CHARLOTTE, N.C. -- More than a year after Chiquita Brands International moved to Charlotte, a lawsuit accusing the banana company of financing the killing of thousands of Colombians through its payments to guerrilla fighters still hangs over Chiquita’s head.
The plaintiffs, more than 4,000 relatives of Colombian victims, are represented by American lawyers. The lawsuits were combined in federal court in Florida in 2008, and attorneys say they’re seeking potentially billions of dollars worth of penalties.
“The significance and magnitude of the claims that are pending against Chiquita are significant enough to threaten the survival of the company,” said Jack Scarola, a Florida-based attorney whose firm represents about 500 of the Colombian plaintiffs.
Chiquita has said for years that the payments were extortion money and intended to protect workers. The company is seeking to have the lawsuit dismissed. The case is currently in the 11th Circuit Court of Appeals in Atlanta, and though there’s no date set for a ruling, attorneys familiar with the case said the court could rule later this year.
The lawsuit has dogged Chiquita for more than five years, even as the company attempts to complete a turnaround and return to growth and stronger profits.
“Chiquita itself was a target in the Colombian conflict; its Colombian subsidiary was extorted and threatened, and dozens of employees were murdered indiscriminately by Colombian guerrillas and paramilitaries alike,” said Ed Loyd, a Chiquita spokesman, in a statement.
In response to Scarola’s comments about the company’s future being threatened, Loyd said: “It is appalling that a company that has been targeted by guerrilla and paramilitary groups for extortion to prevent the additional loss of life of its employees is subjected to these types of baseless claims and statements.”
Chiquita agreed to pay a $25 million fine in 2007, after voluntarily disclosing to the U.S. Department of Justice that it had paid more than $1.7 million to the right-wing United Self-Defense Forces of Colombia — classified as a terrorist group by the U.S. — from 1997 to 2004. The group is known as AUC, by its Spanish initials. Chiquita has since sold its Colombian subsidiary.
Now, Chiquita is asking the 11th Circuit dismiss the case because the company says the plaintiffs can’t tie Chiquita to each murder or act of violence. The fact that the company made payments to paramilitaries isn’t sufficient to make it liable for the killings, Chiquita said. The company also said a recent Supreme Court decision in an unrelated case set a higher standard for whether foreign citizens’ cases about U.S. companies’ actions abroad can be heard in U.S. courts.
“The U.S. Supreme Court has now made clear in the Kiobel decision that alien tort claims arising from conduct occurring abroad cannot be heard in a U.S. court,” wrote Loyd.
In legal filings, Chiquita’s attorneys have said that the claims are too vague to stand up in court. Many victims are identified only by pseudonyms. And the company says there isn’t enough evidence to tie it to specific killings.
“There are no allegations linking Chiquita to any of the incidents aside from conclusory assertions that the crimes were committed, for example, ‘by the AUC’ and that Chiquita is responsible for the crimes based on its ‘support of the AUC,’” the company’s attorneys wrote.
Scarola said the company is trying to delay the case on procedural grounds.
“They are fighting a desperate procedural battle to keep these issues from ever getting to the jury,” said Scarola.
As the lawsuit wends its way through the federal court system, Chiquita is moving ahead with its restructuring plan under CEO Ed Lonergan. The company is seeking to cut costs as it refocuses around its core business of bananas and salads, and has shed many of its other fruit product lines.
Chiquita, which employs more than 300 uptown, was lured to Charlotte in part by $22 million worth of state and local incentives.
In its most recent quarter, Chiquita said in August that its profits increased five-fold, to $31 million, while sales fell 2.5 percent from last year, to $812 million.
‘It is still horrible’
The paramilitary groups brutalized workers and helped keep labor unions out of the banana fields, the plaintiffs allege.
Some women who lost relatives to the AUC and are among the plaintiffs in lawsuits against Chiquita agreed to speak by phone recently with The Associated Press from the town of Apartado, Colombia. They spoke on condition that their names not be used because they fear retribution from former paramilitary members, many of whom still live in that area and have powerful political connections.
One of the women, a 48-year-old who makes a small income sitting for a neighbor’s baby, told the AP paramilitary troops descended on her home in 2000 while her husband and a friend were working in their garden. The troops requested identification papers and demanded to know whether there were weapons for the leftist guerrillas hidden in the home. She said they ransacked the home and found none, and she fled with the couple's infant child.
“When he let me go, I ran with my girl and jumped over the (garden) wall. I don’t even know how I did that. I’d never done it before,” the woman told the AP, between sobs.
When she returned to her home with neighbors, she found her husband shot dead on their kitchen floor. Now, she said, the Chiquita lawsuit gives her some hope for justice and a better life for herself and her two children.
Another woman, a 45-year-old single mother of three, makes a living selling lunches from house to house. She told the AP right-wing paramilitary soldiers initially forced her family off their land in 1997, accusing them of being sympathetic to the leftists. Not long after, she said, her 17-year-old brother was brutally beaten and fatally shot.
“It is still horrible for us. My mother died the next year of sadness,” she said. “The bitterness is never erased.”
The Associated Press contributed to this story.