Unocal and the ATCA

[Ian Murray <seamus2001@xxxxxxxxx>]

[National Law Journal]
9th Circuit spurns U.S. over alien tort claims
A big Unocal case is still to be argued.
By Marcia Coyle
STAFF REPORTER

WASHINGTON-An attempt by the Bush administration and the business
community to halt federal court litigation against corporations sued for
human rights violations abroad appears to have suffered a major blow in
the 9th U.S. Circuit Court of Appeals.

The government and major business organizations have filed amicus briefs
in Doe v. Unocal Corp., No. 00-566603 and Roe v. Unocal Corp., No.
00-56628, arguing that the Alien Tort Statute of 1789, more widely known
as the Alien Tort Claims Act (ATCA), does not create a cause of action
permitting foreign nationals to bring human rights claims in federal
courts for conduct occurring in other nations.

The Unocal case-viewed as pivotal by human rights and corporate defense
lawyers in the fight over ATCA-will be heard by the full 9th Circuit on
June 17.

But last week, in an unrelated case also involving claims under the
act-with the United States itself as one of the defendants-the en banc 9th
Circuit ignored the government's request to revisit precedents or an
analysis of the statute has led that court, and many around the country,
to permit these claims to go forward. Alvarez-Machain v. U.S., No.
99-56772, and Alvarez-Machain v. Sosa, No. 99-56880.

The Alien Tort Claims Act provides that "the district courts shall have
original jurisdiction of any civil action by an alien for a tort only,
committed in violation of the law of nations or a treaty of the United
States."

In the Alvarez decision last week, the 9th Circuit affirmed a liability
judgment against Francisco Sosa, a former Mexican policeman who was hired
in 1990 by U.S. Drug Enforcement Administration (DEA) agents to help
kidnap Dr. Humberto Alvarez-Machain and bring him to the United States.

Alvarez-Machain, wanted in the kidnapping and killing of a DEA agent in
1985, was later tried and acquitted. He then sued his captors, the United
States and DEA agents for a number of torts under ATCA and the Federal
Tort Claims Act.

The court upheld the judgment against Sosa, ruling that the "unilateral,
nonconsensual, extraterritorial arrest and detention of Alvarez were
arbitrary and in violation of the law of nations" under the Alien Tort
Claims Act.

The Alvarez decision has "enormous" implications for the Unocal case and
all cases against corporations under the statute, said Paul L. Hoffman of
Schonbrun DeSimone Seplow Harris & Hoffman of Venice, Calif., counsel to
Alvarez and who, with the Center for Constitutional Rights, represents
citizens of Myanmar (formerly Burma) suing Unocal.

The Justice Department in Alvarez, he explained, pressed the same argument
as in Unocal that the act does not apply to claims brought by aliens for
actions occurring in other countries.

"No judge on the en banc court bought that," Hoffman said. "They basically
reaffirmed the ATCA framework that the 9th Circuit has followed for more
than a decade. This is a carefully considered opinion. I say that and we
didn't win everything."

Sosa's counsel, Carter G. Phillips of Chicago's Sidley Austin Brown &
Wood, said that he sees "no sentiment" on the court for revisiting any of
its Alien Tort Claims Act cases.

Phillips, who filed an amicus brief for the U.S. Chamber of Commerce and
other business groups in the Unocal case, predicted that it will be fought
over what standard should be applied to the claims against Unocal, not
over whether the claims could be brought in the first place.

The latter question is the most important legal question, said Edwin V.
Woodsome Jr. of Washington's Howrey Simon Arnold & White, counsel to
Unocal.

"Can any lawsuit be brought under the act?" he asked. "The United States
has taken a position, particularly in the Unocal case and as well in other
cases, that the ATCA does not provide a substantive cause of action, but
only confers jurisdiction. The court in Alvarez didn't spend much time on
that issue."

Unocal was sued in 1996 by Burmese villagers who claim that they and their
families were assaulted, raped, tortured and forced into labor by the
Myanmar military, which provided security and other services for the
construction of an oil pipeline by Unocal. The suit was the first against
a corporation under the act.

A 9th Circuit panel last year held that Unocal could be liable under the
law for aiding and abetting the military in forced labor, murder and rape.

