D.C. Circuit Defines “Venture” Under the TVPRA
March 12, 2024
On March 5, 2024, the D.C. Circuit issued its long-awaited opinion in Doe v. Apple, a suit against U.S. tech companies seeking to hold them liable under the Trafficking Victims Protection Reauthorization Act (TVPRA) for forced labor and human trafficking used to mine cobalt in the Democratic Republic of the Congo (DRC). (Disclosure: I joined an amicus brief supporting plaintiffs.) The court of appeals held that plaintiffs failed to state a claim for relief because purchasing cobalt through the global supply chain is not “participation in a venture,” which the TVPRA requires for liability.
The opinion by Judge Neomi Rao (joined by Chief Judge Sri Srinivasan and Judge Nina Pillard) interprets “participation in a venture” to mean “taking part or sharing in an enterprise or undertaking that involves danger, uncertainty, or risk, and potential gain.” Although this definition does not cover the plaintiffs’ claims in this case, it is broad and comports with how the TVPRA has been applied in the First and Seventh Circuits.
The D.C. Circuit did not answer the question whether the TVPRA’s civil cause of action applies extraterritorially. But, as I explain below, its interpretation of “participation in a venture” may moot that question with respect to suits against U.S. companies involving forced labor abroad.
The TVPRA and Plaintiffs’ Claims
First passed in 2000, the TVPRA has been repeatedly reauthorized and expanded with bipartisan support. As I previously described in more detail, Congress added a civil cause of action to the TVPRA in 2003. In 2008, Congress expanded that cause of action in several ways, among them by authorizing suits against persons who benefitted from “participation in a venture” that they knew or should have known engaged in violations of the TVPRA. In 2008, Congress also expressly provided that six of the TVPRA’s offenses apply extraterritorially when the offender is a U.S. national, a U.S. permanent resident, or present in the United States irrespective of nationality.
The plaintiffs in Doe are children, and the family members of children, who were injured or killed mining cobalt in the DRC. Cobalt is an essential ingredient in lithium-ion batteries, which power devices from mobile phones to electric vehicles. Plaintiffs sued five U.S. tech companies—Apple, Alphabet, Microsoft, Dell, and Tesla—that purchase cobalt through supply chains to power their products, alleging that they benefitted from participation in a venture that they knew or should have known engaged in forced labor and human trafficking, both violations of the TVPRA.
The district court dismissed plaintiffs’ claims on four alternative grounds, holding that: (1) the plaintiffs lacked standing; (2) the plaintiffs had not adequately alleged that the defendants “participated in a venture”; (3) the plaintiffs had not adequately alleged forced labor or human trafficking; and (4) the TVPRA’s civil remedy does not apply extraterritorially.
The DC Circuit’s Decision
The court of appeals addressed only the first two grounds, holding that the plaintiffs had standing but had not adequately alleged participation in a venture.
Standing
The district court held that plaintiffs lacked Article III standing to bring their claims, but the D.C. Circuit disagreed. Standing, the court of appeals explained, requires three elements: (1) that the plaintiffs suffered an injury in fact; (2) that the injury is fairly traceable to the action of the defendants; and (3) that the injury is redressable by a favorable decision of the court.
After noting that the injuries plaintiffs alleged were clearly injuries in fact, Judge Rao turned to traceability. Quoting the Supreme Court’s decision in Spokeo, Inc. v. Robins (2016), she observed that “Congress has the power to … articulate chains of causation that will give rise to a case or controversy where none existed before.” On the other hand, Article III establishes some minimum requirements.
In Spokeo and TransUnion LLC v. Ramirez (2021), the Supreme Court looked both to history and to Congress’s judgment in addressing other elements of the standing analysis. Assuming without deciding that the same approach applies to traceability, Judge Rao concluded that “the TVPRA’s indirect liability for ‘participation in a venture’ satisfies the constitutional minimum because it mirrors the aiding and abetting liability long established at common law.” “Like aiding and abetting liability,” she explained, “the TVPRA requires (1) a wrongful act that causes an injury, specifically forced labor; (2) knowledge, as the defendant must knowingly benefit; and (3) substantial assistance, namely participation in the ‘venture.’” It is not necessary for the TVPRA to track the traditional elements of aiding and abetting liability precisely, she emphasized, because “Congress maintains some leeway when creating statutory causes of action.”
