Judges split on suing U.S. firms over foreign labor

A federal appeals court in San Francisco reaffirmed its ruling Friday that youngsters on cocoa plantations in Africa can sue U.S. chocolate makers for allegedly collaborating in slave labor.

But eight judges, led by an appointee of President Trump, argued in dissent that corporations can’t be sued for actions in foreign countries.

The suit by six former laborers on farms in the Ivory Coast “alleges clear, egregious and terrible violations of (their) basic human rights,” but that conduct “took place almost entirely abroad,” said Judge Mark Bennett in an opinion joined by seven colleagues on the Ninth U.S. Circuit Court of Appeals in San Francisco. He said the court was ignoring Supreme Court directives that the Alien Tort Statute, a 1789 law allowing foreigners to sue in U.S. courts for violations of international law, “must be narrowly construed and sparingly applied.”

But the court majority said the suit accuses

the U.S. companies of enough involvement in illegal labor practices — paying “kickbacks” to the plantation owners to keep their prices low and sending employees to Africa to inspect the operations — to allow the case to proceed, a conclusion the court first reached in 2014.

“The allegations paint a picture of overseas slave labor that (the companies) perpetuated from headquarters in the United States,” Judge Dorothy Nelson said in a ruling for a threejudge panel.

The companies, Nestle and Cargill, asked the full appeals court for a new hearing before a larger panel. The court said the request failed to gain a majority among its 25 active judges. That leaves Nelson’s ruling in place, although she said the plaintiffs must present more specific evidence of wrongdoing by Nestle.

Nestle issued a statement endorsing Bennett’s opinion, adding, “Forced child labor is unacceptable and has no place in our supply chain.” The company stated that it was working “to combat this global social problem.”

Cargill could not be reached for comment but issued a similar statement earlier in the case. The companies could seek review in the Supreme Court.

The suit was filed in 2005 by residents of the African nation of Mali and covered 1994 to 2000. The six youths said they were kidnapped at ages 12 to 14 and taken to plantations on the Ivory Coast, where they were forced to work without pay for up to 14 hours a day, six days a week. They said their overseers beat and whipped them, gave them scraps to eat, and locked them in small rooms at night.

The Ivory Coast produces 70% of the world’s cocoa. While the U.S. chocolate makers said they do not tolerate child slave labor, the court said in its 2014 ruling that the domestic chocolate industry persuaded Congress in 2001 to defeat a bill that would have required all importers and manufacturers to certify that their products were “slave free.”

The Supreme Court ordered the Ninth Circuit to reconsider that ruling based on the high court’s decision in 2018 that said the 1789 law could be used only against U.S. companies and not against firms located abroad. The appeals court removed foreign companies from the suit but said last fall, and repeated Friday, that the case could proceed against Nestle and Cargill.

Those companies “were well aware that child slave labor is a pervasive problem in the Ivory Coast,” but, according to the lawsuit, “continued to provide financial support and technical farming aid,” Nelson said.

Bennett, however, said the suit alleged “solely foreign misconduct” and did not claim that the U.S. companies “engaged in slavery or are associated with any of the actual perpetrators beyond their status as buyers of cocoa.”

Even if the companies’ payments to the plantation owners amounted to “kickbacks,” Bennett said, “the payments, like the slavery, all took place in Africa.”

His dissent, calling for a new hearing, was joined by Judges Ryan Nelson and Bridget Bade, also Trump appointees, and by Judges Jay Bybee, Consuelo Callahan, Carlos Bea, Sandra Ikuta and Milan Smith. Another part of Bennett’s opinion, endorsed by the same judges except for Bade and Smith, interpreted a recent Supreme Court ruling as a prohibition on suits against all corporations under the 1789 law, an issue that has divided other courts.