The Lawsuit Brought by African-Americans Seeking Compensation from Corporations for The Wrongs of Slavery:
Why the Opinion Dismissing the Suit Is Unpersuasive

Last month, a federal district judge in Chicago dismissed -- for the second time -- the class action lawsuit brought against corporate America on behalf of African-Americans seeking compensation for the injuries of slavery.

The dismissal is problematic, because its legal reasoning is flawed. Moreover, though its result is probably correct, its statute of limitations ruling should not have been rendered before the plaintiffs were allowed to take some discovery from the defendant corporations.

For this reason, as I will argue below, Judge Norgle's decision will not satisfy either side of the slavery reparations debate. Thus, the U.S. Court of Appeals for the Seventh Circuit will now have to step in to clean up the mess made by the District Court.

The Genesis and Basis of, and the Rulings on, the Slavery Claims

The suit decided by Judge Norgle began as a series of lawsuits against a variety of American corporations, which were filed around the country. I wrote about one of these suits in a 2002 column. The suits were consolidated in federal court in the Northern District of Illinois.

The gravamen of the suits was that various American corporations such as CSX, Aetna, and Fleet Bank had profited from slavery, and that those who descended from slaves have various civil claims arising from that fact. The claims were varied, ranging from tort claims for damages, to claims in unjust enrichment, to claims under various states' consumer fraud statutes.

Judge Norgle dismissed all these claims in 2004 - in a ruling entitled In re African-American Slave Descendants Litig. But he also permitted the plaintiffs to replead their suit - and they took him up on his offer, filing an amended complaint.

One year later, as noted above, Judge Norgle has dismissed the suit once again. His second ruling, it turns out, is almost an exact copy of his first. It is not clear why he even allowed the plaintiffs a second chance, if he was only going to rebuff them once again, for the very same reasons.

The Problem with Judge Norgle's Rulings: Right Answer, Wrong Reasons

The problem with both of Judge Norgle's opinions is that they raise specious arguments against the slavery class action suit - arguments that not only are faulty, but also distract attention from the very serious, real arguments that should doom the suit.

My critique of Norgle's opinion, therefore, should not be interpreted as support for the suit. Rather, it is a plea for clarity and for telling the truth.

Judge Norgle believes that the slavery class action should be dismissed because the plaintiffs have no standing to sue in federal court, and because the suit runs afoul of the U.S. Supreme Court's "political question" doctrine. But neither argument holds water.

After Judge Norgle's first decision was handed down, Professor Richard Epstein critiqued it in a 2004 Boston University Law Review article entitled "The Case Against Black Reparations" - an article that I am drawing upon as a major source for this column.

Like me, Prof. Epstein feels that, in his initial ruling, Judge Norgle reached the right result (dismissal) for the wrong reasons. (Indeed, Epstein found Norgle's decision to spend so much time on certain procedural objections "bewildering.")

Unfortunately, Judge Norgle's second ruling - which mostly repeats his first one - fails to convincingly address any of Epstein's points.

The Problem with Judge Norgle's Ruling on Standing

First, Judge Norgle argued that the plaintiffs have no standing under Article III of the U.S. Constitution to bring a suit in federal court.

"Standing" means, roughly, the right to be the person (or organization) who goes to court to enforce a particular legal rule. Article III standing has been interpreted to mean that the plaintiff must suffer some actual injury at the defendant's hands. Judge Norgle said this requirement was not fulfilled - citing the Supreme Court's 1992 decision in Lujan v. Defenders of Wildlife.

But here, the "actual injury" requirement was plainly fulfilled: The plaintiffs said the corporations had harmed either them, or others whom they were legally entitled to represent - including elderly relatives, some who died a long time ago and some who had died only recently. (Wrongful death statutes allow family members to "step into the shoes" of plaintiffs who die before a case can be brought; Judge Norgle's ruling never discussed the applicability of these statutes.)

The actual injury alleged here was plain: The plaintiffs claimed the defendant corporations had "converted" (illegally taking possession of) their property, and tortiously injured the persons of those they represented. These are simple, straightforward claims for redress.

If the plaintiffs could not satisfy the wrongful death rule of the relevant jurisdiction chosen by Judge Norgle, then they ought to be dismissed for that reason. An argument from standing adds nothing to the case.

