In Re: AFRICAN-AMERICAN SLAVE DESCENDANTS LITIGATION. Deadria Farmer-Paellmann, Timothy Hurdle, et al., Plaintiffs-Appellants, v. Brown & Williamson Tobacco Corporation, et al., Defendants-Appellees. Nos. 05-3265, 05-3266. 2005. Appeal from the United States District Court for the Northern District of Illinois. Eastern Division. No. 02 C 7764. The Honorable Charles R. Norgle, Sr., Judge Presiding. United States Court of Appeals, Seventh Circuit.
TABLE OF CONTENTS
Table of Authorities
1. PLAINTIFFS HAVE PLED SUFFICIENT STANDING TO PROCEED TO DISCOVERY
A. Former slaves and the living children of pre-1865 slaves are undeniably invested with standing
B. Plaintiffs, as heirs of slaves, were denied the opportunity to inherit their parents' estate, thereby giving rise to an “injury in fact” sufficient to withstand a Rule 12(b)(6) motion to dismiss
C. The “slender reed of injury” required for standing is satisfied
D. Lack of certainty of inheritance does not bar their claim to standing
E. Plaintiffs' standing to seek disgorgement is not impugned by the lack of evidence directly linking particular defendants to particular plaintiffs
F. In the alternative, arguendo, plaintiffs meet the test for third party litigant standing
i. Plaintiffs have a “sufficiently concrete interest in the outcome” of the action to stand as third party litigants
ii. Plaintiffs have a “close relationship” with the third party sufficient to sustain alternative “third party litigant” standing
iii. Obviously, there “exists some hindrance to the third party's ability to protect his or her own interests.”
2. STANDING OF PLAINTIFFS UNDER THE CONSUMER PROTECTION CLAIMS
A. Any defect in naming defendants to the state consumer fraud claims can be cured by Amendment
B. The pleadings specifically state that plaintiffs Porter and McGee were injured by the defendants ‘failure to disclose their slave trading history
i. Pleading as to Plaintiff Marcelle Porter and Ina McGee
ii. Since all reasonable inferences must be drawn in plaintiffs' favor, the complaint meets the requirements for alleging injury by deception
B. Plaintiffs Porter and McGee were injured in their constitutional right to avoid commerce with an entity they find morally repulsive
3. THE “CLEAR ERROR” STANDARD OF REVIEW REQUIRED THE COURT BELOW TO CONDUCT A FACTUAL HEARING INTO THE QUESTION OF EQUITABLE ESTOPPEL OF THE STATUTE OF LIMITATIONS
OF PRIVATE PROPERTY CLAIMS PERTAINING TO FORMER SLAVES HAS BEEN “COMMITTED” TO THE POLITICAL BRANCHES ... 16 The remaining Baker standards
5. PLAINTIFFS' APPEAL ADDRESSES THE PURPORTED FAILURE TO STATE A CLAIM
Certificate of Compliance
Statement of Compliance with Circuit Rule 31 (e)
1. Plaintiffs Have Pled Sufficient Standing to Proceed to Discovery
A. Former slaves and the living children of pre-1865 slaves are undeniably vested with standing.
Defendants' argument that plaintiffs lack standing ignores a well pled premise of the complaint: that some plaintiffs, as the living former slaves and the other plaintiffs as children of the deceased slaves have standing to assert their claims and those of their parents' estates.
Nowhere do defendants argue (nor could they) that the former slaves themselves lack standing to seek disgorgement of the defendants' profits gained from the slaves' stolen labor. Likewise, the children of slaves have standing to assert their claims. It is axiomatic in American law that a child has the right to seek representative status to sue on behalf of their parents' estate. Thus, the claims of the plaintiff Wall family members, all former slaves, must survive dismissal at this early stage. Plaintiffs Julie Mae Wyatt Kervin and Hannah Hurdle Toomey, both living children of deceased slaves, Plaintiffs' Brief at 5, fall directly within the ambit of this traditional and long accepted form of legal standing. Hence, regardless of issues as to any other plaintiffs, The Wall family, as former 20th Century slaves, and Wyatt Kervin and Hurdle Toomey, as the living children of pre-1865 slaves, have standing to seek disgorgement of defendants' profits from slave trading, financing and insuring.
While defendants argue at 20 that plaintiffs Wyatt Kervin and Hurdle Toomey have not yet filed state law certifications to become the legal representatives of their parents, standing is based on the relation of adversity between the parties, cf. Poe v. Ullman, 367 U.S. 497, 506-507 (1961), and concreteness of a party's interest, Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167 (2000), and not on the technical issues of ultimate certification of representative status by a probate court. See e.g. Vermont Agency of Natural Resources v. United States Ex. Rel. Stevens, 529 U.S. 765, 770; 773-774 (2000) (a party invested with direct or inchoate representative capacity will have standing to assert another's “injury in fact” despite the uncertain outcome of the action).
