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By Yoji Cole
© 2003 DiversityInc.com July 08, 2003
This story originally appeared in the June/July issue of DiversityInc, the magazine. The magazine contains exclusive articles and features not found online. Subscribe today.
Hannah Hurdle Toomey, 71, is one generation removed from slavery but for her, the story remains sharp. Her father, Andrew Jackson Hurdle, was born into slavery in 1845. Toomey, who was born when her father was 87 years old, remembers listening to stories of her father's first 10 years spent on a North Carolina plantation before he was auctioned off with several brothers and sisters to a farm in Texas.
Toomey heard those stories from her siblings. Andrew Hurdle died at 89, the father of 25 children and a successful man who worked as a minister, farmer, manager of a sorghum syrup mill and launched one of Texas' first African-American schools of higher education: Northeast Texas Christian Theological and Industrial College.
"He was scarred on his back from being whipped and beat but he taught us not to hate and not to be a perpetual victim," Toomey says.
Robert Holloway, 84, says he still gets visions of the night in 1921 when white men shot their way into his family's home and ignited the curtains, setting the house ablaze, but the memories are buried beneath a life of happier experiences. The white mob went from home to home and business to business -- all African-American-owned -- and burned and killed everything and everyone in site in what has become known as the Tulsa Race Riots of 1921.
"It's a tough experience to explain," says Holloway who adds that recalling that night is like reliving a fatal car crash.
The contemporary movement calling for reparations for African Americans has been simmering on the nation's back burners since 2000 when Aetna first released an apology expressing regret for profiting from slavery. Now, the issue of whether African Americans deserve reparations for the enslavement of their ancestors and the destruction of their livelihoods is being brought by plaintiffs, such as Toomey and Holloway, in two class-action lawsuits.
The first lawsuit seeks restitution from 16 corporations that it claims profited from slavery. It is a collection of complaints that were filed in the federal courts of New York, New Jersey, Illinois, Louisiana, Texas and California, which have been combined into a class-action being heard in the Chicago-based Northern District Federal Court - Eastern Division. The second lawsuit seeks restitution from the city of Tulsa, its mayor and police chief and the state of Oklahoma for the 1921 race riot in which whites decimated the African-American section of Greenwood and killed more than 300 African-American residents.
The Tulsa case has something the corporate-reparations case does not and that's living survivors who are demanding monetary compensation for destroyed wealth and punitive damages. Plaintiffs' lawyers in the corporate-reparations case say their goals include the creation of a historic commission that could supervise the transfer of corporate documents, the creation of a depository, which would house all corporate documents related to slavery, and the creation of a fund to which corporations would contribute that could be used to address and repair the harm from slavery that, they say, still exists today.
"We envision the common fund to be used for economic development, health care, housing and education," says Diane Sammons of the Livingston, N.J., law firm of Nagel, Rice, Dreifuss & Mazie.
Sammons adds that a blue-ribbon panel of scholars, economists, psychologists and health-care specialists should be appointed to explore how a fund would be best utilized.
The story of how these two lawsuits came about is one that details the dogged determination of a lone researcher and the leadership of several lawyers, scholars and activists who have come together and fallen apart, all the while focusing on seeking redress for the wrongs of slavery.
While in Tulsa, the city and state admitted culpability following the findings of a riot commission in 2001, most corporate defendants have responded with defiance, some have added regret, but the popular notion holds that the statute of limitations has expired on injury claims stemming from the antebellum era so an apology is the most plaintiffs would receive.
Norfolk Southern, which is described by reparations plaintiffs as a successor-in interest to numerous railroad lines that were constructed or run, in part, by slave labor, vows to defend against lawsuits on behalf of "our employees, customers and shareholders," says Frank Brown, spokesperson for the Norfolk, Va.-based company.
"We don't think that it is right that the courts be used 140 years after abolition to attribute the wrongs of what we all agree is a sad chapter in history to individuals and companies today," Brown says.
Other companies have attempted to be slightly more conciliatory, such as JPMorgan Chase, New York Life Insurance and Aetna.
Plaintiff's researchers found that New York-based JPMorgan Chase, the second-largest financial services firm in the nation, had two predecessor banks, Merchants Bank and Leather Manufacturers Bank, which were involved in a slavery-era agreement with a London-based insurance company to insure the lives of American slaves.
JPMorgan Chase hired an outside firm to conduct an independent search of both internal and external documents and found that the two financial institutions were among more than 200 banks and other companies that over the years merged or were acquired and eventually became the present-day company, says company spokesperson Thomas Johnson, who added that JPMorgan Chase did not find evidence linking it to slavery.
