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Nestle, ADM Child Labor Lawsuit Revived on Appeal

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Dec. 19 (Bloomberg) -- A lawsuit against a unit of Nestle SA 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 U.S. Supreme Court in April, ruling in a case against units of Royal Dutch Shell Plc, insulated multinational corporations from some lawsuits brought under the statute. The San Francisco appeals court said that opinions expressed in the high court ruling suggested that companies may be liable for alien torts claims under certain circumstances.

Attorneys suing on behalf of child laborers alleged in a lawsuit filed in 2005 against Nestle USA Inc., Archer-Daniels-Midland Co. and Cargill Inc. that child slave labor wouldn’t have continued on the plantations without the companies’ “active participation and cooperation in the entire system of child slavery,” according to court filings.

From 1994 to 2000, plaintiffs in the lawsuit, referred to as John Does, were forced to work as long as 14 hours a day with no pay and with guns pointed at them and were whipped and beaten by guards if they didn’t work quickly enough, their lawyers said.

Amend, Refile

A U.S. judge in Pasadena, California, dismissed state law and federal tort claims against the companies. The appeals panel said the judge erred in tossing the case and allowed the plaintiffs to amend and refile it.

“We are examining the Ninth Circuit’s order and considering our next steps,” Jackie Anderson, a spokeswoman for Decatur, Illinois-based ADM, said in an e-mail.

Cargill is disappointed in the ruling today and is confident it will ultimately prevail in the suit, Tim Loesch, a spokesman for the Minneapolis-based company, said in an e-mail.

“Cargill is concerned about the safety and well-being of children who may be involved in dangerous or forced work on cocoa farms, and we are committed to working towards a cocoa supply chain where no children are subject to these conditions,” he said. “As part of our efforts to eliminate these practices, Cargill developed the Cargill Cocoa Promise, our global commitment to support the long-term future of sustainable cocoa production and to making a difference to the farmers and to the communities that rely on cocoa for their livelihoods.”

Hannah Coan, a spokeswoman for Glendale, California-based Nestle USA, declined to comment on the ruling.

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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