What do Nestle and Zyklon B have in common?
As San Francisco Chronicle reports: U.S. court rules OK to sue chocolate firms over child slave labor
The companies, which also included Archer Daniels Midland and Cargill, were well aware – from their own frequent visits and independent studies – that they were selling the products of child slavery, but insisted on “finding the cheapest sources of cocoa,” said the Ninth U.S. Circuit Court of Appeals in San Francisco.
The industry loves your money so much that they’ve even interfered with attempts to ban slave-produced goods in the past:
The Ivory Coast produces 70 percent of the world’s cocoa supply, and the companies named in the lawsuit dominate the Ivorian market, the court said. Rather than trying to end child slavery, the court said, the U.S. chocolate industry successfully lobbied Congress in 2001 to defeat a bill that would have required all U.S. importers and manufacturers to certify that their products were “slave free.”
From the court’s 2-1 decision (PDF):
The defendants are well aware of the child slavery problem in the Ivory Coast. They acquired this knowledge firsthand through their numerous visits to Ivorian farms. Additionally, the defendants knew of the child slave labor problems in the Ivorian cocoa sector due to the many reports issued by domestic and international organizations. Despite their knowledge of child slavery and their control over the cocoa market, the defendants operate in the Ivory Coast “with the unilateral goal of finding the cheapest sources of cocoa.” The defendants continue to supply money, equipment, and training to Ivorian farmers, knowing that these provisions will facilitate the use of forced child labor.
Consider, if someone were to supply money, equipment, and training to a terrorist organization, we would have no trouble deciding that such supply constitutes significant and material support to terrorists. At the very least, I think we could safely conclude that such support would aid and abet terrorism. That’s the case being made here, just in regard to slavery instead. Indeed, Alien Tort Statute (ATS) claims have involved support of terrorism, so support of slavery should be a no brainer.
Under contemporary international law, federal courts have permitted plaintiffs to pursue ATS claims based on a broad range of misconduct, including genocide, war crimes, torture, and supporting Terrorism.
Open and shut? What, with that much money involved? Defendants don’t think so. They argue:
First, the defendants argue that there is no specific, universal, and obligatory norm preventing corporations—as opposed to individuals—from aiding and abetting slave labor. [emphasis added]
Funny how corporations are people when it comes to lobbying, perhaps especially when it comes to any future need to lobby against mandatory certification that imported goods are “slave free.” But when it comes to actually substantially and materially supporting
terrorism slavery child slavery, all bets are off and corporations are suddenly not people.
Apparently corporations suffer from some new form of existential schizotypal disorder. Sadly, the courts aren’t much better. Addressing the issue of corporate liability, the very thing Nestle et al attempt to absolve themselves from using their “if it ain’t illegal, it’s okay” profit-driven mentality (the shareholders made us do it!), the courts offer contrasting decisions.
In Tel-Oren, Judge Edwards concluded that the plaintiffs’ ATS claim was barred because there was no consensus that international law applied to torture carried out by non-state actors.
Contrast this with:
In Kadic, by contrast, the Second Circuit held that international law’s prohibition on genocide applies regardless of whether the perpetrator is acting on behalf of a state.
So if you’re a non-state actor, you can torture people under international law but not attempt to wipe them out? That really clears things up. Time to revise my to-do list. No genocide. Reprioritize torture. All will be okay. Clearly it will, if I use Nestle-think.
When SCOTUS is helpful, which doesn’t appear to be often of late, apparently it’s a footnote.
In the footnote, the Court directed federal courts contemplating the recognition of new ATS claims to consider whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or individual. Id. (emphasis added (by judge)).
So corporations are corporate people, but not individual people, and individuals are individual people (mostly?) but not corporate people, unless perhaps an individual incorporates as sole officer and stockholder, in which case we end up with an individual person and a corporate person comprising one individual person who gets to act as two persons. Got it? In any case, whatever kind of person a person is, Nestle et al appear to at least be private actors until such time as they figure out how to set themselves up as governments. Can it be that their “we are(n’t) people” defense will fail because they don’t address private actor status?
