Federal Courts Dismiss Workers' Case

by Paul Wolf, World War 4 Report

On August 11, 2009, the Court of Appeals for the 11th Circuit in Atlanta affirmed the dismissal of a case against the Coca-Cola Company and its Colombian subsidiaries, brought by a Colombian labor union and several of the union's leaders. The plaintiffs alleged that Coca Cola and its local bottlers collaborated with the Autodefensas Unidas de Colombia (AUC), a right-wing terror organization, to torture and murder the unionists, in violation of international law. The lawsuit was brought suit under the Alien Tort Claims (ATS) and Torture Victim Protection (TVPA) Acts.

The case is noteworthy, not only because Coke has been the target of boycotts and protests in relation to its labor practices, but also because the decision itself helps clarify a particularly muddy and controversial area of law. In recent years, liberal activists have sought to hold US corporations liable in US courts for their actions overseas, which either constitute war crimes, or some other conduct universally prohibited under international law.

While the outcome may be disappointing, once the details are understood, it is hardly surprising, and should not be seen as a setback for advocates of corporate responsibility. The Coke case was really a stretch. The plaintiffs did not allege that Coca-Cola USA was directly responsible for any of the murders. Instead, liability was premised on a complex chain of relationships. In the words of the Court:

Plaintiffs attempt to connect the Coca-Cola Defendants to the local facilities’ management through a series of agency and alter ego relationships. For example, in the [Isidro Segundo] Gil case, the plaintiffs' layered theory of agency and alter ego liability is as follows: the bottling facility, Bebidas [y Alimentos, in Carepa, Antioquia], is responsible for the acts of its employees, including conspiring with local paramilitaries to rid the facility of unions. Bebidas, in turn, is an alter ego or agent of Richard Kirby, Bebidas' owner and manager, such that Kirby is liable for any wrongful conduct by Bebidas employees that resulted in the murder of Gil. Bebidas and Kirby, in turn, are the alter egos or agents of Coca-Cola Colombia because Coca-Cola Colombia is responsible for manufacturing and distributing Coca-Cola products to Bebidas and all other bottlers in Colombia. Coca-Cola Colombia, a wholly-owned subsidiary of Coca-Cola USA, in turn, is an alter ego or agent of Coca-Cola USA because Coca-Cola Colombia is under the management, control, and direction of Coca-Cola USA to the extent that its separateness is illusory.

With such a convoluted and indirect theory of liability, it's perhaps unsurprising that the court dismissed the claims against Coca-Cola USA. The court found that the parent company did not have the requisite control over its Colombian counterparts to be held liable for theirs acts. Then, in a subsequent decision, the court found the allegations of conspiracy between the bottlers and the AUC to be insufficient, and dismissed the case entirely.

The plaintiffs appealed, and the Court of Appeals affirmed the dismissal of the ATS and TVPA claims. First, it considered whether the Colombian paramilitaries (AUC) could be considered agents of the Colombian state. State action is required for torture (TVPA) claims, and for ATS claims that are not closely related to a war (i.e., are not "war crimes"). The court found the plaintiffs contention that the "regular military and the civil government authorities in Colombia tolerate the paramilitaries, allow them to operate, and often cooperate, protect and/or work in concert with them" insufficient to transform the paramilitaries into "state actors." Relying on the Supreme Court's recent decisions in the Twombly and Iqbal cases, which have raised the bar to sue in federal court, the Court of Appeals rejected the allegations as being without factual support and lacking in detail. This is unfortunate, since the relationship between the Colombian government and the AUC is now the subject of numerous legal proceedings in Colombia. In the last two years, dozens of legislators and military officers have been prosecuted for supporting the AUC. In fact, one of Coke's bottlers is located almost directly across the street from the Colombian army's notorious 17th Brigade headquarters in Carepa. General Rito del Rio Alejo, who commanded this brigade at the height of the AUC's reign of terror, is currently in the brig awaiting his trial. But because of the particular way the relationship between the government and AUC was described in the Coke case, the TVPA and non-war-crime ATS claims were dismissed for lack of state action.

