Jae Won Jeong versus Taiheiyo Cement Corporation et al
Filed: October 4, 1999
On October 4, 1999, Jae Won Jeong filed suit against WWII-era cement manufacturer Onoda Cement Company Ltd. (now Taiheiyo Cement Corporation) and its U.S. subsidiaries (Taiheiyo Cement U.S.A., Inc., Glacier Northwest, Inc., [a.k.a. Lone Star Northwest, Inc.] and the California Portland Cement Company) in California’s Superior Court Los Angeles County. The case was filed under California Code of Civil Procedure section 354.6 that allows survivors and the heirs of WWII slave laborers to seek compensation from companies that exploited such labor. Jeong sought an apology for forced labor, back-wages for his labor and injuries he acquired while working for Onoda Cement, and a trust fund to be set up for other former forced laborers. He argued that as a Korean student at Tokyo’s Hosei University, he was taken away in 1943 and forced to work in a limestone quarry for Onoda without being paid and without adequate food, water, or safety. The lawsuit sought class-action status for those forced laborers who worked for Onoda and its affiliates anytime between 1929-1945.
On August 30, 2001, the defendants made a motion for judgment on the pleadings, contending that the 1951 San Francisco Peace Treaty waived Jeong’s claims, the 1965 Japan-Korea Agreement resolved his claims, and the U.S. federal law preempted Jeong’s claims based on 354.6. On September 14, 2001, Los Angeles County Superior Court Judge Peter Lichtman issued his decision, denying the defendant’s motion for judgment.
Judge Lichtman argued against the defendants’ claims regarding the 1951 Treaty by citing that Jeong was not a U.S. citizen at the time of the Treaty; thus, Jeong cannot have waived his claims by virtue of his U.S. citizenship. Moreover, the system of reparation payments under the 1951 Treaty applied to allied POWs only. Finally, due to the fact that the 1951 Treaty states that disputed issues by and between Japan and its former occupied-territories ‘shall be the subject of special arrangements,’ Judge Lichtman stated that the Treaty did not bar Jeong from making his claims since Korea was occupied. Even if this phrase did not mandate certain types of remedies, it would have obligated only Japan, not Korea, to accept the terms of the 1951 Treaty because Korea was not a signatory to the 1951 Treaty.
Arguing against the claims made in terms of the 1965 Japan-Korea Agreement, Judge Lichtman was unable to determine the correct interpretation of the Agreement. As such, the court had two options: (1) apply California law or (2) dismiss the action without prejudice. Given these options, the Court declined to dismiss the action and allowed the case to proceed under California law 354.6.
Finally, arguing against the claims that federal law preempted Jeong’s claims based on 354.6, the Court found that there was no declaration by Congress precluding such claims.
Given the outcome, the case proceeded in trial court under Judge Lichtman. After a federal district court decided that in a similar case (see In re: World War II Era Japanese Forced Labor) California statute 354.6 was unconstitutional under the foreign affairs doctrine announced in Zschernig v. Miller (1968)-due to the fact that the statute interfered with the federal government’s exclusive power over foreign affairs-Taiheiyo filed a second motion for judgment on the pleadings in January 2002 asserting the same constitutional argument under the foreign affairs doctrine. Additionally, it argued that 354.6 violated due process by reaching claims that arose in a foreign country over 50 years ago. Finally, it argued that all claims for injuries suffered by Korean nationals during the war must be addressed by the Japanese and North/South Korean governments through ‘special arrangements’ under the 1951 San Francisco Treaty.
Taiheiyo petitioned for a writ of mandate, arguing that 354.6 was unenforceable on 4 grounds: (1) the 1951 Treaty demonstrated federal government policy regarding WWII claims of Korean nationals and thus pre-empted 354.6, (2) the statute was unconstitutional under the Zschernig ruling, (3) the section violated due process by permitting a 50 year old claim that arose outside of California, and (4) Jeong’s claims presented nonjusticiable political questions. On February 11, 2002, the United States government filed an amicus curiae in support of Taiheiyo’s petition and urging the court to accept the writ of mandate as well as dismiss statute 354.6 as unconstitutional. The Court of Appeals accepted to consider the petition for a writ of mandate because statute 354.6 represented a legal issue of significant legal importance. As such, a stay was placed on the proceedings in Judge Lichtman’s court pending the ruling, temporarily halting court proceedings.
