|Articles||Legal News||Thailand Lawyer||Links||Home|
The general principles of the federal common law of agency have been formulated largely based on the Restatement of Agency. Moriarity v. Gluecker Funeral Home, Ltd., 155 F.3d 859, 866 n. 15 (7th Cir. 1998); Cilecek v. Inova Health Sys. Servs., 115 F.3d 256, 259-60 (4th Cir. 1997). Under those general principles, an agency relationship may be express or implied; in addition, a jury may infer from the factual circumstances that apparent agency authority exists. See Hasbrouck v. Sheet Metal Workers Local 232, 586 F.2d 691, 693 (9th Cir. 1978); see also 3 AM. JUR. 2D AGENCY § 21 (1986) (The manner in which the parties designate the relationship is not controlling, and if an act done by one person in behalf of another is in its essential nature one of agency, the one is the agent of such other notwithstanding he is not so called.(footnote omitted)).
As is true of joint liability principles, agency liability principles are well-established in international law. They are frequently discussed in international legal materials. See, e.g., Case Concerning the Barcelona Traction Power & Light Co. (Bel. v. Spain), 1970 I.C.J. 3, 215 (discussing principal-agent liability as applicable to commercial relationships generally); Application for Review of Judgment No. 333 of the U.N. Administrative Tribunal (Yakimetz Case), May 27, 1987 (applying principal-agent liability to acts of United Nations employees).12 Principal-agent liability is also widely adopted by civil law and other common law systems. See, e.g., Bazley v. Curry, 2 S.C.R. LEXIS 134 (1999) (Canadian Supreme Court statement of vicarious liability principles); CIVIL CODE OF FRANCE, Art. 1384 (1994) ([A person] is liable not only for the damage which he caused by his own act, but also for that which is caused by the act of persons for whom he is responsible, or by things which he has in his keeping.); CIVIL CODE OF GERMANY, § 831 (1975) (A person who employs another to do any work is bound to compensate for any damage which the other unlawfully causes to a third party in the performance of his work.). Thus, the conclusion that plaintiffs agency theory is cognizable under federal common law is further supported by the international legal authorities that establish agency as a general principle of international law.
A factual question requiring trial exists with respect to whether an agency relationship existed between Unocal and the Myanmar military. Some evidence in the record suggests that such a relationship existed. For instance, plaintiffs cite an internal Unocal briefing document regarding the Yadana Project, discussed by the majority, which states that [a]ccording to our contract, the government of Myanmar is responsible for protecting the pipeline. There is military protection for the pipeline and, when we have work to do along the pipeline that requires security, the military people will, as a matter of course, be nearby. They also point to memoranda by various Total and Unocal employees recounting that oil company officials requested specific battalions to perform various tasks, including the construction of helipads for the convenience of corporate executives. Plaintiffs argue that the record supports either an implied or express agency relationship, based on the conduct of the parties. As the majority has also pointed out, the record contains evidence of daily meetings between Total and Unocal executives and Myanmar military commanders, so that the corporations could instruct the military leaders regarding specific security or infrastructure projects that were required for the pipeline construction. Moreover, Unocal stated publicly on several occasions that it controlled the Myanmar militarys actions in connection with the pipeline project. In response to accusations of human rights abuses occurring by the Myanmar military with respect to the Yadana project, Unocal denied the existence of such abuses, and stressed its ability to prevent any wrongdoing due to its control of the military. Unocals alleged actions directing the Myanmar military create a triable question of fact as to whether an agency relationship existed between Unocal and the Myanmar armed forces.
