John Doe I v. Nestle, USA ( 2015 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOHN DOE I; JOHN DOE II; No. 10-56739
JOHN DOE III, individually
and on behalf of proposed D.C. No.
class members; GLOBAL 2:05-CV-05133-SVW-
EXCHANGE, JTL
Plaintiffs-Appellants,
v. ORDER AND
AMENDED ORDER
NESTLE USA, INC.; ARCHER
DANIELS MIDLAND
COMPANY; CARGILL
INCORPORATED COMPANY;
CARGILL COCOA,
Defendants-Appellees.
Filed May 6, 2015
Amended June 10, 2015
Before: Dorothy W. Nelson, Kim McLane Wardlaw,
and Johnnie B. Rawlinson, Circuit Judges.
Order;
Amended Order;
Dissent by Judge Bea
2 DOE V. NESTLE
SUMMARY*
Alien Tort Statute
The panel denied a petition for panel rehearing and, on
behalf of the court, a petition for rehearing en banc.
Dissenting from the denial of rehearing en banc, Judge
Bea, joined by Judges O’Scannlain, Gould, Tallman, Bybee,
Callahan, M. Smith, and N.R. Smith, wrote that the panel
majority had substituted sympathy for legal analysis in
concluding that the defendant corporations engaged in the
Ivory Coast cocoa trade with the purpose that the plaintiffs be
enslaved, hence aiding and abetting the slavers and plantation
owners. Judge Bea wrote that the panel majority’s conclusion
was wrong, created a split with the Second and Fourth
Circuits, and conflicted with Supreme Court doctrine
interpreting the Alien Tort Statute.
ORDER
The order denying the petition for rehearing/rehearing en
banc, filed on May 6, 2015, is hereby amended at Page 2,
Line 3, to add the sentence:
Judges Graber, Ikuta, Watford, Owens,
and Friedland did not participate in the
deliberations or vote in this case.
SO ORDERED.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
DOE V. NESTLE 3
AMENDED ORDER
Judge Rawlinson voted to grant the petition for rehearing
and petition for rehearing en banc.
Judge Nelson and Judge Wardlaw voted to deny the
petition for panel rehearing. Judge Wardlaw voted to deny
the petition for rehearing en banc and Judge Nelson so
recommended.
The full court was advised of the petition for rehearing en
banc. A judge requested a vote on whether to rehear the
matter en banc. The matter failed to receive a majority of the
votes of the nonrecused active judges in favor of en banc
consideration. Fed. R. App. P. 35.
Judges Graber, Ikuta, Watford, Owens, and Friedland did
not participate in the deliberations or vote in this case.
The petition for panel rehearing and the petition for
rehearing en banc are DENIED.
Judge Bea’s dissent from the denial of rehearing en banc
is filed concurrently with this order.
4 DOE V. NESTLE
BEA, Circuit Judge, with whom O’SCANNLAIN, GOULD,
TALLMAN, BYBEE, CALLAHAN, M. SMITH, AND N.R.
SMITH, Circuit Judges, join, dissenting from the denial of
rehearing en banc:
Unfortunately, the panel majority here has substituted
sympathy for legal analysis. I quite agree plaintiffs are
deserving of sympathy. They are alleged former child slaves
of Malian descent, dragooned from their homes and forced to
work as slaves on cocoa plantations in the Ivory Coast. But
they do not bring this action against the slavers who
kidnapped them, nor against the plantation owners who
mistreated them. Instead the panel majority concludes that
defendant corporations, who engaged in the Ivory Coast
cocoa trade, did so with the purpose that plaintiffs be
enslaved, hence aiding and abetting the slavers and plantation
owners. By this metric, buyers of Soviet gold had the
purpose of facilitating gulag prison slavery.
How was the cocoa buyers’ purpose shown? By their
purchase of cocoa and their conduct of “commercial
activities [such] as resource development,” conduct one of
our sister circuits has explained does not establish that a
defendant acted with the required purpose.1 The panel
majority’s conclusion is wrong. Even the plaintiffs admit
defendants intended only to maximize profits, not harm
children through slavery.2 It also creates a circuit split with
the Second and Fourth Circuits.
1
Presbyterian Church of Sudan v. Talisman Energy, Inc., 582 F.3d 244,
264 (2d. Cir. 2009).
2
Doe I v. Nestle USA, Inc., 766 F.3d 1013, 1025 (9th Cir. 2014).