On January 15, 2003, the California Court of Appeals issued its decision concerning Taiheiyo’s petition for writ of mandate. The court denied the petition for writ of mandate and thus, removed the stay on court proceedings, allowing Judge Lichtman to resume proceedings. The Court of Appeals denied the petition on the basis that statute 354.6 is a valid procedural statute retroactively extending limitations for a narrowly defined category of pre-existing claims to permit redress of injuries for California residents. Taiheiyo’s motion was therefore denied and the decision was thus in Jeong’s favor, moving the case forward.
On January 21, 2003, in a separate case, a federal appeals court dismissed suits brought by WWII POWs who argued they were enslaved by Japanese and German companies. In this case, the Ninth Circuit Court of Appeals upheld lower court rulings that said treaties signed by the U.S. barred prisoners from seeking restitution from companies accused of forcing them into work during WWII because such action is an intrusion on the federal government’s ability to conduct foreign affairs and commerce. As such, California Statute 354.6 was found unconstitutional. With this news, the defendants filed a motion to stay the proceedings. On January 24, Judge Lichtman denied their motion, rejecting the argument that the federal appeals court was controlling or correct. Instead, Judge Lichtman accepted Jeong’s request to set his case for trial, setting September 8, 2003 as the date for the trial to begin.
In a separate case, on June 23, 2003, the U.S. Supreme Court issued its ruling in American Insurance Association, et al., v. John Garamendi, Insurance Commissioner, State of California. The case specifically concerned whether a California statue that required an insurance company doing business in California to retrieve, compile, and disclose information about each insurance policy issued by that company or an affiliate in Europe that was in effect between 1920 and 1945 (1) impermissibly intrudes upon the national government’s exclusive power over foreign affairs and foreign commerce or (2) regulates extraterritorially in violation of the Commerce Clause, the Due Process Clause, or both. This statute was the Holocaust Victim Insurance Relief Act of 1999 (HVIRA). Additionally, the case considered other related statutes, such as 354.6, that provided separate means for Holocaust victims to resolve outstanding WWII-era claims. The ruling was important because it agreed with the Ninth Circuit Court’s decision, concluding that these state laws, including 354.6, interfered with the U.S. government’s authority over foreign affairs and foreign commerce, thereby affecting the ability of the U.S. government to enact and implement a national foreign policy. With the U.S. Supreme Court finding this law as unconstitutional, the decision put all Japanese forced labor related-claims in doubt as they were being argued under the same California law.
Given these decisions, Taiheiyo petitioned for another writ of mandate to halt the proceedings. Because California Statute 354.6 was found unconstitutional, on March 30, 2004, Judge Lichtman issued his decision, granting the petition and therefore halting the proceedings. This left Jeong only the California Supreme Court as a possibility to pursue. However, despite his efforts, his petition for review of his case was denied by the Supreme Court on July 14, 2004 and the case considered closed.
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For a link to the lawfirm overseeing Mr. Jeong’s case, see Lieff Cabraser Heimann & Bernstein, LLP at www.lieffcabraser.com
Frank Dillman et al versus Mitsubishi Materials Materials Corporation et al
Filed: September 14, 1999
On September 14, 1999, Frank Dillman (Marine veteran), George Cobb (Navy veteran), and Maurice Mazer (Army veteran) filed suit against Mitsubishi Materials Corporation and Mitsubishi Corporation in Japan and against its U.S. subsidiaries, Mitsubishi Materials USA Corporation and Mitsubishi International Corporation. The suit was filed in California’s Orange County Superior Court claiming they were forced to work at Mitsubishi’s copper mines and smelter near Hanawa, Japan. The lawsuit sought unspecified damages for lost wages and emotional distress. Dillman and Mazer were POWs for nearly 3 years while Cobb was imprisoned by Japan for a few months after his submarine sunk. They argued that while they were forced to work in copper mines in Hanawa, Akita prefecture, they endured beatings and injuries from Mitsubishi employees, worked in dangerous conditions and were given only enough food to stay alive. They filed the case under California Code of Civil Procedure section 354.6.
