Judge: Unocal Not Liable for Claims

Unocal Corp. cannot be held liable for claims against its subsidiaries in the construction of a natural gas pipeline that involved allegations of human rights abuses by the Myanmar military, a judge ruled Friday.

Los Angeles County Superior Court Judge Victoria Gerrard Chaney said Unocal had acted in good faith by setting up legitimate subsidiaries to undertake the project in the 1990s. The subsidiaries were not named in the lawsuit.

"Here there is no evidence of bad faith or wrongdoing by Unocal," she said during her ruling.

Lawyers for villagers in the nation formerly known as Burma contend Unocal should be held accountable for slavery, murder and rape allegedly committed by the military to aid the $1.2 billion Yadana pipeline project.

Chaney said her ruling applied only to allegations that Unocal set up shell companies that were not sufficiently independent to avoid liability.

She did not rule on whether the villagers could try to hold the subsidiaries accountable. She set a status hearing on the case for Feb. 20 and could rule then on whether the lawsuit can continue.

Unocal lawyer Daniel Petrocelli hailed Friday's ruling as a "complete victory and vindication" for the oil giant.

"We were sued for political reasons, and politics don't make it in a courtroom. Hard facts and evidence do," he said.

Attorney Dan Stormer, who represents the villagers, said he was disappointed by the ruling but vowed to pursue claims that Unocal was in a joint venture with the subsidiaries and that the firms were acting on Unocal's behalf.

"In every case there are bumps in the road," he said.

Stormer said during closing arguments earlier this week that Unocal had "complete and utter control" over the subsidiaries created to build and operate the pipeline.

Petrocelli countered that Unocal cannot be held accountable because California law holds that subsidiaries with vast financial resources cannot be bypassed in order to get to a parent company.

The judge said Friday she relied on testimony that showed subsidiaries were common and legitimate forms of business in the oil and gas industries. She also said it was common for parent corporations to handle some business functions for subsidiaries.

Villagers first filed their lawsuit in 1996 in federal and state courts in California.

A judge found then that Unocal had no liability and dismissed the federal case, which prompted the plaintiffs to pursue their claims under state law in Los Angeles County Superior Court.

The federal case was reinstated last year on appeal by a three-judge panel of the 9th Circuit Court of Appeal.

Unocal argued in June before the full 11-judge panel that the case wrongly relies on the obscure 1789 federal Alien Tort Claims Act that allows foreign nationals access to U.S. courts to sue for damages.

The appeals court has not issued a ruling.

[Source: Laura Wides, Associated Press Writer, Los Angeles, Usa, 23Jan04]


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