DOE V. NESTLE 5
But the consequences of the majority’s decision do not
end there—the majority leads us into open conflict with
Supreme Court doctrine interpreting the Alien Tort Statute
(“ATS”). The Court unequivocally requires that federal
judges who are fashioning federal common law torts for
violations of customary international law under the ATS
operate under a “restrained conception” of the extent of such
liability. Sosa v. Alvarez-Machain, 542 U.S. 692, 725–26
(2004). The panel majority flouts that requirement by
permitting a broad expansion of liability under the ATS. The
panel majority allows a single plaintiff’s civil action to effect
an embargo of trade with foreign nations, forcing the
judiciary to trench upon the authority of Congress and the
President. And in the process, the majority creates a second
circuit split by misinterpreting the Supreme Court’s decision
in Kiobel v. Royal Dutch Petroleum, 133 S. Ct. 1659 (2013),
as creating a new test for when the presumption against
extraterritorial application of United States law is rebutted,
rather than incorporating the settled doctrine of Morrison v.
National Australia Bank Ltd., 561 U.S. 247 (2010).
For these reasons, our court should have corrected the
panel’s mistake by granting a hearing en banc, and I
respectfully dissent from the order denying rehearing.
I begin by bringing to mind the basic principles of ATS
litigation. The text of the ATS gives the federal district
courts “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. The Supreme
Court has held that the ATS does not create a substantive tort
action; instead, the statute is purely a grant of jurisdiction.
Sosa v. Alvarez-Machain, 542 U.S. 692, 724 (2004). ATS
actions thus sound in federal common law. Id. But because
6 DOE V. NESTLE
there are “good reasons for a restrained conception of the
discretion a federal court should exercise in considering a
new cause of action of this kind,” an ATS claim must “rest on
a norm of international character accepted by the civilized
world and defined with a specificity comparable to the
features of the 18th-century paradigms we have recognized.”
Id. at 725–26.3 Those “good reasons” include the general
presumption against judge-made law, the paucity of early
cases utilizing the ATS’s jurisdictional grant, the disfavoring
of court-created private rights of action, the risk that ATS
litigation poses to the foreign relations of the United States,
and the absence of an affirmative congressional mandate to
engage in “judicial creativity” by crafting new norms. Id. at
726–28. Indeed, Sosa repeatedly emphasizes the need for
restraint in extending liability to a defendant who is “a private
actor such as a corporation or individual.” Id. at 732 n.20.
As the majority opinion in this case recognizes, the
Supreme Court’s list of requirements for an ATS action is not
exhaustive; instead, the Sosa opinion’s standard “is
suggestive rather than precise, and is perhaps best understood
as the statement of a mood—and the mood is one of caution.”
Doe, 766 F.3d at 1019 (quoting Flomo v. Firestone Natural
Rubber Co., LLC, 643 F.3d 1013, 1016 (7th Cir. 2011)). In
light of its recognition of these principles, the majority’s
errors are all the more curious.
I turn now to the particulars of this case. Plaintiffs,
alleged former child slaves who worked on cocoa plantations
in the Ivory Coast, have sued the defendant chocolate
companies on the theory that by purchasing the chocolate
3
Those paradigms are “violation of safe conducts, infringement of the
rights of ambassadors, and piracy.” Sosa, 542 U.S. at 724.
DOE V. NESTLE 7
produced by Ivorian plantations, providing technical
assistance4 to the plantations, and lobbying Congress for a
voluntary alternative to the mandatory “slave-free” licensing
scheme Congress was considering, the defendants aided and
abetted a violation of customary international law: child
slavery.
I agree with the majority and the plaintiffs that child
slavery is a violation of customary international law. And I
further agree that aiding and abetting a crime is itself a crime,
with its own actus reus and mens rea elements. The parties
in this case dispute what is the correct mens rea standard for
ATS aiding and abetting liability. Defendants claim that a
showing that they acted purposefully to bring about (or
maintain) the use of slavery to produce cocoa is required to
confer liability. Plaintiffs claim that knowledge that slavery
was so employed, together with acts of defendants which
circumstantially benefit the slaver, is enough; specific intent
(purpose) that slavery be facilitated need not be alleged.
Plaintiffs candidly admit they cannot in good faith allege
defendants acted with the specific intent to promote slavery
and thus harm children.
The panel majority did not accept plaintiffs’ assertion that
knowledge that cocoa growers employed slavery makes out
the mens rea element of aiding and abetting liability. Rather,
they recognized that “two of our sister circuits have
concluded that knowledge is insufficient and that an aiding
and abetting ATS defendant must act with the purpose of
facilitating the criminal act . . . .” Id. at 1023 (citing Aziz v.
Alcolac, Inc., 658 F.3d 388, 399–400 (4th Cir. 2011);
4
The technical assistance is not alleged to have included whips, chains,
or other implements of slavery.