"We feel the allegations are without merit," Johnson says.
New York Life Insurance Company and Hartford, Conn.-based Aetna Inc., however, have both admitted that their records indicate they or their predecessor companies insured the lives of slaves as property and named the owners as the beneficiaries. New York Life's admission in 2002 followed the 2000 approval of California's Senate Bill 2199, which required all insurance companies conducting business in the state not only to research their own historical records for any link to antebellum slavery but make their records open to the public. It was sponsored by former state Sen. Tom Hayden.
In a statement, New York Life said its predecessor company, Nautilus Insurance Company, "... wrote policies on the lives of slaves in 1846 and 1847. The trustees of Nautilus properly voted to end the practice in 1848 ... We profoundly regret that our predecessor company ... was associated in any way with [slavery] for even a brief period of time. The fact that slavery was legal in certain parts of the United States at the time doesn't make it any less repugnant."
Sy Sternberg, chairman, president and CEO of New York Life, donated in May 2002 the company's original 155-year-old archived insurance policies to the New York City-based Schomburg Center for Research in Black Culture.
"It is only through scholarly research and education that all Americans can begin to understand the effects of slavery on American society," Sternberg said in a press release.
"Hayden was inspired to create California's SB 2199 after learning of research that indicated that African Americans could trace their family trees into the antebellum era through Aetna's historical insurance policies. Shortly following that revelation, Aetna admitted it sold life insurance policies on slaves to their owners. Aetna's admission was the result of research conducted by one woman, a student at the New England School of Law."
The student, Deadria Farmer-Paellmann, now 37, had enrolled in law school with an eye on finding a method for obtaining reparations for African Americans. She worked as a clerk for the National Coalition of Blacks for Reparations in America (N'COBRA), and while attending her "Race and Law" class in 1997 she realized corporations could be found liable for their involvement in slavery. African Americans have been seeking reparations since President Andrew Johnson reneged on the pledge of "40 acres and a mule." And, ever since the Supreme Court sided with the government in Cato v. United States, the government has seemed immune from lawsuits that seek redress from slavery.
Corporations, however, were new ground. They were defendants whose largess it could be argued was established in large part from the free labor that slaves provided, which plaintiffs characterize as unjust enrichment. When companies hedge their defense on the fact that slavery was widely practiced and legal prior to the Civil War, Farmer-Paellmann responds that such a position indicates tacit support of the Dred Scott case.
Scott, a slave, in the mid-1850s had been taken by his owner into Louisiana, which was free territory. Upon his owner's death, Scott argued in court that he was entitled to freedom since slavery was outlawed in the territory, arguing "once free, always free." Scott was denied his freedom by all levels of U.S. courts and he finally ended up arguing his case before the Supreme Court. The court, however, ruled that a slave could not achieve U.S. citizenship and, therefore, could not exercise the privilege of a free citizen to sue in federal courts. A slave, Chief Justice Roger Taney ruled, was property, nothing more, and never could be a citizen.
"The essence of that is what these companies are supporting, even today," Farmer-Paellmann says. "When they say we don't owe anything, they're saying the [decision in the] Dred Scott case was right and that [African Americans] weren't persons back then and that we didn't have any rights that white men were bound to respect; they're basically reiterating that concept today."
Farmer-Paellmann learned of Aetna's slave-insurance policies when reading an African-American genealogy book that suggested using insurance company records to trace a family tree with branches in the antebellum era. She found the company's corporate records and approached Aetna in February of 2000.
That month, "there were several phone calls between me and Aetna," Farmer-Paellmann says, during which the company's director of diversity, Gwen Houston, said the insurance carrier would issue an apology and "restitution."
"I was called on the very last day of Black History Month in 2000 and I was told they would pay restitution," Farmer-Paellmann says.
Aetna spokesperson David Carter says the company never agreed to pay reparations.
"We had discussions with Farmer-Paellmann out of respect for her viewpoint," says Carter.
Aetna at the time was in the midst of fulfilling an SEC request to restate its earnings -- prompting its CEO, Richard Huber, to resign -- in addition to a major restructuring that called for the company to sell its financial-services and international divisions to Netherlands-based ING Groep.
A scholarship program tied to Aetna's sold financial-services firm was discussed with Farmer-Paellmann, says Carter, but he maintains it never was positioned as a means of restitution. The Aetna Foundation since 1980 has donated in excess of $260 million to a variety of charitable causes, many that deal with community and social issues that include the African-American community, he says.
