Shootout at Texas' Legal Corral

State wrangles over allowing foreign plaintiffs to bring injury suits against US companies. LAW: 'TOXIC TORTS'

TWO Dallas lawyers, Charles Siegel and Russell Budd, represent a group of Costa Rican banana-plantation workers who say that handling a chemical pesticide manufactured by two United States companies has made them sterile. For six years the lawyers have struggled to be allowed to sue the companies in a US court, and last year the Texas Supreme Court cleared the way. But by the end of this month, the Texas legislature may write a law that shuts the courthouse door. The lawmakers don't carry a grudge against the Costa Ricans. Some are worried that the case will encourage foreign plaintiffs to come to Texas to sue companies that operate in the state. That would have a "very, very chilling effect on the business community, primarily on future economic development in this state," says a state legislator, Rep. Parker McCollough, in a telephone interview.

The banana workers' case pits supporters, who argue that US courts sometimes may be the best place to hold corporations accountable for their actions overseas, against critics, who maintain that courts should preserve the right to dismiss cases deemed "inconvenient" for one or both of the parties involved.

And the origins of this case highlight another controversy: whether US chemical companies should be allowed to sell their products abroad if their use is banned or restricted in this country. (See related article below.)

The attorneys are members of a small Dallas firm, Baron & Budd, that specializes in so-called "toxic torts," cases where people sue companies for damages after they've been injured by a chemical. They heard about the Costa Rican farm workers in late 1982.

The firm was called in by a toxicologist working for the Costa Rican judiciary who "began to notice this unfolding epidemic of sterility" among banana workers, says Mr. Siegel. The thread linking the workers was exposure to DBCP, a worm-killing pesticide made by Shell Oil Company and Dow Chemical Company.

Troubles with DBCP cropped up in the US in 1977, when dozens of workers who had been exposed to the pesticide were found to be sterile. Its use was immediately restricted and virtually banned two years later by government authorities.

Many of the US workers sued for damages. One San Francisco jury in 1983 ordered Dow to pay six production workers and three of their wives almost $5 million to compensate for DBCP effects.

That same year, Mr. Budd sued Dow, Shell, and other companies in a Florida court, but the case soon got into trouble over a legal doctrine called forum non conveniens. Dating back to 17th-century Scotland, forum allows a judge to dismiss a case if it is in the interest of justice and more "convenient" for the parties to try the case elsewhere. The doctrine is used in at least 40 states and by federal judges.

Dow and Shell have denied that they sold DBCP for use abroad after federal restrictions were imposed in the late 1970s, but they also argue that Costa Ricans should seek justice in their own courts. The judges in Florida agreed, dismissing the DBCP case on forum grounds.

Budd then took the case to Texas in 1984 and California in 1985. The latter action was dismissed, but the Texas case ended up in that state's Supreme Court. In a 5 to 4 decision handed down in March 1990, the court said the forum doctrine did not exist in Texas, allowing the Costa Ricans to sue.

One dissenting justice, Nathan L. Hecht, wrote in a much-quoted opinion that the decision would make Texas "the courthouse for the world." Will "Texas entice employers to move here, or people to do business here, or even anyone to visit?" he asked.

Another dissenter, Justice Raul Gonzalez, promised that "Texas will become an irresistible forum for all mass disaster lawsuits ... forcing our residents to wait in the corridors of our courthouse while foreign causes of action are tried."

"The dissenters," wrote Justice Lloyd Doggett in a concurring opinion, "argue that it is inconvenient and unfair for farmworkers allegedly suffering permanent physical and mental injuries ... to seek redress by suing [Shell] in a court three blocks away from its world headquarters and [Dow], which operates in Texas this country's largest chemical plant." But in this case, the justice opined, the forum doctrine "has nothing to do with fairness and convenience and everything to do with immunizing multinat ional corporations from accountability for their alleged torts causing injury abroad."

Dow and Shell asked the US Supreme Court to review the case, which is now known as "Alfaro" after the last name of one of the Costa Rican plaintiffs, but the high court declined to do so last January.

Then Texas corporations and their lobbyists increased pressure on the legislature to pass a law saying that Texas judges can use the forum doctrine to dismiss foreigners' cases against Texas defendants.

One group promoting this legislation is "Jobs for Texas," a group of some 30 chief executive officers that wants "to make a more hospitable business climate in Texas," according to Russell Weintraub, a University of Texas law school professor who has assisted Shell's legal team.

"Imagine how many Costa Rican farm workers are waiting in the wings," he says. "This is just the tip of the iceberg."

Lawyer Siegel says his firm now represents 350 Costa Ricans in several suits pending in Texas courts, adding that estimates of the total number of Costa Ricans injured by DBCP range between 1,200 and 1,500. But if the Alfaro legislation is passed, he says, Dow and Shell will try again to have Alfaro and the other suits dismissed. "That's the first thing I expect."

He says that his clients won't get justice in Costa Rica, where damage awards are limited to less than $2,000. Also, lawyers there don't work on a contingency fee basis - Baron & Budd has so far worked for free, but will get 40 percent of any awards - and the farm workers are too poor to pay hourly rates, Siegel says.

Representative McCollough, a sponsor of the legislation, says amendments may allow the Alfaro case to proceed. Another measure would keep judges from dismissing cases like Alfaro.

Such provisions have been discussed, says Jim Marston, executive director of the Texas branch of the Environmental Defense Fund (EDF), but they aren't on paper yet. The EDF and other environmental and consumer groups, along with the Texas Trial Lawyers Association, are lobbying against the legislation.

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