Nov. 20 (Bloomberg) -- Chiquita Brands International Inc.’s bid to stop the U.S. Securities and Exchange Commission from releasing documents on payments to Colombian terrorist groups was thrown out of court.
U.S. District Judge Richard Leon in Washington rejected the company’s argument that the damage it would suffer from disclosure of the records, in a case in Florida connected to the Colombian payments, should bar their release to a public-interest group under the Freedom of Information Act.
“Chiquita’s speculation about potential publicity and its effect on a future jury in the Florida litigation does not satisfy the level of certainty required” to exempt the records from the law, Leon said today in his ruling.
“There can be no doubt that the SEC rationally determined from the record that disclosure of the Chiquita payment documents would not seriously interfere with the fairness of the Florida litigation,” Leon wrote.
Chiquita, based in Charlotte, North Carolina, contended the documents might compromise the impartiality of the Florida court proceedings. The company is fighting multiple suits brought by families claiming relatives were kidnapped and murdered after Chiquita made payments to the United Self Defense Forces of Colombia, or AUC, and other terrorist groups. Complaints from around the U.S are consolidated in a court in Fort Lauderdale.
The Chiquita suit was triggered by a request for the records under FOIA by the Washington-based National Security Archive, a nonprofit group that opposes government secrecy.
Chiquita plans to appeal Leon’s ruling, Ed Loyd, a company spokesman, said in an e-mailed statement.
“The ‘National Security Archive’ is not an independent public interest group,” Loyd said. “It is associated with and is actively assisting the plaintiffs’ lawyers who are involved in trying to extract millions of dollars from Chiquita through litigation.
‘‘Chiquita does not believe that the Archive is entitled to the documents under FOIA and the company will continue to defend against these claims.’’
Chiquita, the owner of the namesake banana brand, was fined $25 million after pleading guilty in March 2007 to engaging in transactions with a terrorist group. It paid AUC militias $1.7 million from 1997 to 2004, prosecutors said.
Michael Evans, a senior analyst for the National Security Archive, said it isn’t a party to the Florida litigation and doesn’t stand to gain anything from its outcome.
‘‘Our interest is in documenting U.S.-Colombian relations, particularly security relations, and we’ve known for a long time that Chiquita is a big part of that story,” Evans said.
“It’s certainly possible, if not likely,” that plaintiffs will look at the records for evidence to support their case, Evans said.
“They’re certainly welcome to do so, and so is Chiquita. We’re an independent nongovernmental research organization,” he said.
The records sought includes “payments to leftist guerrilla groups as well as the right-wing AUC,” Evans said. “It’s perhaps the most important collection of records about corporate ties to terrorism.”
The company has said its employees were victims, and that the actions the company took were motivated to protect the lives of its employees and their families.
The SEC is “pleased with the decision,” John Nester, a commission spokesman, said in an e-mailed statement.
The FOIA case is Chiquita Brands International Inc. v. U.S. Securities and Exchange Commission, 13-cv-00435, U.S. District Court, District of Columbia (Washington).
The Florida litigation is In Re: Chiquita Brands International Inc., Alien Tort Statute and Shareholders Derivative Litigation, 08-md-1916, U.S. District Court, Southern District of Florida (Ft. Lauderdale).
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