United States

United States

Summary of developments:
  • Alvarez v. Johns Hopkins University: a federal court rules that Johns Hopkins University and two other corporations must face a lawsuit over a 1940s experiment that infected hundreds of Guatemalans with syphilis. (2019)
  • Reformed Section 307 of the Tariff Act 1930 prohibits companies from importing products produced by forced labour, even if US domestic supply cannot meet demand. (2016)
  • Section 1502 of the Dodd-Frank Act requires disclosure of due diligence results on whether or not their products contain conflict minerals. (2010)
Last updated on 21-01-2018

Legislative Developments

Section 307 of the Tariff Act of 1930

 

In a nutshell

In more detail

Name of Legislation

Tariff Act of 1930

19 U.S.C. § 307 (2016)

Area of Law

Customs and Border Patrol (CBP)

 

Jurisdiction

Federal

 

Current Stage

In force

In 2016, the U.S. Congress closed the "consumptive demand" loophole in section 307, which exempted goods derived from forced labour where American domestic production could not meet demand.

Requirement

Prohibits importation of products produced, in whole or in part, by forced labour or convict labour

All companies are prohibited from importing products produced, in whole or in part, by forced labour or convict labour into the United States.

CBP is required to detain incoming shipments when information “reasonably but not conclusively” indicates that they contain goods that have been produced with forced labour. If further investigation confirms this initial finding, CBP is required to exclude the products from the American market and, in cases of serious violations, refer the importer to the Immigration and Customs Enforcement (ICE) for criminal investigation.

Material Scope

Forced labour, child labour, and convict labour

 

Personal Scope

All importers into the U.S.

 

Reach of the requirements

Any goods imported into the U.S.

 

Enforcement

Goods banned from entry into the U.S. and potential for criminal investigation

When information reasonably but not conclusively indicates that merchandise within the purview of the provision is being imported, the CBP Commissioner may issue withhold release orders pursuant to 19 C.F.R. § 12.42(e). If the Commissioner is provided with information sufficient to make a determination that the goods in question have been produced with forced labour, the Commissioner will publish a formal finding to that effect in the Customs Bulletin and in the Federal Register pursuant to 19 C.F.R. § 12.42(f). 

The CBP Commissioner is required to submit a report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives that includes:

  • The number of instances in which merchandise was denied entry during the one-year period preceding the report submission.
  • A description of the merchandise denied entry.
  • Other information deemed appropriate with respect to monitoring and enforcing compliance.

The forced labour provision has not been rigorously enforced due to issues of process, evidentiary standards, and capacity. However, if better enforced, the provision can be a powerful tool to encourage companies to take proactive steps to conduct due diligence of labour conditions in their supply chains and ensure that goods produced for the U.S. market are not made with forced labour.

Resources

♦ List of all withhold release orders here.

Dodd-Frank Wall Street Reform and Consumer Protection Act

 

In a nutshell

In more detail

Name of Legislation

Section 1502 of the Dodd Frank Act

Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)

Area of Law

Company law

 

Jurisdiction

Federal

 

Current Stage

In force

The Dodd-Frank Act was passed in 2010, and the final rules implementing section 1502 by the U.S. Securities and Exchange Commission (SEC) were adopted in 2012

Requirement

Disclosure of conflict minerals due diligence results

Disclosure requirement that calls on companies to determine whether their products contain conflict minerals by carrying out supply chain due diligence.

Material Scope

Illegal commodities (conflict minerals)

 

Personal Scope

Public companies listed on U.S. exchanges with products that contain tantalum, tin, gold, or tungsten

 

Reach of the requirements

Full supply chain involving conflict minerals sourced from the Democratic Republic of Congo and surrounding areas

 

Enforcement

The company is required to report to the SEC under the Exchange Act. Reports are made publicly available.

The extent to which 1502 will be implemented and enforced remains uncertain following a decision of the U.S. District Court for the District of Columbia.

 
Resources:

Statement of Acting Chairman Piwowar on the Court of Appeals Decision on the conflict minerals rule, April 2017.

Case Law

Alvarez v. Johns Hopkins University et al.

 

In a Nutshell

In More Detail

Name of Case

Alvarez v. Johns Hopkins University

Estate of Arturo Giron Alvarez, The 773 Individuals Identified On Exhibit 1 To The Complaint and Unknown Use Plaintiffs, Plaintiffs

v. The Johns Hopkins University, The Johns Hopkins University School Of Medicine, The Johns Hopkins Hospital, The Johns Hopkins Bloomberg School Of Public Health, The Johns Hopkins Health Systems Corporation, The Rockefeller Foundation, and Bristol-Myers Squibb Company, Defendants

Area of Law

Tort Law

 

Alien Tort Statute, 28 U.S.C. § 1350. (ATS)

This case concerns a 1940s U.S. government experiment that infected hundreds of Guatemalan people with syphilis as part of a nonconsensual and involuntary experiment regarding the effectiveness of penicillin, a new drug at the time.

The case Garcia v. Sebellius was originally brought against the U.S. government in 2011, but resulted in a court finding absolute immunity for officials’ acts taken within the parameters of their employment. Alvarez is the civil case that follows.

At issue is whether, following the U.S. Supreme Court’s 2018 Jesner v. Arab Bank decision, U.S. domestic corporations may be held liable under the Alien Tort Statute for international law violations perpetrated against non-U.S. citizens. In the present case, the violations alleged relate to nonconsensual medical experimentation on Guatemalan nationals during the 1940s and 50s.

Jurisdiction

U.S. District Court, District of Maryland  

Current Stage

Ongoing

3 Jan 2019: Defendants’ motion to dismiss is denied, ATS claims survive, case will continue to discovery.

The court held that Jesner “does not bar ATS suits against domestic corporations.” The court also upheld its ruling in Alvarez I “that there is an international law norm barring nonconsensual medical experimentation on human subjects.”

Requirement/Result

Pending Plaintiffs demand compensation for nonconsensual medical experimentation conducted on them, their ancestors, their spouses, and/or other relatives in Guatemala during the 1940s and 50s.

Material Scope

Crimes against humanity, involuntary and nonconsensual medical experimentation on human subjects

Second Amended Complaint: Violations of the law of nations, including crimes against humanity; aiding and abetting crimes against humanity; conspiring to commit crimes against humanity; cruel, inhumane, and degrading treatment; aiding and abetting and conspiracy to commit cruel, inhumane, and degrading treatment; involuntary and nonconsensual medical experimentation on humans; and aiding and abetting and conspiracy to commit involuntary and nonconsensual medical experimentation on humans.

Third Amended Complaint: claims were compiled into one ATS claim. The court did not address the above actions separately.

Pros

  The court found that “allowing domestic corporate liability would further the purpose of the ATS, by affording a remedy in U.S. courts to foreign nationals for violations of international law by a U.S. corporation.” This case provides renewed faith in the ATS as a viable vehicle for seeking justice and remedy for victims of corporate harms. 
Resources

♦ Court opinion of January 3, 2019 and other case documents

♦ a Reuters article about the case

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