U.S. Litigation Concerning Japanese Forced Labor in World War II

David D. Caron & Adam Schneider
October 29, 2000
I. Introduction
Over the past few years, American courts have heard a number of prominent cases addressing claims related to World War II.  In 1998, for example, Swiss financial institutions reached a $1.25 billion settlement with Jewish holocaust victims and their heirs over Adormant accounts@ from World War II, [1] and earlier this year the United States and Germany approved the establishment of a $5 billion fund for the settlement of forced labor claims against German companies, both actions being  stimulated, in part, by class action suits filed in United States federal courts. [2]   Continuing this series of events, there has now followed a series of cases, almost entirely in California state courts or Federal Courts within California, asserting forced labor claims against Japanese companies. Although a continuation of the legal actions looking back to the suffering of the Second World War, the California cases also represent a new development insofar as they stem from events in the Pacific rather than European theater of World War II.
II. Statutory Basis and Procedural History
A catalyst for this series of California cases is California Code of Civil Procedure section 354.6, ACompensation for slave and forced labor,@ which came into effect in July of 1999. This statute provides that
AAny Second World War slave labor victim, or heir of a Second World War slave labor victim, Second World War forced labor victim, or heir of a Second World War forced labor victim, may bring an action to recover compensation for labor performed as a Second World War slave labor victim or Second World War forced labor victim from any entity or successor in interest thereof, for whom that labor was performed, either directly or through a subsidiary or affiliate.@ [3]  
Perhaps as significantly, the statute waives applicable statutes of limitations that might otherwise bar the litigation of events now more than fifty years past. [4]  
Following the implementation of this statute, several different groups of plaintiffs filed suit in California state court.  These plaintiffs include former United States prisoners of war (POWs), Chinese and Korean civilian internees, and former POWs and civilians from various European nations.  If certified, each of these classes of plaintiffs could be quite large, although accurate numbers are not available at this point.  The defendants in these actions include some of the leading corporations of Japan, along with their American subsidiaries: Mitsubishi Heavy Industries, Mitsubishi International, Mitsui & Co., Mitsui Mining, Sumitomo Heavy Industries, and Nippon Steel, among others.
During the first part of this year, the various actions bought in State court were the subject of  motions seeking their removal to Federal Court. Given the large number of actions proceeding independently throughout the state, a complex and confused situation ensued. In June of this year, the Judicial Panel on Multidistrict Litigation consolidated the various cases for coordinated pretrial proceedings before Judge Vaughn R. Walker of the United States District Court for the Northern District of California. [5]
III. Present Status and Future Legal Issues      
In his recent Order of September 21, 2000, Judge Walker did two things. [6]   First, he rejected the plaintiffs= motions to remand to state court on the ground that the Aremoval jurisdiction exists because these actions raise substantial questions of federal law by implicating the federal common law of foreign relations.@ [7] Second, Judge Walker granted in part defendants= motions to dismiss the claims finding that the Treaty of Peace with Japan, [8] signed in 1951 in San Francisco by the United States and 47 other allied powers and Japan, Aconstitutes a waiver@ of the claims brought by the former military personnel of the United States or its allies during World War II . More specifically, Judge Walker=s analysis looks to Article 14(b) of the Treaty, that provision stating:
(B) Except as otherwise provided in the present Treaty, the Allied Powers waive all reparation claims of the Allied Powers, other claims of the Allied Powers and their nationals arising out of any actions taken by Japan and its nationals in the course of the prosecution of the war, and claims of the Allied Powers for direct military costs of occupation.  
Judge Walker found this waiver to be unambiguous, but nonetheless looked beyond the text to find  that Athe history of Allied experience in post-war Japan, the drafting history of the treaty and the ratification debate . . . resolve [any doubt] in favor of a finding of waiver.@ [9] Afar-fetched,@Judge Walker also rejected plaintiffs argument that the phrase Aprosecution of the war@ in Article 14(b) should not be read to include claims based on forced labor by Japanese companies. Finding it
Judge Walker concludes his Order emphasizing the value that all gained through the waiver of claims in 1951:
The Treaty of Peace with Japan, insofar as it barred future claims such as those asserted by plaintiffs in these actions, exchanged full compensation of plaintiffs for a future peace. History had vindicated the wisdom of that bargain. And while full compensation for plaintiffs' hardships, in the purely economic sense, has been denied these former prisoners and countless other survivors of the war, the immeasurable bounty of life for themselves and their posterity in a free society services the debt. [10]  
Plaintiffs have indicated that they intend to appeal this aspect of Judge Walker's Order. 