"We were educating and discussing with her Aetna's commitment to the African-American community and giving her a full understanding of Aetna," Carter says. "The scholarship, which predated her coming to Aetna, was fulfilled by Aetna financial after it was spun off."
The company's statement reads in part: "In March 2000, Aetna expressed regret that the company was involved, in the early years of its existence, in insuring the lives of slaves. Company practices from nearly 150 years ago do not reflect the record of diversity and support of fairness and equity for all people in the years since, however. Aetna has been publicly recognized for its numerous philanthropic and workplace-diversity initiatives over many years."
When named in a reparations lawsuit launching independent researchers and revealing their findings to the public is the proper response, says Frank J. Vandall, professor of law at Emory University's School of Law. He recommends companies emulate Deutsche Bank's response to accusations about its involvement with the Nazis during WWII. Deutsche Bank not only opened its archives to outsiders, but it hired a historian to write a book on its past.
"Deutsche is an example of responding seriously," Vandall says. "They opened their books to a historian and provided him access to everyone living who was involved with the bank. That's a very large first step."
Since the filing of the complaint that seeks restitution from corporations, companies have been forewarned that at the very least they'll have to spend money on a defense if it's learned they reaped revenues from slave labor. The plaintiff's argument is aimed at punching holes in the statute-of-limitation issue with legal jabs such as equitable grounds, unjust enrichment and human-rights violations. The legal theory behind equitable grounds holds that the statute of limitations doesn't start ticking until the victim discovers the crime.
Unjust enrichment is a claim that provides a means for anyone who has wrongfully lost property to recover the property in court, however, legal scholars say since slavery wasn't a crime it wasn't illegal to use slave labor. The international community, in the absence of the United States, at the August 2001 World Conference Against Racism, deemed slavery a crime against humanity and with crimes against humanity, there is no statute of limitations.
Vandall's colleague, William J. Carney, the Charles Howard Camdler professor at Emory Law School, says there's no reason that companies should keep records that are more than 100 years old.
Carney says no living investor would care about a company's links to slavery and that, "anyone who makes a claim against a company is not an investor in the company -- they don't care about the well being of the company."
Following Aetna's apology, Farmer-Paellmann joined the Reparations Coordinating Committee, a group comprised of some of the nation's top legal minds and Ivy League scholars, such as attorneys Johnnie Cochran, Willie E. Gary and Michael Hausfeld, as well as Princeton University's Cornel West and Columbia University's Manning Marable and the group's founders, Harvard Law School Professor Charles Ogletree and author/activist Randall Robinson. The group, which formed in 2000, launched with great promise -- ABC's "20/20" recorded an early meeting at Robinson's request -- and it aimed to use lawsuits to force apologies and financial restitution from targeted corporations with the ultimate goal, a suit aimed at the federal government and an apology from the president.
But after the initial launch and national coverage, not much happened. The RCC met two or three times a year in Washington, D.C., and Farmer-Paellmann says that as the 2001 meetings rolled into 2002, she became increasingly concerned that the statute of limitations would expire on companies that she had named early.
The RCC lacked a focus and hadn't committed to pursuing a lawsuit based on Farmer-Paellmann's research, she says.
"The last meeting of the RCC in July 2001 left me concerned that an action would not be filed in time," Farmer-Paellmann says. So she called another lawyer, Edward Fagan, who had been involved with prosecuting the corporations on behalf of Holocaust survivors. Farmer-Paellmann had reached out to Fagan earlier, before she went to Aetna, but he was involved with the Holocaust cases and hadn't expressed interest. This time, however, his reaction was different.
Fagan was first introduced to the idea of naming corporations as defendants in an African-American reparations lawsuit by a colleague, Sammons, whose firm shares office space with his in Livingston, N.J. Sammons, a former prosecutor in Manhattan, had been mulling over the different avenues for seeking reparations for African Americans. Consequently, she jumped at the chance to finally learn how he tackled the statute-of-limitations issues when seeking restitution from companies that made money off of Holocaust victims during World War II. Sammons was stumped on defendants to target until news hit in August 2001 of Yale University's admission that it relied on slave-trading money for its first scholarships. She realized then that business entities could be targeted with her theory on unjust enrichment.
By this time Farmer-Paellmann thought the RCC was moving too slowly, so she decided to work with Sammons and Fagan, creating a complaint.
