Chesley v. Union Carbide Corp.
| Decision Date | 25 February 1991 |
| Docket Number | No. 401,D,401 |
| Parties | In the Matter of the Petition of Stanley M. CHESLEY, F. Lee Bailey, Lionel Alan Marks, and Michael Phulwani, Individually, and on Behalf of the Plaintiffs' Executive Committee, for a Judgment Pursuant to Section 475 New York Judiciary Law, determining and enforcing an attorney's charging lien, Plaintiffs-Appellants, v. UNION CARBIDE CORPORATION and the Union of India, Defendants-Appellees. ocket 89-7663. |
| Court | U.S. Court of Appeals — Second Circuit |
Lionel Alan Marks, New York City, for plaintiffs-appellants.
Bud G. Holman, New York City (William A. Krohley, Lisa E. Cleary, Kelley Drye & Warren, New York City, of counsel), for defendant-appellee Union Carbide Corp.
Before KEARSE, ALTIMARI and MAHONEY, Circuit Judges.
Appellants are and represent American attorneys who, on behalf of Indian plaintiffs who were victims in the Bhopal gas leak disaster that occurred in December 1984, filed suits against Union Carbide Corporation ("UCC"). These actions originated in the United States District Court for the Southern District of New York, or were transferred thereto, pursuant to 28 U.S.C. Sec. 1407 (1988), by the Judicial Panel on Multidistrict Litigation. See In re Union Carbide Corp. Gas Plant Disaster, 601 F.Supp. 1035 (J.P.M.D.L.1985) (per curiam). These suits were subsequently consolidated with a parallel suit filed by the Union of India ("UOI"), purporting to act as parens patriae on behalf of the Bhopal victims. 1
In response to a motion by UCC, the district court, John F. Keenan, Judge, dismissed these actions on the ground of forum non conveniens. See In re Union Carbide Corp. Gas Plant Disaster, 634 F.Supp. 842 (S.D.N.Y.1986), modified, 809 F.2d 195 (2d Cir.), cert. denied, 484 U.S. 871, 108 S.Ct. 199, 98 L.Ed.2d 150 (1987) ("Union Carbide"). Litigation in the courts of India ultimately resulted in a $470,000,000 settlement in favor of the Bhopal victims.
Appellants, who did not participate in the Indian proceedings, thereupon moved in the district court for the determination and enforcement of an attorney's charging lien pursuant to N.Y.Jud.Law Sec. 475 (McKinney 1983) to recover fees and expenses for their representation of Bhopal victims. 2 The district court denied the motions on the ground that it lacked subject matter jurisdiction in view of the prior forum non conveniens dismissal. Appellants contend here that the motions should have been heard pursuant to the district court's ancillary jurisdiction.
We affirm, although on a different basis than that expressed by the district court.
The Bhopal disaster was caused by the release of methyl isocyanate from a pesticide plant operated by Union Carbide India Limited ("UCIL") in Bhopal, India shortly after midnight on December 3, 1984, and resulted in thousands of deaths and injuries. Union Carbide, 809 F.2d at 197.
At the outset of this litigation, the district court appointed two of the appellants, Stanley H. Chesley and F. Lee Bailey, and one representative of UOI as a Plaintiff's Executive Committee to coordinate the litigation.
On July 2, 1985, the district court ordered that each participating attorney or firm make an initial payment of $1,000 to an "Executive Committee/Liaison Counsel Expense Fund." On August 23, 1985, the court ordered an increase of that payment to $3,000. Also, pursuant to an offer it initially made on April 18, 1985, UCC contributed five million dollars in interim relief for the Bhopal victims, which was treated as an advance payment or credit to UCC.
This contribution was initially suggested by Philadelphia counsel for certain Bhopal plaintiffs. Counsel for UOI stated at the hearing where this contribution was addressed, however, without rejoinder or objection by any plaintiff's counsel, that "there should be no attorneys' fees at all attached to this interim relief, neither now nor in the future," and reiterated that view a little later in the hearing. A subsequent district court order that dealt with the distribution of those funds specified: "Neither the promulgation, implementation nor anything contained herein shall be asserted or used in any manner against the interests of [UCC]."