A court may dismiss an action only where it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). If, as alleged, these adult children are the natural heirs of their parents and their de facto legal representatives, then it follows that standing must be accepted by the court at this early pleading stage as plaintiffs, the heirs of their parents, have a “concrete interest” in the outcome of the litigation. See e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 563 (1992), citing Lujan v. National Wildlife Federation, 497 U.S. 871, 883-889 (1990). Any inquiry as to whether plaintiffs will ultimately qualify as representatives of their parents' estate under state probate law must await a factual inquiry that is beyond the Court's power on a motion to dismiss. Hishon, supra.
B. Plaintiffs, as heirs of slaves, were denied the opportunity to inherit their parents' estate, thereby giving rise to an “injury in fact” sufficient to withstand a Rule 12(b)(6) motion to dismiss.
Plaintiffs Wyatt Kervin and Hurdle Toomey allege that they are their parents' living offspring; that their parents suffered the loss of their wages by slavery; that defendants have profited from such deprivation and that such should be disgorged as a matter of equity into a public benefits trust. SCAC paras. 111-114, 270-280,288. Such allegations more than comprise a sufficiently “well pled” complaint by these plaintiffs as the living offspring of their slave parents to seek equitable remedies on behalf of their parents' estates. Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990). Since plaintiffs as the living children of slaves were denied the right to inherit their slave parents lost earnings and wages, plaintiffs as heirs were deprived of the opportunity to inherit, “an injury in fact”, Vermont Agency of Natural Resources, supra. sufficient to sustain standing. It cannot be said that there is no set of facts that can be proved consistent with their allegations. Boim v. Quranic Literacy Instittue and Holyland Foundation for Relief and Development, 292 F.3d 1000, 1008 (7th Cir. 2002), citing Slaney v. The International Amateur Athletic Federation, 244 F.3d 580, 597 (7th Cir. 2001). Moreover, since these defendants can redress the injury - i.e., they can disgorge unjustly acquired profits and earnings into a public benefits funds - standing is enhanced. Cf. Utah v. Evans, 536 U.S. 452 (2002) (Standing allowed even where named defendants had no power to remedy the wrong.).
C. The “slender reed of injury” required for standing is satisfied.
As the living children of former slaves, these plaintiffs are not, as Judge Norgle concluded, seeking to litigate a “derivative harm uprooted from the soil of another's injury.” Final Order 49 [App. 49]. To the contrary, Kervin and Toomey are representing the estates of the very persons who were injured - their parents. As the direct heirs of their once-enslaved parents, they are directly injured in their lost inheritance opportunities. Likewise, plaintiffs in other degrees of relationship to the former slaves not only stand as deprived putative heirs but, as descendants of the slaves, they are the parties most directly interested in the outcome of this proceeding. In a judicial world in which the mere perception of injury to a general right suffices to establish standing, Friends of the Earth, 528 U.S. at 181-183, what parties, as a class, have a greater or more concrete interest to bring this action? Thus, the “slender reed of injury”, 13 Charles Allen Wight, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure, Sec. 3531.4 (2d ed. 1984), that the district court acknowledged will sustain standing, Final Order at 50, is more than satisfied.
D. Lack of certainty of inheritance does not bar their claim to standing.
That plaintiffs could have no “certainty” of inheriting such wealth is no more a bar to standing than was the lack of certainty that a medical student would have been admitted to medical school but for racial quotas. See e.g., Regents of the University of California v. Bakke, 438 U.S. 265 (1978), where the Supreme Court found that the lost opportunity to compete equally for admission was sufficiently concrete to withstand a standing challenge despite the lack of even reasonable certainty as to whether he would have been admitted in the absence of discrimination. 438 U.S. at 280-281. Just as the mere existence of racial quotas formed a sufficient factual nexus to support the Bakke standing, the defendants' participation or profiteering from slavery with its direct and immediate loss of the slaves' right to acquire wealth and property forms a sufficient factual nexus to the plaintiffs' loss of inheritance rights to support their claims of standing. As in Bakke, the instant plaintiffs demonstrate a concrete lost opportunity. Bakke at 280-281.
In Friends of the Earth, the Court recognized that plaintiffs had standing to seek equitable relief where they had suffered no discernible injury aside from their perception that they had lost the opportunity to use allegedly polluted public land, to which they had no personal claim of right, a far less concrete and particularized harm than the instant plaintiffs' actual and discernible lost opportunity to inherit their enslaved parents' stolen wealth. Friends of the Earth, 528 U.S. at 181-183. Just as the Friends plaintiffs could seek equitable relief in the absence of any personal injury or any concrete allegation beyond their mere “perception” of injury, these plaintiffs, as former 20th Century slaves (SCAC paras. 92-101) and as the children (and descendants in other degrees of relationship) of former slaves, can seek the equitable remedy of disgorgement of profits.
The issue is not what proofs the plaintiffs will ultimately bring to bear in a factual stage of the action, but whether they meet the “exceedingly low”, Ancata v. Prison Health Services. Inc., 769 F.2d 700, 703 (11th Cir. 1985), citing Hishon at 73, “slender reed of injury”, Final Order at 50 quoting Wright, Miller, Cooper, supra, sufficient to show standing. As in Rosner v. United States, 231 F.Supp.2d 1202 (S.D.Fla. 2002), the burden of proof may ultimately be the plaintiffs', but, at this early stage, they have demonstrated sufficient concrete claims to be enabled to proceed with this action. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974) (“The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test.”).