On March 26, 2002, they filed their first federal class-action lawsuit in Brooklyn, N.Y., on behalf of all African-American descendants of slaves.
"Things did appear to get a little sleepy [within the RCC] and they did get revised after I decided to file the action," Farmer-Paellmann says.
Ogletree responded with an op-ed column in The New York Times the following Sunday writing that the RCC, "will proceed with its own plans to file wide-ranging reparations lawsuits late this autumn."
In addition to corporations, Ogletree named Brown, Yale and Harvard universities as targeted defendants and wrote that, "naming the government as a defendant is also central to any reparations strategy; public officials guaranteed the viability of slavery and the segregation that followed it." The RCC's eventual filing, however, didn't occur in autumn and was aimed at a smaller target than the federal government. On Feb. 24, 2003, the RCC filed a lawsuit in federal court in Tulsa, Okla., on behalf of Holloway and more than 100 named African-American survivors, all of whom are older than 80 years of age, of the city's 1921 race riots. The lawsuit demands that the governments of Tulsa and Oklahoma - as well as hundreds of other "unnamed John Does" - compensate the survivors for the rioting and looting that murdered their family members and destroyed their homes and businesses. The crackdown began after an African-American man was jailed following a false accusation of raping a white woman. Many of the most violent acts were done by the Tulsa police, men deputized by the Tulsa police, National Guardsmen ordered into Tulsa by the governor and men acting with the explicit or implicit permission of city and state officials. In the end, up to 400 African Americans were killed, hundreds more were injured, and 8,000 to 10,000 people were left homeless by the destruction of 42 city blocks. Like the reparations lawsuit filed against the corporations, the Tulsa suit must hurdle some statute-of-limitations obstacles. The case is a primer, Ogletree has said, for future cases. And, indeed by filing the small suit in Tulsa, the RCC is following in the tradition of the Civil Rights movement as laid out by Thurgood Marshall and the National Association for the Advancement of Colored People (NAACP). Marshall and the NAACP litigated small easy cases in an attempt to set legal precedence and eventually change the legal environment so that the tough cases could be won.
With that philosophy, the complaint attempts to establish a precedent for overturning the statute-of-limitations restriction. The case argues that the statute of limitations should be waived because of new evidence uncovered by a legislative race-riot commission that began conducting its investigation into the riot in 1997 and published its report in 2001. Following its release, the state tacitly accepted all of the recommendations, which included cash payments to survivors and descendants. This, the suit contends, restarted the statute-of-limitations clock.
The issue landed in court because the city has refused to address the matter and the state only agreed to pay for a memorial and not reparations to the survivors. "There is also evidence that the state and the city prevented the victims from seeking redress and the state and the city concealed evidence," says Michele Roberts, an RCC member and litigator in the case from the Washington, D.C.-based law firm, Shea and Gardner.
"It would have been very difficult for slaves to have walked into a court after slavery and say, 'I want to sue my former master'," says Roberts. "I don't know the names of the people who tried to prevent slaves from doing that, but in Tulsa I know the names of the people, the wrong doers, who have prevented the victims from seeking redress."
"In some regards, we want to see how things shake out in Tulsa," says Roberts. "The consequences of slavery in this country continue to be felt. There's no question that what happened in Tulsa is a result of slavery."
In Tulsa, Holloway and other families lost the foundation they have built on and would have passed down to successive generations. Net worth reveals the vestiges of slavery, says Dalton Conley, associate professor of sociology and director of the Center for Advanced Social Science Research. The typical white family enjoys a net worth that is more than eight times that of its African-American counterpart, says Conley in a New York Times editorial, quoting economist Edward Wolff.
"Some economists estimate that up to 80 percent of lifetime wealth accumulation results from gifts from earlier generations, ranging from the down payment on a home to a bequest by a parent," Conley says. "If the federal government used such net-worth inequality as a basis and then factored in measures like population size, it could address reparations by transferring about 13 percent of white household wealth to blacks. A two-adult black family would receive an average reparation of about $35,000."
Conley researched national data to follow African-American and white adolescents into adulthood and found that when comparing African-American and white families with the same net worth, African Americans are more likely to finish high school than whites and are equally likely to complete a bachelor's degree.
"Thus, one generation after reparations were paid, racial gaps in education should close -- eliminating the need for affirmative action," Conley says.
For descendants of African Americans who were enslaved and survivors of The Tulsa Race Riots, such as Toomey and Holloway, the reparations lawsuits gives them hope that their parents' loss of freedom and life won't be buried and forgotten and that others can learn from their struggles.