The U.S. State Department and the Justice Department worked with the defendants, both in court and behind the scenes, to oppose the plaintiffs’ moves, arguing that the 1951 San Francisco Peace Treaty waives their claims.
In May 2001, Judge McDonald ordered the two sides to mediate a settlement. The defendants filed a Demurrer and a Motion for Judgment on the Pleadings. On October 19, 2001, Orange County Superior Court Judge William F. McDonald overruled the demurrers and denied the motions for judgment on the pleadings; thereby rejecting all arguments that the State Department and the defendants’ lawyers and lobbyists made in both the courtroom and in Congress. In so doing, Judge McDonald ruled in favor of the POWs and indicated that the case would continue to move forward to trial. Asserting that the court had a right to hear the POWs’ claims, Judge McDonald based his decision on: (1) it is the courts that determine the meaning and/or the applicability of the 1951 Peace Treaty, not the executive branch; (2) ‘political question doctrine’ does not prevent the court from adjudicating the rights of the private party plaintiffs against private companies; and (3) factual issues exist as to the application of the 1951 Peace Treaty with Japan to the plaintiffs’ claims. While applying to Dillman’s case, the ruling also applied to one other case against Mitsubishi and one against Mitsui.
On December 18, 2001, the defendants filed a petition for writ of mandate, asking the Court of Appeals for a halt to the proceedings. The following day, the U.S. government filed an amicus curiae (friend of the court) in support of the writ petition.
On February 6, 2003, the Court of Appeal (Fourth Appellate District, Division Three) issued its decision, ordering in favor of an issuance of a writ of mandate, commanding the Orange County Superior Court to enter a new and different order to dismiss the case. In other words, the Court of Appeal rejected the plaintiff’s claims. The Court argued that the plaintiff’s claims were precluded by the 1951 Peace Treaty that specifically provided for the indemnity to Allied soldiers from certain Japanese assets and otherwise waived all such claims. On February 21, 2003, the POWs filed a petition for a review of the Court of Appeal’s decision, which was granted by the California Supreme Court on April 30, 2003.
While this case was pending, in a separate case, on June 23, 2003, the U.S. Supreme Court issued its ruling in American Insurance Association, et al., v. John Garamendi, Insurance Commissioner, State of California. The case specifically concerned whether a California statue that required an insurance company doing business in California to retrieve, compile, and disclose information about each insurance policy issued by that company or an affiliate in Europe that was in effect between 1920 and 1945 (1) impermissibly intrudes upon the national government’s exclusive power over foreign affairs and foreign commerce or (2) regulates extraterritorially in violation of the Commerce Clause, the Due Process Clause, or both. This statute was the Holocaust Victim Insurance Relief Act of 1999 (HVIRA). Additionally, the case considered other related statutes, such as 354.6, that provided separate means for Holocaust victims to resolve outstanding WWII-era claims. The ruling was important because it agreed with a Ninth Circuit Court’s decision on January 21, 2003 (Deutsch v. Turner Corp) that these state laws, including 354.6, were unconstitutional because they interfered with the U.S. government’s authority over foreign affairs and foreign commerce, thereby affecting the ability of the U.S. government to enact and implement a national foreign policy. With the U.S. Supreme Court finding this law as unconstitutional, the decision put all Japanese forced labor related-claims in doubt as they were being argued under the same California law.
On September 24, 2003, the California Supreme Court issued its opinion concerning the POWs’ petition for review, transferring the review back to the Court of Appeal, Fourth Appellate District (Division Three) with directions to vacate its decision and to reconsider the case in light of the Garamendi decision by the U.S. Supreme Court. In light of both the Garamendi case and the Deutsch case, on November 5, 2003, the Court of Appeal issued its decision, dismissing the POWs’ claims.
