Wednesday, May 13, 2009

'A Blatant Extortion': the DBPC case in Nicaragua and Dole Food

'A Blatant Extortion.' WSJ Editorial
A judge slams plaintiffs lawyers' torts-for-import game.
WSJ, May 13, 2009

Court cases get dismissed all the time, but rarely are dismissals as significant as the two lawsuits against Dole Food and other companies that were tossed recently by a California judge. Among other good things, the ruling is a setback for tort lawyers who troll abroad seeking dubious claims to bring in U.S. courts.

The allegations against Dole, the world's largest fruit and vegetable producer, involved banana plantation workers in Nicaragua who alleged that exposure to the pesticide DBPC in the 1970s left them sterile. The only problem is that most of the plaintiffs had not worked at plantations and weren't sterile. In fact, there's no evidence that farm workers at Dole facilities were exposed to harmful levels of the chemical -- which was legal and widely used at the time -- or that the level of exposure they did experience even causes sterility.

"What has occurred here is not just a fraud on the court, but it is a blatant extortion of the defendants," said Los Angeles Superior Court Judge Victoria Chaney in her oral ruling. More than 40 related cases involving thousands of plaintiffs from Honduras, Costa Rica, Guatemala, Panama and the Ivory Coast are pending in her court. And the ruling puts in doubt some $2 billion in judgments that plaintiffs lawyers have already obtained in Nicaragua.

Judge Chaney dismissed the cases "with prejudice" to prevent the plaintiffs from filing again on the same claims, and she denounced the lawyers who hatched the scheme. "This is a very sad day for me to be presiding over such a horrific situation," said the judge, who described a "pervasive conspiracy" involving U.S. plaintiffs lawyers and corrupt Nicaraguan judges.

Judge Chaney said she heard evidence of U.S. attorneys colluding with judges, lab technicians and local officials in Nicaragua to suborn perjury and doctor medical reports. Ten thousand men were rounded up and coached to make false claims of sterility in hope of reaping billions of dollars from companies like Dole, Dow Chemical and Amvac. Anyone who revealed the ruse was threatened with violence, as were the U.S. investigators hired by the defendants.

"There have been groups of medical personnel providing sham laboratory reports indicating sterility where none really exists; groups of fathers denying paternity of their own children, posing as lonely men coming into the court, saying that they had no solace in their old age because they have no children," said the judge.

Plaintiffs attorney Juan Dominguez of Los Angeles was singled out for alleged behavior that Judge Chaney said has "criminal overtones." At a hearing last week, she announced that she was referring Mr. Dominguez to federal prosecutors for investigation of perjury, obstruction of justice, defrauding the court and conspiring to defraud a U.S. company. Mr. Dominguez didn't show at Judge Chaney's hearing and is thought to be somewhere in Nicaragua.

The plaintiffs were also represented by the Sacramento firm of Miller, Axline & Sawyer. The judge said she didn't believe the Miller Axline lawyers were in on the conspiracy but added that they should have been suspicious. "I would have thought that a bit of vigilance would have suggested to plaintiff's counsel that something was awry," she said.

The ruling is especially useful as a rebuke to the torts-for-import business, whereby U.S. tort lawyers travel abroad, join with local lawyers to manufacture claims, and then engage in client recruitment practices that are blatantly illegal in the U.S. In essence, the tort bar's goal is to import lawsuits from foreign countries where it's nearly impossible to challenge claims on factual grounds because evidence is hard to come by. In a related case involving Dole, the Texas plaintiffs firm Provost Umphrey is asking a federal judge in Miami to enforce a $98.5 million judgment obtained by banana farm workers in Nicaragua. Never mind that the Nicaraguan judge who made the initial ruling is the same one cited by Judge Chaney for allegedly taking bribes and fixing cases against U.S. firms.

Judge Chaney's actions are a welcome act of legal hygiene and an example for other judges of how to police false legal claims.

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