Slave reparations are unlikely, but lawsuit may prod companies

In the 1850s, Aetna insured slaveholders against the death of their human property, and the predecessors of the CSX rail company used slaves to build their tracks.

At the time, it was just ordinary business in antebellum America. But those practices have come back to bite the companies this week, as they were sued for profiting from slavery.

While the legal case may be a long shot, the class-action suits – which appear to be the first ever filed on behalf of the 35 million African-Americans estimated to be the descendants of slaves – could nudge embarrassed companies into voluntarily paying up.

Like recent suits against German and Japanese companies who supplied enemy armies during World War II, they raise the question of how much responsibility corporations today should take for their role in events decades – or even centuries – ago.

"Many of these corporations started out and got to be considerably wealthy because of our enslavement," says Kalonji Olusegun of the Washington-based National Coalition of Blacks for Reparations in America. "The inheritance of that enslavement still exists within their corporate structure."

The suit filed Tuesday in federal court in New York, which also names FleetBoston Financial Corp. as a defendant, is the latest attack by reparation advocates. They argue that America has not repaid the financial debt owed African-Americans for two centuries of enslavement and degradation. Unpaid slave wages alone total $1.4 trillion dollars, the suit alleges – a total equal to one-tenth of the entire US economy today.

In recent years, the reparations movement has gained popular support, although not all African-Americans have been in favor of it. In any event, there have been few legal victories. A federal appeals court, for example, found no legal basis for a $100 million slave-reparations suit brought against the federal government in 1995, although the Florida Legislature did award $2 million in 1994 to victims of a 1923 race riot.

More recently, a high-powered team of lawyers including Harvard law professor Charles Ogletree have focused their research on corporations with roots in antebellum America.

Deadria Farmer-Paellmann, who was the plaintiff named in the suit this week, found evidence that dozens of US companies profited from slavery. Those findings prompted California to require all insurers who do business in the state to detail their own participation in the slave trade.

Aetna, which apologized for its role in slavery in 2000, says the focus should be on its more recent history of hiring a diverse workforce and investing millions in African-American communities. "These issues in no way reflect Aetna today," says company spokesman Fred Laberge.

CSX this week acknowledged that slave labor helped construct its rail lines, but it argued that courtrooms are the wrong setting to redress slavery. "Its impacts cannot be attributed to any single company or industry," CSX said.

As a precedent, reparation advocates point to payments to the victims of the Holocaust and Japanese internment during World War II. But in the case of slavery, proving actual harm is more difficult since the slaves themselves died long ago.

The suit faces a rocky future in the courts, legal experts say. Instead of relying on traditional tort law that covers most injury claims, this new suit uses a more novel theory of "unjust enrichment."

This theory usually depends upon an actor profiting by acting illegally, says Robert Sedler, a law professor at Wayne State University in Detroit. But at the time, slavery was legal. There's also the problem of tracing the "wrongfully gained" wealth to the present company, says Anthony Sebok of Brooklyn Law School. Also, for the litigation to proceed, it must survive the time limits imposed in such cases.

While the cases may have little legal standing, corporations uncomfortable with bad publicity could find themselves in a bind. German corporations hit with lawsuits for their role in the Holocaust settled for billions of dollars.

"The lawsuit is a smart political move," says Mr. Sedler. "It changes the notion of reparations from payments to individuals to remediating the consequences of slavery, and puts the burden on companies that have profited from slavery."

The suit says that up to 100 companies could be sued in all, and lawyers involved say that 12 will soon get letters requesting a dialogue on settlements. "We expect those companies that are targeted to stand up," attorney Roger Wareham said at a press conference on Tuesday.

More than just extracting payments or apologies from individual companies, reparation advocates see such suits as a way to educate the public about the historic costs of slavery and discrimination.

Says Adrienne Davis, a law professor at the University of North Carolina: "I would hope successful suits against companies would be only the first step towards a larger national project of reconciliation regarding slavery and the international slave trade."