8 DOE V. NESTLE
Presbyterian Church of Sudan v. Talisman Energy, Inc.,
582 F.3d 244, 259 (2d Cir. 2009)). However, the majority
decided that it need not reach the question whether
knowledge was a sufficient mens rea, because plaintiffs’
allegations met the purpose standard. In particular, though
plaintiffs “conceded that the defendants did not have the
subjective motive to harm children,” and alleged only that
“the defendants’ motive was finding cheap sources of cocoa,”
the majority found that plaintiffs sufficiently alleged
defendants had the purpose of aiding child slavery because of
defendants’ “myopic focus on profit over human welfare.”5
Doe, 766 F.3d at 1025–26. Thus, pursuit of profit over
human welfare, in the majority’s eyes, allows a jury to find
the defendants specifically intended not merely to buy cocoa
cheap, but to promote slavery as a means of buying cheap.6
5
Plaintiffs allege four types of conduct that, taken together, are meant
to show the defendants acted with the purpose of aiding and abetting
slavery. First, the defendants bought the slavers’ cocoa. Second, the
defendants supplied the plantation owners with money, equipment and
training for the cultivation of cocoa, while defendants knew the continued
and expanded profitability of those farmers would facilitate the use of
child slave labor; defendants continue to establish and honor those
agreements today. Third, the defendants lobbied against Congressional
efforts to curb the use of child slaves by, for example, opposing a bill that
would require United States importers to certify and label their products
“slave free.” The companies instead urged and secured the adoption of a
private, voluntary enforcement mechanism for “slave free” certification,
similar to the regime for “fair trade” coffee imports into the U.S. Fourth,
though the corporations have enough market power effectively to control
Ivory Coast’s cocoa markets, and could use that power to stop or limit the
use of child slave labor if they so chose; they have taken no such action.
6
The panel majority does not explain how this pleading could make
plausible a finding of purpose to promote slavery in light of the concession
from the plaintiffs that the defendants did not have the purpose of
promoting slavery. See Doe, 766 F.3d at 1025. After all, one would
DOE V. NESTLE 9
In so reasoning, regardless what the majority contends, it
was most certainly not following Aziz. There, the Fourth
Circuit noted that defendant Alcolac had sold chemicals that
could be used to produce lethal mustard gas with full
knowledge of that possible use, despite having been told that
the chemical in question was subject to U.S. export
restrictions. The chemical was sold to a company defendant
Alcolac knew was a shell company designed to evade those
export restrictions.
Through the shell company, the chemicals eventually
reached Saddam Hussein’s regime in Iraq, which used the
chemicals to create mustard gas it then used to killed
thousands of Kurds. Aziz, 658 F.3d at 390–91. Plaintiffs
alleged, in sum, that Alcolac sold its chemicals “with actual
or constructive knowledge that such quantities [of the
chemicals] would ultimately be used by Iraq in the
manufacture of mustard gas to attack the Kurds.” Id. at 394.
Nonetheless, the Fourth Circuit held plaintiffs had not
adequately alleged purposeful violation of customary
international law by Alcolac. Id. at 401. That is, the
allegations that Alcolac knew how the chemicals would be
used did not amount to an allegation that Alcolac harbored
specific intent (i.e. purpose) that the Kurds be gassed, and
thereby accomplish a form of genocide.
The contradiction with the majority’s holding is obvious.
If selling chemicals with the knowledge that the chemicals
will be used to create lethal chemical weapons does not
assume that a panel, having concluded that the plaintiff must show
purpose, would find that a plaintiff who concedes the defendant lacks that
purpose has briefed himself out of his case. The panel majority’s contrary
decision is unexplained and, I submit, inexplicable.
10 DOE V. NESTLE
constitute purpose that people be killed, how can purchasing
cocoa with the knowledge that slave labor may have lowered
its sale price constitute purpose that people be enslaved? The
majority replies that “the defendants [in Aziz] had nothing to
gain from the violations of international law.” Doe, 766 F.3d
at 1024. Demonstrably not so—the more Saddam Hussein
used chemical weapons to kill his opponents, the more of
Alcolac’s chemicals he would need and thus the higher the
sales of Alcolac’s products; the higher their sales, of course,
the higher their profit.7
The majority fares no better with its characterization of
the Second Circuit’s decision in Talisman, which should
come as no surprise since the Fourth Circuit’s Aziz opinion
explicitly relied on Talisman. Aziz, 658 F.3d at 398.
