Unocal May Be Tried on Abuses, State Court Rules
A state appeals court has cleared the way for Unocal Corp. to face trial in Los Angeles over allegations that it shares responsibility for the murder, rape and enslavement of villagers by troops guarding a pipeline project in Myanmar.
Refugees from the southeast Asian nation formerly known as Burma accused Unocal in a landmark lawsuit of looking the other way while government troops abused villagers who were forced to work on a $1.2-billion natural gas pipeline project built by a consortium that includes the El Segundo-based company.
Superior Court Judge Victoria Chaney ruled last year that Unocal should face trial for so-called vicarious liability. Lawyers for Unocal challenged her ruling, arguing that the case did not belong in a state court because the crimes allegedly were perpetrated by foreign troops outside California.
The 2nd District Court of Appeal denied Unocal’s request in a ruling dated Wednesday, saying only that the company had failed to make a case for preventing a trial.
Lawyers for the plaintiffs said they were encouraged by the ruling.
“That was Unocal’s last hope to avoid trial,” said Katie Redford, a lawyer and co-founder of Earthrights International, a human rights watchdog organization that is backing the suit. “It’s the last obstacle between our clients and trial.”
But Charles Strathman, Unocal’s chief legal officer, said the company would consider filing a new challenge with the California Supreme Court.
“We had doubts as to whether California tort law should apply to actions that occurred entirely outside of the state and whether state court should have jurisdiction over these types of matters,” Strathman said.
Forced labor was legal in Myanmar in the mid-1990s, when the 39-mile natural gas pipeline was laid through a region of farm villages and mountain rain forests. Although the military dictatorship acquiesced to international pressure and banned forced labor in 1999, the practice is believed to be still widespread.
Executives for Unocal have acknowledged that troops did force villagers to carry ammunition and supplies for the military and to perform other labor in the vicinity of the project. But they deny that any of the labor occurred for the project or within a construction corridor over which Western pipeline operators have control. Lawyers for Unocal said the firm had no knowledge of the alleged murder and rapes nor any control over the actions of the troops purported to have committed such crimes.
Because the commercial arm of the military regime is a participant in the pipeline, the plaintiffs argue that Unocal should share liability for the alleged misdeeds of the army, which was expected to safeguard the project.
The refugees first filed suit in federal court seven years ago. U.S. District Judge Ronald S.W. Lew ruled that the evidence suggested Unocal was aware of the military’s abuses. But because the company did not control the troops, Lew ruled that it should not stand trial for liability and dismissed the case.
That allowed the refugees to file a second suit under state law in Superior Court in October 2000.
In September, a three-judge panel of the U.S. 9th Circuit Court of Appeals ruled the federal suit back in. In the majority opinion, the judges decided that the test for liability was whether Unocal knowingly encouraged the alleged abuses. The judges concluded that there was evidence that Unocal met that test and should face trial.
Unocal challenged that decision, and an 11-member panel of the 9th Circuit will hear new arguments in June over whether the company should face a federal trial.