E. Plaintiffs' standing to seek disgorgement is not impugned by the lack of evidence directly linking particular defendants to particular plaintiffs.
It is undisputed that enslaved African-Americans, including the parents of plaintiffs and ancestors in other degrees or relationship, were injured by defendants who earned and retained profits from the financing, insuring, trading and purchasing of human chattel.
Defendants do not deny that such conduct caused equitable harm to persons enslaved, but argue instead, that plaintiffs cannot establish that their particular ancestors were victimized by any particular defendant. This “shell game” defense consists not of the claim that the defendants were innocent of the wrong - the profiting and retention of profits from slave trading, financing and insuring - but only that the slaves' representatives cannot offer evidence that the particular defendants victimized any particular slave.
First, Plaintiffs have alleged direct harm by particular defendants. SCAC paras. 67,69,72,79,84,90,103.
Second, even the absence of direct causation does not doom standing and has been dispensed with in cases where it cannot be determined which of a group of collective wrongdoers caused an individual's harm:
“[C]ourts recognize joint liability against actors completely independent and unrelated to each other in circumstances where their conduct has caused indivisible injury which cannot be accurately apportioned and identified by the plaintiff.
Dement v. Olin-Mathieson Chemical Corp., 282 F.2d 76, 82 (5th Cir. 1960) (citation omitted); Hall v. E. I. Du Pont de Nemours & Co., 345 F. Supp. 353, 375 (E.D.N.Y. 1972).
Where a wrong is known to have been imposed by multiple actors among a class of victims causing “indivisible injury which cannot be accurately apportioned and identified by the plaintiff,” Dement, supra, liability can be imposed collectively among those known tortfeasors even without direct evidence of harm by a particular defendant to a particular plaintiffs. Any contrary rule would enable tortfeasors whose acts are indivisible from one another and which effectively enhanced each other's position, to escape liability. To avoid such unjust result, the inability to identify individualized acts causes “a shift of the burden of proving causation to the defendants.” Hall at 374. Rather than dismiss the action for lack of individualized proof that any particular defendant victimized any particular ancestor or parent, the district court should have denied the motion on the ground that defendants' collective conduct in slave trading, financing, insuring and profiteering causes the burden of proof to shift to the defendants. Id., citing Rest. 2d Torts § 433B (1965). Certainly, on a motion to dismiss the presumption must favor plaintiffs and, in any event, such factual analysis must await a motion for summary judgment.
In James v. Bessemer Processing Co., 155 N.J. 279, 301-302 (1998), the Court recognized the “formidable” difficulty in attributing direct liability to individualized defendants where the victims injuries arose over many decades from repetitive and multiple exposures. Bessemer at 301-302. Due to “the unique difficulties faced by a plaintiff attempting to establish causation in the toxic-tort context”, Id. [emphasis added], the courts have accepted that circumstantial evidence may be used to establish liability of a group of collective tortfeasors.” See e.g., Bessemer at 301 citing Sholtis v. American Cyanamid Co., 238 N.J. Super. 8, 29; 568 A.2d 1196 (App.Div. 1990). Indeed, the asbestos cases and a host of other product liability cases have paved the way for the application of equitable principles to enable remedies in the absence of existing standards of liability. In Sholtis, the court recognized that the absence of “definitive standards” defining liability was no barrier to remand. Sholtis at 30.
Rather than simply dismiss the action because of its relative novelty, the district court should have first sought to discern those standards that could be applied to this action of first impression, i.e., the disgorgement of wrongfully obtained profits from slave trading, financing and insuring. Sholtis, supra. Surely, this action presents “the unique difficulties faced by a plaintiff attempting to establish causation”, Bessemer at 301-302, that requires the court to go beyond rigid rules of law and create equitable standards to enable the action to go forward.
F. In the alternative, arguendo, plaintiffs meet the test for third party litigant standing.
Plaintiffs who are asserting the rights of the estates of their once enslaved parents, Plaintiffs' Brief at 5, and others such as Cain Wall, Sr., who were enslaved in the 20th century, Plaintiffs Brief at 7, are undeniably acting in their own stead and can assert standing independently. To the extent that they (or other plaintiffs), arguendo, are deemed to be asserting the rights of third party litigants, the complaint fits within the exceptions to this alternate form of standing. In Powers v. Ohio, 499 U.S. 400, 410-411 (1990), though factually distinct, the Supreme Court recognized three bases for standing where a claim asserts a third party's interests, demonstrating the reach of equity to assure access to the courts: 1) the litigant must have a “sufficiently concrete interest in the outcome of the issue in dispute”; 2) “the litigant must have a close relation to the third party”; and 3) “there must exist some hindrance to the third party's ability to protect his or her own interests”. 499 U.S. at 410-411.
i. Plaintiffs have a “sufficiently concrete interest in the outcome” of the action to stand as third party litigants.
