEGAL STANDARD

In order to survive a Rule 12(b)(6) Motion to Dismiss, a plaintiff's complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint's allegations are true.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. A complaint that offers mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Iqbal, 129 S.Ct. at 1951; see also Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir.2009) (citing Iqbal, 129 S.Ct. at 1951). Courts should not “unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Iqbal, 129 S.Ct. at 1950.

III. FACTS

The individual Plaintiffs are Malians who allege that they were forced to labor on cocoa fields in Cote d'Ivoire. Plaintiffs seek class status on behalf of similarly situated Malians who were forced to labor in Cote d'Ivoire. The remaining Plaintiff, Global Exchange, is a San Francisco-based human rights organization that promotes social justice.

Plaintiffs allege that they have filed suit in the United States because: (1) there is no law in Mali allowing civil damages for their injuries caused by non-Malian cocoa exporters (as all Defendants are American, European, or Ivorian corporations); (2) no suit can be brought in Cote d'Ivoire because “the judicial system is notoriously corrupt and would likely be unresponsive to the claims of foreign children against major cocoa corporations operating in and bringing significant revenue to Cote d'Ivoire” (FAC ¶ 2); (3) Plaintiffs and their attorneys would be subjected to possible harm in Cote d'Ivoire on account of general civil unrest and “the general hostility by cocoa producers in the region”; and (4) the United States has provided an appropriate forum for these claims through the Alien Tort Statute and the Torture Victim Protection Act, 28 U.S.C. § 1350.

Plaintiffs claim that Defendants have aided and abetted violations of international law norms that prohibit slavery; forced labor; child labor; torture; and cruel, inhuman, or degrading treatment. Plaintiffs also seek relief under state-law unjust enrichment. All Plaintiffs (including Global Exchange) allege violations of Cal. Bus. & Prof. Code § 17200.

Plaintiffs allege that Defendants obtain an “ongoing, cheap supply of cocoa by maintaining exclusive supplier/buyer relationships with local farms and/or farmer cooperatives in Cote d'Ivoire.” (FAC ¶ 33.) ⁴ These exclusive contractual arrangements allow Defendants “to dictate the terms by which such farms produce and supply cocoa to them, including specifically the labor conditions under which the beans are produced.” ( Id.) Defendants control the farms' labor conditions “by providing local farmers and/or farmer cooperatives inter alia ongoing financial support, including advance payments and personal spending money to maintain the farmers' and/or the cooperatives' loyalty as exclusive suppliers; farming supplies, including fertilizers, tools and equipment; training and capacity[-]building in particular growing and fermentation techniques and general farm maintenance, including appropriate labor practices, to grow the quality and quantity of cocoa beans they desire.” (FAC ¶ 34.) This oversight requires Defendants to engage in “training and quality control visits [that] occur several times per year and require frequent and ongoing visits to the farms either by Defendants directly or via their contracted agents.” ( Id.)

Plaintiffs identify certain of Nestle's representations in which Nestle states that it “ ‘provides assistance in crop production’ ” and performs “ ‘tracking inside our company supply chain, i.e. from the reception of raw and packaging materials, production of finished products to delivery to customers.’ ” (FAC ¶ 36 (quoting Nestle “Principles of Purchasing,” 2006).) Nestle also states that “ ‘[i]n dealing with suppliers, Purchasing must insist on knowing the origin of incoming materials and require suppliers to communicate the origin of their materials,’ ” and that it “ ‘actively participate[s] as the first link in an integrated supply chain,’ ‘develop[s] supplier relationships,’ and ‘continually monitor[s] the performance, reliability and viability of suppliers.’ ” ( Id.) Nestle also states that its “ ‘Quality System covers all steps in the food supply chain, from the farm to the consumer of the final products ..., includ[ing] working together with producers and suppliers of raw ... materials.’ ” (FAC ¶ 37.) Finally, Nestle has stated that “ ‘[w]hile we do not own any farmland, we use our influence to help suppliers meet better standards in agriculture.... Working directly in our supply chain we provide technical assistance to farmers.’ ” (FAC ¶ 38.) This assistance “ ‘ranges from technical assistance on income generation to new strategies to deal with crop infestation, to specific interventions designed to address issues of child labour,’ ” including “ ‘[s]pecific programmes directed at farmers in West Africa [such as] field schools to help farmers with supply chain issues, as well as a grassroots ‘training of trainers' programme to help eliminate the worst forms of child labour.’ ” ( Id.)

Plaintiffs identify certain of Archer Daniels Midland's representations in which the company states that its relationship ⁵ with the SIFCA cooperative “ ‘gives ADM Cocoa an unprecedented degree of control over its raw material supply, quality and handling.’ ” (FAC ¶ 39 (quoting ADM statements contained in 2001 article in Biscuit World ).) An Archer Daniels Midland executive has been quoted as saying “ ‘ADM Cocoa can deliver consistent top quality products by control of its raw materials,’ and that ‘ADM is focused on having direct contact with farmers in order to advise and support them to produce higher quality beans for which they will receive a premium.’ ” ( Id.) Archer Daniels Midland has represented that it has a “ ‘strong presence in [cocoa] origin regions,’ ” and that “ ‘ADM is working hard to help provide certain farmer organizations with the knowledge, tools, and support they need to grow quality cocoa responsibly and in a sustainable manner.... ADM is providing much needed assistance to organizations representing thousands of farmers and farming communities. These efforts are making an impact at the farm level.’ ” (FAC ¶ 40.) It has also stated that it “ ‘is actively involved in long term efforts to ensure that cocoa is grown responsibly and sustainably. Such efforts include research into environmentally sound crop management practices, plant breeding work to develop disease-resistant varieties, and farmer field schools to transfer the latest know-how into the hands of millions of cocoa farmers around the world. Starting from the cocoa growers through to the world's top food and beverage manufacturers, ADM Cocoa is committed to delivering the best in product quality and service at every...