The Multinational Monitor

May 1997 · VOLUME 18 · NUMBER 5

N A M E S    I N    T H E    N E W S

Unocals Liability

UNOCAL CAN BE HELD LIABLE for human rights violations committed by the government of Burma, a federal judge in Los Angeles ruled in April. The ruling represents the first time that a U.S. court has ruled that U.S.-based corporations can be held liable for abuses perpetrated by their partners in a foreign country.

In October 1996, the democratically elected government-in-exile of Burma filed the lawsuit against Unocal, charging the multinational oil company with wide-scale human rights violations in connection with the construction of a natural gas pipeline in Burma.

The lawsuit alleges that Unocal's joint venture with the Burmese military regime and with Total, a French oil company, has caused the forced labor of tens of thousands of villagers, the systematic destruction of villages in the pipeline region and other human rights violations.

The lawsuit claims that, as part of the joint venture agreement, Unocal relied on Burma's military government, the State Law and Order Restoration Council (SLORC), to provide and maintain all military operations in the pipeline region, thereby resulting in severe repression of citizens of Burma.

In a statement issued at the time the lawsuit was filed, Unocal called the allegations "false, irresponsible and frivolous." The company added, "We believe this lawsuit is motivated solely by political considerations."

Unocal vowed to appeal the judge's ruling.

U.S. District Court Judge Richard Paez ruled that while SLORC could not be held responsible in U.S. courts, Unocal could be.

BankAmerica Fraud

A proposed national class action settlement of consumer fraud claims against BankAmerica and two of its subsidiaries has been substantially improved -- with class members receiving millions more and their lawyers receiving millions less -- Trial Lawyers for Public Justice (TLPJ) announced in April. TLPJ challenged the proposed settlement in Graham v. Security Pacific Housing Services, Inc., as an unconstitutional attempt by BankAmerica to cap its liability.

The original settlement would have paid approximately $2 million to class members and $5.4 million to class counsel, and allowed any unclaimed funds to revert to BankAmerica. The revised settlement would pay approximately $7.4 million to the class members and $2 million to class counsel, and create no reversion of funds to BankAmerica.

"This is a huge victory for the class and against class action abuse," says TLPJ Executive Director Arthur H. Bryant.

"Despite these improvements," says Bryant, "the settlement still has several objectionable provisions. ... We intend to maintain our challenge to these provisions."

The lawsuit alleges that two BankAmerica subsidiaries defrauded consumers who borrowed money to purchase mobile homes by charging them excessive rates for insurance that protected the companies' interest in the homes.

In 1995, a Mississippi jury awarded $500,000 in compensatory damages and $38.5 million in punitive damages to a single consumer in a case involving similar allegations against Trustmark National Bank.

In April 1996, shortly after statewide class actions against the BankAmerica subsidiaries were settled in Alabama and Arizona, lawyers in Mississippi filed Graham on behalf of Mississippi residents. Five months later, they announced a settlement -- on behalf of all other similarly situated consumers nationwide -- providing approximately $120 to all Mississippi residents and $60 to all non-Mississippi residents who file claims.

On January 10, 1997, U.S. District Judge Charles Pickering preliminarily approved the proposed settlement and scheduled a hearing on its fairness for April 16. While several class members filed timely objections to the proposal, the defendants paid those class members $20,000 each (or more) to withdraw their objections. TLPJ then announced its challenge.

Marketing Booze to Kids

Investigate the broadcast alcohol commercials that reach and appeal to children. That is the call from more than 200 citizen groups from around the country in an April petition to the Federal Communications Commission (FCC). The petition drive was coordinated by George Hacker of the Center for Science in the Public Interest.

Hacker says that the decision by the Distilled Spirits Council of the United States to abandon its 48-year voluntary ban on broadcast ads raises "significant public interest issues" requiring a comprehensive investigation by the FCC.

Earlier this month, President Clinton urged the FCC to investigate the effects of liquor commercials on young people. In addition to the President, some two dozen U.S. Representatives, led by Joseph Kennedy, D-Massachusetts, have requested an FCC investigation of liquor advertising on radio and television.

Twelve states and Puerto Rico have joined a petition to the agency filed last summer by Alaska's Governor Knowles seeking a ban on broadcast liquor ads. Broadcasters, advertisers, and alcoholic-beverage producers oppose FCC action.

Broadcasters, advertisers and alcoholic beverage companies have claimed that they have a Constitutional right to air beer, wine and liquor commercials. But Hacker says that "the Constitution is not a suicide pact."

-- Russell Mokhiber

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