Late in the afternoon of April 23, Los Angeles County Superior Court Judge Victoria G. Chaney shuffled the papers on her desk and looked out at the attorneys and spectators in her courtroom.
For three days last spring she had heard a story that one lawyer compared to a John Grisham novel, a story about a "make-believe case with make-believe plaintiffs, make-believe evidence, and make-believe damages." There was testimony about Nicaraguan men who claimed to be banana workers but who had never worked on a banana farm, about faked lab tests for male sterility, about witnesses in fear of "having their tongues cut out." In fact, an entire day of testimony was taken behind closed doors so the identities of these witnesses would not be disclosed. The physical evidence included DVDs, DNA results, deposition transcripts?and a bag of pork rinds.
Now Chaney had to rule on an order to show cause for terminating sanctions that she herself had initiated. The two cases before her had been brought by eleven Nicaraguan plaintiffs identified as former banana workers who alleged they became sterile because of exposure to dibromochloropropane (DBCP), a worm-killing pesticide (Mejia v. Dole Food Co., Inc.,
No. BC340049 (L.A. Super. Ct., filed September 20, 2005) and Rivera v. Dole Food Co., Inc.,
No. BC379820 (L.A. Super. Ct., filed Oct. 26, 2007)).
Chaney had several options, among them a partial dismissal or, as plaintiffs counsel had proposed, permitting a new team of attorneys to assess the cases. Few judges ever face such a decision, and Chaney could barely contain her emotions.
"This is a very sad day for me, to be presiding over such a horrific situation," she said in the hushed courtroom, with reporters scribbling down her every word. "What has occurred here is not just a fraud on this court, but it is blatant extortion of the defendants."
Chaney?a judge given to pendulous earrings and colorful phrasing?then described the extent of that fraud. A "heinous conspiracy" by plaintiffs attorneys in Nicaragua and the United States had so infected "every aspect" of the cases, she said, that it is "not possible for this court to ensure a fair, untainted trial."
She dismissed the plaintiffs' claims with prejudice, "preventing their ability to ever come back, at least in this court, and hopefully in any other court, and raise these claims again." She added, "I have serious, serious doubts about the bona fides of any plaintiff claiming to have been injured as a result of exposure to DBCP while working on banana plantations. Because of all this, lesser sanctions are wholly inadequate."
After calling out the names of colluding foreign lawyers and judges, Chaney commented, "We'll never know if anybody in Nicaragua was actually injured or harmed by the alleged wrongful conduct of the defendants, and people will never have the opportunity to learn, since this fraud is so pervasive and extensive that it has forever contaminated even our own ability to ever know the truth."
Among the attorneys sitting in Chaney's courtroom that afternoon were Scott A. Edelman and Andrea E. Neuman, co-lead trial counsel for Dole Food and partners at Gibson, Dunn & Crutcher. Attorneys from Gibson Dunn, one of the bluest of the state's blue-chip law firms, had been brought into the DBCP litigation shortly before a Los Angeles jury in 2007 found Dole and manufacturers of DBCP liable for $3.3 million in compensatory damages and $2.5 million in punitive damages (Tellez v. Dole Food Co., Inc.,
No. BC312852 (L.A. Super Ct., jury verdict Nov. 16, 2007)).
Dole appealed the Tellez
verdict as contrary to the evidence, and Gibson Dunn lawyers got the punitive-damage award overturned. But with the Mejia
cases pending, the company wanted Gibson Dunn to dig deeper into the DBCP cases for evidence of fraud. "It was an attitude change, a fundamental shift in our approach to this litigation," says C. Michael Carter, Dole's vice president and general counsel.
Juan J. Dominguez, a Los Angeles personal injury specialist named lead plaintiffs counsel in the DBCP cases, had been seeking a total of $21.5 billion in damages for more than 4,000 plaintiffs. To win his Tellez
verdict, Dominguez had presented a David-and-Goliath tale of injured Nicaraguan banana workers seeking compensation from giant U.S. corporations: Dole, which operated banana farms in Nicaragua, and DBCP manufacturers Dow Chemical Co. and Amvac Chemical Corp.
But as Judge Chaney spelled out in her April ruling, David had not played fair with Goliath. "I presided over the Tellez
trial and watched the witnesses," Chaney said from the bench. "I knew something was wrong with many of the witnesses, I just didn't understand what it was, because the evidence of fraud had never been raised. It couldn't have been raised, since the discovery of this fraud has really come to a head only in the last six months or so."