Talisman Energy (“Talisman”), a Canadian oil corporation,
was part of a conglomerate that had a business arrangement
with the Sudanese government whereby Talisman extracted
oil in several regions of Sudan. Talisman and its
conglomerate worked closely with the Sudanese government:
Talisman upgraded airstrips for the Sudanese government,
who used the airstrips were used to conduct bombing raids on
the ethnic South Sudanese; Talisman considered expanding
its oil-exploration area into South Sudan despite knowing the
government would kill the local inhabitants to give Talisman
the land; Talisman paid royalties to the Sudanese
government, knowing the money would go to the
7
The plaintiffs in Aziz alleged that Alcolac had sold one million pounds
of its chemicals to the shell corporation, on the understanding that the
shell corporation “intended to place further orders in the three to six
million pound range annually.” Aziz, 658 F.3d at 391. It belies economic
reality to suggest that an order of that size provides no benefit to the seller
of goods.
DOE V. NESTLE 11
continuation of the ethnic genocide8 perpetrated by the
government against the South Sudanese people; and, the
conglomerate provided fuel to Sudanese government military
aircraft taking off on bombing missions in pursuit of its
genocidal aims. Talisman, 582 F.3d at 262. Nevertheless,
the Second Circuit held that plaintiffs (Southern Sudanese
victims of the government’s attacks) had not shown Talisman
had aided and abetted the Sudanese government’s genocidal
acts, because “[p]laintiffs d[id] not suggest in their briefs that
Talisman was a partisan in regional, religious, or ethnic
hostilities, or that Talisman acted with the purpose to assist
persecution.” Id. at 263. In distinguishing this case, the
majority makes a point—Talisman was harmed by the
government’s genocidal conduct to the extent that it
ultimately had to abandon its Sudanese venture, while Nestle
continued its cocoa business.9 Doe, 766 F.3d at 1024. But
the Second Circuit also noted that “if ATS liability could be
established by knowledge of those abuses coupled only with
such commercial activities as resource development, the
statute would act as a vehicle for private parties to impose
embargos or international sanctions through civil actions in
United States courts.” Talisman, 582 F.3d at 294.10
8
Genocide is a recognized violation of customary international law.
Abagninin v. AMVAC Chemical Corp., 545 F.3d 733, 739 (9th Cir. 2008).
9
Of course, Talisman also benefitted from its relationship with the
military; like any oil company doing business in a region prone to
violence, it had to “rely on the military for defense.” Talisman, 582 F.3d
at 262.
10
An embargo by chocolate manufacturers on Ivory Coast chocolate
farmers is precisely the predictable economic effect plaintiffs’ successful
action would have. Indeed, failure to effect an embargo by refusing to
deal with the plantation owners is precisely the misuse of economic power
12 DOE V. NESTLE
By contrast, defendants here are alleged to have been
aware that slavery was occurring on the cocoa plantations, but
not to have done anything to assist directly in the enslavement
of plaintiffs. Indeed, the plaintiffs in this case do not even
allege that defendants could not have procured similar prices
from the Ivorian plantations absent their use of slave
labor—by technological innovations or the exercise of
monopsony power, for instance.11 By contrast, Talisman was
required to acquiesce in the Sudanese government’s misdeeds
if it wanted to make a profit. It bears emphasis that Alcolac
and Talisman undoubtedly knew that their actions were
contributing to great evils: the use of poison gas in Alcolac’s
case, and genocide in Talisman’s. Nonetheless, the Second
and Fourth Circuit’s decisions absolved these companies of
ATS aiding and abetting liability, because plaintiffs’
allegations did not make it plausible that defendants
specifically intended Kurd or Southern Sudanese killings.
which the majority finds sufficient to make plausible the conclusion that
defendants acted with the purpose to promote slavery. Doe, 766 F.3d at
1025.
11
Nor can the panel majority rely for its answer on the plaintiffs’
allegations that the corporations trained farmers and lobbied Congress. As
to farmer training, the complaint alleges that two of the named defendants
are attempting to change farming and labor practices in the Ivory Coast in
an effort to reduce the use of child labor; the complaint contains no
allegation that the third defendant has engaged in any farmer training at
all. The panel majority cannot be inferring pro-slavery purpose from anti-
slavery activity. As for the lobbying, plaintiffs themselves allege that the
corporations’ lobbying efforts had the intent of ensuring child labor free
chocolate; the plaintiffs then allege that the defendants’ lobbying had the
effect of allowing child slavery to continue. That the corporations’
lobbying is alleged to have backfired does not mean that the backfire was
intended.
DOE V. NESTLE 13
Thus, the panel majority’s claim to have adopted the
Second and Fourth Circuit’s analysis is simply incorrect. It
has not done so, and has thus created a circuit split on the
proper mens rea element for aiding and abetting liability
under customary international law.
