Dole Off The Hook In $97M Banana Farmers Award

By Erin Marie Daly

Law360, New York (October 21, 2009) -- A federal judge has ruled that a $97.4 million judgment a Nicaraguan court issued against Dole Food Co. cannot be enforced, marking a decisive victory for the world’s biggest fresh fruit and vegetables producer in a years-long saga over alleged injuries banana farmers suffered because of pesticides.

In a ruling Tuesday, Judge Paul Huck of the U.S. District Court for the Southern District of Florida said Dole and co-defendant Dow Chemical Co. had “clearly established” their entitlement to nonrecognition of the award, issued four years ago by a trial court in Chinandega, Nicaragua.

The 150 plaintiffs, who worked on Dole’s banana plantations in Nicaragua between 1970 and 1982, claimed they were harmed by their exposure to the chemical compound dibromochloropropane, or DBCP, which has been linked to sterility.

At the center of the case is “Special Law 364,” a statute the Nicaraguan Legislature enacted in 2000 specifically to handle DBCP claims.

Applying the law in this case, the trial court awarded $97.4 million to compensate the plaintiffs for DBCP-induced infertility and psychological effects, an amount that averaged out to about $647,000 per plaintiff.

Dole and Dow appealed the judgment to an intermediate appellate court in Nicaragua, where their appeal is still pending.

The companies also appealed in the U.S., contending that the Southern District of Florida couldn’t enforce the judgment because the Nicaraguan court lacked jurisdiction under Special Law 364.

Judge Huck agreed, noting that the Nicaraguan attorney general had found that Special Law 364 violates the country’s constitution because, among other things, it assumes that the plaintiffs will automatically prevail and does not even contemplate the possibility that DBCP defendants might succeed in defeating the plaintiffs’ claims.

The Nicaraguan Supreme Court later upheld the law.

But Judge Huck said it was clear that without Special Law 364’s presumption of causation, there was no evidence before the Nicaraguan trial court sufficient to determine that DBCP exposure caused the plaintiffs’ injuries.

The Nicaraguan court’s application of Special Law 364’s irrefutable presumption of causation resulted in findings that were “incompatible with medical and scientific facts,” Judge Huck said.

For one thing, the judge said, the evidence before the trial court was sufficient to conclude that only six percent of the prevailing plaintiffs possessed sperm impairments medically consistent with a finding of sterility.

In addition, the majority of the plaintiffs were awarded damages even though they suffered exclusively from conditions not scientifically linked to DBCP exposure, he said.

About one-fifth of the prevailing plaintiffs whom the trial court found exhibited various types of sperm impairments as a result of DBCP also couldn’t have suffered from sperm impairments caused by DBCP because they fathered children in the years since their last alleged exposure to the chemical and before their spermograms were taken, the judge said.

Special Law 364 properly could be viewed as a “blocking statute,” or a law that closes the doors of a foreign country’s courts to prevent a U.S. court from finding that an alternative forum exists, Judge Huck added.

The defendants effectively invoked their opt-out rights under Special Law 364, divesting the Nicaraguan trial court of jurisdiction, he said.

Judge Huck said that both Special Law 364 and the judgment itself “purport to establish facts that do not, and cannot, exist in reality.”

“The law under which this case was tried stripped defendants of their basic right in any adversarial proceeding to produce evidence in their favor and rebut the plaintiffs’ claims,” he said.

Westlake Village, Calif.-based Dole and pesticide makers like Dow have been slapped with billions of dollars in judgments by Nicaraguan courts in similar suits but have largely refused to pay the amounts.

Dole is represented by Gibson Dunn & Crutcher LLP and Hunton & Williams LLP.

Dow is represented by Kirkland & Ellis LLP, Schirrmeister Diaz-Arrastia Brem LLP and the Law Offices of Ronald Weil PA.

The plaintiffs are represented by Podhurst Orseck Josefsberg Eaton Meadow Olin & Perwin PA and Provost & Umphrey Law Firm LLP.

The case is Osorio v. Dole Food Co., case number 1:07-22693, in the U.S. District Court for the Southern District of Florida.