G THE B IN EN V C R H E

S

A N 8 8 D 8 B 1 AR SINCE www. NYLJ.com Volume 253—NO. 36 Wednesday, February 25, 2015 Perspective Expert Analysis The Lusitania and the Law

by timothy g. nelson

ne hundred years ago, the there was weapons ordinance aboard fare by both sides during World War II.5 R.M.S. Lusitania, a Cunard the Lusitania, including rifle bullets, At the time, the still-neutral United liner en route from New York shrapnel shells and fuses—thus lend- States was adamant that the sinking to was sunk by a ing some credence to Germany’s initial violated international law.6 In 1916, it OGerman U-Boat. It was attacked off the claim that it was entitled to confront extracted a diplomatic note from Ger- south coast of in the afternoon the vessel. The traditional view is that many that, while denying illegality, of May 7, 1915; a victim of Germany’s regardless of whether “contraband” expressed regret for the sinking and policy of attacking British-bound com- was aboard, the sinking was still illegal accepted liability for it. merce without warning. Of the 1,962 because, under the so-called “cruiser In 1923, a three-member “mixed passengers, 1,201 were killed. One rules,” the U-boat could only have claims commission” adjudicated claims hundred twenty eight were American.1 “stopp[ed] and search[ed]” the ves- of U.S. nationals for damage arising out This did not instantly draw the U.S. sel, “impounding her cargo, and seizing of the sinking. Because liability had into . It remained been admitted, its sole task neutral until April 6, 1917. The was to enunciate the relevant actual trigger was the leaked While the role of “moral damages,” particu- damages principles and then “Zimmerman Telegram”— larly in business cases, is still debated, the make individual awards. exposing Germany’s bizarre influence of ‘Lusitania’ is undeniable. As in so The commission held that bid to ally with Mexico and manu facets of legal life, a case that initially “[t]he fundamental concept of attack Texas, Arizona and ‘damages’ is satisfaction, rep- New Mexico2—but the sinking prompted controversy in one area (laws of aration for a loss suffered; a loomed large: when seeking a naval warfare) has spawned jurisprudence in judicially ascertained compen- declaration of war, President an entirely different sphere. sation for wrong. The remedy decried the should be commensurate with “reckless and lawless subma- the loss, so that the injured rine warfare adopted now without dis- [her] as a prize or destroying her after party may be made whole.”7 This was guise by the Imperial German Govern- making proper provision for the safety not “punishment” for the wrongdoer, ment,” as well as the “American lives of the crew and passengers. It did not but rather a sum that would “insure taken” by it.3 justify a ‘sink on sight’ policy.”4 Still, to the individual full, adequate, and Historians have debated the legality controversy lingers, particularly given complete compensation for a wrong of Germany’s actions. It turns out that the widespread use of submarine war- inflicted to his detriment.” Wednesday, February 25, 2015

Moreover: Lusitania has also been cited in While the role of “moral damag- That one injured is, under the rules investor-state arbitration—the pro- es,” particularly in business cases, of international law, entitled to be cess by which businesses can seek is still debated, the influence of compensated for an injury inflicted compensation for expropriation or Lusitania is undeniable. As in so resulting in mental suffering, injury mistreatment of foreign investments. many other facets of legal life, a to his feelings, humiliation, shame, Although investment damages are often case that initially prompted contro- degradation, loss of social position economic, the 2009 Desert Line deci- versy in one area (laws of naval war- or injury to his credit or to his repu- sion, arising under the Yemen-Oman fare) has spawned jurisprudence in tation, there can be no doubt, and Bilateral Investment Treaty, shows that an entirely different sphere. such compensation should be com- a “moral” component may be awarded. 1. See Diana Preston, Lusitania: An Epic Tragedy 303 (2002). mensurate to the injury. Such dam- In that case, the Yemeni government 2. See Barbara Tuchman, The Zimmerman Telegram (1958). 3. 55 Cong. Rec. 305, 103, 104 (1917). ages are very real, and the mere fact had coerced a contractor (DLP) to sur- 4. Preston, note 1, at 390. 5. The Soviet Navy undertook submarine attacks on Ger- man shipping, sinking the M.V. Wilhelm Gustloff in January that they are difficult to measure or render its rights under a $20 million 1945—history’s largest loss of life through one sinking (9,400 deaths). See Cathryn J. Prince, Death in the Baltic: The World estimate by money standards makes private arbitration award. Besides War II Sinking of the Wilhelm Gustloff (2013). The U.S. Navy en- gaged in successful submarine warfare against Japan, but this them none the less real and affords restoring the full value of the award, was “justified as a reprisal for Japanese breach of the law.” See D.P. O’Connell, The Influence of Law on Power 44 (1975). no reason why the injured person the investor-state tribunal, citing Lusita- 6. See also The Lusitania, 251 F. 715, 728-32, 736 (S.D.N.Y. 1918) (dismissing a claim against the shipowners, holding fault should not be compensated.8 nia, awarded $1 million in moral dam- “must be laid upon those who are responsible for the sinking of the vessel, in the legal as well as the moral sense”; i.e., “the illegal act of the Imperial German government,” breaching “a Lusitania’s general pronouncements ages for the “threats and attacks on the cherished and humane rule observed, until this war, by even the bitterest antagonists”). on personal injury damages have been physical integrity of [the] investment,” 7. Lusitania Cases (U.S. v. Ger.), 7 R.I.A.A. 32, 39 (Mixed Claims Comm’n 1923). cited widely, including in numerous as well as the impact on the physical 8. Id. at 40. 9. Decision re Letelier & Moffitt, (U.S.-Chile), 31 I.L.M. 1 ¶¶ international law claims involving health of DLP’s employees, reputation, 31, 35, 43 (1992). 10. Case of Diallo (Guinea v. Democratic Republic of Congo), injury to individuals. Lately, atten- prestige and credit.11 I.C.J. Rep. 2012 at 324 ¶¶ 18, 24-25. 11. Desert Line Projects LLC v. Yemen, No. ARB/05/17, Award tion has focused upon its specific Subsequent claims for moral damages ¶¶ 185, 290, 298 (ICSID 2008). 12. Lemire v. Ukraine, No. ARB/06/18, Award ¶ 333 (ICSID holdings concerning non-economic claims have not fared as well: recently 2011) (“moral”) damages. They were cited an investment tribunal stated that such Timothy Nelson is a partner at Skadden, Arps, Slate, Mea- in the 1992 compensation recommen- damages are reserved for “exceptional gher & Flom. Audrey Feldman, an associate, assisted in dations relating to the assassination of cases, provided that the state’s actions the preparation of this article. Chilean dissident Orlando Letelier.9 In imply physical threat, illegal detention 2012, the World Court cited Lusitania or other analogous situations in which in awarding $85,000 in “non-material” the ill-treatment contravenes the norms Reprinted with permission from the February 25, 2015 edition of the NEW YORK damages against a state engaging in according to which civilized nations LAW JOURNAL © 2015 ALM Media Properties, LLC. All rights reserved. Further 10 12 duplication without permission is prohibited. For information, contact 877-257-3382 human rights violations. are expected to act.” or [email protected]. # 070-02-15-26