On pages 15-17 of the decision, Judge Nelson cites several disagreeing cases and provides an analysis of one from her own circuit, affirming that decision. To wit:
We conclude that the prohibition against slavery is universal and may be asserted against the corporate defendants in this case. Private, non-state actors were held liable at Nuremberg for slavery offenses.
The prohibition against slavery applies to state actors and non-state actors alike, and there are no rules exempting acts of enslavement carried out on behalf of a corporation. Indeed, it would be contrary to both the categorical nature of the prohibition on slavery and the moral imperative underlying that prohibition to conclude that incorporation leads to legal absolution for acts of enslavement.
Of course, this will still leave the decision regarding matters of domestic law to the initial court.
Determining when a corporation can be held liable therefore requires a court to apply customary international law to determine the nature and scope of the norm underlying the plaintiffs’ claim, and domestic tort law to determine whether recovery from the corporation is permissible. Our holding that the norm against slavery is universal and thus may be asserted against the defendants addresses only the international legal issues related to corporate liability in this case. We do not address other domestic law questions related to corporate liability, and leave them to be addressed by the district court in the first instance.
So, what about Nestle et al’s other two arguments? I’m not so sure they’re keeping good company when it comes to their quibbles in their second argument concerning mens rea and actus reus.
Second, the defendants argue that the plaintiffs’ complaint fails to allege the actus reus and mens rea elements of an aiding and abetting claim.
Mens rea? Actus reus? More plainly “guilty mind” and “guilty act.” From (not the world’s finest legal resource, but suitable for this purpose) Wikipedia:
In civil law, it is usually not necessary to prove a subjective mental element to establish liability for breach of contract or tort, for example. However, if a tort is intentionally committed or a contract is intentionally breached, such intent may increase the scope of liability as well as the measure of damages payable to the plaintiff.
Back to Judge Nelson:
The plaintiffs argue that the required mens rea for aiding and abetting is knowledge, specifically, knowledge that the aider and abetter’s acts would facilitate the commission of the underlying offense. This knowledge standard dates back to the Nuremberg tribunals, and is well illustrated by the Zyklon B Case, 1 LAW REPORTS OF TRIALS OF WAR CRIMINALS 93 (1946). There, the defendants supplied poison gas to the Nazis knowing that it would be used to murder innocent people, and were convicted of aiding and abetting war crimes.
Way to go, Nestle et al. Try to get yourself off the hook with an argument that would have exonerated the makers of Zyklon B had it been successful. Maybe there’s a new product in that for Nestle. How about the Zyklon Freedom Bar? Freedom for me, and not for thee!
What if the knowledge test isn’t enough? What if purpose must be evident, as in Nestle et al purposefully aided and abetted child slavery?
Reading the allegations in the light most favorable to the plaintiffs, one is led to the inference that the defendants placed increased revenues before basic human welfare, and intended to pursue all options available to reduce their cost for purchasing cocoa. Driven by the goal to reduce costs in any way possible, the defendants allegedly supported the use of child slavery, the cheapest form of labor available. These allegations explain how the use of child slavery benefitted the defendants and furthered their operational goals in the Ivory Coast, and therefore, the allegations support the inference that the defendants acted with the purpose to facilitate child slavery. [emphasis added]
The defendants’ alleged plan to benefit from the use of child slave labor starkly distinguishes this case from other ATS decisions where the purpose standard was not met. See Talisman, 582 F.3d at 262–64; Aziz, 658 F.3d at 390–91, 401. According to the allegations here, the defendants have not merely profited by doing business with known human rights violators. Instead, they have allegedly sought to accomplish their own goals by supporting violations of international law. [emphasis added]
The defendants had the means to stop or limit the use of child slavery, and had they wanted the slave labor to end, they could have used their leverage in the cocoa market to stop it. Their alleged failure to do so, coupled with the cost-cutting benefit they allegedly receive from the use of child slaves, strongly supports the inference that the defendants acted with purpose. [emphasis added]
The defendants’ alleged lobbying efforts also corroborate the inference of purpose. According to the complaint, the defendants participated in lobbying efforts designed to defeat federal legislation that would have required chocolate importers and manufacturers to certify and label their chocolate as “slave free.” As an alternative to the proposed legislation, the defendants, along with others from the chocolate industry, supported a voluntary mechanism through which the chocolate industry would police itself. The complaint also alleges that when the voluntary enforcement system was eventually put into practice instead of legislation, it “in effect guaranteed the continued use of the cheapest labor available to produce [cocoa]—that of child slaves.” [emphasis added]
And police themselves they didn’t. Just how much guilty mind do the decision makers need to have before they can be held accountable?