Turning to redressability—the final element for Article III standing—Judge Rao found it “straightforward for the plaintiffs’ damages claims,” since money can compensate for injury. Plaintiffs’ claims for injunctive relief were another matter. Assuming without deciding that the TPVRA authorizes injunctive relief in addition to damages, Judge Rao concluded that an injunction would not provide redress. First, the complaint did not allege that any of the plaintiffs were still miners. Second, the complaint did not allege that the defendants “have control over informal mining operations and forced labor violations far down the supply chain.” It was “entirely speculative,” the court said, whether pressure by the defendants would have any impact on cobalt mining practices.
Defining “Venture”
As noted above, the TVPRA creates a civil remedy not only against the perpetrators of TVPRA offenses but also against anyone who knowingly benefits from “participation in a venture” which that person knew or should have known was engaged in TVPRA violations. Significantly, the statute does not require that the venture be forced labor. Rather, as the D.C. Circuit noted, the “statute makes it unlawful to ‘participat[e] in a venture’ that engages in forced labor” (emphasis added).
The court rejected the suggestion that it should look to the definition in the child sex trafficking provision of the statute, which defines “venture” to mean “any group of two or more individuals associated in fact, whether or not a legal entity,” because that definition is expressly limited to “this section. Instead, the court looked to the ordinary meanings of “participation” and “venture,” which it found in various dictionaries. Putting these definitions together, the court concluded that “participation in a venture” means: “taking part or sharing in an enterprise or undertaking that involves danger, uncertainty, or risk, and potential gain.”
Judge Rao went on to explain this definition in greater detail. “[A] formal business relationship is not necessary to be a participant in a venture,” she wrote, but “something more than engaging in an ordinary buyer-seller transaction is required to establish ‘participation’ in an unlawful venture.” She contrasted this case with two others. In Ricchio v. McLean (1st Cir. 2017), a motel operator rented a room to a man who repeatedly abused a young woman he was grooming for prostitution, sharing his purpose, receiving his payments, and controlling the premises on which the violations occurred. In G.G. v. Salesforce.com, Inc. (7th Cir. 2023), an internet services company maintained a continuous business relationship with, and provided specific advice and support to, a website, Backpage.com, that hosted prostitution ads. “By contrast,” the D.C. Circuit explained, “the plaintiffs here have not alleged a factual basis to infer a common purpose, shared profits and risk, or control as in Ricchio, nor do they allege the Tech Companies and the cobalt suppliers had the type of direct and continuous relationship that existed between the parties in Salesforce.”
Judge Rao’s use of the disjunctive “or,” both in her definition of participation in a venture and in her distinguishing of other cases is significant. Under the D.C. Circuit’s test, a person participates in a venture if they share a “common purpose” or share “profits and risks” or exercise “control” or have a “direct and continuous relationship.” “[P]urchasing a commodity, without more, is not ‘participation in a venture’ with the seller,” the court concluded. But there are many other things that fall within that definition.
Extraterritoriality
Although the D.C. Circuit found it unnecessary to decide whether the TVPRA’s civil remedy applies extraterritorially, that question is bound to arise in future cases. The district court held that the civil remedy did not because the act’s extraterritorial jurisdiction provision refers only to six “offense[s]” under the TVPRA and not to the civil cause of action. But there is a simple answer to this. The extraterritorial jurisdiction provision does not refer to the civil cause of action because a cause of action is not an “offense.” The cause of action expressly states that anyone “who is a victim of a violation of this chapter may bring a civil action.” The cause of action is coextensive with the offenses in the TVPRA; when they apply extraterritorially, it does too.