In granting en banc review, the 9th Circuit said it was interested
primarily in whether the criminal law-based aiding-and-abetting standard
was correct or, as argued in a concurring opinion in the panel ruling,
whether general federal common law tort principles, such as agency, joint
venture or reckless disregard, should apply to the claims.

New old weapon

On the books since 1789, the Alien Tort Claims Act was rarely used until
1980. In that year, the 2d Circuit held that it gave jurisdiction to
federal courts to hear claims by citizens of Paraguay regarding torture
committed in that country. Filartiga v. Pena-Irala, 630 F.2d 876. After
Filartiga, suits were filed primarily against individuals. U.S. courts
recognized that such crimes as genocide, war crimes, torture, forced labor
and prolonged, arbitrary detention violate the law of nations, and claims
for those violations could be brought under the act.

With the filing of the Unocal case in 1996, human rights lawyers began to
focus on possible violations by multinational corporations. Chevron,
Texaco, Union Carbide, ExxonMobil, Gap. Inc., Coca Cola, Del Monte and
others have been sued for complicity in various alleged human rights
violations.

A number of cases have been dismissed on procedural grounds, such as forum
non conveniens. And when money judgments are awarded, they are often
difficult to collect, particularly those against former despots.

So how effective a weapon is the law?

"Some people might say no money, no justice," said Jennifer Green of the
Center for Constitutional Rights, counsel to the Myanmar plaintiffs. "But
that's not what the client says. Having a day in court, being able to have
judicial review of horrific human rights violations; that's very
significant both in terms of the client's need and general
accountability."

Since the cases against corporations are relatively recent, it may be too
early to judge the effectiveness of the act for plaintiffs, said Hoffman,
her co-counsel in Unocal. "On the other hand," he said, "we have enough
indications that the courts are receptive to these cases and have applied
basic alien tort claim principles that corporations are taking notice. The
fact that corporations are mobilizing to do away with ATCA or limit it and
have sought Bush administration assistance in and out of court means they
take it very, very seriously."

These cases, he said, are not about money.

"We took the Unocal case because we thought we could establish the
principle that when corporations do business with repressive regimes in
the world and get involved in certain kinds of ways with that, they could
be held liable for human rights violations," he said. "If that principle
stands, corporations are going to have to pay attention to human rights in
their conduct of business."

The Chamber of Commerce, the National Foreign Trade Council, the National
Association of Manufacturers and others have the act on their "tort
reform" agendas, along with medical malpractice, asbestos and class action
litigation. While they have met with lawmakers on Capitol Hill, some
business representatives said, no legislation has been introduced yet
dealing with alien tort claims.

"I think there's enough there to show this statute can make a lot of
mischief in the wrong hands," said Paul Kamenar, senior executive counsel
of the Washington Legal Foundation. "It represents a larger problem with
activist courts trying to take a statute from 1789 never intended to be
used against multinational corporations," he said.

'Activist groups'

"It's another part of this larger agenda that the activist groups have in
terms of taking international law and applying it in the domestic setting.
They've tried it in death penalty cases," Kamenar said.

Sidley Austin's Phillips, who said he will appeal Alvarez to the Supreme
Court, noted that "the law of nations" is not self-defining, which makes
it difficult for companies to know what might be a violation.

Unocal's Woodsome agrees. "It seems to me the rules of the road ought to
be clear," he said. "I don't think any American company has ever believed,
and appropriately, they should be responsible for the acts of foreign
governments to damage their citizens."

Human rights lawyers say they aren't accusing companies of vicarious
liability but of direct complicity in human rights violations.

In its ruling last year that Unocal may be liable on the forced labor,
murder and rape claims, the 9th Circuit said aiding and abetting means
"knowing practical assistance or encouragement that has a substantial
effect on the perpetration of the crime."

Unocal "formed a partnership with the Burmese military despite knowing the
military was going to commit abuses on behalf of Unocal's project," said
Richard Herz, counsel to EarthRights International. "Their own consultant
told them there would be abuses. Other companies were unwilling to do
business in Burma."

As these cases move through the courts, Woodsome said, "The likelihood is
enhanced that ultimately the Supreme Court will want to visit the issue. I
would be more comfortable having the court take a look at the statute from
a strictly legal point of view and answer: Is this what it was supposed to
be about?"