Supreme Court Narrows Ability to Hold U.S. Corporations Accountable for Facilitating Human Rights Abuses Abroad

People around the world have been horrified at the role that technology companies like Cisco, Yahoo!, and Sandvine have played in helping governments commit gross human rights abuses. That’s why EFF has consistently called out technology companies, and American companies in particular, that allow their internet surveillance and censorship products and services to be used as tools of repression and persecution, rather than tools to uplift humanity. Yet legal mechanisms to hold companies accountable for their roles in human rights violations are few and far between.

The Supreme Court has now further narrowed one mechanism: the Alien Tort Statute (ATS). We now call on Congress to fill the gaps where the Court has failed to act.

The Supreme Court recently issued an opinion in Nestlé USA, Inc. v. Doe, in which we filed an amicus brief (along with Access Now, Article 19, Privacy International, Center for Long-Term Cybersecurity, and Ronald Deibert, director of Citizen Lab at University of Toronto.) Former child slaves on cocoa farms in Côte d’Ivoire claimed that two American chocolate companies, Nestlé USA and Cargill, facilitated their abuse at the hands of the farm operators by providing training, fertilizer, tools, and cash in exchange for the exclusive right to buy cocoa. The plaintiffs sued under the ATS, a law first passed by Congress in 1789, which allows foreign nationals to bring civil claims in U.S. federal court against defendants who violated “the law of nations or a treaty of the United States,” which many courts have recognized should include violations of modern notions of human rights, including forced labor.

EFF’s brief detailed how surveillance, communications, and database systems, just to name a few, have been used by foreign governments—with the full knowledge of and assistance by the U.S. companies selling those technologies—to spy on and track down activists, journalists, and religious minorities who have then been imprisoned, tortured, and even killed.

First, the Bad News

The centerpiece of the Supreme Court’s opinion is about what has to happen inside the U.S. to make an American company liable, since the Court’s earlier decision in Kiobel v. Royal Dutch Petroleum (2013) had rejected the idea that a multinational corporation based in the U.S. could be held liable solely for its actions abroad. The former child slaves alleged that Nestlé USA and Cargill made “every major operational decision” in the United States, along with, of course, pocketing the profits. This U.S. activity was in addition to the training, fertilizer, tools, and cash the companies provided to farmers abroad in exchange for the exclusive right to buy cocoa. The Court rejected this “operational decision” connection to the U.S. as a basis for ATS liability, saying: 

Because making “operational decisions” is an activity common to most corporations, generic allegations of this sort do not draw a sufficient connection between the cause of action respondents seek—aiding and abetting forced labor overseas—and domestic conduct … To plead facts sufficient to support a domestic application of the ATS, plaintiffs must allege more domestic conduct than general corporate activity.

We strongly disagree with the Court. When a company or an employee leads the company’s operations from within the United States and pockets profits from human rights abuses suffered abroad, the courts in the United States must exercise jurisdiction to hold them accountable. This is especially important when victims have few other options, as is often the case for people living under repressive or corrupt regimes. 

But this decision should be of little comfort to companies that take material steps in the U.S. to develop digital tools that are used to facilitate human rights abuses abroad—companies like Cisco, which, according to the plaintiffs in that case, specifically created an internet surveillance system for the Chinese government that targeted minority groups like the Falun Gong for repression. Building surveillance tools for the specific purpose of targeting religious minorities is not merely an “operational decision,” even under the Supreme Court’s crabbed view. EFF’s Know your Customer framework is a good place to start for any company seeking to stay on the right side of human rights.

Next, Some Good News

While we are not happy with the Nestlé decision, it did not embrace some of the more troubling arguments from the companies.

A key question on appeal was whether U.S. corporations should be immune from suit under the ATS, that is, whether ATS defendants may only be natural persons. The Supreme Court had already held in Jesner v. Arab Bank (2018) that foreign corporations are immune from suit under the ATS, meaning that U.S. courts don’t have jurisdiction over a company, for example, based in Europe relying on forced labor in Asia. Thus, the question remained outstanding as to U.S. corporations. In Nestlé, five justices (Sotomayor, Breyer, Kagan, Gorsuch, Alito) agreed that the ATS should apply to U.S. corporations.

As Justice Gorsuch wrote in his concurring opinion, “Nothing in the ATS supplies corporations with special protections against suit… Generally [] the law places corporations and individuals on equal footing when it comes to assigning rights and duties.” This was refreshing consistency, as the Court has held that corporations are “persons” in other legal contexts, including for purposes of free speech, and the companies in this case had pushed hard for a blanket corporate exception to ATS liability.

Corporate accountability dodged another bullet as it appears that a majority of the Court agreed that federal courts may continue to recognize under certain circumstances, as the Court addressed in Sosa v. Alvarez-Machain (2004), new causes of action for violations of modern conceptions of human rights, given that the “law of nations” has evolved over the centuries. This might include new substantive claims, such as for child slavery, or indirect forms of liability, such as aiding and abetting. Justice Sotomayor, joined by Breyer and Kagan, was explicit about this in her concurrence. She cited the Court’s opinion in Jesner, which notes “the evolving recognition … that certain acts constituting crimes against humanity are in violation of basic precepts of international law.”

Only three justices (Thomas, Gorsuch, Kavanaugh) would have limited the ATS to a very narrow set of historical claims involving piracy or violations of the rights of diplomats and “safe conducts.” These justices would prohibit new causes of action under the ATS, including the claim of aiding and abetting child slavery at issue in Nestlé. 

Next Step: Congress

As the Supreme Court has increasingly tightened its view of the ATS, in large part because the law is very old and not very specific, the Nestlé decision should be a signal for Congress. Justice Thomas’ opinion goes to great lengths to praise Congress’ ability to create causes of actions and forms of liability by statute, grounded in international law. He argues “that there always is a sound reason to defer to Congress.”

Congress should take him up on this invitation and act now to ensure U.S. courts remain avenues of redress for victims of human rights violations—especially as American companies continue to be leaders in developing and selling digital tools of repression to foreign governments. Any American company that puts profits over human rights should face real accountability for doing so.