On June 10, a jury in the Southern District of Florida handed down an unprecedented $38.3 million verdict against Chiquita Brands International, Inc. for its complicity in the murders of eight Colombians by the paramilitary group Autodefensas Unidas de Colombia ("AUC")—a group designated a terrorist organization by the United States. The case involved the application of a longstanding common law concept in a novel context, which will heighten uncertainty for companies implicated in international human rights issues and could change their self-disclosure calculus.
History
Chiquita pled guilty to engaging in transactions with a specially designated global terrorist organization in March 2007, affirmatively disclosing to the Department of Justice that it had made monthly payments for over six years to the AUC after leadership of the terrorist organization conveyed to Chiquita executives that the failure to make such payments would lead to physical harm against Chiquita personnel and property in Colombia.
These payments continued after the AUC was designated as a Foreign Terrorist Organization in 2001 and occurred against the advice of outside counsel. Following the plea, a slew of civil actions was filed against Chiquita by family members of those murdered by the AUC. Thousands of cases against Chiquita were consolidated into ten actions on November 13, 2023; the recent verdict was the first such case to go to trial.
The Rise and Fall of the Alien Tort Statute
Plaintiffs' claims in their initial complaints arose primarily under the Alien Tort Statute ("ATS"), 28 U.S.C. § 1350, passed as part of the Judiciary Act of 1789. The ATS grants jurisdiction in the United States federal courts over a civil action brought by a non-citizen for a tort "committed in violation of the law of nations or a treaty of the United States." Beginning in the 1980s and 90s, the ATS began to be used by foreign nationals to seek redress in American courts for injuries caused by human rights offenses or acts of terrorism.
The ATS, once nearly dormant, was rejuvenated by the landmark case Filártiga v. Peña-Irala, 630 F.2d 876 (2d Cir. 1980). In Filártiga, Paraguayan citizens Joel and Dolly Filártiga brought a claim under the ATS against former Paraguayan official Americo Peña-Irala, who kidnapped, tortured, and murdered their son. The Second Circuit, ruling in favor of the Filártigas, held that federal courts have jurisdiction under the ATS for recognized violations of international law such as torture, offering an avenue for redress irrespective of the nationalities of the defendant or plaintiff or location of the crime, so long as the alleged wrongdoer is served in the United States.
The Second Circuit reasoned, in part, that allowing such suits to be brought in federal court in the United States under the ATS was consistent with the "transitory tort" doctrine ("TTD"), under which a tort committed in one jurisdiction can be adjudicated in the courts of another jurisdiction where the defendant is subject to suit.
Filártiga led to a flurry of ATS litigation. Throughout the 1980s and 1990s, cases brought under the ATS were primarily against foreign officials or individuals who were alleged to have committed war crimes and other human rights violations, including Paul v. Avril, 901 F. Supp. 330 (S.D. Fla. 1994) (upholding damages against Haitian military ruler for torture and false imprisonment), Xuncax v. Gramajo, 886 F. Supp. 162 (D. Mass. 1995) (awarding damages against former Guatemalan Minister of Defense for human rights violations), and Kadic v. Karad~ic, 70 F.3d 232 (2d Cir. 1995) (holding that a non-state actor could be held liable for allegations of genocide, torture, and war crimes in Bosnia).
However, the Supreme Court stepped in and cabined the reach of the ATS in Sosa v. Alvarez-Machain, 642 U.S. 692 (2004). In that case—decided 30 years after Filártiga—the Supreme Court limited federal jurisdiction under the ATS for claims analogous to three eighteenth-century international law torts: violation of safe conducts, infringement of the rights of ambassadors, and piracy. Sosa marked the beginning of a series of rulings in which the Supreme Court curtailed the reach of the ATS.
In 2013, the Supreme Court again restricted ATS claims in Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013), holding that the general presumption against extraterritorial application of U.S. laws extended to claims asserted under the ATS. Similarly, in 2018, the Supreme Court held in Jesner v. Arab Bank, PLC, 584 U.S. 241 (2018), that foreign corporations could not be sued under the ATS.
Then, in 2021, the Supreme Court held in Nestlé USA, Inc. v. Doe, 598 U.S. 623 (2021), that while the ATS does apply to domestic corporations to the same extent as natural persons, there must be a "sufficient connection" between the alleged tort and the U.S.-based conduct to sustain ATS jurisdiction.
Mere decision-making from within U.S. headquarters is often too "common" or "generic" to satisfy this requirement. The combined effect of these decisions was to severely limit the availability of ATS causes of action to potential plaintiffs.
