SAN FRANCISCO (CN) – Hundreds of terror victims claiming Chevron funded crimes against humanity with illegal oil payments to former Iraqi dictator Saddam Hussein will have a tough time getting evidence to prove their case, a federal judge said Thursday.
"You're going to have to be relying on bank records from banks in the Middle East, asking them to trace Saddam Hussein's money," U.S. District Judge James Donato said Thursday. "It doesn't seem to me you're going to get that."
During a motion to dismiss hearing Thursday, Donato said Baruch Yehuda Ziv Brill and 328 other named plaintiffs may have adequately alleged a link between Chevron's oil payments and acts of terror in the Middle East.
But plausibly alleging facts to survive a motion to dismiss and obtaining solid proof to show Chevron's money went to suicide bombers' families are two very different standards, the judge said.
Donato predicted a federal subpoena ordering a Jordanian bank to turn over records on Saddam's financial transactions would likely "end up at the bottom of a trash heap, and I can't do anything about it."
The plaintiffs, 18 of them U.S. citizens, say Chevron's illegal oil purchases from July 2000 to December 2002 put about $20 million into a slush fund that Saddam used to carry out crimes against humanity and acts of terror in Israel.
Last January, Donato dismissed claims to hold Chevron, which paid $27 million to settle the SEC's 2007 lawsuit over the illegal oil sales, liable under the Anti-Terrorism Act and Alien Tort Statue for financing terrorism.
On Thursday, plaintiffs' attorney Maria Wetiz of Boucher LLP in Woodland Hills, California, said a 2004 investigation by the U.S. House of Representatives International Relations Committee found Saddam diverted money from the United Nations Oil for Food program to pay millions of dollars to the families of Palestinian suicide bombers.
But Chevron attorney Robert Mittelstaedt, of Jones Day in San Francisco, said Saddam had other sources of income he used to fund those heinous acts. Mittelstaedt added the plaintiffs also lack clear evidence directly tracing Chevron's money to the acts of terror.
"It's preposterous to think that money from an oil kickback, in light of the millions Saddam Hussein had available to him, that money from Chevron was used to pay a suicide bomber’s family," Mittelstaedt argued.
But Donato appeared less than convinced by Chevron's argument, given that the plaintiffs named specific banks and embassies where money was sent before it ended up in the hands of suicide bombers' families.
Though the terror victims may ultimately lose in court on a motion for summary judgment, Donato said it appears they have plausibly alleged facts to both survive the motion to dismiss and to request discovery to prove their claims against Chevron.
"There is a point where I have to say they have enough to warrant discovery," Donato said. "This seems very close to me. I'm not sure why this is not enough."
Donato said he would delay ruling on the plaintiffs' Alien Tort Statute claims until the Supreme Court decides whether corporations can be held liable under that law. The high court is currently considering that question in the case Jesner v. Arab Bank, which was argued last month. A decision is expected by June 2018.
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