January 28, 2004
From the desk of Mindles H. Dreck:Let the Games Begin
I'm surprised there isn't more comment from the legal bloggers about Judge Norgle's dismissal of the slavery reparations lawsuit. It is quite a thorough opinion (scroll down for legal filings)rejecting the plaintiffs' standing, injury and ruling that the statute of limitations is long passed.
[LEGAL BLOGGER UPDATE: Bainbridge, Curmudgeonly Clerk and Overlawyered are on it, with interesting observations about the status of corporations and their successor shareholders, as well as an interesting observation (in CC's comments) about whether the current shareholders don't have the slave-owning shareholders' profits embedded in their own costs -hence experiencing no gain whatsoever from slavery-related activities]
Of course, noting any of the above draws a predictable reaction:
Outside the courtroom after Norgle's ruling, more than 60 people gathered around activist Conrad Worrill, who said he expected such a decision from Norgle, whom he called an "arrogant, racist, white judge."
In addition, there is certainly no question that those who would pay reparations (shareholders and employees of the defendants) have little connection with those who benefited from slavery. Many are unions, foreign investors recent immigrants and some beneficial owners inevitably descended from slaves themselves. Furthermore, the involvement with slave trafficking of the various companies named in this and one other suit varies dramatically from one company to the next. Three criteria emerge from the defendant selection in this lawsuit:
- A continuous history - who ever thought avoiding the M&A craze would be a liability?
- Availability of records - one Historical Soceity officer noted to me that corporations have reconsidered or requested the return of donated archives since the suit
- Pedigree and perceived deep pockets - A tackle shop or distillery that might have actually owned a slave doesn't cut it, apparently.
But this is just the beginning, as one activist notes:
But Deadria Farmer-Paellmann, a legal researcher who was lead plaintiff, said reparations advocates will start using other tactics to pressure companies accused of profiting from slavery. "The next stages will include boycotts and ads in university (newspapers) and major press."
Other lawsuits have been filed, naming even the Pope and Jaques Chirac. More seriously, other institutions will be roped in, in a strategy designed either to coerce a mass settlement or force the government to intervene:
The number of corporations that benefited from slavery and that could be sued may reach more than a hundred, according to Deadria Farmer-Paellmann, a lawyer who is a plaintiff and who almost single-handedly has uncovered the information linking corporations to slavery. "These companies have become multibillion-dollar interests in large part due to the practice of stealing people and stealing their labor," she said. "Justice requires that they atone for these wrongs by paying restitution." (Prior to her recent research, the reparations movement was focused almost solely on restitution by the government.) Additional corporations could include utility companies that used slaves to lay gas lines beneath Southern cities like New Orleans and mining companies that forced slaves to dig for coal, according to USA Today reporter James Cox, who has researched the subject extensively. Media companies like Gannett, Knight Ridder and the Tribune Company have been linked to slavery because their predecessors published ads for runaway slaves. Nor are universities exempt. Advocates are discussing whether schools including Harvard, Brown, Yale and the University of Virginia should be sued because many of their original benefactors were allegedly wealthy slaveowners.
Hence the third criteria above. Defendants have to be vulnerable to PR damage. Even if the end is judged noble, the means is clearly a shakedown. As one critic remarks:
This, and similar litigation, is not filed with the expectation of winning in court. It is a tactic to encourage settlements from large corporations. In this sense, it is legal extortion. The sensitivity of this issue — and indeed the issue of race relations in our society — can be seen in the judge’s decision. Even though the suit was wholly without merit, and he dismissed it, Norgle acknowledged the “historic injustices and immorality of the institution” of slavery, as if he were the first to notice.Corporate America should resist the reparations shakedown. If one company settles, it will increase pressure on others to do the same. Any attempt to pay off the racial hustlers in hopes they will go away is shortsighted. It will only increase the size of their demands. It will also produce a highly negative reaction from shareholders, customers and employees. NLPC is ready, willing and able to help organize such a reaction.
This is an extremely blunt instrument for dealing with a long past horror. One doubts that any large reparation fund will benefit anyone but the organizers and the net effect to the country could be anything but negative, considering the number of other reparations that might plausibly be sought with such a precedent and the disincentive to maintain a consistent corporate presence here. Furthermore, if the objective is as stated here by Richard Barber, a NJ activist:
``We are here on behalf of all of those enslaved Africans who worked for 240 years without a payday,'' Barber said. He said there are people in America ``who have trust funds built on the backs of slaves. Time to pay up.''
then this lawsuit is way off the mark. Where are the descendants of those who had trust funds created from owning the shipping companies that moved slaves? All over the world. Some significant portion have succumbed to generational dilution and are sitting in public sector jobs hoping the private sector pays the tab*. Others of these trust funds are, no doubt, safely invested in companies formed sometime after the Civil War.
