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Voice of Experience

Voice of Experience: June 2024

Adventures in the Law: Chiquita Banana Loses Appeal

Norm Tabler


  • Chiquita International Brands attempted an appeal from making payments to a known terrorist group.
Adventures in the Law: Chiquita Banana Loses Appeal

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In the hundreds, maybe thousands, of television shows dealing with extortion, there has never—never—been a happy ending when the victim paid the demand. The extortionists always fail to honor the bargain (they are criminals, after all), or they keep demanding more money.

Apparently, Chiquita never saw those shows or, if they did, never learned that lesson. When a Columbian terrorist group approached them in 1989, demanding a payoff in return for “protection,” they acquiesced. And just as the TV shows consistently warned, the terrorists kept coming back for more. Chiquita—a/k/a Chiquita Brands International, Inc.--ended up paying them for 15 years!

Chiquita’s woes weren’t limited to 15 years of payoffs. Nor did they end after 15 years. They continue to this day, 35 years after the first payment. Chiquita now has a rap sheet. They have been found guilty of supporting international terrorism. Why? Because the terrorist group they paid all those years was a notorious terrorist organization. The U.S. had designated it as a foreign terrorist organization, or FTO, and it’s a crime to support an FTO.

What Chiquita saw as protection payments, the U.S. government saw as ongoing funding support of an FTO. Charged with that crime, Chiquita entered into a guilty plea agreement that included a $25 million criminal fine.

That’s not all. The terrorist organization had a nasty habit of killing innocent people. A missionary organization and representatives of six Americans kidnapped and murdered by the group sued Chiquita for their role in the deaths. What role? Keeping the terrorist group in business by regularly funding it. The court gave the plaintiffs summary judgment on some of the claims; Chiquita settled the remainder.

Chiquita then turned to their insurers—they had several—for coverage of (a) their considerable defense costs in the civil suits and (b) the amounts they paid by virtue of the plaintiffs’ summary judgment and the settlements.

The insurers denied the claims, declaring that the payments to the plaintiffs were not “occurrences” within the meaning of the policies. In 2008, Chiquita filed a lawsuit in Ohio seeking a declaration that the payments were covered by the policies. The case moved at the typical snail’s pace, with more of Chiquita’s insurers joining in. 

The trial court ruled for the insurers, declaring that the actions of Chiquita at issue in the lawsuits against them—namely payments to the terrorist group—did not constitute “occurrences” as defined in the policies. An occurrence is an accident, while Chiquita’s payments were “intentional conduct.” Therefore, the insurers had no duty to defend Chiquita or indemnify them against payments to the plaintiffs.

Chiquita appealed. In May of this year, the Ohio Court of Appeals rendered its opinion, ruling against Chiquita and in favor of the insurers on every point. Chiquita’s actions, as alleged in the civil suits against them, did not constitute “occurrences” because they were not accidents. They were intentional. In fact, the court opined that Chiquita intended to harm the terrorism victims, saying:

“may not have wanted to hurt anyone … [but] the natural and expected consequences of sending protection money to a terrorist group engaged in a campaign of violence is that the group would use the money to continue that violent campaign but select different targets.”

In June, a federal jury in Florida found Chiquita liable for eight murders committed by the terrorists and ordered Chiquita to pay a combined $38.3 million to 17 relatives of the victims.

The lesson? If you have the misfortune of encountering an extortionist, heed the lesson driven home in countless episodes of Mannix, Barnaby Jones, Columbo, and Kojak: Paying extortionists never leads to a happy ending. In fact, the ending could be worse than those TV sleuths ever imagined. As Chiquita learned the hard way, you could end up criminally and civilly liable for the evil deeds of the extortionists themselves.

The case is Travelers Property et al. v. Chiquita International Brands, Ohio Court of Appeals.