John Doe v. Nestle, S.A., 929 F.3d 623

Background

Plaintiffs are former child slaves who allege they were forced to work on cocoa farms in Côte d’Ivoire and filed an ATS suit alleging defendants (large cocoa purchasers/processors) aided and abetted slavery.
Defendants include U.S.-based companies (e.g., Cargill, Nestle USA) and foreign corporations; plaintiffs allege defendants maintained exclusive buying relationships, provided financial support and technical assistance, and made U.S.-based financing/decision-making that sustained the supply chain.
The district court dismissed for lack of subject-matter jurisdiction, concluding the ATS would be impermissibly extraterritorial because the underlying wrongful conduct and injury occurred abroad.
On appeal the Ninth Circuit panel reversed and remanded, holding some alleged domestic conduct (payments described as “spending money,” U.S.-based inspections, and financing decisions) could displace the presumption against extraterritoriality and that plaintiffs should be allowed to amend to specify domestic defendants’ culpable conduct.
Multiple judges dissented from denial of rehearing en banc, arguing (1) Jesner and related Supreme Court precedents limit or bar corporate ATS liability and counsel extreme caution, and (2) plaintiffs’ allegations are predominantly foreign and thus barred by the presumption against extraterritoriality.
The panel instructed plaintiffs on remand to drop foreign defendants and to plead particularized domestic conduct attributable to each domestic defendant; plaintiffs have Article III standing as to certain defendants (e.g., Cargill) but pleadings must be clarified.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether corporations are proper ATS defendants	ATS and customary international law allow corporate liability for norms like slavery; Nestle I supports corporate ATS liability	Jesner and Sosa counsel against judicially creating corporate ATS liability; corporate defendants should be immune absent Congressional action	Panel: foreign corporations dismissed per Jesner, but domestic corporate liability remains viable under Nestle I; dissent: Jesner forecloses corporate ATS liability and en banc review was warranted
Whether ATS claims here are impermissibly extraterritorial	Domestic conduct (payments, inspections, financing decisions originating in U.S.) sufficiently “touch and concern” the U.S. to displace presumption against extraterritoriality	Relevant wrongful conduct and injuries occurred abroad; U.S. corporate presence or decision-making is insufficient to overcome the presumption	Panel: certain alleged U.S. conduct is specific/domestic enough to allow the claim to proceed; dissent: all relevant conduct occurred abroad and claims are barred
Whether aiding-and-abetting liability under ATS is cognizable	Plaintiffs rely on aiding-and-abetting theory to hold corporations secondarily liable for overseas slavery	Defendants and some judges say creating ATS aiding-and-abetting liability is a major expansion for courts and should be left to Congress	Panel did not decide merits of aiding-and-abetting now; remanded to permit targeted pleading; concurrence/dissent urge that aiding-and-abetting is not cognizable without Congressional authorization
Standing (Article III)	Plaintiffs suffered concrete injury from slavery; injuries are redressable and traceable to defendants (at least Cargill)	Defendants contest traceability and particularity of allegations to some defendants	Court: plaintiffs have standing as to Cargill; allegations against Nestle and others are less clear but plaintiffs get one opportunity to replead to show traceability to domestic defendants

Key Cases Cited

Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (2018) (Supreme Court held ATS does not permit suit against foreign corporations and urged caution in recognizing new ATS liabilities)
Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013) (Supreme Court applied presumption against extraterritoriality to ATS and required claims to "touch and concern" the U.S.)
Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) (ATS claims must rest on a norm of international law and courts must exercise caution before recognizing new causes of action)
RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090 (2016) (articulated the Morrison focus framework for extraterritoriality inquiries applied in ATS context)
Nestle USA, Inc. v. Doe ("Nestle I"), 766 F.3d 1013 (9th Cir. 2014) (Ninth Circuit held corporations could be liable under ATS; panel here applies Nestle I to domestic corporations)
Doe v. Nestle, S.A. ("Nestle II"), 906 F.3d 1120 (9th Cir. 2018) (panel opinion reversing dismissal, remanding for targeted repleading; contains opinions on rehearing denial)
Sarei v. Rio Tinto, PLC, 671 F.3d 736 (9th Cir. 2011) (en banc) (articulated norm-specific approach to ATS liability later discussed in Nestle decisions)
Steel Co. v. Citizens for a Better Env't, 523 U.S. 83 (1998) (discussed redressability in standing analysis)
Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) (adopted the "focus" test used in extraterritoriality analyses)
Correctional Servs. Corp. v. Malesko, 534 U.S. 61 (2001) (Bivens precedent cited regarding reluctance to extend liability to corporations)