Thus, the allegations suggest that a myopic focus on profit over human welfare drove the defendants to act with the purpose of obtaining the cheapest cocoa possible, even if it meant facilitating child slavery. These allegations are sufficient to satisfy the mens rea required of an aiding and abetting claim under either a knowledge or purpose standard.
So what about the guilty act itself? Taking the Zyklon B defense for mens rea didn’t help, so maybe Nestle can use that same kind of thinking in terms of the act with better effect.
The parties dispute, however, whether international law imposes the additional requirement that the assistance must be specifically directed towards the commission of the crime.
To wit: If a fermenter isn’t gonna be used to ferment the child slaves, what has it got to do with the child slaves? No connection, your honor!
There is debate over this issue, and on this point, while still making her own case known, Judge Nelson kicks the can back to the first court to decide the matter of actus reus.
What appears to have emerged is that there is less focus on specific direction and more of an emphasis on the existence of a causal link between the defendants and the commission of the crime. However, we decline to adopt an actus reus standard for aiding and abetting liability under the ATS. Instead, we remand to the district court with instructions to allow plaintiffs to amend their complaint in light of Perisic and Taylor, both of which were decided after the complaint in this case was dismissed and this appeal had been filed.
Lastly, there is the defendants’ third objection to consider:
Finally, the defendants argue that the plaintiffs’ complaint improperly seeks extraterritorial application of federal law contrary to the Supreme Court’s recent decision in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013) (“Kiobel II”).
On this point, Judge Nelson essentially plays the “citation needed” card, perhaps justly so, for a second reason to remand the case back to the first court. At least the plaintiffs will have the opportunity to amend their claims as needed to address the objections of the defendants.
Here, the plaintiffs seek to amend their complaint to allege that some of the activity underlying their ATS claim took place in the United States. On the record before us, we are unable to conclude that amendment would be futile, because unlike the claims at issue in Kiobel II, the plaintiffs contend that part of the conduct underlying their claims occurred within the United States. See Kiobel II, 133 S. Ct. at 1669. Moreover, it would be imprudent to attempt to apply and refine the touch and concern test where the pleadings before us make no attempt to explain what portion of the conduct underlying the plaintiffs claims took place within the United States. We therefore decline to determine, at present, whether the plaintiffs’ ATS claim is barred by the Supreme Court’s holding in Kiobel II, and remand this case to allow the plaintiffs to amend their complaint.
Insofar as I concur with Judge Nelson’s ruling, as did Judge Wardlaw, and Judge Nelson already addressed concerns stated by the sole (and only partial) dissent of Judge Rawlinson, I leave it to the curious reader to wade through the dissenting bits and pieces to be found on pages 32-45. Does that make me partial? Yes, yes it does. Why?
Judge Rawlinson’s closing two statements:
Therefore, I concur in a remand to allow Plaintiffs to further amend their Complaint in an effort to state a claim under the ATS. I dissent from any holding that they have adequately done so.
I suppose if Judge Rawlinson had her way, the Nestle way, arguments as presented should have resulted in the makers of Zyklon B getting a free pass. Or maybe it’s just that she prefers the Las Vegas defense…”what happens over there stays over there.”
Have a candy bar, Judge Rawlinson. If Nestle took my advice, however doubtful, they’d have one just for you.
For more on the state of cocoa slavery (2012): The human cost of chocolate
Love chocolate? There are options. What’s your favorite?