Updates on Two Alien Tort Lawsuits

A new Alien Tort Statute (ATS) lawsuit has been filed against the Alabama coal firm, Drummond Co., alleging that it made payments to the Colombian paramilitary group, Autodefensas Unidas de Colombia (AUC). (This blog has had a post on the Alien Tort litigation against Chiquita Brands International for its payments to the AUC.)

The Alien Tort Statute allows non-US citizens to bring lawsuits for certain violations of international law. It has been used to successfully bring lawsuits or in settlement against other corporations (and individuals) including Chevron, Unocal and Yahoo!

According to the complaint in the new lawsuit:

Drummond Co. paid a Colombian death squad millions of dollars to murder and terrorize union workers at its coal mine, hundreds of people claim in Federal Court. They claim the Autodefensas Unidas de Colombia used a "scorched earth policy ... torturing and murdering" and displacing thousands of peasants from their homes along Drummond's railroad line in Cesar and Magdalena provinces.
"Almost every family in these provinces lost a family member, a neighbor or friend to war crimes committed by the AUC during its brutal civil war with the FARC," the complaint states.
The plaintiffs also sued Alfredo Araujo Castro, Drummond's "manager of community relations" in Colombia, and James Atkins, its director of security in Colombia.
They claim, among other things, that Araujo committed perjury when he testified in June 2005, in Romero v. Drummond Co., that he had never met with "his childhood friend, Rodrigo Tovar Pupo, alias Jorge 40, the leader of the AUC's Northern Block ... or any other AUC members."
They claim that Atkins and Araujo were present at a meeting with death squad leaders in November 2000 "at the entrance to Drummond's mine in La Loma," and that "at this meeting, defendant Atkins, on behalf of Drummond, approved a payment to the AUC of the assassination of the top leaders of the Drummond union".

Second, on Tuesday, a jury is to be selected in the Wiwa v. Royal Dutch Petroleum Co. case. From a previous post on this trial:

A trial against Royal Dutch Shell for its close relationship with the Nigerian military regime is set to begin in New York on May 26. It alleges that Shell was complicit in the Nigerian military's egregious campaign of human rights abuse, including the strategy that led to the executions.

Shell began oil production in the Niger Delta in 1958 and worked with the Nigerian government to suppress opposition to its presence. Nigerian soldiers used deadly force and massive, brutal raids against the Ogoni people (the ethnic group that lives in that region) throughout the early 1990s to repress a growing movement against the oil componsibilityany. This was done at the request of Shell, and with Shell’s assistance and financing.

Law.com has posted an excellent article on the Wiwa case and the state of the Alien Tort Statute when it comes to suing corporations.

"We know that corporations can in principle be liable but of course proving liability at trial is necessarily a different matter," [George Washington University Law School Professor Ralph] Steinhardt said. "We don't have very many examples of these cases going to trial because of very lengthy pretrial proceedings. There has been an effort to wear down the plaintiffs."

Steinhardt agrees that the rarity of cases going to trial also stems from the novelty of the claims and period of adjustment.

"Assuming everyone is working in good faith, it is true that this is the application of ancient principles in new settings and whenever you get ancient principles in new settings" it takes awhile for the law to develop, he said.

Adding to the uncertainty in lower courts, he said, is that, to this point, "the Supreme Court has looked out at this body of jurisprudence and let it stand."

There is another element at work: Plaintiffs' lawyers are gaining more experience and have gotten a much better feel as they have learned from their past success and their past failures.

Drimmer also said that fewer cases are being dismissed on forum non conveniens and other grounds as judges have made the adjustment. [Jonathan C. Drimmer is a partner at Steptoe & Johnson who lectures on the Alien Tort Statute at Georgetown Law School and advises multinational companies on compliance with the Alien Tort Statute.]

"Courts clearly are a lot more comfortable hearing alien tort cases that have no direct connection to United States than they were five years or 10 years ago," he said. "We are still in the nascent stages of litigation on the parameters of the ATS. Twenty years from now, we are going to look back at and see this as the period when the blocks were being built on how this law is going to be interpreted."

"Corporations on Trial"

People and Power is presenting "Corporations on Trial," a five-part series on the many lawsuits against multi-national corporations. The series, on Al Jazeera English, begins today with "Dumping Ground," which examines "how ordinary residents of the Ivory Coast are taking on one of the world's largest oil traders." An interview with People & Power presenter and reporter, Juliana Ruhfus provides some background.

Why is it that countries where the doctrines of corporate law and the associated legal procedures are not well developed, are places where multinational corporations can sometimes act with impunity?

This is probably a problem which goes beyond the law. Many of the worst abuses take place in the world's poorest countries. These are often countries which generate most of their income from natural resource exploitation rather than manufacturing or services.

They have the least educated and least empowered populations as well as the fiercest concentration of economic and political power in the hands of small elites.

Consequently they usually post very high scores on corruption indices. This is a bad combination and easily exploited by deal-makers inside and outside the country.Why is there such a big number of cases involving US companies?

This is not necessarily due to the fact that US companies behave worse than others.

Indeed it can be argued that it is because the US has legislation which allows lawyers to bring such cases in the first place.

