Tentative Settlement of ATCA Human Rights Suits Against Unocal

INTERNATIONAL LAW AND NONSTATE ACTORS

In December 2004, the parties in long-running federal litigation against Unocal concerning the $1.2 billion Yadana gas pipeline project in Burma (now Myanmar) reached a tentative agreement to settle.1 The agreement came on the eve of arguments in the case before the U.S. Court of Appeals for the Ninth Circuit, sitting en bane.

In 1996, fifteen villagers from the Tenasserim area filed a U.S. federal class action lawsuit against Unocal, Total S.A., and an entity wholly owned by the Burmese government. All of the defendants were involved in a joint venture to extract natural gas from offshore fields and to transport it to Thailand via a 62-kilometer pipeline. The suits, brought under the Alien Tort Claims Act (ATCA),2 alleged that the defendants were responsible for multiple violations of internationally protected human rights, including killings, forced labor, and other serious abuses, perpetrated by the government of Burma/Myanmar in connection with the project. Total and the Burmese entity were dismissed from the litigation. The U.S. district court initially refused to dismiss Unocal, finding that corporations are subject to ATCA claims when they cooperate with governments engaged in human rights violations.3 The court subsequently granted summary judgment for Unocal, however, finding that as a factual matter it was not sufficiently connected with the construction and operation of the project to sustain liability.4

The plaintiffs appealed to the Ninth Circuit Court of Appeals. A three-judge panel ruled that the district court erred in finding that plaintiffs had to show that Unocal controlled the actions of the Burmese military; it was sufficient to show that Unocal knowingly assisted the military in its actions. The Ninth Circuit then decided to rehear the matter en banc. In anticipation of that argument, the U.S. Department of Justice submitted an amicus curiae brief in February 2003, arguing that the Ninth Circuit had erroneously construed the ATCA as affording an implied right of action in addition to conferring jurisdiction.5 (In June 2004, in Sosa v. Alvarez-Machain, the U.S. Supreme Court agreed with the Justice Department view that the ATCA is solely ajurisdictional grant, but disagreed with the department’s contention that only customary law norms accepted and made enforceable by the political branches could provide a cause of action.)6

Unocal released the following statement of the parties regarding the tentative settlement agreement:

The parties to several lawsuits related to Unocal’s energy investment in the Yadana gas pipeline project in Myanmar/Burma announced today that they have reached a settlement in principle of their suits. Although the terms are confidential, the settlement in principle will compensate plaintiffs and provide funds enabling plaintiffs and their representatives to develop programs to improve living conditions, health care and education and protect the rights of people from the pipeline region. These initiatives will provide substantial assistance to people who may have suffered hardships in the region. Unocal reaffirms its principle that the company respects human rights in all of its activities and commits to enhance its educational programs to further this principle. Plaintiffs and their representatives reaffirm their commitment to protecting human rights.7

1 Unocal Settles Rights Suit m Myanmar, N.Y. TIMES, Dec. 14, 2004, at C6; Unocal to Settle Rights Claims, WASH. POST, Dec. 14, 2004, at E2.

2 28 U.S.C. 1350(2000).

3 See William J. Aceves, case Report: Doe v. Unocal, 92 AJIL 309 (1998).

4 Doe v. Unocal Corp., 110 F.Supp.Sd 1294 (C.D. Cal. 2000). On the early phases of the Unocal litigation, see Sean D. Murphy, Contemporary Practice of the United States, 95 AJIL 145 (2001).

5 Sean D. Murphy, Contemporary Practice of the United States, 97 AJIL 703 (2003).

6 Sosa v. Alvarez-Machain, 124 S. Ct. 2739, 2754-55 (2004); see Brad R. Roth, Case Report: Sosa v. Alvarez-Machain; United States v. Alvarez-Machain, 98 AJIL 798 (2004); Sean D. Murphy, Contemporary Practice of the United States, id. at 845, 847.

7 Unocal Press Release, Settlement Reached in Human Rights Lawsuit (Dec. 13, 2004), at .

Copyright American Society of International Law Apr 2005