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14 Oct 2021

Lauren Hopkins, Megan Morgan, Alan Sachs & Elizabeth Johnson, Beveridge & Diamond LLP

USA: Supreme Court rejects human rights lawsuit against US corporations, but leaves door open for future claims

"Supreme Court Rejects Human Rights Lawsuit Against U.S. Corporations, But Leaves Door Open For Future Claims", 1 July 2021

On June 17, the U.S. Supreme Court held that U.S. corporations are not liable for alleged abuses against non-U.S. citizens in foreign countries merely because general operational decisions made in the United States contributed to the tortious overseas conduct. Nestlé USA, Inc. v. Doe I

Although U.S. corporations are subject to [Alien Tort Statute] liability in theory, the scope of the ATS has been curtailed [but] five justices signaled that U.S. corporations are not immune to liability under the ATS in principle …

There is potential for a push for supply-chain due diligence legislation [in the US] … Other countries, such as the UK, Australia, France, the Netherlands … Germany and Norway, have enacted anti-slavery or supply chain due diligence legislation in order to address this issue. Additionally, the European Union is poised to introduce similar legislation at the EU-level …

There may be a shift in the legal mechanisms in which similar lawsuits are filed…[such as] under the Trafficking Victims Protection Reauthorization Act. …or state consumer protection acts to bring consumer class actions against manufacturers…

…[The Nestlé USA decision] argued that authority is so limited there will essentially never be a basis for courts to [recognize claims under international law beyond] three historical torts: violation of safe conducts, infringement of the rights of ambassadors, and piracy.