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 military’s 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. Unocal’s 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 government’s actions under
an agency theory. Nevertheless, should plaintiffs prove their allegation
that such a contract existed, a jury might have considerable difficulty
in accepting Unocal’s 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 party’s 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 another’s 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 military’s 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 Unocal’s participation in the Yadana Pipeline Project,
and from its continuing decision to use the services of the Myanmar
military during the course of the pipeline’s construction.14
d.
Murder and Rape Claims15
Like
the majority, I agree with the Second Circuit’s 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 majority’s 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 majority’s 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.
4.
Conclusion
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 Unocal’s 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.
Part
9
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 Unocal’s 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, Unocal’s liability is indirect;
proximate cause is therefore irrelevant to plaintiffs’ claims against
Unocal.
15.
I agree with the majority’s 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.