Barber also remarks:
"If the healing of this nation is to begin, it must start with reparations."
I doubt it. I'm afraid it may be just the opposite.
However, I'm interested in other opinions. Iis extracting a settlement that penalizes unrelated third parties an attitude-altering slippery slope, or am I blind to the valuable 'closure' that exceeds this defect?
UPDATE: My bad, Venomous Kate blogged the ruling and has more, including this interesting observation:
claims which are settled are considered discharged. Period. Free and clear. So the payment of reparations associated with slavery would mean that from that moment forward, each and every person of African-American heritage had been compensated for "disadvantages."Think about it. Like caucasians, African-Americans would no longer have the protection of "race-based quotas" in hiring or college admissions. There would be no further societal impetus for protection against racial discrimination as to African-Americans (while all other races would be entitled to ongoing protection.) No more "minority status" because, although statistically African-Americans might remain a minority there would no longer be a justification for additional legal protections since the legal effect of reparations is to have removed any "disadvantage" associated with being African-American.
I was hoping to get Eugene Volokh's opinion on the ruling, but he is busy being astonished at someone who thinks slaves were freer than today's taxpayers!. I suppose the slave-descendants owe taxpayers' reparations then...
* Actually, I'm passingly familiar with some descendants of East India merchants, and such a description wouldn't be too far off the mark. The primogenitor changed his mind about slavery, but selling Opium in East Asia and doing business at gun point doesn't make one a saint, does it? For most of the descendants, the fortune is long gone, but for the visiting privileges to an incredible group of islands off of Cape Cod held in trust for generations.
Posted by Mindles H. Dreck at January 28, 2004 3:22 PM | TrackBack | Technorati inbound links
So Barber believes that inherited guilt will heal the nation? Well, there's a first time for everything. Even though I believe that hell will freeze over before that happens.
If this movement were to gain widespread, intense, support in the African American electorate, it would be the final nail in the coffin for the Democrats, as a party with national aspirations.
Is it just me or have others noticed that the existence and expansion of affirmative action (re: Michigan) and, now, the loud push for reparations - by any means necessary - is having a deleterious effect on race relations? The debate is becoming more and more polarized and there is a growing "us vs. them" feel to the discussions.
Three criteria emerge from the defendant selection in this lawsuit:
1. A continuous history - who ever thought avoiding the M&A craze would be a liability?
Actually, FleetBoston is a conglomerate of many banks that have been swallowed up over the last 20 years. The doctrine of successor liability means that the product of a merger between two companies is subject to the debts of the two predecessors.
I thought that the US Government paid the debt at Gettysburg, Antietem, Shiloh, etc with the blood of Union soldiers...who would have thought that was not enough.
Fascinating coincidence that this is back in the news just in time for tomorrow's Dem debate in South Carolina, where Al Sharpton polls well. One wonders whether the issue will arise - after all, the judge did say this is "an issue that has been historically and constitutionally committed to the legislative and executive branches of our government.”
"If the healing of this nation is to begin, it must start with reparations."
Ah yes, there's nothing like knifing open an ugly scar in order to claim that the healing process has not yet begun. And naturally, the cure is lucre, preferably that of others, in large quantities.
Hide this story from your kids the next time you try to tell them there's no such thing as a money tree. They find even one paragraph of this hullabaloo and they'll have you up against the wall in mere seconds.
This is nothing more than racebaiting. The people responsible for these lawsuits should be awarded stiff fines for abusing the judicial system.
Reasonable arguments for a present remedy to past wrongs can be made. Yet the argument they've provided only serves to portray the whole of their position as entirely untenable (as can be seen from observing the vast majority of the responses to the issue).
The fact is that slavery did put the African-American population at a much lower initial value from the point at which they acquired their freedom. Yet the current stance of most in favor of reparations makes them rightly appear, well... rent seekers looking for an ancient excuse to milk someone else's cow.
