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CCR Wins Significant Legal Motion in Unocal Case

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A Superior Court Judge ruled against oil giant Unocal’s motion to apply Burmese and Bermuda law in the CCR case Doe v. Unocal. Unocal is accused of being complicit in human rights violations that took place in Burma.

On July 31, 2003, plaintiffs won a major legal victory in the Superior Court of California. The state court action in Doe v. Unocal is part of a series of cases filed by CCR to hold the corporation responsible for its complicity in the forced labor and brutal treatment of Burmese people in building an oil pipeline.
California law recognizes a legal action to hold a corporation liable for the unlawful results of its business practices. Unocal filed motions that asked the court to apply unfavorable Bermuda law or Burmese law rather than California law. Unocal argued that its Burma subsidiaries are incorporated in Bermuda and that the alleged illegal acts took place in Burma (Myanmar).

State Superior Court Judge Victoria Gerard Chaney issued the 11 page decision denying Unocal’s motions. The judge found that Unocal conducted significant transactions concerning the Burmese pipeline in California. On the other hand, the subsidiaries were “exempt” corporations in Bermuda, which meant that although they had a “legal” existence there, they could not do business in that country. Consequently, Bermuda had diminished interest in regulating the corporate behavior of exempt corporations.

The judge also analyzed the possibility of applying Burmese law. She found that a recent U.S. State Department report concluded that since 1988 “there [i]s no effective rule of law” in Burma. The judge determined that it is “questionable whether Burma has a functioning judiciary actively interpreting statutes and establishing decisional law” on which a California court could rely. From this and other facts she reasoned that the law of Burma is “radically indeterminate.” This weighed heavily against Unocal’s claims that Burma law should apply.

Perhaps the most significant ruling of the decision was Judge Chaney’s refusal to apply Burmese law to this case on public policy grounds, since it would not recognize a legal action based upon the forced labor claim. The court explained that failure to recognize this claim was offensive to public policy and prejudicial to recognized standards of morality. She concluded: “Application of this rule is not unfair in this case. Prior to its involvement in the pipeline project, Unocal had specific knowledge that the use of forced labor was likely, and nevertheless chose to proceed.”

While this is likely not the last of Unocal’s legal obstacles in this case, plaintiffs are one giant step closer to bringing the corporation to justice.

 

The Center for Constitutional Rights is dedicated to advancing and protecting the rights guaranteed by the United States Constitution and the Universal Declaration of Human Rights. Founded in 1966 by attorneys who represented civil rights movements in the South, CCR is a non-profit legal and educational organization committed to the creative use of law as a positive force for social change.