John Doe I et al. v. UNOCAL Corp. et al.

Court	Superior Court of California, Country of Los Angeles, United States
Case number	BC 237 980 and BC 237 679
Decision title	Ruling on UNOCAL Defendants' Motion for Judgment
Decision date	14 September 2004
Parties	John Doe I Jane Doe I John Doe II Jane Doe II John Doe III Jane Doe III John Doe IV John Doe V John Doe VI John Doe VII John Doe VIII John Doe IX John Doe X John Doe XI Louisa Benson UNOCAL Corporation Total S.A. John Imle Roger C. Beach
Categories	Crimes against humanity, Human rights violations, Torture
Keywords	accountability (private contractors), crimes against humanity, detention, Forcible transfer, Murder, rape, torture
Links	Ruling on UNOCAL Defendants' Motion for Judgment
Other countries involved	Myanmar

Summary

In 1979, fourteen Burmese villagers filed a complaint against the oil company UNOCAL. They claimed that they suffered abuses including torture and rape during the construction of the Yadana Pipeline. UNOCAL allegedly assisted in the abuses perpetrated by the military government in Rangoon.

The Burmese villagers based their claim on the Alien Tort Claims Act (ATCA), which allows US courts to decide cases in respect of foreign nationals for crimes that occurred outside of the US.

In the particular decision, the Superior Court held that even though one of the theories of the Burmese villagers was refused, the case was not dismissed and as a result, they were allowed to proceed with their further theories. On 14 September 2004, the defendants’ motion for judgment was denied.

Procedural history

In March 1997, the US District Court for the Central District of California agreed to hear the case of fourteen Burmese villagers who had filed a complaint against the – now defunct – oil company, UNOCAL. According to the claim, based on the ATCA, the villagers had suffered abuses including torture and rape during the construction of the Yadana Pipeline. UNOCAL was allegedly complicit in the abuses perpetrated by the military government in Rangoon.

The Court ruled that corporations and their executives could be liable under the ATCA for violations of international law committed abroad, which the US courts had authority to hear. However, the Court found that UNOCAL could not be held liable for the abuses claimed in the suit. On 4 October 2000, the plaintiffs brought a second complaint. The plaintiffs claimed negligent supervision because UNOCAL ‘knew or reasonably should have known that SLORC military... would violate plaintiffs' rights’; violation of Business and Professionals Code § 17200 as a result of UNOCAL’s ‘fraudulent and deceptive practices’; violation of the California Constitution, Art. 1, § 6, which prohibits slavery and involuntary servitude, amongst others.

Nevertheless, following an appeal, the US Court of Appeals for the Ninth Circuit overturned the decision in September 2002, allowing the case to proceed.

In February 2003, the Ninth Circuit Court decided to rehear the appeal before an eleven-judge en banc panel. In late 2003, in the first phase of the trial in state court, Judge Chaney concluded that the UNOCAL subsidiaries involved in the pipeline project and the parent companies had separate personalities. On 14 September 2004, Judge Chaney dismissed the defendants’ motion for judgment. Judge Chaney held that the decision in the first phase of the trial did not preclude the plaintiffs from relying on other theories of liability.

Related developments

After various interim decisions, UNOCAL announced in December 2004 that it would settle the claim out of court, agreeing to provide compensation for the victims. The decision to settle followed the rejection by the District Court of a motion for summary judgment. Under the terms of the settlement, which remain confidential, UNOCAL agreed to provide funds to improve living conditions in the region, in addition to providing compensation.

Legally relevant facts

Neither UIC, UGVL, UIPC, UMOC nor MGTC, the UNOCAL subsidiaries involved in the pipeline project, is an alter-ego company of Unocal Corporation. Based on that finding, Judge Chaney concluded that the parents and the subsidiaries had separate personalities. (See p. 4 of the ‘Ruling on UNOCAL Defendants' Motion for Judgment’, and its reference to p. 31 of the ‘Statement of Decision’).

Core legal questions

Does summary judgment dispose of individual issues? (p. 8)
Is alter ego the only theory under which the owners of a corporation can be held liable for the corporation’s debts? (p. 3)

Specific legal rules and provisions

Alien Tort Statute, Section 1350 of Chapter 28 of the US Code.
Section 14M(a) of the Restatement (Second) of Agency .
Sections 2295, 2307 and 2296 of the California Civil Code.
Section 437c(f) of the California Code of Civil Procedure.

Court's holding and analysis

The Superior Court rejected the UNOCAL Defendants' Motion for Judgment.

The Superior Court held that the fact that the parent and the subsidiary companies were separate entities does not lead to a disposal of the case because there are other theories under which a corporation can be held liable for the corporation’s debt (p. 3). In particular, the Court held that it cannot find that the ‘owner of a corporation can be held liable for the corporation’s debts only when the corporate veil is pierced’ (p. 6).

In addition, the Superior Court held that its summary judgment does not dispose of further claims of the plaintiffs. The reasoning was that a summary judgment disposes of ‘causes of action’ not ‘individual issues’ (p. 8).