Significantly, there is evidence in the record that Unocal did not simply, by its inaction, take advantage of the routine presence of the Myanmar military in the Tenasserim region. The record indicates that there was in fact little to no rebel activity in the region where the pipeline construction occurred, and that the center of the Myanmar civil war was 150-200 miles distant from the pipeline project. A jury could reasonably conclude that the military was present in Tenasserim not merely to maintain order, as was its function in other parts of the nation. Rather, it could determine that military forces were brought to Tenasserim in order to support the pipeline project, that the military was performing duties for the pipeline project quite distinct from traditional military or state functions, and that it did so at the request of and in close coordination with Unocal and the other private entities. It is not essential that a formal contract have existed between Unocal and the Myanmar military in order for Unocal to be held liable for the governments actions under an agency theory. Nevertheless, should plaintiffs prove their allegation that such a contract existed, a jury might have considerable difficulty in accepting Unocals denial of an agency relationship.
c. Reckless Disregard
Finally, the facts alleged by the plaintiffs, if proved, support a recovery against Unocal under an additional theory, that of the common law theory of recklessness or reckless disregard. Here, plaintiffs allege that Unocal had actual knowledge that the Myanmar military would likely engage in human rights abuses, including forced labor, if it undertook the functions Unocal and the other private parties desired it to perform in connection with the Yadana Pipeline Project. Nevertheless, according to plaintiffs, Unocal recklessly disregarded that known risk, determined to use and in fact did use the services of that military to perform pipeline-related tasks, and thereby set in motion international law abuses that were foreseeable to Unocal. Plaintiffs thus allege that Unocal acted with recklessness, which occurs when a party is aware of (or should be aware of) an unreasonable risk, yet disregards it, thereby leading to harm to another. Farmer v. Brennan, 511 U.S. 825, 836 (1994).
Federal common law contains two variants of the theory of recklessness or reckless disregard. Plaintiffs include both in their complaint, and in my view the record contains evidence sufficient to require trial on both. The first is traditional civillaw recklessness, sometimes referred to as objective recklessness; the Supreme Court has stated that [t]he civil law generally calls a person reckless who acts or (if the person has a duty to act) fails to act in the face of an unjustifiably high risk of harm that is either known or so obvious that it should be known. Farmer, 525 U.S. at 836-37 (citing W. Keeton, D. Dobbs, R. Keeton, & D. Owen, PROSSER AND KEETON ON LAW OF TORTS § 34, pp. 213-214 (5th ed. 1984); RESTATEMENT (SECOND) OF TORTS § 500 (1965)). The second version is subjective recklessness, also referred to as willful recklessness. This doctrine requires actual knowledge of a substantial risk which the defendant subsequently disregards. Ewolski v. City of Brunswick, 287 F.3d 492, 513 (6th Cir. 2002).
The concept that one party may be held liable for a reckless disregard of the welfare of another pervades federal common law and has been applied in a variety of contexts. It is recognized, for instance, in admiralty law cases, see, e.g., Youell v. Exxon Corp., 48 F.3d 105, 110-11 (2d Cir.), vacated on other grounds, 516 U.S. 801 (1995), in cases arising under the Warsaw Convention, Saba v. Compagnie Nationale Air France, 78 F.3d 664, 668-69 (D.C. Cir. 1995), as well as in constitutional tort cases brought pursuant to 42 U.S.C. § 1983. Medina v. City and County of Denver, 960 F.2d 1493, 1496 (10th Cir. 1992). The Supreme Court has also adopted a willful recklessness standard in cases involving deliberate indifference under the Eighth Amendment. Farmer, 525 U.S. at 836 (With deliberate indifference lying somewhere between the poles of negligence at one end and purpose or knowledge at the other, the Courts of Appeals have routinely equated deliberate indifference with recklessness. It is, indeed, fair to say that acting or failing to act with deliberate indifference to a substantial risk of serious harm to a prisoner is the equivalent of recklessly disregarding that risk. (citations omitted)). On a continuum that runs from simple negligence through gross negligence to intentional misconduct, Saba, 78 F.3d at 668, recklessness lies between gross negligence and intentional harm. The common law principle of recklessness has typically been applied to acts by a defendant that directly cause harm to a plaintiff. Nevertheless, I see no reason why the general principle that liability arises for one partys conscious disregard of unreasonable risks to another should not apply when a defendant consciously disregards the risks that arise from its decision to use the services of an entity that it knows or ought to know is likely to cause harm to another party.13
Proof of even willful recklessness does not require proof of intent; it requires only that a defendant have acted in conscious disregard of known dangers. City of Canton v. Harris, 489 U.S. 378, 390 n. 10 (1989). The doctrine of reckless disregard of anothers rights has been well-developed in the § 1983 context; there, courts have held that a plaintiff need not prove that a defendant intended to cause harm to the specific plaintiff. [R]eckless intent does not require that the actor intended to harm a particular individual; reckless intent is established if the actor was aware of a known or obvious risk that was so great that it was highly probable that serious harm would follow and he or she proceeded in conscious and unreasonable disregard of the consequences. Thus, reckless intent involves disregard of a particular risk rather than intent to cause a particularized harm. Medina, 960 F.2d at 1496. Plaintiffs theory that by using the services of the Myanmar military in connection with the Yadana Project, Unocal recklessly disregarded the likelihood that their human rights would be violated is thus well grounded in federal common law.
