Office of the Solicitor General at the Department of Justice in Washington, D.C. Credit: Mike Scarcella / NLJ

The U.S. Justice Department is urging the U.S. Supreme Court to shield domestic corporations from liability in the U.S. for alleged violations of international law under the Alien Tort Statute, the opposite of what it argued before the justices just three years ago.

The Justice Department's new position came in a friend-of-the-court brief filed in two pending cases: Nestle USA v. John Doe I and Cargill v. Doe I. The cases stem from a lawsuit brought by former child slaves of Malian origin who claim they were trafficked and forced to work harvesting cacao beans on Ivory Coast plantations, which supplied the beans to Nestle and Cargill Inc. They seek damages for alleged forced labor and torture they suffered as a result of the alleged conduct either caused and/or aided and abetted by the corporations. Their case has been pending since 2006.

In the Supreme Court, Nestle, represented by Hogan Lovells partner Neal Katyal, and Cargill, represented by Mayer Brown partner Andrew Pincus, challenge a decision by the U.S. Court of Appeals for the Ninth Circuit. The appellate court ruled that domestic corporations may be held liable under the 1789 Alien Tort Statute and a cause of action for aiding and abetting a violation of international law existed under the statute.

The Justice Department had argued twice before that corporations—whether domestic or foreign—were liable under the statute: Kiobel v. Royal Dutch Petroleum Co. from 2013 and the 2018 case Jesner v. Arab Bank. In a fractured opinion in Jesner, the Supreme Court ruled that foreign corporations could not be held liable, but the justices left open the issue of domestic corporations.

In its Nestle-Cargill brief, U.S. Solicitor General Noel Francisco stated in a footnote that the justices' Jesner decision rejected the government's argument that corporate liability was appropriate because corporations were traditionally liable in tort actions at common law. He said the "United States has revisited its position in light of the court's opinion, which rejected not only the government's conclusion but also its basic framework for analysis."

Several international and tort law scholars questioned the Justice Department's reliance on Jesner for its change of heart on corporate liability.

One scholar, William Dodge of the University of California Davis School of Law, called the government's footnote "disingenuous" for justifying the changed position on what, he argued, was an inaccurate reading of the Jesner opinion.

Dodge, who filed an amicus brief supporting Jesner in 2017, said parts of Jesner that drew majority support are limited expressly to foreign corporations. "If you read the concurring opinions by Alito and Gorsuch, they emphasize the differences between domestic defendants and foreign defendants," Dodge said.

William Aceves of California Western School of Law said "Jesner was a fractured opinion and the government is relying, in part, on portions of Jesner that garnered fewer votes than the dissent. This is certainly not as conclusive as the government suggests."

The government's new position, Aceves added, also "overreaches" because it would preclude corporate liability "even in cases where every aspect of the litigation occurred in the United States. Such a categorical approach is not found in Jesner."

On the other hand, some scholars suggested that if Francisco is correct that the Jesner majority rejected the government's theory in that case, the Justice Department might feel "stuck" and compelled now to argue against domestic corporate liability.

"I think reasonable minds could debate whether the solicitor general 'had to take this new position in light of Jesner,'" another scholar said. "But I also think it could be valid to say that Jesner stands for nothing more than the bottom-line foreign corporations holding, such that the domestic corporations issue remains an open one that the solicitor general could argue either way."

The former child slaves are represented in the Supreme Court by longtime human rights litigator Paul Hoffman of Schonbrun Seplow Harris & Hoffman in Hermosa Beach, California. He argues that the justices should deny review of the petitions.

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