Moreover, the majority is on the wrong side of the circuit
split it creates. Sosa requires that the federal courts accept as
proper bases of a claim for relief only those violations of
customary international law that have “definite content and
acceptance among civilized nations.” Thus, if there is
conflict as to the proper scope of ATS liability, the narrower
reading should be chosen, as no consensus can be said to exist
on the broader one. Sosa, 542 U.S. at 732. As the majority
opinion recognizes, “the Rome Statute rejects a knowledge
standard and requires the heightened mens rea of purpose,
suggesting that a knowledge standard lacks the universal
acceptance that Sosa demands.”12 Doe, 766 F.3d at 1024.
The conflict between the Rome Statute’s rejection of
knowledge and the panel majority’s effective acceptance of
knowledge is sufficient to eliminate the required consensus.
In its assessment of our sister circuits and its reading of
Supreme Court precedent, therefore, the panel majority is
well off the mark.
12
The Rome Statute, 37 I.L.M. 999 (1998), is the treaty that establishes
the International Criminal Court. The United States has signed but not
ratified the treaty. In 2002, Under Secretary of State John Bolton sent a
letter to then-UN Secretary General Kofi Annan which stated that the
United States did not intend to become a party to the treaty and suspended
the United States’s signature. See Press Statement of Richard Boucher,
United States Department of State, May 6, 2002, available at
http://2001-2009.state.gov/r/pa/prs/ps/2002/9968.htm.
14 DOE V. NESTLE
I turn next to the question of extraterritoriality—an
important one in this case, since all the acts of enslavement
and maintenance of slavery are alleged to have occurred
outside United States borders. While this case was pending
before the panel, the Supreme Court announced its decision
in Kiobel v. Royal Dutch Petroleum, 133 S. Ct. 1659 (2013).
The Supreme Court held in Kiobel that the presumption
against extraterritoriality applies to claims brought under the
ATS; as usual, that presumption is rebuttable.13 Id. at 1669.
To be viable, ATS claims must “touch and concern the
territory of the United States” with “sufficient force to
displace the presumption against extraterritorial application.”
Id. (citing Morrison v. National Australia Bank, 561 U.S.
247, 264–273 (2010)).
The plaintiffs claim Kiobel’s “touch and concern”
language announces a new test to determine when the
presumption against extraterritoriality is rebutted, while
defendants argue Kiobel simply adopts the test announced in
Morrison. Morrison’s text adopted a “focus” test, whereby
courts must ask whether the defendants engaged in the
conduct that is the focus of the statute at issue. Morrison,
561 U.S. at 266–67.14 The panel majority adopted plaintiffs’
13
This is the presumption that “when a statute gives no clear indication
of an extraterritorial application, it has none.” Kiobel, 133 S. Ct. at 1664(brackets omitted) (quoting Morrison v. National Australia Bank Ltd.,
561 U.S. 247, 255 (2010)). That is, American statutes—the 1934
Securities Exchange Act or the 1797 Alien Tort Statute—do not apply to
actions taken beyond our shores unless Congress tells us to the contrary.
14
In Morrison, an Australian bank had purchased a Florida mortgage-
servicing company, and listed the mortgage-servicing company’s assets
on its annual reports. It proudly touted the success of the mortgage-
servicing company’s business and gave it a high valuation. A few years
DOE V. NESTLE 15
view and held that “Morrison may be informative precedent
for discerning the content of the touch and concern standard,
but the opinion in Kiobel II did not incorporate Morrison’s
focus test.” Doe, 766 F.3d at 1028. Respectfully, the
majority is quite wrong.
First, the Supreme Court’s opinion in Kiobel counsels
against the majority’s analysis. As the Supreme Court’s
majority opinion states, though Morrison dealt with acts of
Congress, “the principles underlying the [Morrison] canon of
interpretation [which counsel against the Exchange Act’s
extraterritorial application] similarly constrain courts
considering causes of action that may be brought under the
ATS.” Kiobel, 133 S. Ct. at 1664. Moreover, the Court’s
explanation of the “touch and concern” language is
later, however, the bank wrote down the value of the mortgage-servicing
company’s assets, causing the bank’s share price to drop. Id. at 251–53.
The plaintiffs, Australian shareholders in the bank, brought suit for
violation of SEC Rule 10b-5, which states that it is unlawful “to use or
employ, in connection with the purchase or sale of any security registered
on a national securities exchange or any security not so registered, . . . any
manipulative or deceptive device or contrivance in contravention of such
rules and regulations as the [Securities and Exchange] Commission may
prescribe.” Id. at 262 (ellipses and brackets in original). The district court
dismissed for lack of jurisdiction because the conduct occurred abroad,
and the Second Circuit affirmed. The Supreme Court reclassified the issue
as merits-based rather than jurisdictional, and affirmed. In light of the
presumption against the extraterritorial applicability of federal law, the
Court held that “the focus of the Exchange Act is not upon the place
where the deception originated, but upon purchases and sales of securities
in the United States.” Id. at 266–67. Because the statute intended only to
regulate domestic transactions and protect prospective parties to domestic
transactions alone, the plaintiffs’ claims, which arose out of deception
occurring in Australia, between Australian buyers and sellers of Australian
bank shares, were dismissed for failure to state a claim for relief.