Plaintiffs, as the living children of the deceased slaves, have a direct and “sufficiently concrete interest in the outcome” of the action based on their status as the natural heirs of their parents who were deprived of wages and assets. Those plaintiffs alleging that they themselves were enslaved in the 20th Century and injured by defendants' actions, SCAC paras. 91-101, certainly have a “concrete interest in the outcome” of the action inasmuch as they themselves were the injured parties whose wages and earnings were stolen. Plaintiffs in other degrees of relationship, i.e., plaintiff Deadria Farmer-Paellman, the apparent grand-descendant of a slave named in the Aetna policy, Plaintiffs' Brief at 6, and others such as Richard E. Barber, Sr. whose ancestry is defined and indisputable, Id., also have a sufficiently “concrete” interest to seek disgorgement, since they are not seeking personal recovery but only assert that defendants in equity must disgorge wrongfully attained profits. Such representative standing is both current doctrine, see Friends of the Earth, 528 U.S. 181-183, and has a long and honored judicial history. Griswold v. Connecticut, 381 U.S. 479, 481 (1965) (upholding representative third party standing); Japan Whaling Association v. American Cetacean Society, 478 U.S. 221 (1986) (upholding standing of naturalist group to seek relief for the benefit of future whale watchers where claim of harm is conditional, not concrete, based upon the possibility that government regulations may harm future animal observation); Metropolitan Washington Airports Authority v. Citizens for Abatement of Aircraft Noise, Inc., 501 U.S. 252, 264-265 (1991). Where previous courts have held that such inchoate and putative interests support standing, these plaintiffs, asserting claims of disgorgement of monies and profits taken from their known enslaved relations for known, undisputed wrongs, must be deemed to have a “sufficiently concrete interest in the outcome” to maintain standing as third party representative litigants. Powers v. Ohio, 499 U.S. at 410-411.
ii. Plaintiffs have a “close relationship” with the third party sufficient to sustain alternative “third party litigant” standing.
Unquestionably plaintiffs who are the natural issue of the former slaves have a “close relationship” with the third party, i.e., their parents' estates. As to plaintiffs in other degrees of relationship to the former slaves, their relation is still sufficiently close in view of the non-personal remedy that is sought, i.e., disgorgement into the public trust, to sustain standing. In Friends of the Earth, supra, where plaintiffs sought equitable relief on behalf of the environmental interest generally, the lack of direct injury was not a barrier to standing where the remedy sought was equitable and not for personal recovery. Friends of the Earth at 181-183. If courts have allowed standing for plaintiffs seeking equity for animal actors or for harm to the environment generally, then plaintiffs here, seeking equitable relief for human wrongs, must also be deemed to have standing.
iii. Obviously, there “exists some hindrance to the third party's ability to protect his or her own interests.”
As set out in detail in the Plaintiffs' Brief at 23-30, the former slaves lacked appropriate access to the courts, lacked information as to the defendants' involvement in slave trading, financing, insuring and profiteering: such information was only disclosed in the two years preceding the filing of these complaints. Additionally, the enslaved and their descendents faced unending violence and racially motivated deprivation of liberty for one hundred years following the close of the Civil War. These plaintiffs for the first time now are armed with the information and the level playing field to seek the equitable disgorgement of wrongfully gained wealth still residing in defendants. Plainly, the former slaves operated under a “hindrance” that must now be vindicated by their living children or descendants in other degrees.
2. Standing of Plaintiffs Under the Consumer Protection Claims.
As to the consumer protection claims, the defendants' argument that plaintiffs lack standing again falls to the well-pled allegations of the complaint.
A. Any defect in naming defendants to the state consumer fraud claims can be cured by Amendment.
Defendants readily admit that the Complaint states plainly that “some or all [the] plaintiffs are presently consumers of defendants”. Defendants Brief at 17 citing SCAC at para. 103. As the SAC is a consolidated pleading and the federal rules require only notice pleading, Conley v. Gibson, 355 U.S. 41 (1957), the allegations suffice to survive dismissal. Alternatively, plaintiffs Marcelle Porter and Ina McGee, allege specifically that they were customers of defendants JP Morgan Chase and Aetna, respectively. SCAC paras. 84,90. At a minimum, their allegations should suffice to allow their claims to survive.
The defense, at 17, does not deny such facts, but claims only that these plaintiffs failed to “name” these particular defendants in their initially filed complaints. This argument fails as these complaints are now consolidated matters. To the extent that the complaints need amendment to expressly include these particular defendants as named parties in the caption, the appropriate remedy is to direct that the complaints be amended, not dismissed. See e.g., Wilson v. Electro Marine Systems, Inc., 1985 U.S. Dist. LEXIS 12459, 1-2 (N.D. Ill. 1985). Since defendants already know the substantive pleading they cannot claim undue prejudice by such amendment. Id. Additionally, the cause of action must be liberally construed to give effect to its reasonable inferences. Lewis v. Local Union No. 100 of Laborers' International Union, 750 F.2d 1368, 1372 (7th Cir. 1984).
B. The pleadings specifically state that plaintiffs Porter and McGee were injured by the defendants' failure to disclose their slave trading history.
i. Pleading as to Plaintiffs Marcelle Porter and Ina McGee.
The Complaint states:
“Plaintiff Marcelle Porter is a customer of JPMorgan Chase. But for this Defendants' deception, she would not have been it's customer.”