Edelman, Neuman, and the Gibson Dunn team knew that Dole's credibility would be severely damaged in the pending DBCP cases if they couldn't substantiate any fraud. The odds of doing so also appeared to be against them, because U.S. litigants have no discovery rights in Nicaragua. Any witness in Nicaragua who might testify about fraud would have to do so voluntarily. And why would anyone help Dole in a country where Dominguez, tapping into long-standing grievances over exploitation by multinationals, was hailed as a hero for helping injured banana workers?
"It was a real uphill battle to uncover this fraud," says Dole's Carter. "We knew it was there ... all the dynamics were there. It finally just came to a head."
During a year of investigation, Edelman and Neuman learned how difficult that uphill battle would be. By the time of her last trip to Nicaragua, Neuman was so concerned for her own safety that she hardly left her hotel in the capital city of Managua, and registered under a false name. The crucial evidence might not have been obtained if she had not struck an unlikely rapport with a Mejia
plaintiff, Donald Francisco Quiñonez. In what amounted to a confession, Quiñonez told Neuman at a deposition in Los Angeles that he had created his sexual history "like a parrot," following the direction of a woman at Dominguez's field office in Nicaragua who supplied him with a list of fictional partners.
Even then, the defense attorneys needed an extraordinary order by Chaney to get their evidence into court. Last October, Chaney prohibited disclosure of the identity of witnesses who agreed to speak to Edelman and Neuman?prohibiting disclosure even to Dominguez. With that order, Dole was able to take the depositions or declarations of witnesses amid, in Chaney's phrase, "a pervasive atmosphere of fear and extreme danger."
Donald Quiñonez comes from the city of Chinandega, the center of a desperately poor agricultural region on the Pacific coast of Nicaragua. Chinandega became the center of the DBCP litigation?the place where, according to Chaney, Dominguez's "captains" recruited plaintiffs and where the attorney, nattily attired in a linen suit like something out of a Graham Greene novel, addressed his clients en masse during extended visits from Los Angeles. "We are fighting multinational corporations. They are giants. And they are going to fall!" Dominguez proclaimed at one meeting attended by a Los Angeles Times
In 1970 Dole?then known as Standard Fruit & Steamship Company?came to Chinandega at the invitation of Nicaraguan dictator Antonio Somoza, who wanted to revive the country's banana industry. Plaintiffs attorneys documented that irrigation workers applied DBCP repeatedly on the banana plantations to kill nematodes, microscopic worms that destroy the roots of the trees.
Dow Chemical manufactured DBCP until 1977, when the U.S. Environmental Protection Agency provisionally banned use of the chemical in the United States after several workers reported they were made sterile by exposure to it. But Dole continued to use the pesticide at its banana plantations overseas.
In 1979 Sandinista rebels overthrew the Somoza regime, and the new government tossed out Dole in 1982. Dole's managers left the country in such haste that they did not bring employee records with them. As a result, the company had no way to document years later whether a plaintiff who said he worked on one of its banana farms was telling the truth. "That was the genesis of this whole fraud," says Edelman.
A year after Dole's departure from Nicaragua, a California jury awarded $4.9 million to six Occidental Corp. workers exposed to DBCP while mixing pesticides at a factory in Lathrop owned by Dow Chemical. Tests showed that the workers had zero or below-normal sperm counts. The award sparked something of a gold rush, with attorneys filing claims on behalf of more than 50,000 banana workers around the world allegedly exposed to the chemical. By 1997 Dow Chemical and other companies had paid $41.5 million in settlements to 26,000 workers worldwide.
In Nicaragua, the National Assembly gave plaintiffs a major boost in 2001 by passing Special Law No. 364, formally the "Special Law for the Conduct of Lawsuits by Persons Affected by the Use of Pesticides Manufactured with a DBCP Base." Under Article 4 of the new statute, a defendant had to deposit $100,000 as a procedural prerequisite within 90 days of the date of filing in a Nicaraguan court. Under Article 8, a defendant also had to post a $15 million bond. The new law made DBCP the presumptive cause of any sterility found in banana workers; under its provisions a judge in Chinandega awarded nearly $490 million in December 2002 to about 450 workers represented by Dominguez.
During her oral ruling, Judge Chaney gave a scathing review of Special Law 364's requirements. She noted, for example, a provision giving the parties only eight days to assess the evidence presented by as many as 1,000 Nicaraguan plaintiffs. "It took four and a half months of day-in-and-day-out trials in the Tellez
case, for twelve people, to allow all parties to thoroughly review and allow the jury to consider the evidence," she pointed out.