16 DOE V. NESTLE
encompassed in one citation to Morrison. Id. at 1669.15 The
meaning is clear: the Supreme Court stated that the Morrison
presumption against extraterritorial application of American
statutes is to be applied to ATS cases. And, since the
15
Kiobel cites to pages 2883–88 of Morrison. In those pages, the
Supreme Court explained why the Australian share fraud claims in
Morrison did not have sufficient “contact with the territory of the United
States.” Morrison, 561 U.S. at 2884. The Court first noted that the
principal purpose of the 1934 Securities and Exchange Act was to protect
transactions on domestic exchanges, as Congress could not regulate
foreign exchanges. Second, as to securities traded on foreign exchanges,
the Securities Exchange Act was exclusively focused on domestic
purchases and sales; here, the transaction had not occurred in the United
States. Id. Furthermore, there was no contemporary statutory context
suggesting that Congress’s “comprehensive regulation of securities
trading” was meant to encompass foreign transactions on securities not
registered in the United States. Id. at 2885. Indeed, the strong risk of
incompatibility with foreign law counseled against application of the
Securities and Exchange Act to such transactions. Id. The Court further
noted, in rejecting the test proposed by the Solicitor General (“SG”), the
fact that the SG’s test (which asked if “significant and material conduct”
had happened in the United States) would open the floodgates of class
action litigation for lawyers representing victims of foreign securities
fraud. Id. at 2886. Finally, the Court explained that the consistency of the
SG’s proposed test with international law meant only that adoption of the
SG’s test would not violate international law, not that it was required by
international law, and that the SEC’s interpretation was not entitled to
deference because it was based on cases which the Supreme Court had
disapproved.
Thus, a court applying the Morrison test in the ATS context should
focus on the location of the alleged violation of customary international
law, statutory indicia that Congress intended U.S. courts to regulate the
particular conduct at issue, the risk of an increase in future litigation, and
the existence of a well-founded interpretation of applicable law to which
the court should defer. All of these considerations point to the conclusion
that plaintiffs’ claims here lack sufficient contact with the territory of the
United States.
DOE V. NESTLE 17
presumptions are the same, it follows that the very same
evidence is needed to rebut either presumption. Moreover,
the Kiobel opinion cannot have imparted any additional
meaning to the “touch and concern” test; the Kiobel majority
did not apply the test or provide any further guideposts as to
its possible meaning. Against this evidence, the panel
majority points to the mere use of different language, as well
as some language in the concurrences of Justices Kennedy
and Alito in Kiobel, to claim a new but undefined test was
created by the Court. Doe, 766 F.3d at 1028. This is too thin
a reed on which to support such an expansive argument.
Second, the two circuits to consider this issue agree that
Kiobel simply directs application of the Morrison test; the
panel majority’s contrary conclusion thus creates another
circuit split. In Baloco v. Drummond Co., Inc., 767 F.3d
1229 (11th Cir. 2014), the Eleventh Circuit noted that “[t]he
Court in Kiobel looked to Morrison v. National Australia
Bank Ltd., 561 U.S. 247 (2010), for a discussion of when
claims that ‘touch and concern the territory of the United
States’ do so ‘with sufficient force to displace the
presumption against extraterritorial application.’”16 Id. at
16
Baloco was a Colombian national and the child of a union leader who
worked for Drummond Ltd. at Drummond’s coal mining operation in
Colombia. Drummond is a closely-held corporation with its principal
place of business in Alabama. The union leader was murdered, Baloco
alleged, by paramilitary members of the AUC, an organization affiliated
with Colombia’s military which provided security for Drummond’s coal
mining operation and was engaged in a guerrilla war with FARC. Baloco
brought suit under the ATS, Trafficking Victims Protection Act, and
Colombia’s wrongful death statute. The district court granted
Drummond’s motion to dismiss Baloco’s ATS claims for lack of subject
matter jurisdiction under 12(b)(1). The Eleventh Circuit affirmed. The
court adopted the presumption that the ATS statute did not touch murders
occurring outside the United States, and applied the Kiobel “touch and
18 DOE V. NESTLE
1236–37 (quoting Kiobel, 133 S. Ct. At 1669). Similarly, in
Mastafa v. Chevron Corp., 770 F.3d 170, 182–86 (2d Cir.