Compl. at para. 84 [emphasis added]. Plaintiff McGee makes an identical assertion against Aetna (SCAC at para. 90). These direct statements are wholly sufficient to meet the pleading requirement that a complaint provide a short and plain state of the claim and the grounds on which it rests. Conley v. Gibson, 355 U.S. at 48. For notice pleading purposes no more is required.
ii. Since all reasonable inferences must be drawn in plaintiffs' favor, the complaint meets the requirements for alleging injury by deception.
On motion to dismiss the court must draw all reasonable inferences in the non-movant's favor. Scheuer, 416 U.S. at 236; Boim, 292 F.3d at 1008. Under “simplified ‘notice pleading,’ ” Conley v. Gibson, 355 U.S. 41, 47, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957), the “complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Lewis, 750 F.2d at 1373.
The assertion that “but for [defendants] deception” plaintiffs would not have been customers of Aetna or JPMorgan plainly gives rise to the reasonable inference that plaintiffs were induced to become defendants' customers by these false omissions.
B. Plaintiffs Porter and McGee were injured in their constitutional right to avoid commerce with an entity they find morally repulsive.
By seeking to avert trade with these defendants, Porter and McGee were acting within their constitutional right to avoid commercial intercourse with businesses they find to be morally or ethically repugnant. See e.g., NAACP v. Clairborne Hardware Co., 458 U.S. 886, 907-912 (1982) (boycotting of merchants to protest racial policies is protected First Amendment activity). As the right to boycott an entity is an important first amendment associational interest, Claiborne, supra, the defendants' concealment of material information as to their slave trading histories, inducing plaintiffs to trade and conduct business with defendants under false pretenses, caused direct injury to plaintiffs' right to avoid association with these defendants. For notice pleading purposes, Conley, supra, the complaints set forth a sufficiently well pled complaint of consumer injury by deception and omission.
3. The “clear error” standard of review required the court below to conduct a factual hearing into the question of equitable estoppel of the statute of limitations.
Defendants' argument that the correct standard for review of a denial by the district court of a claim of equitable estoppel to toll a statute of limitations is “clear error”, Defendants' Brief at 7, further highlights the district court's error in granting the motion to dismiss without an evidentiary hearing.
The “clear error” standard arises out of the court's having determined an issue of fact. Pierce v. Underwood, 487 U.S. 552, 558 (1988) (“...questions of fact [are] reviewable for clear error”.) A claim that the statute of limitations is to be tolled is just such a factual question, see e.g. Melendez-Arroyo v. Cutler-Hammer de P.R. Co., 273 F.3d 30, 39 (1st Cir. 2001), requiring an evidentiary hearing before the “clear error” test can be invoked, precisely what occurred in those decisions cited by defendants, see Defendants' Brief at 7-8, but which did not occur in the district court below. See Bensman v. United States Forest Service, 408 F.3d 945 (7th Cir. 2005) and Montenegro v. United States, 248 F.3d 585 (7th Cir. 2001), where the court considered evidentiary submissions on the question of equitable tolling. The question of when the plaintiff was first aware of the basis of her suit is not a question of law and is improperly determined on a motion to dismiss. Aldrich v. McCulloch Properties, 627 F.2d 1036, 1042 (10th Cir. 1980) (“[W]hether a plaintiff should have discovered the basis of his suit under the doctrine of equitable tolling does not lend itself to determination as a matter of law... Dismissal of the securities claims on the pleadings was, therefore, improper.”).
As the defendants' argument helpfully highlights, it is the general rule that a trial court should hold an evidentiary hearing in cases where the “clear error” test will apply, i.e., for questions of equitable tolling. Mandarino v. Mandarino, 2006 U.S. App. LEXIS 11927, 7-8 (2d Cir. 2006) (“...the District Court should not have resolved the fact-specific equitable tolling issue on defendants' motion to dismiss.”); Coons v. Mineta, 410 F.3d 1036, 1040-1041 (8th Cir. 2005) (reversing dismissal because district court failed to hold evidentiary hearing on question of equitable tolling in discrimination action); United States v. Battles, 362 F.3d 1195, 1198 (9th Cir. 2004) (Because equitable tolling issues “are highly fact-dependent...we remand... to the district court with instructions that it develop an adequate evidentiary record before again determining whether the statute of limitations should be equitably tolled as to those claims.); Melendez-Arroyo v. Cutler-Hammer de P.R. Co., 273 F.3d at 39 (directing that district court hold hearing on equitable tolling claims); Beaird v. Seagate Tech., 145 F.3d 1159, 1175 (10th Cir. 1998), quoting Delmar v. Raytheon Aircraft Corp., 1996 U.S. Dist. LEXIS 12913, No. 96-1002-JTM, 1996 WL 499144, at (D. Kan. Aug. 9, 1996) (“Tenth Circuit cases ‘indicate a detailed factual inquiry is necessary to determine whether equitable tolling should be applied,’ requiring ‘in all likelihood, an evidentiary hearing’ ”.).
The court below did not conduct an evidentiary hearing on this highly fact-specific issue but only evaluated the parties' legal argument on a Rule 12(b)(6) motion to dismiss. No affidavits and no factual inquiry was had by the court below, a direct violation of the prevailing rule governing substantive tolling questions.