In March 2004 a Nicaraguan court had returned an $82.9 million verdict against Dole and Shell Chemical in another of Dominguez's DBCP cases. But Dominguez and his Nicaraguan associates faced problems enforcing foreign judgments in the United States. Filing in U.S. courts, by contrast, the plaintiffs might achieve an enforceable judgment as well as potential punitive damages, which are not available in Nicaragua. "In terms of getting your money, it's arguably quicker to litigate in the United States versus obtaining a foreign judgment and then attempting to enforce it," Neuman says.
So later in 2004 Dominguez filed the Tellez
complaint, the first Nicaraguan banana worker case brought in the United States. A year later he followed up with the Mejia
For the Law Offices of Juan J. Dominguez, complex toxic-tort litigation was a departure from its usual case-load. Cuban-born and raised in Southeast Los Angeles, Dominguez had specialized in representing personal injury plaintiffs since 1987, claiming on his website to have recovered more than $65 million for his clients. He has a healthy ego, as evidenced by his "Juan 'Accidentes' Dominguez" ads on the sides of L.A. buses, his red Ferrari convertible, and his oil portrait hanging in the firm's conference room.
"I have never, nor will I ever, represent the interests of big corporations and insurance companies that routinely trample, abuse, and exploit the rights of the less fortunate, pollute our environment, and violate basic human rights for their nefarious goals of corporate greed, higher profits, and luminous stock returns," Dominguez states on his website. (He declined to be interviewed for this story, responding only by email that he denies any wrongdoing.)
Robert M. Conley, an attorney to whom Dominguez referred criminal cases, says that many of Dominguez's clients were Spanish-speaking and low income. "He thought of himself as someone with an altruistic streak," says Conley, now a Los Angeles County public defender. "He took the cases of people who didn't have a mouthpiece. Rightly or wrongly, he viewed himself as having an interest in lower-class citizens."
Dominguez hired as lead trial counsel Duane C. Miller of Sacramento's Miller, Axline & Sawyer. Miller had the relevant experience, previously guiding the Occidental plaintiffs to their victory over Dow Chemical. Dole's defense was led by veteran trial lawyer Frederick L. "Rick" McKnight of Jones Day in Los Angeles. After a grueling four-month trial Miller won a verdict, including $2.5 million in punitive damages, for six of twelve plaintiffs. But the award was far lower than what the plaintiffs lawyers had hoped for. McKnight called it "a huge defeat" for the workers. "It doesn't even pay their costs, much less their bills," he told reporters outside the courtroom.
Nevertheless, the finding of liability moved Dominguez a bit closer to his ultimate goal. In a conversation recorded last year by a documentary film crew, Dominguez told Miller, "I can see the day when we reach a global settlement. The only way to do that is to keep trying small cases." (See "Bananas!,
the Movie," page 27.)
That strategy seemed to be working?Dole's Carter says the company wasn't keen to go through more trials. "You've got a big company and poor, so-called innocent victims?and with a jury, that becomes a challenge," he says wryly.
During the Tellez
trial, one plaintiff broke down in tears when Miller asked him, "When you learned you were sterile, how did that make you feel?" The defense followed the standard toxic-tort strategy of challenging causation, arguing that though there was evidence that DBCP made factory workers who handled it sterile, the exposure of banana workers to the chemical was minimal and certainly not enough to cause sterility. But the Tellez
jury didn't buy it, and Carter decided the company needed a new, more aggressive approach.
Scott Edelman, based in Gibson Dunn's Century City office, is a trial lawyer with a focus on entertainment law who frequently handles high-stakes litigation involving TV networks and film studios. Andrea Neuman, based in the firm's Orange County office in Irvine, is an expert in environmental law who has worked on numerous high-profile toxic-tort cases, including the defense of Lockheed Martin from allegations it contaminated groundwater in San Bernardino County. Nothing had really prepared either lawyer for their investigation of the Nicaraguan banana worker claims.
"We knew witnesses would be at risk," Neuman recounts at the firm's downtown L.A. headquarters. "If we investigated the fraud, we had to be effective. If we fell flat, we knew we would be in big trouble. It [the evidence] had to be guns blazing."