I have previously explained in detail why the TVPRA’s structure provides a clear indication of extraterritoriality under the Supreme Court’s current two-step framework. The Fourth Circuit correctly applied that framework in Roe v. Howard (4th Cir. 2019), concluding that the TVPRA’s civil cause of action applies extraterritorially to the same extent as its predicate offenses. The Supreme Court’s recent decision in Abitron Austria GmbH v. Hetronic International, Inc. (2023) does not change the analysis, because conduct in the United States is not required when a statute has a clear indication of extraterritoriality as is found in the TVPRA.
There is a twist, however. Recall that the TVPRA’s extraterritoriality provision extends six criminal offenses extraterritorially only when the alleged offender is a U.S. national, U.S. permanent resident, or present in the United States. In Doe v. Apple, for example, the human trafficking provision may not have applied extraterritorially because the persons engaged in such trafficking were not U.S. nationals etc. If the criminal provision does not apply extraterritorially, then there is no violation of the TVPRA and so no civil claim.
But the same is not true of the forced labor provision and the child sex trafficking provision. To take the former as an example, Section 1589(b) states:
Whoever knowingly benefits, financially or by receiving anything of value, from participation in a venture which has engaged in the providing or obtaining of labor or services by any of the means described in subsection (a) [forced labor], knowing or in reckless disregard of the fact that the venture has engaged in the providing or obtaining of labor or services by any of such means, shall be punished as provided in subsection (d) [criminal penalties].
In other words, a person who knowingly benefits from participation in a venture involving forced labor is not just civilly liable but also criminally liable. Several conclusions follow. First, a person who benefits from forced labor may be sued not just as a beneficiary but also as a perpetrator. Second, if the defendant is a U.S. company, the forced labor provision does apply extraterritorially because the alleged offender is a U.S. national. Third, the extraterritorial application may not even matter because it is the benefitting itself that constitutes the offense and that offense occurs in the United States.
To be clear, Section 1589(b) still requires “participation in a venture,” and the D.C. Circuit will undoubtedly interpret the phrase in this provision the same way it interpreted the phrase in the TVPRA’s civil cause of action. Thus, Apple and the other defendants in this case would still not be liable. But when the requirement of “participation in a venture” is met, Section 1589(b) allows forced labor claims against U.S. companies even when the persons applying force are not U.S. nationals.
Implications for Future Cases
It is not clear whether the plaintiffs in Doe v. Apple could have alleged the additional involvement necessary to show “participation in a venture” under the D.C. Circuit’s test. But sometimes a purchaser of commodities is more than a purchaser of commodities.
Take the facts of Nestlé USA, Inc. v. Doe (2021), in which U.S. chocolate companies were sued for aiding and abetting child slavery in Ivory Coast. The Supreme Court held that plaintiffs could not state a claim under the Alien Tort Statute because the defendants had not engaged in sufficient conduct in the United States. The Court contrasted the TVPRA, which “allow[s] plaintiffs to sue defendants who are involved indirectly with slavery.”
Although the plaintiffs in Nestlé suffered their injuries before 2008, when the TVPRA’s cause of action was expanded, similar plaintiffs today might well have valid claims. The complaint alleged that the U.S. defendants not only purchased cocoa from farms using child slaves but also provided those farms with technical and financial support in exchange for exclusive rights to buy cocoa. Under the D.C. Circuit’s opinion in Doe (and the Seventh Circuit’s in Salesforce), providing specific support is enough to establish “participation in a venture.” And under Doe (and the First Circuit’s decision in Ricchio), so are control and shared purposes.
Conclusion
The D.C. Circuit’s decision in Doe v. Apple makes clear that U.S. companies cannot be held liable under the TVPRA simply for buying products made with forced labor. More is required for “participation in a venture.” But if that requirement is satisfied, victims of forced labor abroad should be able to sue U.S. companies regardless of how the extraterritoriality question is resolved.