On July 29, 1985, UCC moved to dismiss all of the Bhopal cases pending before Judge Keenan on the grounds that: (1) the district court was forum non conveniens; (2) the attorneys purporting to appear on behalf of the individual plaintiffs lacked authority to maintain the actions; and (3) the plaintiffs did not have standing or authority to bring these cases in the United States. Because the forum non conveniens issue was potentially dispositive, consideration of the latter issues was deferred, and the district court never reached those issues. Rather, on May 12, 1986, as amended June 10, 1986, the district court issued an opinion and order granting UCC's motion on the ground of forum non conveniens, subject to the conditions that:
1. Union Carbide shall consent to submit to the jurisdiction of the courts of India, and shall continue to waive defenses based upon the statute of limitations;
2. Union Carbide shall agree to satisfy any judgment rendered against it by an Indian court, and if applicable, upheld by an appellate court in that country, where such judgment and affirmance comport with the minimal requirements of due process 3. Union Carbide shall be subject to discovery under the model of the United States Federal Rules of Civil Procedure after appropriate demand by plaintiffs.
Union Carbide, 634 F.Supp. at 867.
Contemporaneously, by letter dated May 27, 1986 addressed to the "Bhopal Disaster Plaintiffs' Committee", and individually to appellants Bailey and Chesley, as well as two other counsel for Bhopal plaintiffs, appellant Marks stated:
I have a very important request to make before the final order is entered on the forum non conveniens motion.
I request that a motion or application be made to the Court that the dismissal order be subject to a lien for attorneys' disbursements (and fees) for services against the proceeds of any settlement or suit paid by Union Carbide (USA) or its insurers.
* * * * * *
If you do not agree to immediately make such application before the Court prior to the entry of the final order, then please give the undersigned permission to individually apply to the Court to impress such a lien.
No such motion or application was made at that time, however, nor thereafter until February 1989, as hereinafter discussed.
This court affirmed the order of the district court, but modified it to delete the second and third conditions. Union Carbide, 809 F.2d at 205-06. In rejecting a suggestion by UCC that the district court exercise some sort of supervisory role to ensure the observance of due process standards in the continuing litigation in the courts of India, we said:
The district court's jurisdiction is limited to proceedings before it in this country. Once it dismisses those proceedings on grounds of forum non conveniens it ceases to have any further jurisdiction over the matter unless and until a proceeding may some day be brought to enforce here a final and conclusive Indian money judgment.... The concept of shared jurisdictions is both illusory and unrealistic. The parties cannot simultaneously submit to both jurisdictions the resolution of the pre-trial and trial issues when there is only one consolidated case pending in one court.
Union Carbide, 809 F.2d at 205.
Litigation then ensued in the courts of India for more than two years, culminating in a settlement, on February 15, 1989, of the claims against UCC and UCIL by Bhopal victims for 470 million dollars. Pursuant to the settlement agreement and at the direction of the Supreme Court of India, UCC and the UCIL "deposited [the settlement funds] to the credit of the Registrar of Court in a Bank under directions to be taken from [that] Court" (order of Supreme Court of India dated February 15, 1989), there to be consolidated with the residue of the five million dollar interim payment previously made by UCC.
Bailey and Chesley thereupon brought in the district court a motion seeking an order:
a. Compelling the Union of India and Union Carbide Corporation to submit to this Court a plan for the distribution of the proceeds of the settlement of $470 Million ($470,000,000.00) Dollars which has apparently been reached, and
b. Requesting this Court to reimburse the Plaintiffs' Executive Committee members, F. LEE BAILEY AND STANLEY M. CHESLEY, and the remaining Plaintiffs' attorneys for their legitimate costs and expenses related to the maintenance of the Bhopal Litigation in the United States from the settlement fund created by the Union Carbide Corporation and to pay compensation for services rendered, and
3. Setting a date for the submission of fee applications and of papers documenting the services performed and expenses incurred and/or for a hearing regarding this matter....
This motion was supplemented by a letter application by Marks which requested that "the Court conduct a hearing pursuant to Section 475 of [the] New York Judiciary Law to determine the amount of the plaintiffs' attorney's liens for services and disbursements," and further by a "Petition for Attorney's Lien under Section 475 of the New York Judiciary Law" submitted by Chesley, Bailey, Marks, and appellant Phulwani. The petition asserted, inter alia, that:
The proceeds of settlement of $425 Million paid by the Union Carbide Corporation (including the $5 Million interim payment made pursuant to the June 7, 1985 Order of this court) are presently on deposit with the Registrar of the Supreme Court of India....
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