Claims of perpetuating fraud upon the court must meet a high evidentiary standard. According to a 20-year-old opinion by the First Circuit, "A fraud upon the court occurs where it can be demonstrated, clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system's ability to impartially adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party's claim or defense." (Aoude v. Mobil Oil Corp.,
892 F.2d 1115 (1st Cir. 1989).)
Dole's first breakthrough in the case came from a "Witness X" in Nicaragua, who claimed that at least two of the Tellez
plaintiffs had never worked on a banana farm. But despite a protective order, "Witness X" was so concerned for his safety that he would not sign a declaration, and Judge Chaney denied Dole's motion for a new trial on hearsay grounds.
Only deposition testimony, or a declaration signed by the witness under oath, would be admitted as evidence of fraud. To obtain such evidence, Edelman and Neuman soon realized, they would need a far more sweeping protective order than the one Chaney had issued previously. This left them with a catch-22: How could they make a showing to Chaney that would justify such an order if they couldn't get anyone to talk without one?
"Dole hadn't had any luck getting people to go on the record," says Edelman. "It was also a question of ... who are we going to get to talk? Unlike responding to a lawsuit filed in the U.S., we can't go down to Nicaragua and just start noticing depositions. It really put Dole at a disadvantage."
During an initial round of depositions in Mejia
in July 2008, Dole attorneys confronted plaintiff Pablo Emilio Peralta with evidence that he had impregnated several women after
he claimed to have worked on a banana farm. When Peralta failed to appear for the resumption of his deposition, his lawyers said he was "ill" and had been "having trouble eating." In fact, Jones Day's McKnight soon found Peralta munching on pork rinds at a nearby coffee shop. But Peralta didn't give Dole a definitive admission of fraud, or any "guns blazing" evidence.
A month later Neuman and Michael Crimmins from Gibson Dunn's Denver office took their first trip to Nicaragua and persuaded eight witnesses to sign declarations revealing the fraud. That led to a turning point in the case on September 17, 2008, during depositions in the conference room of Dominguez's penthouse suite high above Wilshire Boulevard.
plaintiff Donald Quiñonez had withstood hostile questioning from attorneys representing Dow Chemical and Amvac before Neuman began deposing him. Neuman recognized that Quiñonez had a mental handicap, and she didn't believe he had ever irrigated banana trees as he claimed.
"Irrigation was skilled labor ... I knew he never had that job, based on his cognitive issues," Neuman says. She thought Quiñonez might respond to some gentle coaxing.
"Andrea came in very nice, very gentle," Edelman recalls. "She disarmed the guy."
For more than 90 minutes, Neuman led Quiñonez through a recounting of his convoluted employment history, which wouldn't have been remarkable except that he never mentioned working on a banana farm. Questioned about his sterility, Quiñonez said he'd had sex two or three times with a woman about 25 years earlier, but she stopped seeing him because "she wanted me to give her children but I wasn't able to conceive a child for her." Because Quiñonez didn't know himself to be sterile at the time, it wasn't clear why the woman had given up on him so quickly.
Under questioning by Dominguez, Quiñonez testified in some detail about his work on the Maria Elsa banana farm outside Chinandega. This provided Neuman with an opening. "Did you have to study before you came to testify to remember all that detail?" she asked.
"Yes, I had to study," Quiñonez replied. A "friend," he continued, gave him a sheet from a notebook on which was written the dates of his employment at Maria Elsa, the name of the irrigation captain, and "how the guns and pipes [for applying DBCP] were set up."
The following morning, Quiñonez returned for additional questioning and admitted to Neuman that he made up the list of his sex partners while at Dominguez's field office in Chinandega. There "Carlotta" gave him the names, Quiñonez said. "She was reading it and I was writing it down like a parrot [as] they say," he testified. "Like a parrot."
Dole now had evidence that a plaintiff was coached, and the coaching took place in Dominguez's Nicaraguan law office. "It really got us something concrete to take in front of the judge," Edelman says.
Less than three weeks after Quiñonez completed his deposition, Judge Chaney granted Dole's ex parte request for an order protecting the identity of John Doe witnesses in Nicaragua. Chaney found the witnesses were at risk for "annoyance, oppression, and potential intimidation." And the order barred disclosure of the witnesses' identities even to Dominguez.
"We didn't think Dominguez should have access to any of this information," Edelman says. "It was very unusual?one of the lawyers representing the plaintiffs didn't get access to discovery in the case. But another law firm representing the plaintiffs?Miller Axline?did have access." Adds Edelman, "We felt that if [Dominguez] knew who the witnesses were ... that would give him a chance to do something to pressure these people not to testify."