WWII Era Japanese Forced Labor Litigation: A Class Action Lawsuit
Filed: August 6, 1999
On August 6, 1999, former American former-POW Ralph Levenberg filed a damages lawsuit at the Los Angeles Superior Court against Nippon Sharyo Ltd. and its U.S. subsidiary, seeking an apology, a court order to prevent the companies from operating in California, and $75,000 in compensation and other damages for forced labor at Nippon Sharyo from 1942 to 1944 near Nagoya, Japan. It marked the first time a former American POW took a Japanese firm to a U.S. court. On August 9, 1999 Lester Tenney filed a lawsuit in the Los Angeles Superior Court against Mitsui Mining Co. demanding unspecified compensation for California former forced laborers of the Axis powers. Both suits were filed under California Code of Civil Procedure section 354.6, enacted on July 28, which gave state courts jurisdiction to hear WWII forced labor cases.
Other lawsuits throughout the United States followed. The largest of which was filed on September 13, 1999 by 11 American former-POWS representing more than 500 victims in a class action suit in U.S. District Court in Albuquerque, New Mexico against 5 Japanese companies (Kawasaki Heavy Industries, Ltd., Mitsui & Co. Inc., Mitsubishi International Corp., Nippon Steel Corp., and Showa Denko). The suit involved families and estates of POWs who had died. While the suit asked for compensation for forced labor and injuries and asked to bar the Japanese companies from being able to conduct business in the U.S., it did not name any specific monetary figure.
Because of California statute 354.6, all such lawsuits gravitated to California. These suits grew to include not only American former POWs and civilian internees, but former POWs and civilian internees from Australia, Canada, China, England, the Netherlands, the Philippines, Scotland, and South Korea. The plaintiffs in these cases came to represent hundreds of thousands of former POWs and civilians. The defendants in the cases were Japanese mining, steel companies, construction companies, and banks, including, among others, Mitsui, Mitsubishi, and Nippon Steel-and their American subsidiaries.
The increasing number of lawsuits sparked a reaction from the Japanese Ambassador to the U.S. Shunji Yanai. Additionally, because of the growing number of lawsuits in various jurisdictions throughout the United States, the Judicial Panel on Multidistrict Litigation in Washington D.C. on June 5, 2000 consolidated a total of 17 federal suits (at that time) to coordinate pretrial proceedings and prevent inconsistent rulings. After the consolidation, more were added. Because many of the lawsuits overlapped, the number of lawsuits within the consolidated case filed by former POWs belonging to American and Allied forces totaled 13; the number of lawsuits filed by non-signatory nations to the San Francisco Peace Treaty totaled 11. The targeted corporations were: Mitsubishi Corporation, Mitsubishi Materials Corporation, Mitsui & Company, Nippon Steel Corporation, Nippon Sharyo Ltd., Japan Energy Corporation, and Ishihara Sangyo Kaisha Ltd.
The consolidated case was sent to Judge Vaughn Walker of the U.S. District Court for the Northern District of California in San Francisco (U.S. federal court), who had presided over the original Levenberg case. The dramatic increase in the number of lawsuits and the need for a consolidated case sparked reaction from the U.S. government, which on August 17, 2000, filed a Statement of Interest with the court urging Walker to dismiss the case, citing that the 1951 San Francisco Peace Treaty waived all claims against Japan by the government and its nationals.
On September 21, 2000, Judge Walker issued his decision, dismissing the 13 lawsuits filed by the American and Allied POWs. Judge Walker cited that by signing the 1951 San Francisco Peace Treaty, the United States and its WWII allies waived, on behalf of themselves and their nationals, all claims arising out of wartime actions taken by Japan and its nationals. The decision adopted a position similar to that which the U.S. argued in its August 17 Statement of Interest. The dismissal was viewed as threatening for some 30 other lawsuits pending.
