Chiquita Brands International Inc. (CQB), owner of the namesake banana label, failed to halt U.S. lawsuits brought by thousands of Colombians who said they or their relatives were tortured or killed by militias the company paid.
U.S. District Judge Kenneth Marra in West Palm Beach, Florida, today denied Chiquita’s motion to dismiss some of the claims brought under the Alien Tort Statute and the Torture Victim Protection Act. The civil suits, which have been joined into a single case, seek compensation for the victims.
The Cincinnati-based company was fined $25 million by the U.S. after pleading guilty in March 2007 to engaging in transactions with a terrorist group for paying Colombian paramilitary militias $1.7 million from 1997 to 2004. No executives were charged.
The seven complaints consolidated before Marra cover “several thousand” plaintiffs alleging their family members were killed or tortured by Colombian paramilitary groups in banana-growing regions of the country, according to today’s order. The paramilitaries targeted trade unionists and leftist activists, the judge said.
“While the court allowed some claims to move forward, it is important to understand that at this stage of the proceedings, the court is required by law to treat plaintiffs’ outrageous and false allegations as if they were true,” Ed Loyd, a company spokesman, said in an e-mail. “Plaintiffs now have the burden of proving these allegations.”
While dismissing some of the Colombians’ claims, Marra also rejected some of Chiquita’s arguments, including that the case should be dismissed because it could have foreign policy implications. He also rejected Chiquita’s assertion that allowing the claims would give rise to thousands more suits under the Alien Tort Statute.
“Under Chiquita’s argument, an offender who commits a small number of international-law violations would be subject to ATS claims in federal court, while an offender who commits thousands of offenses, thereby making any lawsuit more complex, could escape liability,” he said.
In its statement announcing the 2007 plea, the Justice Department said Chiquita began making payments to a coalition of militias after a meeting in 1997 with the group’s leader, who implied that failure to pay could result in physical harm to people and property at a Chiquita unit in Colombia.
“There is no allegation that Chiquita itself committed any of the crimes perpetrated by the Colombian terrorist groups,” Loyd said in today’s statement. “The only allegation is that Chiquita should be held responsible for these crimes by virtue of the money that it was forced to pay.”
He said the company will defend itself against the remaining claims.
“Chiquita’s already admitted doing what we say they did,” Terry Collingsworth, one of the lead lawyers for the plaintiffs, said after the judge issued the order. The matter will now move toward trial or settlement, Collingsworth said.
Chiquita fell 48 cents, or 3.3 percent, to $14.10 at 2:49 p.m. in New York Stock Exchange composite trading. The shares gained 4 percent this year before today.
The case is In Re: Chiquita Brands International, Inc., Alien Tort Statute and Shareholders Derivative Litigation, 08- 1916, U.S. District Court, Southern District of Florida (Fort Lauderdale).
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