Eventually, Dole submitted eight volumes of evidence of fraud to Judge Chaney, each a four-inch binder. The evidence included the depositions of 17 witnesses taken by Neuman, Edelman, and Crimmins during trips to the Chinandega area, as well as corroborating documentation such as training manuals given to plaintiffs in the case.
"They were training plaintiffs to lie," says Edelman. Many of the witnesses had participated in the fraud and said, even with the protective order, that they were at risk of reprisals from the plaintiffs. "My life is in danger here if they become aware," one witness said in a deposition. "If these people become aware, I don't know who could shoot me on the street." According to court testimony, Dominguez and a lawyer affiliated with him in Chinandega offered a $20,000 "bounty"?a fortune in Nicaragua, where the average annual income is $410?for the witness list.
Things got so tense that Dole's lawyers decided to take the testimony of the last ten witnesses by declaration. Neuman was worried about her own safety. "My concern was not that we would be set upon by angry plaintiffs but that corrupt police officers and judges would do something to get us arrested," she recalls. "I was thinking, 'Is it possible that we're going to be jailed?' "
Neuman's fears were hardly fanciful. Dominguez's captains in Nicaragua allegedly distributed fliers inviting anyone who saw Dole investigators to report them to the police. One investigator testified that three intelligence officers from the national police came looking for him at his hotel in Chinandega. Neuman registered at her Managua hotel under the name "Ellen Smith."
Chaney told the attorneys she had originally intended to hold a trial on the merits of the fraud allegations in September 2009. But she had been reading the depositions as they were filed in court and, concerned at the level of intimidation around the case, she took another extraordinary step. On March 11 she issued an order to show cause why the Mejia
cases should not be dismissed with prejudice. The hearing on that order took three days, with the John Doe witnesses all testifying behind closed doors on April 22.
One witness whose deposition was read in open court said the plaintiffs had been taken on bus trips to banana farms so they would testify convincingly. "When the time comes for, as I say, you know, for the companies or the gringos asking questions about it, ... you won't fail, you will not answer something else," he explained. Another witness said an organizer ordered him to masturbate and put his semen in a bag before being tested for sterility. "Those were his orders, that we needed to do that," he testified.
McKnight of Jones Day also took the stand, armed with a bag of pork rinds to illustrate his coffee-shop encounter with plaintiff Peralta, who had complained of a bad stomach.
In her ruling, Chaney said Dole's evidence had easily met the Aoude
standard of proof. "[I]f you took all the bad cases [of fraud on the court] that I've read and put them together, they don't even come close to what's happened here," she said. The judge spoke of recruiting captains grabbing "groups of men to make spurious claims that they are sterile," of sham lab reports, and of corrupt Nicaraguan judges awarding "judgments based on trumped-up allegations and facts." The fraud, she said, had "also contaminated each and every one of the plaintiffs in the Tellez
In July the district court of appeal issued an order giving the Tellez
plaintiffs 30 days in which to show that that judgment was not procured by fraud. Chaney had previously thrown out the punitive damages in the case, and she reduced the compensatory damages to $1.58 million.
Dominguez now faces civil charges of contempt of court. And Chaney?finding that Dominguez had suborned perjury, interfered with and intimidated witnesses, and made a "deliberate attempt to obstruct the fraud investigation and discovery"?has asked the U.S. Department of Justice to open a criminal investigation and also made a disciplinary complaint to the State Bar of California.
Michael McCarthy, a malpractice specialist at Nemecek & Cole in Sherman Oaks, is representing Dominguez in the contempt matter. He filed court papers in June in which he stated, "Dole?not Juan Dominguez?has been the instigator of systematic intimidation and corruption to cover up the harm it has inflicted on impoverished villages and workers."
Dominguez himself had previously accused Edelman and Neuman of bribing witnesses in Nicaragua. But Chaney ruled that "Plaintiffs' accusations of bribery lack any credibility whatsoever." The passports of Edelman and Neuman showed they were not even in Nicaragua at the time they were supposedly handing out bribes.
Edelman notes that the witnesses to fraud "all corroborated each other's testimony and provided documentary evidence?for example, the training manuals." Furthermore, he says, "They spoke at peril to themselves, so they really had no reason to lie. They did so just to tell the truth. They knew what they saw was wrong."
As for Donald Francisco Quiñonez, the witness who first spoke openly to Neuman, Judge Chaney specifically listed him in her June 15 written order terminating the Mejia
cases. He was, she said, one of those who were "recruited and signed up to be plaintiffs even though they had never worked in any capacity on a banana farm formerly associated with Dole."
Matthew J. Heller is a Los Angeles?based freelance writer.