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Slavery reparations claims dismissed by 7CA: the court held that slave descendants' section 1982 claims are, inter alia, too speculative and the claimants too far removed from the wrong of slavery.

Consumer fraud and federal procedure mavens will want to review a recent seventh circuit opinion concerning claims for reparations for slavery. The court affirmed the Chicago district court's dismissal of most of the claims brought in 10 consolidated suits filed across the country seeking reparations for descendants of slaves from various companies or successors to companies that provided services, such as transportation, finance, and insurance, to slaveowners in the United States, generally during the nineteenth century. The case, consolidated by the multidistrict litigation panel of the federal court system, is lit re African-American Slate Descendants Litigation, 471 Fad 754 (7th Cir 2006).

No basis for jurisdiction

As the court recounted, the suits originated as a series of mostly identical class actions brought on behalf of all Americans descended from slaves with whom one or more of the defendants or their corporate predecessors may have been directly or indirectly involved. The consolidated complaint alleged that the defendants or their predecessors violated the laws of the northern states in transacting business with slaveowners, since slavery %vas illegal in those states even before the Thirteenth Amendment nationally outlawed it in 1865.

The suit also claimed that occasional enslavements occurred long after the passage of the Thirteenth Amendment, even extending into the Twentieth Century, and that some of the defendants or their predecessors were complicit in those instances. The complaint sought disgorgement to the class members, that is, descendants of slaves in the U.S., of the profits that the defendants or their predecessors thereby allegedly obtained.

The plaintiffs founded their federal claims on 42 USC section 1982. Enacted in 1866, it provides that "all citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold and convey real and personal property." But the court found that section 1982 provided no basis for retaining jurisdiction because most of the conduct alleged occurred before 1865, rendering a majority of those claims frivolous.

The plaintiffs' complaints contained state law claims as well, however, most of which satisfied federal diversity jurisdiction requirements. Therefore, the court proceeded to weigh the district judge's ruling that the political question doctrine and the Article III standing requirement required dismissing the complaints with prejudice.

"[T]he wrong to the ancestor is not a wrong to the descendants"

The seventh circuit first observed that dismissal without prejudice would have been the proper result if the district judge was correct in finding no jurisdiction. Instead, the district judge dismissed the complaints truth prejudice--a finding on the litigation's merits.

The court explained that the political question doctrine bars the federal courts from adjudicating disputes that the Constitution entrusts to other branches of the federal government. Had the case before it simply sought reparations for the wrong of slavery, suggested the court, this doctrine by itself would require dismissal. But the plaintiffs had instead cast the litigation as a quest for conventional relief, asking the federal courts to apply state law and section 1982 to the defendants' alleged conduct. Therefore, the court turned to the standing question.

The court first commented that it would be "impossible," through litigation, "to connect the defendants' alleged misconduct with the financial and emotional harm that the plaintiffs claim to have suffered as a result of that conduct." Said the court, "[T]he wrong to the ancestor is not a wrong to the descendants." Otherwise, it continued, "statutes of limitations would be toothless. A person whose ancestor had been wronged a thousand years ago could site on the ground that it was a continuing wrong and he is one of the victims."

The court commented on the leaps of logic and speculation that would be required: "There is no way to determine that a given black American today is worse off by a specific, calculatable sum of money (or monetized emotional harm) as a result of the conduct of one or more of the defendants." Additionally, the court said the plaintiffs generally lacked authority to sue on their ancestors' behalf. Based on Article III standing requirements, the court affirmed the district court's dismissal of the bulk of the claims, though it modified the dismissal to one without prejudice.

The court left some portions of the complaints intact, though questioning whether the plaintiffs would ultimately be able to prove their claims. First, the court said, it would assume, without deciding, that some of the plaintiffs are legal representatives of their slave ancestors.

Second, the court allowed to stand state fraud or consumer protection claims that plaintiff class members bought products or services from some of the defendants that they would not have bought had the defendants not concealed their involvement in slavery. "This claim has nothing to do with ancient violations.... It is a complaint of consumers' being deceived because sellers have concealed a material fact. The injury is the loss incurred by buying something that one wouldn't have bought had one known the truth about the product."

Though the court commented that it knew of no consumer protection law which imposed any duty on sellers to disclose every discreditable fact about themselves that might deter potential buyers, it also remarked that "[a] seller who learns that some class of buyers would not buy his product if they knew it contained some component that he would normally have no duty to disclose, but fearing to lose those buyers falsely represents that the product does not contain the component, is guilty of fraud."

A "predictable response" University of Illinois College of Law professor James E. Pfander finds the court's decision "a relatively predictable judicial response to the problem of how to handle claims based on events that occurred long ago." He said that "reparations claims have been most successful in cases where victims [or their authorized representatives are still alive and] seek [compensation or] the return of particular items, such as works of art that were looted by the Nazis during World War II.

"It's been far more difficult to win reparations in the form of damages from private parties on the basis of tort or breach of contract theories for injuries that occurred generations back," he said. Pfander finds an unheralded aspect of the court's opinion at least as interesting, if not more so, for students of federal rules. That aspect is the power of the tnultidistrict litigation transferee court to pass on FRCP 12(b)([a']) motions. "While one might agree in general with that notion, its application to those who base their claim on state law and only want to return to state court for a hearing strikes me as less than obvious," Pfander remarks.

Helen W Cuniuirsson is an attorney and writer in Highland Park. She ctm be reached at <gunnarssonhgC?>.
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Author:Gunnarsson, Helen W.
Publication:Illinois Bar Journal
Date:Apr 1, 2007
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