In granting defendants= motions to dismiss in part,  Judge Walker=s Order reserves for further proceedings all other claims, including most prominently the claims of plaintiffs who were or are citizens of nations that did not sign the 1951 Peace Treaty; most notably, China and Korea. Given the course of litigation against German companies regarding forced labor, these remaining claims will likely present arguments concerning the Foreign Sovereign Immunities Act, the Act of State doctrine and the Political Question doctrine. Further proceedings also may wrestle with the relevance and interpretation of other treaties that arguably bear on the claims of the remaining plaintiffs.  Japan negotiated a series of normalization agreements with the Republic of Korea in 1965, for example. Likewise, although Cold War politics and disagreements between the United States and Great Britain kept both the Nationalist and Communist Chinese regimes from attending the San Francisco 1951 Peace Conference, Japan signed a peace treaty with the Republic of China shortly thereafter.  Moreover, in 1972, when Japan switched its recognition from the Nationalists on Taiwan to the Peoples' Republic of China, it signed a normalization agreement with the PRC, and later, in 1978, a peace treaty.  
IV. Conclusion
At this point it is too early to tell if the consolidated cases before Judge Walker will follow the pattern of litigation, political intervention, and negotiated settlement established by the earlier suits against European companies.  One similarity that has emerged already, however, is that other unresolved claims arising from the Pacific theater are following the slave labor claims into American courts.  In September of this year, for example, a group of former Acomfort women@ filed a class suit against the Japanese government in federal court, although the legal issues presented by that suit appear to be rather different from those presented in the forced labor claims. [11]
In any case, there would a certain historical symmetry if the resolution of cases stemming from the Pacific theater of World War II should be shaped by the resolution of cases stemming from the European theater, since the war in the Pacific was itself so profoundly shaped by the crisis in Europe. [12]
About the Authors  
David D. Caron is the C. William Maxeiner Distinguished Professor of International Law at the University of California at Berkeley and a Commissioner with the United Nations Compensation Commission for claims arising out of the 1990-1991 Gulf War.  
Adam Schneider received his Ph.D. in Japanese History from Harvard University and has published on the Japanese empire in the first half of the 20th Century. He is currently completing his law studies at the University of California at Berkeley.  
[1] See, e.g., Jeffrey Craig Mickletz, AAn Analysis of the $1.25 Billion Settlement Between the Swiss Banks and Holocaust Survivors and Holocaust Victims= Heirs@ 18 DICK. J. INT=L L. 199 (1999)
[2] See Edmund L. Andrews, AGermans Sign Agreement to Pay Forced Laborers of Nazi Era,@ THE NEW YORK TIMES, July 18, 2000, section A, page 3.  See generally the extensive documentation available at http://www.state.gov/www/regions/eur/holocausthp.html.
[3] California Code of Civil Procedure '354.6(b).
[4] California Code of Civil Procedure section 354.6(c) states that AAny action brought under this section shall not be dismissed for failure to comply with the applicable statute of limitation, if the action is commenced on or before December 31, 2010.@
[5] Orders of the Judicial Panel on Multidistrict Litigation dated June 5, 2000 and June 15, 2000.
[6] In Re: World War II Era Japanese Forced Labor Litigation, MDL-1347 (N.D. Cal. 2000); 2000 U.S. Dist. Lexis 13984; the order is also available at http://www.cand.uscourts.gov/cand/tentrule.nsf/
[7] Id. at p. 2. AThe cases implicate the uniquely federal interests of the United States to make peace and enter treaties with foreign nations,@ at p. 5.
[8] Treaty of Peace with Japan, [1952] 3 U.S.T. 3169, TIAS No. 2490 (1951).
[9] Id. at p. 14.
[10] Id. at p. 18.
[11] Norman Kempster, AWWII-Era Sex Slaves Sue Japan,@ THE LOS ANGELES TIMES, September 19, 2000, part A, part 1, page 15.
[12] On the interplay between American diplomacy toward East Asia and toward Europe in the runup to World War II, see Akira Iriye=s THE ORIGINS OF THE SECOND WORLD WAR IN ASIA AND THE PACIFIC=s THRESHOLD OF WAR (1988). (1987) and Waldo Heinrichs