2014), the Second Circuit applied the Morrison “focus” test
in a post-Kiobel ATS case to determine if the presumption
against extraterritoriality had been rebutted.17
concern the territory of the United States” standard to see if the
presumption was rebutted. The court explained that “[t]he [Supreme]
Court in Kiobel looked to Morrison for a discussion of when claims that
‘touch and concern the territory of the United States’ do so ‘with sufficient
force to displace the presumption against extraterritorial application.”
Baloco, 767 F.3d at 1236–37 (quoting Kiobel, 133 S. Ct. at 1669).
Examining the allegations of Baloco’s complaint, Baloco’s “claims are not
focused within the United States” because the killings occurred in
Colombia in the context of a guerrilla war in Colombia. Baloco, 767 F.3d
at 1237–38.
17
Mastafa was an Iraqi woman who was the victim of torture by agents
of Saddam Hussein’s regime in Iraq. She brought suit against Chevron,
alleging that it paid kickbacks and other unlawful payments to the regime
which enabled the regime to survive and torture her. The district court
granted Chevron’s 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction, and the Second Circuit affirmed. The court explained that the
Supreme Court’s decision in Kiobel “significantly clarified the
jurisdictional grant of the ATS with respect to extraterritoriality.”
Mastafa, 770 F.3d at 181–82. The court noted that in Kiobel, the Supreme
Court had not explained how this presumption could be displaced; “[t]o
determine how to undertake the extraterritoriality analysis where plaintiffs
allege some ‘connections’ to the United States, we first look to the Court’s
opinion in Morrison.” Id. at 183. The circuit interpreted the Morrison
methodology as requiring that the conduct which touched and concerned
the territory of the United States be the conduct which gave rise to ATS
liability. The circuit then concluded that the only conduct alleged in the
complaint which touched and concerned the United States (maintenance
of escrow accounts and arrangement of payments in New York bank
accounts) did not constitute a violation of customary international law.
Thus, the district court correctly concluded that it lacked subject matter
jurisdiction. Applied here, the only conduct of defendants which touched
and concerned the U.S. were (1) sales of cocoa products in the US and
DOE V. NESTLE 19
The panel majority’s analysis thus puts our court on one
side of yet another circuit split; yet again, the majority has
taken the minority, incorrect side.18
Finally, I note that this case squarely presents the question
whether ATS liability should extend to corporations.19 Our
court’s earlier affirmative answer to this question in the panel
was vacated by the Supreme Court, making this a question of
first impression in this circuit. Sarei v. Rio Tinto PLC,
671 F.3d 736, 748 (9th Cir. 2011) (en banc), vacated by
(2) lobbying efforts in the Congress. Neither sales nor lobbying are even
colorable violations of customary international law.
18
There is one other court to have opined on this issue: the Fourth
Circuit, in Al Shimari v. CACI Premier Technology, Inc., 758 F.3d 516(4th Cir. 2014). The paragraphs in which the Fourth Circuit decided that
the Morrison presumption against extraterritorial application was rebutted
do not cite the “focus” test; of course, those paragraphs also do not cite the
“touch and concern” test. Id. at 528–29. However one interprets the
Fourth Circuit opinion, it does not affirmatively hold that “the opinion in
Kiobel II did not incorporate Morrison’s focus test.” Doe, 766 F.3d at
1028. The majority opinion in this case is the first to come to that
conclusion. And the panel majority is the first to hold that Kiobel
necessitates remand of the case to decide whether the presumption against
extraterritoriality has been vacated, a conclusion the Fourth Circuit did not
reach.
19
A circuit split exists on whether the ATS’s grant of jurisdiction
extends to claims against corporations. Compare, e.g., Flomo v. Firestone
Natural Rubber Co., LLC, 643 F.3d 1013, 1021 (7th Cir. 2011)
(“[C]orporate liability is possible under the Alien Tort Statute . . . .”) with
Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 148–49 (2d. Cir.
2011) (“[C]orporate liability has not attained a discernable, much less
universal, acceptance among nations of the world in their relations inter
se, and it cannot, as a result, form the basis of a suit under the ATS.”).
20 DOE V. NESTLE
133 S. Ct. 1995 (2013).20 The panel majority chose to
“reaffirm the corporate liability analysis” of Sarei. Doe, 766
F.3d at 1021. Here again, the majority has erred.
The Sarei analysis, as the majority adopts it today, comes
in three parts. First, the analysis of customary international
law is norm-by-norm, as “there is no categorical rule of
corporate immunity or liability” in ATS cases. Id. Second,
corporate liability can be imposed in the absence of
“international precedent enforcing legal norms against
corporations.”21 Id. Third, norms that are “‘universal and
20
Sarei was vacated in light of the Supreme Court’s decision in Kiobel
and the opinion was not reinstated on remand. Sarei v. Rio Tinto,
722 F.3d 1109 (9th Cir. 2013) (en banc). Instead, “a majority of the en
banc court” voted to affirm the district court’s judgment of dismissal with
prejudice without any further explanation. Thus, the original Sarei en
banc opinion has no precedential effect.
