Wednesday, December 5, 2007

Bhopal Revisited

This week was the 23rd anniversary of the Union Carbide toxic gas leak in Bhopal, India.  The world's worst industrial disaster, it claimed thousands of lives and unsurprisingly spawned major litigation.

As often happens with multinational mass tort litigation, the doctrine of forum non conveniens played a central role.  One of the ironies of forum non conveniens is that the defendant-movant describes the doctrine as a kind of international venue transfer while actually hoping it will serve as a litigation death knell.  A related irony is that on the issue of "adequate alternative forum" (one of the requirements under Piper Aircraft v. Reyno), U.S. defendants sing the praises of foreign legal systems while foreign plaintiffs bash their home courts.  So it was in the Bhopal litigation, but with the embarrassing twist that the one bashing the Indian legal system was the Indian government itself.

On the Indian blog Churumuri, Alok Prasanna offers an angry and pessimistic two-part series from Bangalore on the Bhopal litigation.  Yesterday's post -- How the Rajiv government screwed up on Bhopal -- tells the sorry story:  the aggressive solicitation of Indian plaintiffs by U.S. lawyers, the Indian government's self-anointment as sole representative plaintiff, the filing of U.S. litigation, the forum non conveniens dismissal, and the subsequent lawsuit and settlement in India.  Here's an excerpt in which Prasanna describes the Indian government's bungling of the litigation:

As initial reports of the pending flood of litigation claims started to trickle through, the Indian government, fearing exploitation, and an opportunity to turn this into an emotive, electoral issue, instantly passed a law prohibiting all but itself from representing the victims in any forum anywhere in the world. Then it went ahead and made a mockery of the move.
It filed suit in the District Court of New York, USA. ...

Before even the first papers had even been filed, the then-Prime Minister Rajiv Gandhi started making grandiose claims of a $2 billion compensation that his government would be seeking from [Union Carbide Corporation ("UCC")].  Big mistake.

Any lawyer would connect this statement to the filing of the suit in the USA and ask the American court to dismiss the case since the Indian Government was “forum shopping”, or in lay terms, simply looking for the best bargain. American Courts since 1981 had stopped entertaining foreign claims that could be filed elsewhere, but had been filed in the USA with the sole motive of getting a better award of damages. ...

To counter this, the Indian government made an even more stupid move. It claimed that the Indian judicial system was incompetent and inefficient to deal with the problem. It got professors and experts to file affidavits running down the Indian judicial system before American courts.

Humiliatingly, it was upto the UCC lawyers to defend the Indian judicial system asking for the case to be moved to India. They also pointed out the simple logistical problem of having to haul thousands of documents, mountains of evidence and thousands of witnesses halfway across the world for a trial.

Naturally no American court wanted to be stuck with an expensive, unending case on its hands and the district court of New York threw out the case. The Indian government cut a pretty sorry figure as it dragged itself to the district court of Bhopal, Madhya Pradesh for the next round of litigation. Before the same judicial system and judges it claimed were incompetent and inefficient.

As the litigation dragged on in the Indian courts, Union Carbide eventually settled for $470 million on terms that included dismissal of criminal charges.  Prasanna then describes a painfully slow disbursement process, and suggests that the Indian government as plaintiff was burdened by a serious conflict of interest:

The saga doesn’t end there. The long and painful process of disbursing the amount began and took about 20 years after the settlement. Long slow and laborious the “tribunals” set up by the Government to hand out the awards functioned pretty much like Courts and one needed the help of numerous touts, lawyers and doctors before rightly deserved compensation was gotten. The net result was that the victims didn’t get as much money or as quickly as was promised.

All of this can possibly attributed to run-of-the-mill bungling by the government. Except in this case, the government was as liable as UCC for the Bhopal gas tragedy. Both UCC and the Indian government were shareholders in UCIL. UCIL alone was too small (all assets amounting to Rs 100 crore only) to be made wholly liable for the affair. Any attempt to make UCC liable as a shareholder would automatically make the Indian government liable on an equal footing.

Take a step back and look at it from a distance. One of the defendants in the case, by using its sovereign powers, has usurped the claimants’ rights and ensured that it has not been made liable. It has gone to the extent of settling the case for a far lesser claim than promised instead of fighting for every last penny and virtually let the offenders go scot free.

Today's post -- And how the legal system screwed up on Bhopal -- discusses problems with Indian tort law, evidence, corporate veil-piercing, court resources, and Indian lawyers.  Prasanna sadly agrees with the experts who testified for India (that is, against India) on the forum non conveniens motion:

Remember the stand taken by the Indian Government before the New York district court regarding the inefficiency and incompetence of Indian Courts and legal system? Remember all those esteemed professors of law and legal mavens filing lengthy affidavits detailing the faults and flaws of the Indian legal system and judiciary?

Guess what, it was all true. There was no way in hell that the victims of Bhopal would have seen a single rupee of compensation had the case gone to trial in India.  The reasons are manifold, ranging from the inadequacy of the law to the incompetence of the lawyers.

The author's cynicism, however, is reserved for India.  Prasanna puts on rose-colored glasses when viewing U.S. mass tort litigation, laughably referring to Grisham's King of Torts as an example of how things ought to be done, but understandably looking to the U.S. mass tort experience for ideas on how mass-disaster compensation might have been better handled than it was in Bhopal:

So, do victims of mass disasters have no remedy or relief? Not really. Lawyers in the US and elsewhere had been developing this field of “mass torts” for some years and had mastered the skill of getting relief for their victims quickly without engaging in protracted litigation. Those who have read “The King of Torts” and other John Grisham books would have some idea of how this works and what are the advantages and pitfalls of this technique. Indian lawyers had no clue what was going on.

Indian lawyers stood exposed in the Bhopal tragedy. With little or no specialization in the various fields of law, the bewildering complexity of the problem and multi-disciplinary approach it needed completely befuddled Indian lawyers. Long used to adversarial, lengthy proceedings before courts, the legal fraternity had no answer to the kind of problems the Bhopal tragedy failed. While judges did try to solve the problem with a proactive approach towards interim relief and a bit of legal creativity, they were about as effective as Band Aids on a compound fracture.

HME

http://lawprofessors.typepad.com/mass_tort_litigation/2007/12/bhopal-revisite.html

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Twenty-three years after the gas disaster, "Alok Prasanna offers an angry and pessimistic two-part series from Bangalore on the Bhopal litigation" (first and second parts; via Erichson).... [Read More]

Tracked on Dec 8, 2007 6:50:52 PM

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