422 F.3d 827 (9th Cir. 2005), 04-56582, Dow Chemical Co. v. Calderon

Docket Nº:04-56582.
Citation:422 F.3d 827
Party Name:The DOW CHEMICAL CO.; Shell Oil Company; Shell Chemical Company, Plaintiffs-Appellants, v. Jeronimo Anibal Florian CALDERON; Reynaldo Dionisio Garcia Gomez; Esteban Roberto Romero Martinez; Jose Eugenio Vivas Espino; Julio Alberto Calvo Rojas; Juan Obaldo Martinez Gonzalez; Francisco Valerio Gomez Meneses; Rene Joaquin Montesino Hernandez; Marcos A
Case Date:August 25, 2005
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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422 F.3d 827 (9th Cir. 2005)

The DOW CHEMICAL CO.; Shell Oil Company; Shell Chemical Company, Plaintiffs-Appellants,

v.

Jeronimo Anibal Florian CALDERON; Reynaldo Dionisio Garcia Gomez; Esteban Roberto Romero Martinez; Jose Eugenio Vivas Espino; Julio Alberto Calvo Rojas; Juan Obaldo Martinez Gonzalez; Francisco Valerio Gomez Meneses; Rene Joaquin Montesino Hernandez; Marcos Antonio Caceres Opinion Martinez; Santiago Cristobal Mung Zavala; Osmar Danilo Espinales Reyes; Sixto Tercero; Juan Irene Villalobos; Ramiro Jose Garcia; Venancio Antonio Hernandez; Justino Nicolas Medina; Joel Epifanio Caballero Barrera; Adolfina Del Carmen Candia Rodriguez; Adolfina Del Carmen Candia Aguirre; Aura Estela Palma Castro; Florentina Maradiaga Rodriguez; Albertina Ortega Oviedo; Filomena Zamora Rojas; Lidia Del Carmen Romero Franco; Lastenia Rogelio Acuna Gonzales, Defendants-Appellees.

No. 04-56582.

United States Court of Appeals, Ninth Circuit.

Aug. 25, 2005

Argued and Submitted July 13, 2005.

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Appeal from the United States District Court for the Central District of California, Nora M. Manella, District Judge, Presiding. D.C. No. CV-04-00356-NM.

Michael P. Foradas, Kirkland & Ellis LLP, Chicago, IL, argued the case for the appellants and was on the briefs of the appellants, as attorney for The Dow Chemical Company.

Gabriela I. Monahan, Kirkland & Ellis LLP, Chicago, IL, and C. Robert Boldt, Rick Richmond, Kirkland & Ellis LLP, Los Angeles, CA, and Michael L. Brem, Baker Botts LLP, Houston, TX, were also on the briefs of the appellants, as attorneys for the same party.

David W. Ogden, Jennifer M. O'Connor, Wilmer, Cutler, Pickering, Hale & Dorr LLP, Washington, DC, and Christopher Tayback, Quinn, Emanual, Urquhart, Oliver & Hedges LLP, Los Angeles, CA, were on the briefs of the appellants, as attorneys for the Shell Oil Company and Shell Chemical Company.

Howard Miller, Girardi & Keese, Los Angeles, CA, argued the case and was on the briefs for the appellees. Walter J. Lack, Paul A. Traina, Sean A. Topp, Engstrom, Lipsomb & Lack, Los Angeles, CA, and Thomas V. Girardi, Girardi & Keese, Los Angeles, CA, were also on the briefs of the appellees.

Before REINHARDT, KOZINSKI, and BERZON, Circuit Judges.

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BERZON, Circuit Judge.

The Dow Chemical Company, Shell Oil Company, and Shell Chemical Company ("the Companies") sued more than a thousand Nicaraguan citizens ("the Nicaraguans") in federal district court in California. The Companies seek a declaration that (1) they are not liable for any injuries to the Nicaraguans caused by dibromochloropropane, a toxic pesticide commonly known as "DBCP"; and (2) any judgments of Nicaraguan courts to the contrary are not enforceable in this country. The question before us is whether the Nicaraguans consented to personal jurisdiction by either (1) choosing to file suit in Nicaragua under a Nicaraguan law that requires American companies to deposit a specified sum or submit unconditionally to the jurisdiction of U.S. courts; or (2) defending on the merits a declaratory judgment action brought by a different company in the same federal district court concerning the same set of underlying Nicaraguan judgments. The district court rejected both of these contentions. Agreeing with the district court, we hold that the Nicaraguan defendants did not consent to personal jurisdiction in this action.