For those plaintiffs that were not citizens of countries that were signatories to the 1951 San Francisco Peace Treaty, Judge Walker asked the plaintiffs to file supplemental briefs on their claims. On December 13, 2000, the U.S. filed another Statement of Interest, arguing that the September 21 Court ruling did not apply to non-Allied claims. In particular, the Statement argued that the Court should not entertain claims in a U.S. court after 50 years have passed because post-war settlements-including war crimes trials, the 1951 San Francisco Peace Treaty, and other international agreements-already took Japan’s conduct into consideration and held the nation accountable. California courts should not be able to overturn the government’s foreign policy decisions nor be allowed to interpret treaties and agreements between foreign powers affecting the rights of non-nationals with respect to events that did not occur in the U.S. Finally, in regard to Filipino forced laborers, the U.S. argued that since the Philippines were signatories to the 1951 Peace Treaty, they should be treated identical to Allied claims.
After receiving the briefs he requested, on September 17, 2001, Judge Walker dismissed these 11 lawsuits, dealing a serious blow to more than 24 pending lawsuits. For the Filipino nationals, he found that they were covered by the 1951 Treaty because the Philippines ratified it in 1956. For plaintiffs from non-signatory states, i.e. Chinese and Korean nationals, he held that 354.6 was unconstitutional because it infringed upon the powers of the federal government to conduct foreign policy.
The plaintiffs appealed. The case became Deutsch v. Turner Corp., representing 28 lawsuits, and moved to the U.S. Court of Appeals for the Ninth Circuit, incorporating complaints against Japanese and German corporations. (Josef Tibor Deutsch was suing the German construction company Hochtief AG and its two U.S. subsidiaries for forced labor he conducted during WWII after being taken to Trzebinia, a sub-camp of Auschwitz. His case was dismissed by Judge Stephen Wilson of the Central District of California.) The plaintiffs in this appeal case filed their complaint under California statute 354.6.
On January 21, 2003, the Appeals Court issued its decision, upholding Judge Walker’s decision and dismissing the appeal. The court’s basis for dismissal was similar to the 2000 and 2001 dismissals. Judge Stephen Reinhardt, writing for the court, argued that not only did the U.S. give up compensation claims under the 1951 San Francisco Peace Treaty, but the 1999 California law 354.6 was unconstitutional because it infringed on the federal government’s exclusive power over foreign affairs, including the procedure for resolving war claims. As such, the California law was invalidated. Nevertheless, the plaintiffs appealed to the U.S. Supreme Court.
In a separate case, on June 23, 2003, the U.S. Supreme Court issued its ruling in American Insurance Association, et al., v. John Garamendi, Insurance Commissioner, State of California. The case specifically concerned whether a California statue that required an insurance company doing business in California to retrieve, compile, and disclose information about each insurance policy issued by that company or an affiliate in Europe that was in effect between 1920 and 1945 (1) impermissibly intrudes upon the national government’s exclusive power over foreign affairs and foreign commerce or (2) regulates extraterritorially in violation of the Commerce Clause, the Due Process Clause, or both. This statute was the Holocaust Victim Insurance Relief Act of 1999 (HVIRA). Additionally, the case considered other related statutes, such as 354.6, that provided separate means for Holocaust victims to resolve outstanding WWII-era claims. The ruling was important because it agreed with the Ninth Circuit Court’s ruling, concluding that these state laws, including 354.6, interfered with the U.S. government’s authority over foreign affairs and foreign commerce, thereby affecting the ability of the U.S. government to enact and implement a national foreign policy. With the U.S. Supreme Court finding this law as unconstitutional, the decision put all Japanese forced labor related-claims in doubt as they were being argued under the same California law (that was itself invalidated on January 21).
On October, 6, 2003, the Supreme Court turned aside the appeals from both U.S. and non-U.S. claimants, effectively ending the lawsuits in California’s federal courts and the plaintiffs’ claims. The court’s action was taken without comment. Having exhausted the judicial path for redress, the plaintiffs now direct their efforts to the United States Congress.
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