Equitable tolling of the statute of limitations depends largely on the plaintiffs' state of information as to defendants' involvement in slave trading, financing and insuring, a fact-based question that requires an evidentiary hearing before the equitable tolling question can be determined. It is the very purpose of a discovery rule “to mitigate unjust results that otherwise might flow from strict adherence to a rule of law.” O'Keefe v. Snyder, 83 N.J. 478, 491 (1980). Plaintiffs' pleadings and briefs alone give rise to a question of fact that required a hearing, not a presumptive dismissal, as to whether the information as to defendants' trading, financing, insuring and profiteering of slaves was known prior to the disclosures made beginning in 2002. As has been amply set forth, this action was brought well within the conventional two-year period following disclosure by some defendants of their involvement in slave financing, insuring and profiteering. See Plaintiffs' Brief at 32-34. Plaintiffs did not delay, but acted promptly following the 2002 corporate disclosures.
Likewise, plaintiffs' other theories of tolling and arguments as to the application of the doctrine of laches, Plaintiffs' Brief at 23-34, are all theories that are fact laden requiring a hearing below.
4. Defendants and the Court below offer no support to conclude that the question of private property claims pertaining to former slaves has been “committed” to the political branches.
There are two fundamental errors by the court below and by defendants: 1) the repeated characterization of these claims as “reparations”, traditionally a governmental payment for societal injustice, when in fact the complaints assert private claims against private actors and; 2) the mistaken proposition that courts were not significantly involved in post-Civil War Reconstruction efforts. The first error in wrongfully characterizing the claims runs directly counter to the Supreme Court's teaching in that “political question doctrine requires analysis of ‘the precise facts and posture of the particular case’ and precludes ‘resolution by any semantic cataloguing’ ”. Nixon v. United States, 506 U.S. 224, 252 (1993) (J. Souter, concurring) quoting Baker v. Carr, 369 U.S. 186, 217 (1962). The second error in ignoring the plethora of reconstruction era Supreme court decisions should not be countenanced.
The lower court's reasoning in characterizing the claims as reparations runs directly counter to Baker's admonition: defendants argue and the district court concluded that because the post-Civil War amendments established the former slaves' rights, no judicial remedy exists for actions derived from the slaves' claims to private property compensation. This is precisely the type of “semantic cataloguing” which the court in Baker cautioned cannot be the basis for inferring a political question. Baker v Carr, 369 U.S. at 217. The gravaman of the complaints is not reparations by government, but the disgorgement by private parties of profits wrongfully obtained in the course of private commercial acts of slave trading, financing and insuring, which were illegal in the defendants' home states. Defendants have not established that there is a “textually demonstrable commitment” by the Constitution of such private property claims to the legislative or executive branches. Baker v. Carr, 369 U.S. at 211.
Defendants assert that the post-Civil War amendments constitute a Baker v. Carr “commitment” of these highly complex issues to the political branches. Defendants' Brief at 31-33. Yet no demonstration is made of a single statute or amendment that refers to private property settlements, disgorgement or even to governmental reparations. At best, defendants argue that the conduct of the war by the executive under the Constitution's war powers provisions somehow comprises a “commitment” of the issue of slave-era compensation by private wrongdoers to the political branches. See e.g., Defendants' Brief at 31. This highly generalized argument does not satisfy the strict standard under which the narrow political question doctrine can be raised as a bar to access to the courts.
As the Court in Baker v. Carr noted, it is “finality” of action by the Constitution that renders an issue “committed” to the political branches. Baker at 210 citing Coleman v. Miller, 307 U.S. 433, 454 (1939). A “textually demonstrable commitment” arises where the Constitution “expressly” commits the subject matter to the political branches. Gilligan v. Morgan, 413 U.S. 1, 10 (1973); see also Nixon v. United States, 506 U.S. 224 (1993), where the court scrutinized the actual text of the Constitution to determine “commitment” of the question to the political branches. That the Civil War resulted in the freeing of the slaves does not render the adjudication of their rights a matter “committed” to the political branches inasmuch as the amendments do not refer even inferentially, much less expressly, Gilligan v. Morgan, 413 U.S. at 10, to a delegation of such questions to Congress.
Congress, following the Civil War, repeatedly conveyed private rights of action to African Americans, a demonstration that Congress understood that the post-Civil War amendments were intended, inter alia, to secure access to the courts for the freed slaves. Post-Civil War civil rights statutes were intended by Congress as a major expansion of the power of individuals to bring private actions. See e.g. Zwickler v. Koota, 389 U.S. 241 (1967) describing the Civil Rights Act of 1875 as “the principal ‘....measure of the broadening federal domain in the area of individual rights'...By that statute... ‘Congress gave the federal courts the vast range of power which had lain dormant in the Constitution since 1789.” Zwickler, 389 U.S. at 246-147. Such a sweeping expansion of the power of the judiciary hardly comports with the district court's conclusion (and the defendants' argument) that the post-Civil War amendments restricted claims pertaining to the freed slaves to the political branches.
