Appeals Court Derails Massive Chiquita Alien Tort Case

Appeals Court Derails Massive Chiquita Alien Tort Case Fernando Stankuns de Paula Figueiredo / Flickr

In the latest ruling on the ever-narrowing scope of the Alien Tort Statute, an appeals court has dismissed long-standing claims that Chiquita Brands International Inc. facilitated war crimes by paramilitary groups in Colombia.

A panel of the U.S. Court of Appeals for the Eleventh Circuit held 2-1 on Thursday that it doesn’t have jurisdiction over consolidated lawsuits filed against Chiquita by thousands of Colombians who lost relatives in that country’s civil war. The majority concluded that the human rights abuses at issue occurred outside the U.S., putting the claims beyond the court’s reach under the U.S. Supreme Court’s 2013 decision in Kiobel v. Royal Dutch Petroleum.

The ruling follows an April 24 oral argument that pitted Chiquita outside counsel John Hall of Covington & Burling against Paul Hoffman of Schonbrun De Simone Seplow Harris & Hoffman. Hoffman is a leading figure in alien tort litigation and the lawyer who argued Kiobel at the Supreme Court.

In 2003 the head of Chiquita’s audit committee approached the U.S. Department of Justice with an admission that the company had paid a right-wing militia group to protect its workers. The U.S. government has designated the group as a terrorist organization, citing a history of murder, torture and drug trafficking. In 2007 Chiquita paid a $25 million criminal fine and pleaded guilty to one count of engaging in transactions with a terrorist group.

Meanwhile, Colombians targeted Chiquita under the ATS, a statute enacted more than 200 years ago that allows aliens to sue in the U.S. over acts that violate international law. The legal lineup for the plaintiffs includes prominent human rights lawyers Hoffman and Terry Collingsworth of Conrad & Scherer as well as Milberg, Boies, Schiller & Flexner and Cohen Milstein Sellers & Toll. The lawsuits were consolidated into multidistrict litigation before U.S. District Judge Kenneth Marra in West Palm Beach, Fla.

The plaintiffs scored an important victory in 2011, when Marra ruled that they’d pleaded a viable claim under the ATS. Marra allowed Chiquita to immediately appeal his order to the Eleventh Circuit, however, acknowledging that the case involved novel issues of federal law.

While the appeal was pending, the U.S. Supreme Court ruled in Kiobel that there is a strong presumption against the ATS applying to overseas conduct. In a silver lining for plaintiffs, the court left the door open to the extraterritorial application of the statute for claims that “touch and concern the territory of the United States.”

At oral argument, Hoffman asserted that even post-Kiobel there is jurisdiction over Chiquita because its leaders made payments and weapons transfers from their offices in the U.S. “If this one’s not OK, then there are no extraterritorial cases,” Hoffman said.

The Eleventh Circuit rejected Hoffman’s argument on Thursday. The majority found that the focus should be on the underlying tortious conduct, which involved acts of Colombian paramilitaries against Colombian civilians that occurred in Colombia.

Hoffman said in a statement that he’s disappointed with the ruling. “When a U.S. company funds killers that our government has designated to be a terrorist organization, in violation of U.S. criminal law, and then pulls all its assets from the foreign country where the terrorists operate, it’s clearly the business of the United States,” he said. “What kind of stronger connection to the U.S. could you possibly need?”

In a statement of his own, Covington’s Hall said the company is gratified that the court “faithfully followed Kiobel and held that the Alien Tort Statute doesn’t confer jurisdiction over these plainly extraterritorial claims.” He also said that plaintiffs lawyers have misrepresented Chiquita’s guilty plea, “trying to make it appear that Chiquita’s subsidiary was a willful financier of terrorism instead of the extortion victim that it was.”

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