The Problem with Judge Norgle's "Political Question" Ruling

Second, Judge Norgle held that the political question doctrine barred a federal court from hearing the slavery class action. According to the Supreme Court's 1962 decision in Baker v. Carr, the federal courts should not attempt to adjudicate questions which are nonjusticiable - that is, not susceptible to being resolved in court -- because they are inherently political - and thus better suited to resolution by other branches of government.

As Epstein noted, the political question doctrine often involves issues of foreign affairs - an area constitutionally reserved to the President, with some role for Congress. This case does not involve foreign affairs at all; it puts at issue the alleged treatment of U.S. people, and theft of U.S. property, by U.S. corporations.

Nevertheless, Judge Norgle nevertheless drew an analogy to the handful of decisions that have held Holocaust class actions to be nonjusticiable because of the political question doctrine. But that comparison does not work.

The question of reparations by Germany for Holocaust slave labor - which I have discussed in an earlier column -- was political in that it was the subject of intense negotiations between the United States, Germany, and other nations. Numerous treaties -- some of which explicitly considered the question of reparations to slave laborers -- were drafted and agreed upon by our government.

As a matter of foreign relations in the post-World War II period, the slave labor question was something our government actively considered, and at least partially resolved. Subsequent court decisions involving Holocaust slave labor might thus disrupt the executive branch's ability to make binding promises to other sovereigns - a key component of the foreign affairs power.

In his opinion dismissing the suit, Judge Norgle recounted the history of Congress' efforts to provide reparations during Reconstruction. But the mere fact that Congress was interested in a topic does not, in itself, make it a candidate for the political question doctrine. The Confederacy was not a foreign country, and Reconstruction did not involve negotiations with foreign sovereigns.

Thus, a federal court's taking jurisdiction of this dispute between corporations and the heirs of former slaves would not interfere with any executive power vis-à-vis other nations. Nor did Judge Norgle cite any governmental function analogous to the executive's and Congress' "foreign affairs" power, which would be imperiled by a court's now taking jurisdiction over a case related to the wrongs involved in domestic slavery affecting African-Americans on U.S. soil.

The Better Argument: Expiration of the Statute of Limitations

As I noted above, there is one ground upon which the Court of Appeals could affirm Judge Norgle's dismissal: The statute of limitations. (Ironically, it was probably statute of limitations arguments that really persuaded the courts in the Holocaust cases, not the political question argument - even though, there, the political question argument was much stronger.)

Technically, the statutes of limitations on all these claims - which ultimately arose out of the slavery era - ran long ago. But the plaintiffs argued the limitations periods should be "tolled" - that is, extended - because, through no fault of their own, they and their ancestors were barred from raising these claims in a timely fashion. Alternatively, the plaintiffs also argue for "equitable estoppel" - urging that the defendants' behavior toward their ancestors was so wrongful and deceptive, that it is unfair for them now to try to hide behind the statute of limitations.

Before the Civil War ended in 1865, the tolling argument is plainly correct: unemancipated African-Americans in territory held by the South were hardly able to sue to enforce rights they did not yet have. In the chaos of Reconstruction, too, former slaves could not be expected to instantly adjust to their new circumstances and beat a path to federal court.

But is there a basis for holding that, in the years that followed, the relevant statutes of limitations were "tolled" for 140 more years, through the Civil Rights Movement and its aftermath?

Perhaps not. But, perhaps. Ultimately, the question of equitable tolling and estoppel is a factual one. What were the opportunities for these suits to be brought? Did defendants hide facts from plaintiffs, thus lulling them into not acting on their rights?

In my view, plaintiffs ought to have been able to engage in some rudimentary discovery on these issues. And depending on what they discovered, it's possible they ought to have been allowed to proceed with their case. Perhaps the question can be decided on summary judgment. Arguably, only a jury could decide some of the fact-intensive issues raised by the plaintiffs' equitable estoppel and equitable tolling claims.

The question of whether American corporations should be held liable for the wealth gained through slavery is difficult from both political and legal points of view. It is ironic, of course, that Judge Norgle relied so heavily on the Holocaust litigation in developing his argument on behalf of slavery defendants. In that litigation, of course, the Holocaust defendants ended up funding a settlement worth billions of dollars, despite their "victories" in federal court.

If the slavery class action is going to be decided as a matter of law, not politics, we will need better decisions from our judges than those provided by Judge Norgle.