Nestle, ADM Child Labor Lawsuit Revived on Appeal

A lawsuit against a unit of Nestle SA (NESN) and two other companies alleging children were forced to work as slave labor on cocoa plantations in Ivory Coast was reinstated by a federal appeals court.

The court in San Francisco today ruled 2-1 that corporations can face liability for claims brought under the U.S. Alien Torts Statute, a 1789 law that human rights advocates have used to hold companies responsible in U.S. courts for alleged abuses committed overseas.

The lawsuit was filed in 2005 against Nestle USA Inc., Archer-Daniels-Midland Co. (ADM) and Cargill Inc. A U.S. judge in Pasadena, California, dismissed state law and federal torts claims against the companies. The appeals panel said the judge erred in tossing the case and allowed the plaintiffs to amend and refile it.

Hannah Coan, a Nestle spokeswoman, declined to comment on the ruling. Susan Eich, a Cargill spokeswoman, didn’t immediately return an e-mail seeking comment. An e-mail to ADM’s media office wasn’t immediately returned.

The case is Doe v. Nestle, 10-56739, U.S. Court of Appeals for the Ninth Circuit (San Francisco)

To contact the reporter on this story: Karen Gullo in federal court in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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