The Opportunities and Challenges of the Transitory Tort Doctrine
As the Supreme Court has limited the potential contexts in which the ATS may be applied, plaintiffs seeking to use U.S. federal courts for liability for international offenses have been forced to explore alternative theories, including reviving old ones that had fallen into disuse. The Chiquita plaintiffs chose also to bring claims under the transitory tort doctrine, which holds that an alleged tortfeasor can be held responsible for a past tort wherever they go.
While the doctrine is old, tracing its origins to Mostyn v. Fabrigas, an English law case from 1774, the Chiquita case represents a relatively novel usage of the theory to hold an American corporation liable for international human rights violations under foreign law. This strategy may become a roadmap for future international plaintiffs seeking similar redress in American courts, replacing previously viable ATS claims that are now restricted by Kiobel, Jesner, and Nestlé.
While there are some similarities between ATS and TTD claims, a TTD claim involves a level of complexity that is absent in ATS cases. This is because cases brought under TTD apply the law of the jurisdiction the tort was committed in—here, Colombia—rather than American law. Application of another country's law often requires additional expert opinions and presents difficulty for American juries unfamiliar with the other jurisdiction's legal concepts. This added level of complexity not only increases the number of resources needed to conduct a trial, but also increases unpredictability in the outcome due to inconsistencies across countries' tort laws.
For example, Chiquita's liability under Colombian law is potentially broader in some respects than American tort law. Here, plaintiffs contend that the conduct at issue would potentially give rise to liability under Articles 2341 or 2356 of the Colombian Civil Code.
Article 2341, titled "Extra-contractual Liability," states that "whoever commits a crime or fault that inflicts damage on another is obligated to provide compensation, without prejudice to the criminal penalty imposed by the law for the fault or crime committed." Article 2356, "Responsibility for Malice or Negligence," states that "as a general rule, all damage that can be attributed to malice or neglect of another person must be repaired by said person."
Another hurdle for plaintiffs' ability to pursue TTD claims is the possibility of a dismissal for forum non conveniens. Chiquita filed its first motion to dismiss based on the doctrine of forum non conveniens, arguing that (i) Colombian courts were available and adequate, (ii) the private and public interest factors support dismissal, and (iii) no plaintiff made a showing of risk to personal safety if the case was adjudicated in Colombia.
The Court ultimately denied Chiquita's motion to dismiss. While the Court agreed that Colombia was an available forum, it found that the forum was inadequate because the plaintiffs could face harm if they were to bring the case in Colombia. Due to the plaintiffs' potential physical safety concerns, Chiquita failed to meet the significant burden of persuading the Court to move the litigation to Columbia.
The Verdict
The jury found that the AUC had caused the deaths of the named victims and that Chiquita, in providing funding to the AUC, had violated Colombian law by (1) failing to act as a reasonable businessperson under the circumstances, (2) knowingly providing substantial assistance to the group to a degree sufficient to create a foreseeable risk to others, (3) effecting a hazardous activity that posed increased risk to members of the community, and (4) providing substantial assistance to the group to a degree sufficient to create a foreseeable risk of harm to others.
The jury also found that Chiquita failed to prove that its actions satisfied the defense of duress, and awarded $38.3 million to plaintiffs. Chiquita has announced its intention to appeal, with a second trial of consolidated plaintiffs set to commence on July 15.
Implications and Recommendations
Using civil lawsuits to enforce international human rights law is an evolving enterprise, as creative plaintiffs are undeterred by court rulings cabining such cases. As the ATS has been narrowed in its reach, plaintiffs' attorneys are now turning to the TTD to litigate these claims.
In one sense, this brings us full circle, as the now superseded Filártiga decision had upheld ATS jurisdiction in part based on the history of TTD. Under the TTD, American judges are now confronted with the challenging task of interpreting laws from non-American legal contexts.
For example, Colombian law considers standing questions in connection with the awarding of damages, rather than the actual ability to bring a claim. American judges may have difficulty applying this unfamiliar tort standard—among innumerable other novel issues in foreign law—thereby creating increased unpredictability for corporate defendants.
This landmark verdict is a cautionary tale against letting a case with novel legal theories and allegations ripped from the headlines go to a jury. The eye-popping sums awarded by the jury may trigger additional civil lawsuits from plaintiff firms against companies or firms that have pled guilty to environmental crimes, forced labor violations, the Foreign Corrupt Practices Act, or other statutes protective of human rights. The evolving risk may also change companies' assessments of the risks associated with self-disclosure to the government or at least the manner in which such self-disclosures are made.
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The authors extend their thanks to associate Tram Tran for her assistance.
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