A judge in Los Angeles on Thursday threw out a $2.3 million verdict against Dole Food Co., ruling that widespread fraud orchestrated by the plaintiffs' attorneys prevented the food company from deposing witnesses.
"There was a massive fraud perpetuated on this court," said Victoria Chaney, a judge of California's 2nd District Court of Appeal who was acting as a Los Angeles County, Calif., Superior Court judge in the case.
The case was brought by Nicaraguans who claim they were rendered sterile after being exposed to the pesticide dibromochloropropane, or DBCP, while working on Dole's banana plantations during the 1970s.
Chaney concluded that plaintiffs lawyers Juan J. Dominguez of Los Angeles and attorney Antonio Hernandez Ordenana of Nicaragua coached the plaintiffs, falsified medical records and intimidated Dole's investigators in Nicaragua.
"As a result of the scheme, defendants were unable to conduct reasonable discovery prior to the start of the Tellez trial," she said, referring to the case, Tellez v. Dole.
Dole's lawyer, Scott Edelman, a partner at Los Angeles-based Gibson, Dunn & Crutcher, said the ruling could have a profound effect not just on other cases brought by banana workers, but on all similar cases making their way through U.S. courts.
"This case has shined a spotlight on what can happen in these toxic tort cases," he said.
Chaney, who arrived in the courtroom with an ice pack after having knee surgery the day before, exonerated two Texas attorneys, Mark Sparks of Beaumont's Provost Umphrey and Benton Musslewhite, a Houston solo practitioner, in the fraud. Both had been implicated last year in a related case against Dole called Mejia v. Dole.
In that case, Chaney had found that Dominguez and Ordenana had hired "captains" to recruit and coach workers who joined the cases as plaintiffs. The lawyers and their clients also fabricated work certificates and falsified medical records, she said. She based her findings on statements from anonymous witnesses in Nicaragua who had testified on behalf of Dole.
At that time, Chaney issued terminating sanctions against Dominugez and Ordenana. She referred Dominguez to the State Bar of California. Chaney also threw out the Mejia case and another case against Dole. Tellez, the third case, had ended in a jury award in 2007 for six banana workers.
Following last year's finding, Dole's lawyers began to argue that the Tellez case, like the two that were thrown out, was also tainted by fraud and that the verdict should be thrown out. California's 2nd District Court of Appeal refused to dismiss the verdict but ruled that a prima facie case of fraud existed and returned the case to Chaney to conduct a possible evidentiary hearing.
Thursday's ruling follows nearly a week of testimony during which Steve Condie, a lawyer in Oakland who now represents the six plaintiffs in Tellez, had argued that the verdict should stand because the plaintiffs' lawyers in that case were unable to cross-examine Dole's witnesses during last year's proceedings. At that time, Chaney had issued a protective order for Dole's witnesses, who are referred to in court documents as "John Doe."
On Thursday, Chaney found that Dole's investigators in Nicaragua had been threatened with slander charges and in demonstrations, fliers and radio broadcasts that hampered their efforts to conduct discovery. Furthermore, the records of banana workers in the 1970s had been destroyed, which created a "significant hindrance" in Tellez from the start.
Some of the plaintiffs in Tellez dropped out after DNA testing revealed that they had fathered children, Chaney said. Some failed to recognize faces or names of purported co-workers and admitted to having been coached and "actively coerced" by Dominguez, she added. Of the six who obtained the verdict, Dole provided enough evidence that two never worked on its banana plantations, Another, while a legitimate worker, had assisted in perpetuating the fraud, she concluded. She was uncertain about the legitimacy of the remaining three plaintiffs.
Following the ruling, Condie said he planned to appeal.
"She made this ruling based on evidence from secret witnesses that nobody but Dole was permitted to investigate," he said.
Last year, Chaney implicated a Nicaraguan judge who issued a $97 million judgment that Provost Umphrey had been attempting to enforce in U.S. District Court in Miami. According to Chaney's order, in 2003 the Nicaraguan judge met privately with Sparks and Musslewhite, who worked with Provost Umphrey on DCBP cases.
U.S. District Judge Paul Huck of the Southern District of Florida declined to explore the fraud claims, but on Oct. 20 he refused to enforce the judgment on the ground that the Nicaraguan law on which it was based was "unfair and discriminatory" against defendants.
In the past week, Sparks and Musslewhite have denied the existence of the 2003 meeting, or that they were even there.
On Thursday, Chaney said she believed Musslewhite had not participated in the 2003 meeting and that she "could no longer say Mark Sparks actively participated in the fraud." But she criticized both attorneys for not scrutinizing the activities of their clients more closely.
Following the ruling, Sparks said he was "shocked" he had even been implicated in the cases in Los Angeles.
He credited the judge's decision to payments Dole had made to many of the witnesses, including those who had informed her about the alleged 2003 meeting. In some cases, the payments involved cash equal to "10 times their salaries," he said.
Chaney, while acknowledging that Dole made payments to witnesses, said that she found no evidence of "actual, intentional" bribery.
"Plaintiffs contend Dole bribed several witnesses. This court is not persuaded," she said.
Following the hearing, Edelman said that Dole had provided the witnesses with food and lodging, all of which Chaney had approved.
"Dole did what Dole had to do," he said.