Plaintiffs have presented sufficient evidence to proceed to trial on the reckless disregard claim. There exists a genuine question of material fact as to whether the Myanmar military caused the human rights abuses alleged, and if so, whether Unocal should be liable for those abuses because it acted in either a subjectively or an objectively reckless manner in choosing to make use of the services of the Myanmar military in connection with the Yadana gas exploration project. Plaintiffs allege that Unocal entered into an agreement to participate in the Yadana project knowing that the Myanmar military was also a participant, and that the Myanmar military would perform important pipeline tasks for the project, even though it had knowledge that the military engaged in widespread human rights abuses, including forced labor. Plaintiffs further allege that Unocal continued to use those services after obtaining knowledge that the military was conscripting forced labor in service of the Yadana project.
The record contains evidence that Unocal held several meetings with human rights groups both before and after it
became a part of the Yadana venture, at which those organizations provided Unocal with documentation of the Myanmar militarys brutal treatment of the Myanmar people. Moreover, as noted earlier, Unocal retained a risk management consulting firm prior to joining the Yadana project, and that firm completed a report informing the company that the government habitually makes use of forced labor, and assessing the risk that the proposed joint venture would result in the use of forced labor as high.
Additionally, as the majority has noted, Unocal Vice President Lipman testified that even before Unocal invested in the Project, it was aware that the option of having the [Myanmar] [M]ilitary provide protection for the pipeline construction and operation of it would be that they might proceed in the manner that would be out of our control and not be in a manner that we would like to see them proceed, I mean, going to excess. (Emphasis added.) Unocal Representative Robinson later wrote to Unocal President Imle that [o]ur assertions that [the Myanmar Military] has not expanded and amplified its usual methods around the pipeline on our behalf may not withstand much scrutiny. (Emphasis added.) And Unocal Consultant Haseman told Unocal that [t]he most common [human rights violations] are forced relocation without compensation of families from land near/along the pipeline route; forced labor to work on infrastructure projects supporting the pipeline . . . ; and . . . execution by the army of those opposing such actions. Based on this evidence, a question of fact exists with respect to whether consequences that were or should have been foreseeable to Unocal, in the form of violations of international law by the Myanmar military, resulted from Unocals participation in the Yadana Pipeline Project, and from its continuing decision to use the services of the Myanmar military during the course of the pipelines construction.14
d. Murder and Rape Claims15
Like the majority, I agree with the Second Circuits holding in Kadic v. Karazdic, that under the Alien Tort Claims Act, a plaintiff may recover for wrongs that occur ancillary to a violation of international human rights law as part of the claim for the primary violation. 70 F.3d 232, 244 (2d Cir. 1995) (holding acts of rape, torture, and summary execution committed in connection with genocide or war crimes to be actionable under the ATCA). Here, all of the acts of murder and rape of plaintiffs alleged in the complaint or otherwise in the record on summary judgment occurred in furtherance of the forced labor program. Following the Kadic rule, plaintiffs may pursue those claims as part of their forced labor claims.