21
In the Sarei en banc court’s words, “[t]hat an international tribunal has
not yet held a corporation criminally liable does not mean that an
international tribunal could not or would not hold a corporation criminally
liable under customary international law.” Sarei, 671 F.3d at 761. Of
course, as the Sarei opinion did not state, that an international tribunal has
not yet held a corporation criminally liable does not mean that an
international tribunal would hold a corporation criminally liable, either.
And as the Second Circuit noted in Kiobel, the Sarei panel’s factual
premise was incorrect: the refusal to extend liability to corporations like
IG Farben, which aided and abetted Nazi war crimes, was “not a matter
of happenstance or oversight,” but a careful decision reflecting the central
moral principle of holding men, not “abstract entities,” accountable for
evil actions. Kiobel, 621 F.3d at 134–35.
Moreover, as I discuss below, Sarei’s willingness to rush ahead of
international tribunals’ declarations of law is inconsistent with the
Supreme Court’s cautious mood in Sosa.
DOE V. NESTLE 21
absolute,’ or applicable to ‘all actors,’ can provide the basis
for an ATS claim against a corporation.” Id.
There are many problems with this approach. Our court
was wrong enough in Sarei to join those circuits which held
that corporate liability could exist under the ATS. But even
amongst those circuits that erroneously conclude that
corporate liability can exist under the ATS, the Sarei
approach resuscitated by the panel majority distinguishes
itself as particularly erroneous, in two ways.
First, the Court has explained that a norm cannot give rise
to ATS liability unless it is “specific, universal, and
obligatory.” Sosa v. Alvarez-Machain, 542 U.S. 692, 733
(2004) (quoting In re Estate of Marcos Human Rights
Litigation, 25 F.3d 1467, 1475 (9th Cir. 1994)). Well and
good. In this case, the panel majority finds that the norm
against slavery is sufficiently specific, universal, and
obligatory to give rise to ATS liability. Doe, 766 F.3d at
1022. I agree. The majority then says that because of the
“categorical nature of the prohibition on slavery and the
moral imperative underlying that prohibition,” corporations
must be liable for aiding and abetting slavery. Doe, 766 F.3d
at 1022. But this is circular reasoning: by the panel’s
reasoning, any norm “categorical” enough to give rise to an
ATS claim based on customary international law necessarily
gives rise to corporate liability for violation of that norm.
And worse yet, the majority’s reasoning contradicts the
Supreme Court’s teaching in Sosa that there must be a
meaningful inquiry—not a mere labeling of norms as
‘categorical’—as to whether the particular international norm
at issue, which is assumed to confer liability under the ATS
generally, would allow for corporate liability in particular.
Sosa, 542 U.S. at 732 n.20.
22 DOE V. NESTLE
Second, the Sarei opinion rested its analysis on common
sense inference about “congressional intent when the ATS
was enacted.” Sarei, 671 F.3d at 761. Because Congress
could not have anticipated the “array of international
institutions that impose liability on states and non-state actors
alike in modern times,” the Sarei panel refused to be bound
“to find liability only where international fora have imposed
liability.” Id. But this approach is forestalled by Sosa’s
reminder that federal courts have “no congressional mandate
to seek out and define new and debatable violations of the
law of nations.” Sosa, 542 U.S. at 728. In light of the
cautious mood expressed by Sosa, therefore, a desire to “get
ahead” of international law cannot be followed.
In sum, the majority’s error violates the Supreme Court’s
commands and opens our doors to an expansive vision of
corporate liability.22
We do the law a disservice when we allow our
sympathies, no matter how well-founded, to run our decisions
afoul of the Supreme Court’s unequivocal commands.
Because this court has done such a disservice by refusing to
take this case en banc, I respectfully dissent.
22
More expansive, even, than the Sarei decision that the Court vacated.
In the Sarei en banc opinion, we first noted that there was an international
norm against war crimes, then noted international law cases which
recognized aiding and abetting liability for war crimes. Sarei, 671 F.3d
at 763–66. By contrast, the panel majority here finds an international
norm against slavery and a general international law principle of aiding
and abetting liability—without finding such liability applied to
slavery—and finds those two sufficient to give rise to liability. Thus, the
panel imposes liability for aiding and abetting slavery without citing a
single case in which an international tribunal recognized the applicability
of this form of liability for this particular norm.