By Lawrence Hurley
WASHINGTON (Reuters) - The U.S. Supreme Court on Monday rejected a bid by Nestle SA (VX:NESN), the world's largest food maker, and two other companies to throw out a lawsuit seeking to hold them liable for the use of child slaves to harvest cocoa in Ivory Coast.
The high court left in place a December 2014 ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals that refused to dismiss a lawsuit against Nestle, Archer-Daniels-Midland Co (N:ADM) and Cargill Inc filed by former victims of child slavery.
The plaintiffs, who were originally from Mali, contend the companies aided and abetted human rights violations through their active involvement in purchasing cocoa from Ivory Coast. While aware of the child slavery problem, the companies offered financial and technical assistance to local farmers in a bid to guarantee the cheapest source of cocoa, the plaintiffs said.
The case focused in part on how lower court judges have interpreted a 2013 Supreme Court decision that made it harder for plaintiffs to sue corporations in U.S. courts for abuses alleged to have occurred overseas.
In its 2013 ruling in the Kiobel v. Royal Dutch Petroleum Co case, the court unanimously threw out a lawsuit by 12 people from Nigeria that accused British and Dutch-based Royal Dutch Shell (L:RDSa) Plc of aiding state-sponsored torture and murder.
The court said the law under which the Nigerians brought the case, the 1789 Alien Tort Statute, was presumed to cover only violations of international law occurring in the United States. Violations elsewhere, Chief Justice John Roberts wrote, must "touch and concern" U.S. territory "with sufficient force to displace the presumption."
U.S. companies facing similar suits have had considerable success fending off such cases by citing the ruling, although judges have differed in how they have interpreted it.
In the Nestle case, the appeals court said the plaintiffs could update their lawsuit to see if they could meet the higher burden required under the Supreme Court ruling. Several business groups, including the U.S. Chamber of Commerce, urged the court to hear the case.
The case is Nestle Inc v. John Doe, U.S. Supreme Court, No. 15-349.