What remains ambiguous from the Nestle decision is the scope of conduct that is “more than general corporate activity”, including “operational decisions”. relationship (including how they are regarded with respect to overlapping areas of foreign law in other jurisdictions), and what the scope of such “operational decisions” could mean to differentiate between routine or general corporate activity as opposed to a higher threshold of activity. The Court also did not discuss what the “due diligence” or the legal duty of care is of the corporate parent relative to the subsidiary (even for purposes of understanding the scope of “general corporate activity”), as to make the conduct (action) or omission (failure to act) of the subsidiary either directly imputable to the corporate parent, or at the very least, render a corporate parent negligent for failing to observe its own independent legal truemoney database responsibilities under its due diligence towards the subsidiary and its stakeholders. The Court also exclusively focused its interpretive lens to ATS claims in U.S. courts, without considering the wider trajectory of the interpretation of the due diligence responsibilities of the parent corporation over subsidiaries in foreign jurisdictions such as the United Kingdom in landmark cases of Vedanta v. Lungowe and as Okpabi v. Royal Dutch Shell decided by the UK Supreme Court, among other key jurisdictions in business and human rights litigation.
Arguably the most concerning implication of Nestle is that a U.S. corporation may avoid ATS liability even if it has actual knowledge that its offshore contacts violate international law. So long as the U.S. corporation’s domestic conduct relating to the violation consists of no more than general corporate activity, the U.S. corporation would likely be safe from ATS lawsuits. This standard post-Nestle raises concerns because U.S. corporations now have little incentive to take corrective action upon discovering that their offshore activities violate international law. Many U.S. corporations are linked with numerous instances of human rights violations involving labor abuse, slavery, extrajudicial kills, pollution, and war crimes; now these corporations may openly acknowledge these violations, do nothing to stop them, and still avoid ATS liability. To sufficiently plead an ATS claim against a U.S. corporation following Nestle, plaintiffs should identify any corporate conduct in the United States performed outside the ordinary course of business. That remains open for litigation and future judicial interpretation in the United States.