Doing business in conflict zones has always been complicated. Increased litigation has compounded those risks in recent years. A June 2024 federal jury verdict against Chiquita Brands International illustrates the changing legal landscape. The jury in Florida found Chiquita liable for financing Autodefensas Unidas de Colombia (AUC), a Colombian paramilitary group, and awarded a bellwether group of plaintiffs $38.3 million in damages. A second bellwether trial against Chiquita is scheduled for later this year, and thousands of related claims against Chiquita remain pending. Although the Chiquita litigation has spanned almost two decades, this jury verdict represents the first liability determination and paves the way for the second bellwether trial and eventual resolution of all pending claims. As each plaintiff was awarded around $2 million, Chiquita could be facing hundreds of millions of dollars in damages as the broader litigation includes vastly more victims.
The Chiquita verdict is a signal to corporations that U.S. courts may be more willing to find them liable for actions that occurred abroad and that plaintiffs may increasingly choose to file these claims in U.S. courts. In Chiquita, the alleged actions took place in Colombia and the claims at issue were brought under Colombian law, but this is just one example among many. In Kaplan v. Lebanese Canadian Bank, for example, the Second Circuit held that the plaintiffs plausibly pleaded that Lebanese Canadian Bank had aided and abetted acts of international terrorism under the Antiterrorism Act (ATA) by alleging that the bank had processed transactions in Lebanon for individuals closely affiliated with Hezbollah. As companies weigh the risks of doing business abroad and how best to structure their operations, this verdict should be at the forefront of their minds.
Background to the Chiquita Case
In March 2007, Chiquita pled guilty to “engaging in transactions with a specially-designated global terrorist” after it admitted to paying over $1.7 million to the AUC from 1997 to 2004. Chiquita admitted to recording the payments as “security payments,” but it had never received any actual security services in exchange.
After Chiquita pled guilty, hundreds of plaintiffs filed lawsuits in the United States. The plaintiffs are family members of persons killed by the AUC, and they claimed that Chiquita’s material support to the AUC and actions in Colombia constituted torts that gave rise to federal jurisdiction under the Alien Tort Statute (ATS) and the Torture Victim Protection Act (TVPA). The plaintiffs also asserted violations of customary international law, state common law, and Colombian law based on allegations that Chiquita knew or should have known that the AUC was engaging in crimes and human rights violations. As a direct and proximate result of Chiquita’s alleged conduct, the plaintiffs claimed to have suffered harm entitling them to damages.
The panel on multidistrict litigation eventually consolidated the cases in the Southern District of Florida. From 2011 to 2019, plaintiffs filed over 5,000 wrongful death claims under the ATS, TVPA, and the ATA, with some claims going up to the Eleventh Circuit on appeal and others being dismissed or settled. In 2019, over a decade after the initial lawsuits began and with only the Colombian law claims remaining, plaintiffs moved for class certification. The district court declined to certify the class, so plaintiffs filed new lawsuits. Also in 2019, the district court granted summary judgment for Chiquita, holding that the evidence submitted by the plaintiffs was mostly “inadmissible hearsay” or speculative such that even if it was admissible, it would not support the plaintiffs’ claims. In 2022, the Eleventh Circuit partially reversed the district court’s summary judgment in favor of Chiquita, holding that there was enough circumstantial evidence to connect the deaths of the plaintiffs’ relatives to the AUC. The trial was therefore allowed to proceed, and the first bellwether trial began in May 2024.
The Jury Award
On June 10, 2024, the jury reviewed the allegations and analyzed for each plaintiff:
- Whether the AUC killed the plaintiffs’ relatives;
- Whether Chiquita failed to act as a reasonable businessperson under the circumstances;
- Whether Chiquita knowingly provided substantial assistance to the AUC in the form of cash payments;
- Whether Chiquita was coerced into assisting the AUC in some way; and
- The amount in damages.
The jury ultimately found in favor of 8 of the 9 victims, awarding between $2 million and $2.7 million to the families of each victim. The jury found that the plaintiffs proved by a preponderance of the evidence that Chiquita: failed to act as a reasonable businessperson, knowingly provided assistance to the AUC, and that the assistance constituted a hazardous activity that created a foreseeable risk of harm. The second bellwether trial is set to begin on July 15, and there are still thousands of claims pending. Chiquita, however, has already announced that it will appeal the verdict, so it is unclear when, or even if, the plaintiffs will receive compensation.
Key Takeaways
Although the Chiquita verdict concerned only Colombian law claims, at least three U.S. statutes provide bases for aggrieved plaintiffs to bring claims in the U.S. against corporations that are alleged to have aided and abetted international wrongdoing, including terrorism. The ATA provides a legal remedy for American victims killed or injured by international terrorism, creating a private cause of action. The statute also states that American victims injured by terrorism shall receive three times the amount of damages they sustained and the cost of the suit, including attorney’s fees. Similarly, the ATS provides courts with “original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” The TVPA provides that an individual of any foreign nation who (1) subjects an individual to torture or (2) subjects an individual to extrajudicial killing shall be liable for damages.
These statutes are potent tools for persons claiming injury due to wrongful conduct abroad. The 2016 enactment of the Justice Against Sponsors of Terrorism Act added an aiding-and-abetting and conspiracy liability to the ATA, providing litigants with the “broadest possible basis” for relief. This has led to an increase in ATA litigations. And the ATS may enjoy a resurgence after the Ninth Circuit’s decision last summer in Doe I v. Cisco Systems, which held that U.S. corporations—not just natural persons—can be held liable under the ATS, and that those corporations can be liable for “aiding and abetting” human rights abuses even when they did not commit the abuses directly. 73 F.4th 700 (9th Cir. 2023).
For example, a plaintiff just last week filed a case under the ATS in the Western District of Washington. In Jan v. People Media Project, the plaintiff, an Israeli citizen, was kidnapped on October 7 and held for 246 days. He has now sued People Media Project, a US-based news organization, alleging that the organization aided, abetted, and materially supported Hamas and a Hamas operative by employing the operative and providing him with a platform for his views. Cases like these may become more and more common as courts demonstrate a willingness to hear claims brought under the ATA, ATS, or TVPA.
While decided under Colombian law, the Chiquita verdict is relevant to these other claims because: (i) it is the first time that an American jury has held a major U.S. corporation liable for human rights abuses in another country, which may open the door to similar lawsuits filed against corporations operating outside of the U.S.; and (ii) deliberations regarding liability and damages are likely to be similar in an ATA litigation because the jury would be tasked with considering whether the defendant provided knowing and substantial assistance to a terrorist group. Like Chiquita, an ATA case may have hundreds, if not thousands, of plaintiffs suing the same defendant, meaning that jury verdicts of roughly $2 million per plaintiff can easily exceed $1 billion plus in total liability. In fact, ATA liability can be even higher, since the ATA provides for trebling, i.e., the tripling of damages.
As companies continue to work and expand their operations abroad, the Chiquita verdict and other litigations serve as an important reminder of the exposure that corporations may face for their international operations. Companies should therefore review their business practices in foreign jurisdictions and take steps to limit exposure. Good practices will likely include conducting risk assessments, implementing strengthened due diligence procedures, exercising caution when choosing counterparties, and identifying and addressing potential red flags in transactions. Corporations should also be aware that conducting business in particular regions may drastically increase an entity’s likelihood of facing an ATA, ATS, or TVPA litigation. As the Chiquita decision shows, juries in such litigations may award sizable damages awards that might outweigh the benefits of operating in these areas—dramatically altering a corporation’s cost-benefit analysis. Going forward, operating in these regions could expose a company to millions, if not billions, of dollars in damages.