As with the forced labor claims, however, I disagree with the majority regarding what it is necessary for plaintiffs to prove in order for Unocal to be held liable for acts of murder or rape. Specifically, I disagree with the majoritys view that we must apply once again, independently, a third-party liability standard whether international law or federal common law this time with respect to the specific acts of murder and rape. In my opinion, if it is established that the alleged rapes and murder of plaintiffs occurred in furtherance of the forced labor program, and if Unocal is held liable for the forced labor practices of the Myanmar military, then plaintiffs need not again prove separately the elements of a third-party liability theory. In such case, they need prove only the additional facts supporting the rape and murder allegations. While I would not foreclose a possible foreseeability or ultra vires argument, I would not, as the majority does, require plaintiffs to make a second showing of third-party liability merely because specific acts conducted in furtherance of the primary tort are themselves tortious.
There is one final observation that I hope will clarify what the majority opinion does and does not do. Because the acts of murder and rape involving the plaintiffs all allegedly occurred in furtherance of a regime of forced labor, there is no need to address the question whether Unocal could be held liable if members of the Myanmar military had committed similar acts against plaintiffs separate and apart from a forced labor regime or a similarly well-established pattern of conduct violative of international law. Cf. Kadic, 70 F.3d at 244-45 (leaving open the related question of whether non-state actors who directly commit acts such as murder, rape, or torture may be held liable under the ATCA when those acts are not committed in furtherance of a jus cogens violation.). Accordingly, I read the majoritys statements regarding the rapes and murders as leaving open the question whether a private entity could be held liable for such government conduct if it was unrelated to an underlying violation of international law.
In sum, I agree with the majority that disputed questions of fact exist with respect to whether human rights violations occurred during the construction of the Yadana Pipeline Project, and with respect to the nature of Unocals involvement in such violations. Assuming the necessary evidence is introduced at trial, I would, however, direct that the jury be instructed to apply the three common law theories of thirdparty liability ordinarily applied in tort cases, rather than the international criminal law doctrine of aiding and abetting, including by means of moral support, recently announced by the ad hoc War Crimes Tribunal for the Former Yugoslavia.
12. In addition, the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605, demonstrates that agency liability is a general principle applicable to international entities. In that statute, an exception exists to the general sovereign immunity accorded to foreign states in American courts for certain commercial activities of agents of foreign nations. Id. § 1605 (a)(3).
13. I reach this conclusion in part because at common law, a defendant may be liable for harms caused by an entity that it negligently employs, even if no respondeat superior or agency relationship exists. See, e.g., Bennett v. United States, 803 F.2d 1502, 1505 (9th Cir. 1986) (holding that the U.S. government may be liable for damages arising from the kidnapping and raping of several children by a teacher hired by the government where the government knew or should have known that the teacher had a history of child molestation); see also VanOrt v. Stanewich, 92 F.3d 831, 837 (9th Cir. 1996) (stating that under Monell v. Department of Social Services, 436 U.S. 658 (1978), a municipality may be liable for the negligent hiring of municipal employees).
14. The district court granted summary judgment for defendants in part because in its view plaintiffs produced insufficient evidence that Unocal proximately caused plaintiffs injuries. However, under none of the three federal common law theories discussed in the text is proximate cause a necessary element of Unocals liability. If proximate cause applies at all, it applies to the question whether the Myanmar military was responsible for the international law violations. As a practical matter, if the alleged violations occurred there can be little doubt that they were proximately caused by the Myanmar military. As explained in the text, under any of the three theories, Unocals liability is indirect; proximate cause is therefore irrelevant to plaintiffs claims against Unocal.
15. I agree with the majoritys conclusion that there is insufficient evidence in the record to permit plaintiffs to proceed on a claim of torture, and would limit their claims to those alleging forced labor, murder, and rape. I would also note that the record is replete with horrific accounts of physical abuse of Myanmar villagers by members of the military. Because the victims in those accounts are not plaintiffs in this action, and this suit does not constitute a class action, many substantial allegations of wrongdoing may not give rise to liability as a part of this case.