Calif. Judge Rules Fraud in Lawsuits Against Dole

In a ruling with ramifications for other countries, a California judge dismissed two lawsuits by purported Nicaraguan banana plantation workers against U.S. food giant Dole, finding that greedy lawyers and corrupt judges committed fraud and extortion in a blatant scheme to win billions of dollars in damages.

“This is a very sad day for me to be presiding over such a horrific situation,” Los Angeles County Superior Court Judge Victoria Chaney said.

The decision came after three days of testimony that detailed a scheme to recruit men who would claim they were rendered sterile by exposure to a pesticide in the 1970s. In most cases, the men had not worked at plantations and were not sterile. Witnesses and investigators who exposed the fraud told of fearing for their lives.

“This is an international legal scandal of great proportions,” Theodore Boutrous, a Dole attorney, said.

In its annual report filed with the Securities and Exchange Commission in January, Dole said DBCP cases comprised “a significant portion of the company’s legal exposure” globally. It said there were 249 lawsuits worldwide in various stages of proceedings seeking damages for exposure to DBCP, with 33 of them in U.S. jurisdictions.

“Claimed damages in DBCP cases worldwide total approximately $44.5 billion with lawsuits in Nicaragua representing approximately 88 percent of this amount,” the report said. It said Dole is usually a co-defendant with DBCP makers.

Claimants also have sought to enforce Nicaraguan judgments in Colombia, Ecuador and Venezuela, it said.

In her ruling, Chaney denounced the lawyers who hatched the scheme and said there was a group of corrupt Nicaraguan judges “devouring bribes” to make judgments and aid the plot.

Chaney had heard closed-door testimony about a Nicaraguan judge who presided over a meeting of the conspirators and advised them on how to fake lab tests to feign sterility and win lawsuits.

Dole attorney Scott Edelman said that judge’s role was the most shocking disclosure. He said she ultimately issued a $95 million ruling in favor of the plaintiffs that is now before a Florida court for enforcement. The lawsuits ended up in U.S. courts, with the attorneys who engineered the scheme seeking enforcement of the damages determined by Nicaraguan judges.

Chaney said that as a result of the scheme no one will ever know whether workers were actually injured by the pesticide DBCP in Nicaragua.

“This fraud was so pervasive it has undermined our ability to know the truth,” she said.

She noted she had heard evidence of attorneys suborning perjury, doctoring medical reports and training recruits plucked from an impoverished nation to make false claims in hope of reaping billions of dollars.

All of it, she said, was facilitated by a government that passed a special law to penalize foreign companies.

“There is a lack of respect for law down there,” she said, citing U.S. State Department reports on corruption that she consulted.

She noted that among those who testified were men who denied their own children, claiming they could not have fathered them because they were sterile.

“Plaintiffs have disavowed their own children. How sick,” she said.

An attorney who represented a Los Angeles lawyer alleged to have been one of the moving forces in the fraud conspiracy made no final argument at the hearing and later said he had no comment. The lawyer, Juan J. Dominguez, was said to have taken refuge in Nicaragua.

In 2007, Dole lost a Nicaraguan banana workers lawsuit with the same claim in a trial before Chaney. There was an initial multimillion-dollar jury verdict that was later reduced to $1.58 million and is now on appeal.

In her ruling, Chaney apologized to the jury in that case and said she had suspected there was “something wrong with the witnesses” but was unable to pinpoint it because claims of fraud had not yet been raised when that case was tried.

“What a tragedy,” she said. “Sixteen jurors sat through 41/2 months of trial. Millions of dollars were expended in that case, a case that was built in somebody’s imagination.”

She said she did not know what could be done about that outcome.

For six months after the verdict, Dole and other companies that were sued deployed investigators to Nicaragua to uncover the scheme.

The judge dismissed the two pending cases with prejudice so they could not be raised again.

She said she knew her ruling would have wide-ranging impact not only in the U.S. but overseas where other cases involving DBCP are pending.

According to arguments presented in Chaney’s hearing, lawyers in Nicaragua and the United States have 10,000 clients from Nicaragua and 6,000 from other countries.

The judge said she will issue a lengthy written ruling in the case and will hold another hearing soon to address penalties for perpetrators of the fraud. She said she will refer cases to the California State Bar and prosecutor’s offices for investigation.