Corporate accountability
The South's day in court

ON MARCH 28, 1990, the Texas Supreme Court handed down a landmark decision that shocked the business community and bucked the trend across the United States of restricting foreigners from suing U.S. corporations for injuries caused overseas. In a 5-4 decision, the Court gave notice to U.S. companies that if they hawk their hazardous wares overseas, they may find themselves hauled into U.S. courts, at least in Texas anyway.

The decision in Dow Chemical Company and Shell Oil Company v. Domingo Castro Alfaro struck down a doctrine, known as forum non conveniens, which allowed judges to dismiss suits by foreign plaintiffs on the grounds that the forum or court that the plaintiff had chosen was not convenient or proper because the injury or death took place elsewhere.

Plaintiffs' lawyers, environmentalists and corporate accountability advocates applauded the decision. "The [Texas] Supreme Court decision knocked out an antiquated legal doctrine that should have disappeared with the first export of a hazardous American product," says Russell Mokhiber, editor of Corporate Crime Reporter, an investigative weekly based in Washington, D.C. and author of Corporate Crime and Violence. "The decision shook the corporate world, which has used this special protection against innocent victims injured by American products in faraway lands." A new era of corporate accountability may not yet be on the horizon, but the Texas decision will almost assuredly bring change in corporate boardrooms. The decision will make corporations "more aware of the consequences of their trade in these very dangerous products," noted Monica Moore of the Pesticide Action Network in San Francisco.

Other cases are sure to follow in the wake of the decision. Lawyers for the victims of the 1984 explosion at the Union Carbide plant in Bhopal, India are already considering refiling their claims in Texas courts and Alfaro's lawyer is representing another 220 plaintiffs in similar suits against Dow, Shell and Standard Fruit Company. Standard Fruit was left out of the original case for fear that workers still employed by the company would face retaliation. The Texas decision caused an outcry from the business community. The Texas Association of Business warned that the decision could spell disaster for the Lone Star State.

"[A]llowing foreign workers to sue Texas companies could drive industry from the state or keep new companies from moving in," the association noted. It's a "significant blow not only to Texas business but to future economic development." Dissenting justices made equally ominous predictions. Why "should Texas be the only state in the country, perhaps the only jurisdiction on earth, possibly the only one in history, to offer to try personal injury cases from around the world?" questioned Justice Nathan Hecht in his dissenting opinion.

The Alfaro case
The case that has sparked such controversy began in the 1970s on the Standard Fruit banana plantations of Costa Rica. The 1970s were a time of bumper crops on the plantations, in part because of a pesticide produced by Shell Oil and Dow Chemical. DBCP, or dibromochloropropane, was injected into the ground around the plants, obliterating the pesky nematode worm which ate the banana roots. It was a miracle pesticide, allowing Standard Fruit to reap unparalleled harvests. For the farmworkers who trudged through the banana fields applying the chemical, it gave them a way to feed their families. But the pesticide had another effect, one that Shell and Dow were less eager to have publicly linked to their efficient substance: it caused sterility in workers who handled it. As early as the 1950s, there were disturbing animal studies about the health effects of DBCP. Tests conducted by both Shell and Dow showed that when animals were exposed to the pesticide, their sperm counts fell and their testicles shrivelled and atrophied. In the United States, workers who were exposed to the product found that they later became sterile.

Although Shell, Dow and other companies acted quickly to limit the damage to U.S. workers and thereby forestall the multimillion dollar lawsuits that the allegations had spurred, they continued to ship the product overseas for use by unsuspecting Third World farmworkers.

DBCP has been labelled one of the "Dirty Dozen" by the Pesticide Action Network due to its toxicity, but selling the pesticide overseas is not prohibited by the U.S. government despite the fact that the U.S. Environmental Protection Agency ordered a phase-out of the pesticide on food in 1977. Later, the EPA entirely removed pesticides that contained the toxic substance from the market. In Costa Rica and many other Third World countries, it took much longer to ban the pesticide. By the time public concern had spurred action, a thousand workers allegedly had been sterilized in Costa Rica alone. Many also face elevated risks of stomach cancer from exposure to DBCP. That would have been the end of the story, simply another tragic example of Third World workers or consumers being exposed to hazardous products or processes that are no longer acceptable in the United States. But Domingo Castro Alfaro and 81 other Costa Rican workers and their spouses decided to challenge the U.S. corporations and to sue in U.S. courts.

Thrown out of courts in California and Florida on grounds of forum non conveniens, they persisted and brought their case to Texas, home of Shell's world headquarters and of the largest Dow-owned chemical plant in the Untied States. Originally the farmworkers and their attorney, Charles Siegel of the Dallas law firm of Baron & Budd, found Texas less than receptive. Their suit against Shell and Dow was dismissed in the Houston State District Court on the grounds that it was not a convenient forum. The appeals court, however, overruled the district court, holding that the farmworkers' case should be heard in Texas. Dow and Shell quickly appealed to the Texas Supreme Court. The Supreme Court affirmed the appellate court's decision, dealing a blow to both Dow and Shell and other corporations which apply different health and safety standards to products and processes they ship overseas.

Lawyers from Shell were astounded. "We thought the law was well established that the doctrine of forum non conveniens was available in Texas," says James Evans, an attorney with Shell. "We were really disappointed at the decision." Shell attorneys argue that bringing the case to the U.S. courts will be much more than inconvenient. "The problem that you have is that all the incidents took place elsewhere in the world; how can we get discovery, how can we get the medical records, how can we know what doctors examined the plaintiffs, how can we know what exposures the plaintiffs had, how can we even know what products the plaintiffs dealt with?" asks Evans.

The Texas courts can't force relevant witnesses to come forward from Costa Rica or doctors to release their records, he says. "We think we're put in an extreme disadvantage to defend our case." Siegel responds that the defendants will have easy access to all the information they need. His clients have agreed to come to Houston both for medical examinations and for depositions. "It's really hard for the defendants to argue that our case is inconvenient," he says. "No one can really argue that with a straight face."

By Ellen Hosmer