On The Case

Chiquita must face jury in Colombian terror-funding case - Miami judge

(Reuters) - In a sweeping summary judgment opinion issued Wednesday, U.S. District Judge Kenneth Marra of West Palm Beach, Florida, rejected Chiquita’s attempt to head off a jury trial of claims the company is liable under the Anti-Terrorism Act for the deaths of six Americans killed by the Colombian paramilitary group Fuerzas Armadas Revolucionarias de Colombia (FARC).

Judge Marra’s ruling means Chiquita is facing a Feb. 5 trial date in the long-running case, which is part of consolidated litigation by U.S. citizens and foreign nationals over Chiquita’s payments to Colombian paramilitary groups. If the trial takes place as scheduled, it will be the first in the consolidated Chiquita litigation – and the first Anti-Terrorism Act trial against a U.S. corporation.

The plaintiffs who won Wednesday’s summary judgment ruling are family members or representatives of six Americans whom FARC kidnapped and killed in the 1990s, five of them Christian missionaries and the sixth a geologist. The suits accuse Chiquita of providing more than $220,000 in material support to FARC from 1989 to 1999, in payments averaging $32,000 a year. The U.S. government designated FARC as a foreign terrorist organization in 1997. Chiquita pleaded guilty in 2007 to engaging in transactions with a different Colombian designated terror group and agreed to pay a $25 million criminal fine.

Chiquita has long portrayed itself, as Judge Marra explained, as a victim of extortion by FARC and other Colombian guerrilla outfits. The company contends it only agreed to make payments to the groups under duress, fearing attacks on workers and infrastructure at banana plantations operated by Chiquita’s Colombian subsidiary. Judge Marra quoted a response from Chiquita lawyer Eric Holder of Covington & Burling (and future attorney general) to the Justice Department’s 2007 assertion that Chiquita’s money helped buy the weapons and ammunition Colombian guerrillas used to kill innocent victims: “The company quote, ‘funded terrorism.’ I would agree with that. Yes, in the same way that an extortion victim funds the mafia,” Holder said. “That money that is extorted from the company and goes to (designated terror groups) is not something that was willingly given. It was given at the barrel of a gun and threats.”

In the ATA case before Judge Marra, Chiquita’s extortion defense translated into legal arguments in a motion for summary judgment that, as a matter of law, the company cannot be held responsible because it did not intend its payments to FARC to facilitate acts of terrorism and because there’s not a clear link between its payments and FARC’s murders. Chiquita’s lawyers at Covington & Burling and Jones Foster Johnston & Stubbs argued that there’s no evidence supporting claims that Chiquita did anything but give in to FARC’s extortionate demands. (After Chiquita's summary judgment brief, Blank Rome took over the company's defense. Blank Rome partner Michael Cioffi argued Chiquita's summary judgment case to Judge Marra.)

Judge Marra ruled that a reasonable jury could conclude otherwise. “Plaintiffs allege that Chiquita continuously paid substantial sums of money to the FARC over a nine-year time span, knowing before and during that time of the FARC’s notoriety for extreme violence, its antagonism toward U.S. interests in Colombia, and its targeting of U.S. nationals for ransom kidnappings and murder, including two of the … missionaries involved in this case,” he wrote. “These allegations support a reasonable inference that Chiquita knew the money it paid the FARC ‘would be used … in preparation for’ or to ‘carry out’ terrorism related crimes, including ransom kidnappings and killings of U.S. nationals in Colombia.” (He did grant Chiquita summary judgment on an alternative theory that the company violated the ATA by engaging in a murder conspiracy.)

The judge said it will be up to a jury to decide whether Chiquita’s payments were a substantial factor in FARC’s operations, considering that the group was awash in cash in the late 1990s. Jurors will also have to decide the factual question of whether Chiquita could have foreseen “that funneling money to … FARC would predictably enhance and facilitate its ability to perpetrate such attacks, including those on plaintiffs’ decedents.”

Chiquita, meanwhile, cannot assert as an affirmative defense that it was acting under duress. Judge Marra granted summary judgment to the plaintiffs on that defense, holding that no reasonable juror could conclude the company acted under an imminent threat of death or serious injury in making nearly 60 payments to FARC operatives over the course of nine years. Plaintiffs’ lawyer Jeffrey Talbert of Preti Flaherty Beliveau & Pachios said Chiquita may still argue to the jury that FARC extorted the payments, but the summary judgment ruling means those arguments “may not be legally relevant,” he said.

“This will make jury instructions cleaner,” Talbert said. “It takes an issue off the table.”

Only a settlement, Talbert said, will stop the trial from moving forward next month. Pre-trial evidentiary motions have already been briefed, he said.

Based on Judge Marra’s recitation of the facts, plaintiffs’ lawyers will be able to show jurors incriminating evidence that Chiquita made a calculated business decision to pay off paramilitary groups - instead of working with the Colombian government to oppose their crimes or pulling up stakes in Colombia – and cover up the payments. It’s significant, Talbert said, that much of the evidence comes from Chiquita’s own disclosures in the U.S. government investigation of its payments to Colombian paramilitary groups.

In addition to Preti Flaherty, plaintiffs are represented by Osen LLC, which argued the summary judgment motion before Judge Marra, Podhurst Orseck, Hagens Berman Sobol Shapiro, Kohn Swift & Graf and Von Briesen & Roper.

I emailed Chiquita and Chiquita lawyers John Hall and Jonathan Sperling of Covington for comment on Judge Marra’s decision. None got back to me.

This post has been updated to include Chiquita’s new counsel and to clarify comment from plaintiffs lawyer Talbert.