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Trial Lawyer Tactics Exposed in Latin America

Tuesday, July 14, 2009

The shenanigans cited by a California judge are typical of cases where U.S. 'multinationals' are shaken down by trial lawyers supported by populist, politicized foreign courts.

It is no secret that U.S. trial lawyers hear a siren’s song from the developing world in the form of massive claims brought against multinational corporations, which they drag into court as part of a lucrative crusade against globalization, exploitation, or some other alleged sin.

Last month the ugly truth behind several of these cases was exposed when a judge in California found that a Los Angeles trial lawyer conspired with others to fabricate evidence in three multi-million dollar civil suits accusing Dole Food Company and Dow Chemical of causing sterility among male banana plantation workers through the negligent use of now-banned pesticide “DBCP.”

L.A. personal injury attorney Juan Dominguez is a self-styled crusader for the little guy against, as he describes them on his website, “big corporations and insurance companies that routinely trample, abuse, and exploit the rights of the less fortunate, pollute our environment, and violate basic human rights for their nefarious goals of corporate greed.”

According to L.A. Superior Court Judge Victoria Chaney, Dominguez took his crusade to the extreme by concocting a “blatant extortion” against Dole and Dow. Aided and abetted by Nicaraguan judges, Dominguez and his team coached plaintiffs (many of whom never worked for Dole), doctored employment and medical records, and threatened witnesses and Dole’s defense team. Supposedly sterile fathers were even told to deny their paternity to keep up the ruse.

Our societies are best served by sound laws, ethical lawyers, and fair courts. If these things are not available to the world’s largest companies, they will not be around for the rest of us, either.

After seeing evidence of the fraud, Judge Chaney declared, “this court questions the authenticity and reliability of any documentary evidence presented by plaintiffs that comes out of Nicaragua . . . I can’t believe in government documents . . . I can’t believe the laboratory reports, I can't believe medical reports.” She noted that these misdeeds cast a doubt on all DBCP claims pending in Nicaraguan and U.S. courts—including a $1.6 million judgment that Chaney herself blessed 18 months ago, before Dominguez’s scheming came to light.

The shenanigans cited by Judge Chaney are typical of cases where U.S. “multinationals” are shaken down by trial lawyers supported by populist, politicized foreign courts. Another example is the ongoing case in Ecuador, where indigenous groups supported by the government are suing Chevron-Texaco for $16 billion in environmental and health damages; the U.S. firm questions the evidence and contends that any blame rests with the prime operator, the inept Petroecuador.  

The lack of impartial justice thwarts progress in the developing world, starting with national governments that are either too ineffective, corrupt, or both to protect their own people. Because of dysfunctional judicial systems, genuine victims—and even responsible companies looking to defend themselves from unfounded claims—are denied justice in local courts.

In the case of Nicaragua, the government spawned this scandal by passing “Law 364” in 2000, which imposed egregious disadvantages that leave foreign defendants in DBCP cases in a no-win situation. If a defendant argues for dismissal of the Nicaraguan proceedings, it may force the matter into a U.S. court. Playing by unfair rules may lend credence to outrageous claims. Not defending itself may invite default judgments, with exorbitant damages presented in U.S. courts. In all, Nicaraguan courts have issued more than two dozen DBCP judgments against Dole and others totaling over $2.1 billion.

Because of dysfunctional judicial systems, genuine victims—and even responsible companies looking to defend themselves from unfounded claims—are denied justice in local courts.

Harvard Law School professor Hal Scott, writing in the Harvard International Law Journal in January 2009, exposed Law 364 as part of a “clear and cunning” strategy of passing laws that discriminate against U.S. defendants so that U.S. judges are left with little choice but to open our courts to foreign plaintiffs. Scott argues that Congress should deny access to U.S. courts in cases where a foreign government has rigged its judicial system to prey on foreign defendants. Such a law, he says, would promote reform and greater fairness in overseas courts.

In the meantime, the Dominguez scandal may nudge justice along here at home. There are 31 DBCP-related cases—with thousands of plaintiffs from Costa Rica, Guatemala, Panama, Honduras, and the Ivory Coast—pending against Dole nationwide. Judge Paul C. Huck, of the U.S. District Court for the Southern District of Florida, may soon decide whether a $98 million judgment, which was approved by a Nicaraguan jurist implicated in the Dominguez scandal, is enforceable in the United States.

It would be both unwise and unjust to suggest that any personal injury claim against a multinational corporation is without foundation. However, our societies are best served by sound laws, ethical lawyers, and fair courts. If these things are not available to the world’s largest companies, they will not be around for the rest of us, either.

Roger F. Noriega has worked on U.S. policy in Latin America for over 20 years. He is a visiting fellow at the American Enterprise Institute and founder of Vision Americas LLC, which advocates for U.S. and foreign clients. He is a former assistant secretary of State for Western Hemisphere affairs and a former U.S. ambassador to the Organization of American States.

 

FURTHER READING: Noriega has also written “Slouching to Populism” on how embattled democrats in Latin America read the State Department’s reticence as weakness and indifference, and “From Democracy to Dictatorship” on Ch├ívez’s march toward dictatorship.

 

Image by Dianna Ingram/Bergman Group.

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