I. FACTUAL AND LEGAL BACKGROUND

The underlying disputes in this case concern whether the Companies are liable for injuries allegedly caused by exposure to DBCP. DBCP was used by fruit and vegetable growers throughout the world in the 1950's, 60's, and 70's. By 1979, use of DBCP in the United States was generally prohibited.

Thousands of plaintiffs, including several Nicaraguans, brought suit in the United States in the mid-1990's against both the manufacturers of DBCP and fruit companies that allegedly continued to use DBCP in developing countries after it was banned in the United States. See Delgado v. Shell Oil Co., 890 F.Supp. 1324, 1335-36 (S.D.Tex.1995). With respect to the Nicaraguan plaintiffs, the court in Delgado determined that Nicaraguan courts offered an adequate and more convenient alternative forum, see id. at 1362, and dismissed the suit on forum non conveniens grounds. See id. at 1372-73.

In 2001, the National Assembly of Nicaragua passed the "Special Law for the Conduct of Lawsuits Filed By Persons Affected By the Use of Pesticides Manufactured with a DBCP Base," known as "Special Law No. 364." 1 Of import to this appeal are two procedural sections, Articles 4 and 7 of Special Law No. 364.

Article 4 requires defendants to deposit "within ninety (90) days after the respective lawsuits have been brought before the courts of [Nicaragua], the sum of one hundred thousand dollars or the equivalent thereof in cordobas ... as a procedural prerequisite for being able to take part in the lawsuit." 2 Special Law No. 364, art. 4. Relatedly, Article 7 states:

Companies that, within ninety (90) days of being given notice of this Law by the plaintiff and service of process through the corresponding channel, have not deposited the sum established in Article 4 hereof, must subject themselves unconditionally to the jurisdiction of the courts of the United States of America for the final judgment of the case in question,

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expressly waiving the defense of forum non conveniens invoked in those courts. In the event that the [companies] decide that the proceedings are to continue in the Nicaraguan courts, they are to deposit the amount established in Article 4 of this Law.

Id. art. 7.

Nicaraguans suing under Special Law No. 364 have obtained more than $715 million in judgments against U.S. companies, including The Dow Chemical Company, Shell Oil Company, Shell Chemical Company, and Dole Food Company, many of which were issued without participation by the defendant held liable. Facing potential attempts at enforcement of the various judgments rendered in Nicaragua, Dow Chemical and the two Shell Companies filed a declaratory judgment action against 1,030 named Nicaraguans 3 on January 21, 2004, in the Central District of California. The Companies' First Amended Complaint seeks a declaration that (1) the companies are not liable to the Nicaraguans "for any asserted injuries allegedly caused by exposure in Nicaragua to products purportedly manufactured by Plaintiffs;" and (2) that any judgment obtained by the Nicaraguans in Nicaragua is not recognizable or enforceable in the United States. The Nicaraguans moved to dismiss the complaint under Fed.R.Civ.P. 12(b)(2) (lack of personal jurisdiction) and Fed.R.Civ.P. 12(b)(6) (failure to state a claim).

Dole Food Company filed a separate declaratory judgment action against 465 of the 1030 Nicaraguans ("the Managuan defendants") named in this suit. See Dole Food Co. v. Gutierrez, No. CV 03-9416 NM (PJWx) (C.D.Cal. filed July 14, 2004). The Nicaraguans in Dole Food Co. waived any objection to personal jurisdiction in that case by filing a motion under Fed.R.Civ.P. 12(b)(6). Id. The district court in Dole Food Co. noted that "[h]ad the issue been raised, it is doubtful that this court would have found a basis to exercise personal jurisdiction over the [Nicaraguans]," id. at n. 8, and dismissed most of the claims on the 12(b)(6) grounds; Dole Food voluntarily dismissed the remainder of its case.

In this case, the district court granted the Nicaraguans' motion to dismiss for lack of personal...

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