Unocal Must Face Abuse Suit

Published by MAC on 2004-09-15

Unocal Must Face Abuse Suit

By Lisa Girion, Times

September 15, 2004

A Los Angeles County Superior Court judge denied a motion by Unocal Corp. to dismiss a long-running human rights lawsuit Tuesday, apparently clearing the way for a jury trial in the case of Myanmar refugees who allegedly suffered abuses at the hands of government soldiers guarding a Unocal pipeline.

In an eight-page ruling, Judge Victoria Gerrard Chaney agreed with the plaintiffs that El Segundo-based Unocal's liability could hinge on whether its subsidiaries acted as its agents on the Myanmar pipeline - and said that was a question a jury must decide.

Chaney had previously scheduled a hearing on Sept. 29 to decide how to proceed with the case.

"This is the moment I've been waiting for," said Dan Stormer, a Pasadena lawyer representing some of the 15 Myanmar plaintiffs. "This means the case will go before a jury, and I think a jury will clobber them for their despicable behavior. This is the ruling that Unocal has feared from the start."

Daniel Petrocelli, Unocal's lawyer, said the company still might move for dismissal on other grounds and might ask an appellate court to review Chaney's decision. But he said if the case were to go to trial, he was confident Unocal would prevail.

Stormer said he believed that the trial could start within five months.

The case is being closely watched by the human rights and business communities. First filed in 1996, it is the most advanced of about two dozen suits in U.S. courts that seek to hold multinational corporations liable for alleged human rights violations committed abroad.

In the Unocal case, 15 Myanmar refugees say that Unocal should be held liable for allegedly looking the other way as soldiers enslaved villagers to clear the path for the $1.2-billion pipeline to transport natural gas off Myanmar's coast to Thailand.

Unocal subsidiaries were partners in the project, along with the French oil company Total and the government of Myanmar, a military junta with a poor human rights record in the nation formerly known as Burma.

The refugees also allege that soldiers guarding the remote jungle pipeline corridor committed murder and rape. Unocal has disputed the allegations, saying the refugees may be confusing conduct along the pipeline with atrocities committed on a separate government railway project.

Unocal says the involvement of its subsidiaries and investment in schools and health clinics have improved the quality of life along the pipeline.

Judge Chaney's ruling came after she found in an earlier bench trial that Unocal could not be held liable for its subsidiaries' pipeline involvement on the theory that the firms were merely fictitious shells, or "alter egos," of the parent corporation.

Lawyers for the plaintiffs then argued that Unocal should face liability because its subsidiaries acted as its agents on the pipeline.

In her ruling Tuesday, Chaney acknowledged that the two theories had much in common, but agreed with the plaintiffs that alter ego and agents are distinct legal concepts. Agency liability, she wrote, is a legal question that is guaranteed a jury trial.

A tandem suit against Unocal over the same set of alleged human rights violations is pending in federal court. The U.S. 9th Circuit Court of Appeals heard arguments more than a year ago over whether the Alien Tort Claims Act, a little-used 1789 law, would allow the refugees a trial in federal court, even though the alleged crimes occurred abroad.

The appellate court is believed to be considering the question in light of a ruling on the Alien Tort Claims Act by the U.S. Supreme Court in a separate case in June.

The nation's high court held that foreigners could file suits in U.S. courts for violations of certain international laws. The alien tort law has been successfully used by Holocaust survivors and relatives of people tortured or killed by dictators or their henchmen.

If the federal case proceeds, Unocal would be the first corporation to be tried for indirect liability in human rights violations under the 215-year-old law.