Chiquita Wins Dismissal of U.S. Suits on Colombia Torture

Chiquita Brands International Inc., the banana label owner that in 2007 pleaded guilty to making payments to Colombian paramilitary groups, won dismissal of U.S. lawsuits filed by thousands of Colombians who claim they or their relatives were tortured or killed by the militias.

A federal appeals court in Atlanta yesterday overturned a lower court ruling and threw out several consolidated cases, saying in a 2-1 decision that claims accusing Chiquita of liability for the violence don’t fall within U.S. court jurisdiction.

“The torture, if the allegations are taken as true, occurred outside the territorial jurisdiction of the United States,” the majority wrote. “Noble goals cannot expand the jurisdiction of the court.”

The Cincinnati-based company was fined $25 million by the U.S. after pleading guilty in March 2007 to engaging in transactions with terrorists by paying Colombian militias $1.7 million from 1997 to 2004. No executives were charged under the deal, which was reached when Chiquita was represented by then-Covington & Burling LLP lawyer Eric Holder, now the U.S. attorney general.

The families claim Chiquita provided money, weapons, ammunition and transportation to two armed groups to let the company operate in the region. The groups subsequently killed locals who opposed them or didn’t fall in line, they said.

‘Protect Employees’

Chiquita only paid the militias to protect its employees, and the lawsuits never should have been filed, Ed Loyd, a spokesman for the company, said in an e-mail yesterday.

“The decision reinforces what Chiquita has maintained from the beginning -- that Chiquita is not responsible for the tragic violence that has plagued Colombia,” he said.

More than 50 Chiquita employees were killed by militia, including in a 1995 incident in which a company bus was stopped and all 28 workers inside were massacred, Loyd said.

“The threat was real and we were forced to make the extortion payments, solely to protect the lives of our employees,” Loyd said.

Alien Tort

The lawsuits were filed under the Torture Victims Protection Act and the Alien Tort Statute, a U.S. law that lets non-U.S. citizens sue American companies in federal court over alleged abuses abroad. Recent U.S. Supreme Court rulings have narrowed how the laws can be applied.

The appeals court seized on technicalities from the Supreme Court cases, and painted the Chiquita cases “with a broad brush,” Jonathan Reiter, a lawyer for about 1,000 families in the case, said in a phone interview.

“The critical elements” of the allegations occurred in the U.S., he said. “The entire thing was orchestrated here.”

Reiter said he may ask for a review by the appeals court’s full panel.

U.S. District Judge Kenneth Marra in West Palm Beach, Florida, had denied Chiquita’s motion to dismiss the claims in June 2011. The civil suits, which were joined into a single case, sought compensation for the victims.

Unionists Targeted

The complaints consolidated before Marra covered “several thousand” plaintiffs alleging their family members were killed or tortured by the paramilitary groups in Colombia’s banana-growing regions. The militias targeted trade unionists and leftist activists, Marra said at the time.

Chiquita’s earlier guilty plea related to payments to the right-wing paramilitary group United Self Defense Forces of Colombia, or AUC. The company was also accused of supporting the left-wing Revolutionary Armed Forces of Colombia, or FARC, from 1989 to about 1997.

AUC was FARC’s main enemy and the groups traded control of the region where a Chiquita subsidiary operated at the time. The cases include claims Chiquita supported the terrorists financially and by transporting weapons and drugs.

Chiquita in 2010 reached a settlement with investors who sued the company over the illegal payments.

In its ruling, the appeals court said Chiquita isn’t a “natural person” as required under the Torture Victims Protection Act, while “all the relevant conduct” took place outside the U.S., prohibiting claims under the Alien Tort Statute.

“The real problem here is for these families in Colombia who were victimized -- the door has now been shut for achieving any form of justice in an American court, at least for the time being,” Reiter said.

The case is Cardona v. Chiquita, 12-14898, U.S. Court of Appeals for the 11th Circuit (Atlanta).

(A previous version of this story corrected Colombia spelling.)

(Updates with possible appeal in 13th paragraph.)
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