The court then evaluated the plaintiffs' alternative theory that the murders did constitute war crimes. War crimes, unlike other violations of international law, can be committed by state actors and non-state actors alike. The court rejected the plaintiff's war crimes claims for other reasons, though. According to the court, the plaintiffs had argued that it was sufficient for the purposes of ATS jurisdiction that the crime merely occur during an armed civil conflict. "In this case there is no suggestion the plaintiffs' murder and torture was perpetrated because of the ongoing civil war or in the course of civil war clashes," wrote Judge Black in the decision. "The civil war provided the background for the unfortunate events that unfolded, but the civil war did not precipitate the violence that befell the plaintiffs." In other words, the court considered the company's alleged murder of its unionists to have been a crime committed for its own personal reasons, rather than as part of a war. This is also unfortunate, because although Coke may have had its own reasons to commit the murders (if Coke did in fact order them), the murders do fit into a widespread pattern in Colombia. In Colombia, guerrillas and their rivals battle for union influence and control, and the murder of union leaders is no different from the murder of city councilmen and business leaders, who are all prime targets for assassination in Colombia's dirty war.

Finally, the plaintiffs' conspiracy claims were dismissed for vagueness and lack of factual support. "The scope of the conspiracy and its participants are undefined," the court held, and "plaintiffs' attenuated chain of conspiracy fails to nudge their claims across the line from conceivable to plausible." This again was in reference to the Iqbal and Twombly decisions, and is more indicative of an overall trend in conservativism in the Supreme Court, rather than hostility towards international cases.

The Coca-Cola case, then, stands as a benchmark for the factual basis needed to sue a corporation for war crimes or other violations of international law committed abroad. It is not enough that the corporation takes advantage of a lawless situation to murder its enemies, nor is it enough to say, without proof, that the foreign government tolerates or encourages the lawlessness. Moreover, Coke was a tough case from the start. The long and complex chain of liability proposed by the Coke plaintiffs would be hard to prove even if the case was a domestic one. Taken with the heightened pleading standard articulated in Twombly and Iqbal, a plaintiff really needs to have all his ducks in a row before trying to bring a case like this into court.

The death of the "Killer Coke" case may come as a disappointment to those concerned about corporate responsibility, or about the astronomically high murder rate of trade unionists in Colombia. However, this case was dismissed because of its own idiosyncrasies, with a good measure of bad luck thrown in. Had the Coke plaintiffs been able to predict the Supreme Court's heightened pleading standard, and had the plaintiffs been a little more aggressive in alleging that the murders were part of a broad counterinsurgency campaign to rid Colombian labor unions of guerrilla influence, Coke might very well be preparing for a gruesome trial. Not to mention the fact that anyone involved in these kinds of incidents could potentially face criminal charges, particularly in Colombia, where the extradition of drug traffickers to the US is such a politically charged issue. The lesson, then, is the same. Corporations doing business in war zones are not entitled to play by the local rules.

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Paul Wolf is a lawyer in Washington, DC practicing international human rights law.

For more on Alien Tort Claims Act:

Federal court rules Iraq murder case can proceed against Blackwater
World War 4 Report, Oct. 25, 2009

For more on Coca-Cola's crimes in Colombia:

Colombia: para scandal threatens trade deal
World War 4 Report, April 20, 2007

For more on litigation against corporate criminals in Colombia:

Colombia: lawsuit accuses Dole of funding paramilitaries
World War 4 Report, May 27, 2009

For more on the grisly career of Gen. Rito Alejo del Rio:

Lands cleansed by paramilitaries returned to Afro-Colombians
World War 4 Report, March 24, 2009

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Special to World War 4 Report, November 1, 2009
Reprinting permissible with attribution