For example, section 1983, virtually co-existent with the post-Civil War amendments, gives a private right of action to African Americans to remedy racial discrimination. 42 U.S.C. 1983, et seq. The Civil Rights Act of 1875, though later overturned in part by the Supreme Court, also reflected Congress' understanding that the post-Civil War amendments conveyed a power of private remedy for discrimination. See generally The Civil Rights Cases, 109 U.S. 3 (1883). Such enactments underscore Congress' understanding that the amendments were a grant of power to create private rights of action, not a reservation of private claims to the Congress' political powers. In view of this repeated demonstration by Congress that the amendments authorized the creation of private rights of action, it would require an “express” constitutional mandate, Gilligan v. Morgan, supra, to find that private African American property claims were “committed” to the political branches. No text in the amendments demonstrates such commitment.
Moreover, in the Civil Rights Cases, supra, the Court invalidated statutes conveying a federal right of action to remedy private discrimination, a clear rejection of the argument that remedial powers of any kind were conveyed to the Congress. Obviously, if the Supreme Court could hold in the immediate post-Civil War years that the amendments gave Congress no power to regulate private discrimination, it follows that the amendments did not “commit” the issue of private remedies to the legislative branch. Moreover, at no time in the Reconstruction or post-Reconstruction period did the Supreme Court refuse to assert jurisdiction over any African American rights issues on political question grounds. See e.g. Plessy v. Fergusen, 167 U.S. 537 (1896) where the Court aggressively insinuated itself in the debate over legislative powers to rectify African American discrimination.
Modern cases hold that the amendments were intended to facilitate not only the creation of private remedies by the Congress but also the assertion of private actions without the benefit of legislation. Brown v. Board of Education, 347 U.S. 483 (1954), and its progeny demonstrate conclusively that the 14th amendment invests African Americans with the power to initiate judicial action without Congressional authorization, a further rejection of the notion that claims pertaining to the freed slaves were committed to the discretion of the political branches.
Baker v. Carr demonstrates the short reach of political question doctrine. In Baker the Supreme Court found that the question of apportionment of legislative voting districts had not been committed to the Congress or Executive branches by the post-Civil War amendments, despite express constitutional text referring to minority voting rights. Indeed, if the 15th amendment, with its express protections for minority voting, did not “commit” African American voting rights to the political branches, then the case against political question doctrine is even more compelling here since the post-civil war amendments do not mention the question of property compensation.
A “textually demonstrable commitment” arises where the Constitution “expressly” commits the subject matter to the political branches. Gilligan v. Morgan, 413 U.S. at 10 (“the questions to be resolved...are subjects committed expressly to the political branches of government.”) [emphasis added]; Nixon v. United States, 506 U.S. 224 (1993). Without “text”, there can be no “textually demonstrable commitment” of the issue to the legislative branch. Powell v. McCormack, 395 U.S. 486, 519 (1969) (“In order to determine...a textual commitment...we must interpret the Constitution.”). Nowhere do the 13th, 14th and 15th Amendments address even inferentially African American property rights, whether by way of private property claims or societal reparations. To the contrary, the amendments in toto assert the equality under law of the freed slaves, a designation that lends support to the instant claims of judicial access. See e.g. the Slaughter-House Cases, 83 U.S. 36, 73 (1873), where Justice Miller writing for the majority held that a primary purpose of the 14th Amendment was to reverse Dred Scot v. Sandford, 60 U.S. 393 (1857), where the Court had found that African Americans had no right of access to the judiciary.
Defendants' continued reliance on certain Holocaust-era decisions is misplaced. Every decision cited for this proposition concerned foreign acts on foreign soil under foreign law. Defendants' Brief at 28-29. Other cases cited by defendants concern clear and express U.S. foreign policy judgments. Defendants' Brief at 36 and 38. In contrast, where such claims devolve around American actors, as in the instant actions, the courts have permitted the action to be maintained and rejected political question doctrine as a barrier to adjudication. Rosner v. United States, 231 F.Supp. 2d 1202 (S.D. Fla. 2002) (Upholding claims that Americans violated property rights of persons fleeing Nazi persecution).
That Congress has not reached a consensus on publicly-funded slave era reparations, Defendants' Brief at 34, is inapposite to whether a private right of action is justiciable against private parties holding profits wrongfully obtained from slave trading and financing. In Japan Whaling Ass'n v. American Cetacean Society, 478 U.S. 221, 230, 92 L. Ed. 2d 166, 106 S. Ct. 2860 (1986), the Supreme Court recognized that only those matters “constitutionally committed to Congress or the executive branch” can be deemed non-justiciable. 478 U.S. at 230. Japan Whaling accepted that even matters concerning foreign affairs were not barred as political questions. Id. Following Japan Whaling the court in Koohi v. Varian Associates, Inc., 976 F.2d 1328, 1331 (9th Cir. 1992), refused to apply political question doctrine in an action concerning the management of U.S. weapons systems despite the Constitution's express war powers provisions.
Thus, even where the gravaman concerns matters traditionally within the executive branch's prerogatives, i.e., foreign relations, Japan Whaling, or presidential war powers, Koohi, the courts have asserted their traditional jurisdiction. If such matters are justiciable, the instant matter is all the more justiciable in that private property compensation, i.e., disgorgement by defendants, is not a traditional federal prerogative.