For example the Alien Tort Claims Act (ATCA) allows cases to be brought in the US even if they involve US-registered companies committing abuses in other countries.

ATCA is a centuries old law which was originally created to bring pirates to justice when operating outside US waters.

Ironically it is now being used by lawyers to bring claims against US companies such as the Chiquita Brands fruit organisation – currently being sued for its involvement with illegal Colombian paramilitary organisations.

Check out previous blog posts on corporate social responsibility and the Alien Tort Statute: Pfizer Settles Medical Experimentation Case in Nigeria, Independent Review of Chiquita's Payments to Paramilitaries in Colombia, Book About Ken Saro-Wiwa.

Pfizer Settles Medical Experimentation Case in Nigeria

The state of Kano in Nigeria agreed to settle a lawsuit against Pfizer over a meningitis drug study for $75 million. In the study, Pfizer treated 100 children with meningitis with the experimental antibiotic Trovan. A control group of 100 other children, was treated with an FDA-approved antibiotic, ceftriaxone. However, the families allege that the dose was lower than recommended in order to inflate the apparent effectiveness of Tovan. Eleven children in the study died and others were left with brain damage, paralysis and slurred speech. According to Pfizer, these effects are known to be after-effects of meningitis and the children who received Trovan had a better survival rate than those on ceftriaxone. The families were allegedly not told about the nature of the experiment or about the possible side effects of Trovan.

This case was recently before the Second Circuit Court of Appeals in the US. Eighty-eight Nigerian families brought suit under the Alien Tort Statute (ATS). The statute allows non-US citizens to bring lawsuits for certain violations of international law. It has been used to successfully bring lawsuits or in settlement against other corporations, including Chevron, Unocal and Yahoo! (A previous post discussed an Alien Tort Statute case against Royal Dutch Shell for alleged complicity in human rights abuses by the Nigerian military.)

The majority of the Second Circuit panel decided that claims for non-consensual medical experimentation can be brought under the ATS. However, the court did not review the lower courts decision to dismiss the case on the ground of "forum non conveniens," meaning that there is a more appropriate forum.

In 89 pages containing numerous barbed comments, the 2nd U.S. Circuit Court of Appeals majority and dissent differed over whether the families' claims that their children had been subjected to medical experimentation without their consent fell within the 18th-century law.

In concluding that the law embraces claims of unconsented medical experimentation, Judge Barrington D. Parker wrote for the majority that the dissent took an approach to "customary" international law that is "unselfconsciously reactionary and static."

In dissent, Judge Richard C. Wesley described the majority as creating a new norm "out of whole cloth" upon the basis of "materials inadequate to the task."

Independent Review of Chiquita's Payments to Paramilitaries in Colombia

An update in the Alien Tort Statute/shareholder derivative litigation against Chiquita. The report mentioned is actually more significant in the shareholder suits, but it's conclusions are pretty surprising given the facts. An article in Spanish here.

Under federal law for derivative cases, Chiquita's board of directors had to set up the independent committee in April 2008 to decide whether it should sue on behalf of shareholders who sued to recoup some of the $25 million criminal fine.

The committee concluded in its Feb. 25 report that the suit should be dismissed.

"The defendants made mistakes, some more significant than others. Those mistakes were made in the belief that the actions being taken were in the best interests of the company and were to protect the lives of the company's employees," the report said.

William J. Wichmann, another family attorney, said the committee's factual summary was illuminating, but its conclusions were not.

Payments to paramilitary groups were made by Banadex, Chiquita's subsidiary in Colombia. At various times from 1989 to 2004, Banadex paid the Revolutionary Armed Forces of Colombia, or FARC; the National Liberation Army, or ELN, and the United Self-Defense Forces of Colombia, known as AUC. Payments to AUC continued even after it was named by the State Department as a foreign terrorist organization in September 2001.

"It seems incredible that the special litigation committee could find no fault that they [Chiquita officials] continued to pay them. In fact, I find that shocking," said Wichmann, a Fort Lauderdale solo practitioner.

In fact, Chiquita was told by multiple lawyers multiple times to stop making the payments before it finally did.

Book About Ken Saro-Wiwa

A new novel about Ken Saro-Wiwa, a Nigerian writer and activist for the environment and human rights. He and 8 other activists were executed on trumped-up charges.

A trial against Royal Dutch Shell for its close relationship with the Nigerian military regime is set to begin in New York on May 26. It alleges that Shell was complicit in the Nigerian military's egregious campaign of human rights abuse, including the strategy that led to the executions.

Shell began oil production in the Niger Delta in 1958 and worked with the Nigerian government to suppress opposition to its presence. Nigerian soldiers used deadly force and massive, brutal raids against the Ogoni people (the ethnic group that lives in that region) throughout the early 1990s to repress a growing movement against the oil componsibilityany. This was done at the request of Shell, and with Shell’s assistance and financing.

The US court has jurisdiction under the Alien Tort Statute, which allows non-US citizens to bring lawsuits for certain violations of international law. It has been used to successfully bring lawsuits or in settlement against other corporations (and individuals) including Chevron, Unocal and Yahoo!