Chiquita and the Alien Tort Statute

In March 2008 Chiquita Brands International admitted to illegally supporting guerrillas in Colombia. As part of the plea agreement, Chiquita agreed to pay the U.S. government $25 million in fines over five years. (Reported here).

In addition to the derivative suits that will be followed by this Blog, several groups of plaintiffs have filed Alien Tort Statute (“ATS”), Antiterrorism Act (“ATA”), and shareholder derivative litigation claims against Chiquita in an effort to hold Chiquita responsible for the terrorist acts of the guerrilla groups. These actions have been consolidated in the U.S. Southern District of Florida.

The largest suit filed so far, both in terms of numbers of plaintiffs and dollar value sought, was initially filed in the Southern District of New York under the ATS by 619 plaintiffs who are mostly Colombian survivors of individuals killed by paramilitaries. All but one of the plaintiffs are proceeding under pseudonyms for fear of reprisals in Colombia. The one identified plaintiff was granted political asylum and U.S. residency. U.S. survivors of five missionaries who were kidnapped and killed by Colombian paramilitaries filed a separate suit under the ATA with the New Tribes Mission, a Florida not-for-profit organization.

Each suit asserts that Chiquita provided payments, weapons, and “material support” to either Autodefensas Unidas de Colombia (“AUC”) or Fuerzas Armadas Revolucionarias de Colombia (“FARC”). AUC and FARC are competing Colombian organizations that have been identified as foreign terrorist organizations by the U.S. State Department.

Plaintiffs allege that Chiquita’s support for these organizations was a proximate cause of the deaths of the plaintiffs’ relatives who were killed by the terrorists. Chiquita operated in Colombia through its wholly-owned subsidiary C.I. Bananos de Exportacion, S.A. (“Banadex”), which Chiquita sold in June, 2004. As part of its plea agreement with the Justice Department, Chiquita admitted making payments to AUC, FARC, and other Colombian terrorist groups in order to protect its personnel and properties in banana producing areas. In addition to admissions made by Chiquita as part of its plea agreement, the ATS complaint alleges that Chiquita used its private ports and vessels to directly smuggle arms and munitions into Colombia, and to smuggle cocaine out. The ATA complaint alleges that support to FARC was used to limit the power of trade unions, thereby giving Chiquita a competitive advantage in labor costs.

The ATS complaint itemizes a total of 655 AUC-caused deaths or injuries that occurred between August 1990 and December 2007. Most of the plaintiffs are the legal heirs of individuals who were killed or “went missing,” and some are heirs to more than one victim. Fourteen plaintiffs are themselves survivors of torture. The complaint lists nine causes of action, including engaging in terrorism and/or providing material support to a terrorist organization, crimes against humanity, extrajudicial killing and torture, and wrongful death. The ATS complaint asserts that at least fourteen international laws, treaties, and norms were violated.

The ATA complaint relates to FARC kidnapping and murdering five U.S. citizen missionaries in 1993 and 1994. It lists twenty-four causes of action, including claims for wrongful death, aiding and abetting false imprisonment, and intentional and negligent infliction of emotional distress.

Both complaints are pled with gruesome particularity. For example, the ATS complaint recounts the AUC torture and execution of 36 people in the village of El Salado. Two other massacres of village civilians are also described. The FARC kidnapping of each missionary is reported in the ATA complaint in minute-by-minute detail up to the moment when the men are taken to the jungle and never seen again.

The ATS complaint ends with a demand for trial by jury, and for compensatory and punitive damages totaling more than twelve and a half billion dollars, along with interest, costs, and disbursements. The ATA claim does not name an amount, but prays for compensatory and punitive damages and attorney’s fees.

Chiquita has filed a motion to dismiss the ATS claim on the basis that material support of terrorism is not actionable under the statute. Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), requires that the offending behavior be clearly and unequivocally denounced under the rule of international law to qualify as actionable under ATS. Chiquita argues that plaintiffs have not asserted that the international community has denounced material support of terrorism to the requisite degree, and that the international community has in fact not done so.

The primary materials for this post are available on the DU Corporate Governance Website.