That wages were the primary cost to enslaved African-Americans is equally laughable. Losses in future earnings as a result of the human capital development of which they were deprived by so many years of slavery is a much more real concern.
Righting the wrongs of past generations by wealth transfers between current generations is a hopeless remedy. At present, the issue is the underdeveloped state of African-American human capital. Living descendants of those previously enslaved are left with lower prospects for future income and the income of future generations than they would otherwise have had.
To argue for compensation for past wages is implicitly argue the value of an African-American to be that of an uneducated person engaging in manual labor. The opportunity cost of developing in a society lacking such extreme polarization comes much closer to a real approximation: but for this there can be no reasonable estimation or recompense. Yet to do otherwise is stupid.
So what now to make the best of the situation? What can be done to better the future of the descendants? I would support additional funding for academic institutions to develop the human capital of decendants of the enslaved. Yet you'll find few supporters of this view: the ratio of private to social returns is too low. So we see jokers engaging in rent seeking, making a scene about a proposed remedy that would make little difference in the future of most African Americans and destroys real discussion of credible solutions.
Past 240 years????
1774ish - 1865, anything before is British responsibility. And Dutch, Portugese and the tribes which sold them into slavery.
As an undisputed white boy, I look forward to the implementation of slave reparations so that I can cash in. (For $25,000, I'll *find* a black ancestor even if I have to go back to Alexander the Great to do it).
Alkali - In Fleet's case, I believe most of the acquired companies were merged in or continued as operating bank subsidiaries (like Shawmut, which has a long history). In industrial companies, asset purchases and dscontinuation of the prior corporate shell are much more common. I believe this offers greater protection and poses a research challenge for the litigants.
In his Second Inaugural, Lincoln said:
"If we shall suppose that American slavery is one of those offenses which, in the providence of God, must needs come, but which, having continued through His appointed time, He now wills to remove, and that He gives to both North and South this terrible war as the woe due to those by whom the offense came, shall we discern therein any departure from those divine attributes which the believers in a living God always ascribe to Him? . . .
"Yet, if God wills that it continue until all the wealth piled by the bondsman's two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said 'the judgments of the Lord are true and righteous altogether.'"
His conclusion was that:
"With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation's wounds, to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations."
You may note that that he did not mention reparations. His belief that the war had paid the debt is reflected in the first sentence. The Civil War was a cataclysmic event. Southern manhood was more than decimated (You should see the movie Cold Mountain). The material wealth of the South was deliberatley destroyed by Union Armies. And emancipation occured without compensation (I do not claim this as an injustice, but note it as a fact), which had the effect of wiping out one of the chief investments that southern landowners had made during the previous era.
One of the effects of this cataclysim was that Southern incomes were well below northern incomes for more than a century after the War. Indeed, I am not sure that the South has caught up with the North yet.
A further note. After 140 years, a dollar of current capital could not represent more than 1 cent of old money. But even that overstates the the financial value of old money. The American economy has been very dynamic and passive investors have been ravaged by cycles of boom and bust, inflation and deflation. The idea that there are folks out there living off trust funds established more than a hundred years ago is ludicrous.
If this issue (reparations) ever shows any signs of taking off, I wonder how long it will be before some descendents of Civil War Union soldiers demand 100 quadrillion dollars in compensation for the hundreds of thousands of killed and maimed who fought to end slavery in this country.
Michael -- second the motion for "good points." I would also note that it's a Pandora's Box to open up a compensatory argument for a situation like this because (a) it will be difficult, if not almost impossible, to show the specific instances or value of the grievances, and (b) it was a rather long time ago.
In fact with respect to point (a), had the slave trade not occurred and altered human geography accordingly, sex being what it is a lot of the people allegedly agrieved simply would not exist (or if they did, might find themselves in such hospitable climates as the Democratic Republic of the Congo). And then there are people who do exist but may have no links to slavery past apart from coincidence of race, but cannot show this one way or the other...but may have been victimized by the low income culture because of racial coincidence...but is that really a legally valid link...
And thus, a philosophical can of worms. Does simply being a low-income black 'prove' that you are a victim of the slave trade and entitled to a specific quantity of individual compensation? Given the stakes, it only goes downhill from there.
With respect to point (b), were this reparations claim to actually succeed, it would open the door for all sorts of victim-of-history claims against all manner of commercial entities. Problem is, punishing those entities ultimately punishes the people currently working there, and many (if not a majority) of those people may have no slavery links whatsoever.
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