Georgia v. Stanton, 73 U.S. 50 (1867), cited by defendants, recognized that property claims are not subject to political question doctrine. To assert jurisdiction, the court in Stanton held, “the rights in danger... must be rights of persons or property, not merely political rights, which do not belong to the jurisdiction of a court, either in law or equity”. 73 U.S. at 76. Stanton's recognition that only political issues, not “rights of persons or property”, are outside the court's jurisdiction, supports the instant action for disgorgement of wrongfully obtained property. Mississippi v. Johnson, 71 U.S. 475 (1866), concerned purely political issues, not private property claims. Accord Cato v. United States, 70 F.3d 1103 (9th Cir. 1995).
The remaining Baker standards.
As to the remaining Baker standards, the defendants offer little more than assumptions about the “difficulty” of adjudicating these claims arguing: 1) that the claims refer to acts that “occurred centuries ago and over a span of centuries”; and 2) the inability to discern either the degree of relationship “required for recovery” or the nature of defendants' individual involvement in slaver trading. Defendants' Brief at 35 citing Final Order 69-71.
Defendants presume that it is simply too difficult to adjudicate damage claims arising as of the close of the slave era in or about 1865.
This pre-discovery presumption ignores actuarial tests that can be developed by expert witnesses that will enable the reasoned calculation of profits retained by defendants from slave trading, financing or insuring. It ignores the findings of historical investigations done by some of these same defendants in response to municipal slavery era disclosure requirements. The district court conducted no hearing to determine the scope of potential expert testimony regarding the slavery era profit retention. With no discovery, the court took an extraordinary leap in concluding, at this early stage, that no evidence exists that would enable a reasoned calculation of damages flowing from retained earnings from slave trading, financing or insuring.
“Damage actions are particularly judicially manageable.” Koohi, 976 F.2d at 1331. As Koohi recognized
A key element in our conclusion that the plaintiffs' action is justiciable is the fact that the plaintiffs seek only damages for their injuries...
976 F.2d at 1331. Even where injunctive relief is barred by political question doctrine, an action for damages will still lie for violation of personal rights compensable. Gilligan v. Morgan, 413 U.S. at 11-12. Actions for damages will not bring the judiciary into conflict with the executive or legislative branches:
“[B]ecause the plaintiffs seek only damages, the granting of relief will not draw the federal courts into conflict with the executive branch. Damage actions are particularly nonintrusive....
The mere passage of time has never been held to be a bar to the determination of damages or equitable remedies.
Koohi at 1331. Consequently, it was error for the court below to assume on a preliminary motion to dismiss, without either expert discovery or a hearing as to methodology of damage computation, that the matter did not admit of “judicially manageable standards”. The failure to give plaintiffs the opportunity to make such showing is a fundamental violation of due process. Cf., Vieth v. Jubelirer, 541 U.S. 267, 281 (2004) where the court held a political apportionment case to be non-justiciable only after 18 years of rulings had not yielded “judicially manageable standards”. In contrast, this is the first time this matter has ever been presented to a court and it was premature to find, without a single hearing to review historical or actuarial testimony, a lack of judicially manageable or discoverable standards. See Sholtis, 238 N.J. Super. at 30 (court's equitable powers used to create standards to weigh liability; Perry v. Arlington Heights, 186 F.3d 826 (7th Cir. 1999)(finding as to standing preceded by depositions).
5. Plaintiffs' appeal addresses the purported failure to state a claim.
Plaintiffs' appeal addresses in substance the claims of unjust enrichment that animate these complaints. Throughout their brief, plaintiffs argue the basis in law and equity for the claims of disgorgement of wrongfully attained profits by defendants. See e.g. Plaintiffs' Brief at 1,2,5-7,11-13,18-19,36-37 and passim. By no means can plaintiffs be seen to have failed to appeal the finding of a failure to state a claim where the brief in detail repeatedly makes statements as: “Their [plaintiffs'] claim is that the defendants who attained ill-gotten profits through enslavement should not, under equitable principles, be permitted to retain such earnings that should be deposited into a public trust under cy pres principles.” Brief at 12. See also Brief at 19. The brief is plainly designed to present these claims. As to the consumer protection claims, the brief plainly address these in detail and as the law for each state is substantially similar, the allegations are preserved.
It is respectfully requested that the appeal be granted.
Statement of Compliance with Circuit Rule 31(e)
I, Bruce Afran, Esq., attorney for Plaintiffs-Appellants, hereby certify in compliance with Seventh Circuit Rule 319e) that I have filed a digital version of the Brief of Plaintiffs-Appellants on a virus-free disc in a non-scanne PDF format.
Plaintiff Deadria Farmer-Paellman is prepared to offer evidence on motion to amend to demonstrate injury by such induced commerce with defendants.
As for laches, defendants' brief demonstrates that early recourse to the courts by the freed slaves was unrealistic and practically unavailable. Aside from the failed effort in Johnson v. McAdoo, 45 App. D.C. 440 (D.C. 1916), defendants point only to court applications in 1994, nearly eighty years later, thereby underscoring that practical recourse to the courts by slaves or their descendants is a late and very recent development. See cases cited at Defendants' brief at 25.