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In re Union Carbide Corp.

decided: January 14, 1987.

IN RE UNION CARBIDE CORPORATION GAS PLANT DISASTER AT BHOPAL, INDIA IN DECEMBER, 1984; THE PLAINTIFFS IN ALL CASES WHICH HAVE BEEN CONSOLIDATED INTO THIS PROCEEDING BY ORDER OF THE JUDICIAL PANEL ON MULTIDISTRICT LITIGATION DATED FEBRUARY 6, 1985, AND ORDER OF THIS COURT DATED APRIL 25, 1985, TOGETHER WITH THOSE PLAINTIFFS IN ALL OTHER RELATED ACTIONS WHICH MAY BE CONSOLIDATED SUBSEQUENT TO THE FILING OF THIS NOTICE OF APPEAL, INCLUDING BUT NOT LIMITED TO ALL THOSE CASES WHICH ARE ALL THOSE TORT CASES FILED IN THIS COURT WHICH THE UNDERSIGNED ARE AWARE OF, EXCEPT THE UNION OF INDIA
v.
UNION CARBIDE CORPORATION, NO. 85 CIV. 2696 AND EXCEPT THOSE CASES CONSOLIDATED AS SHAREHOLDERS OR DERIVATIVE CASES BY EXECUTIVE COMMITTEE MEMBERS, STANLEY M. CHESLEY AND F. LEE BAILEY, AND THE UNION OF INDIA, PLAINTIFFS-APPELLANTS, CROSS-APPELLEES, V. UNION CARBIDE CORPORATION, DEFENDANT-APPELLEE, CROSS-APPELLANT



Appeal by individual plaintiffs in some 145 consolidated personal injury actions arising out of the disaster caused by leakage of lethal gas from a chemical plant in Bhopal, India, from an order of the Southern District of New York, John F. Keenan, Judge, dismissing their actions on grounds of forum non conveniens, subject to certain conditions. Cross appeals by Union Carbide Corporation and the Union of India. Order of dismissal modified and in all other respects affirmed.

Author: Mansfield

Before MANSFIELD, PRATT and ALTIMARI, Circuit Judges.

MANSFIELD, Circuit Judge.*fn*

This appeal raises the question of whether thousands of claims by citizens of India and the Government of India arising out of the most devastating industrial disaster in history - the deaths of over 2,000 persons and injuries of over 200,000 caused by lethal gas known as methyl isocyanate which was released from a chemical plant operated by Union Carbide India Limited (UCIL) in Bhopal, India - should be tried in the United States or in India. The Southern District of New York, John F. Keenan, Judge, granted the motion of Union Carbide Corporation (UCC), a defendant in some 145 actions commenced in federal courts in the United States, to dismiss these actions on grounds of forum non conveniens so that the claims may be tried in India, subject to certain conditions. The individual plaintiffs appeal from the order and the court's denial of their motion for a fairness hearing on a proposed settlement. UCC and the Union of India (UOI), a plaintiff, cross-appeal. We eliminate two of the conditions imposed by the district court and in all other respects affirm that court's orders.

The accident occurred on the night of December 2-3, 1984, when winds blew the deadly gas from the plant operated by UCIL into densely occupied parts of the city of Bhopal. UCIL is incorporated under the laws of India. Fifty and nine-tenths percent of its stock is owned by UCC, 22% is owned or controlled by the government of India, and the balance is held by approximately 23,500 Indian citizens. The stock is publicly traded on the Bombay Stock Exchange. The company is engaged in the manufacture of a variety of products, including chemicals, plastics, fertilizers and insecticides, at 14 plants in India and employs over 9,000 Indian citizens. It is managed and operated entirely by Indians in India.

Four days after the Bhopal accident, on December 7, 1984, the first of some 145 purported class actions in federal district courts in the United States was commenced on behalf of victims of the disaster. On January 2, 1985, the Judicial Panel on Multidistrict Litigation assigned the actions to the Southern District of New York where they became the subject of a consolidated complaint filed on June 28, 1985.

In the meantime, on March 29, 1985, India enacted the Bhopal Gas Leak Disaster (Processing of Claims) Act, granting to its government, the UOI, the exclusive right to represent the victims in India or elsewhere. Thereupon the UOI, purporting to act in the capacity of parens patriae, and with retainers executed by many of the victims, on April 8, 1985, filed a complaint in the Southern District of New York on behalf of all victims of the Bhopal disaster, similar to the purported class action complaints already filed by individuals in the United States. The UOI's decision to bring suit in the United States was attributed to the fact that, although numerous lawsuits (by now, some 6,500) had been instituted by victims in India against UCIL, the Indian courts did not have jurisdiction over UCC, the parent company, which is a defendant in the United States actions. The actions in India asserted claims not only against UCIL but also against the UOI, the State of Madhya Pradesh, and the Municipality of Bhopal, and were consolidated in the District Court of Bhopal.

By order dated April 25, 1985, Judge Keenan appointed a three-person Executive Committee to represent all plaintiffs in the pre-trial proceedings. It consisted of two lawyers representing the individual plaintiffs and one representing the UOI. On July 31, 1985, UCC moved to dismiss the complaints on grounds of forum non conveniens, the plaintiffs' lack of standing to bring the actions in the United States, and their purported attorneys' lack of authority to represent them. After several months of discovery related to forum non conveniens,*fn1 the individual plaintiffs and the UOI opposed UCC's motion. After hearing argument on January 3, 1986, the district court, on May 12, 1986, in a thoroughly reasoned 63-page opinion granted the motion, dismissing the lawsuits before it on condition that UCC:

(1) consent to the jurisdiction of the courts of India and continue to waive defenses based on the statute of limitations,

(2) agree to satisfy any judgment rendered by an Indian court against it and upheld on appeal, provided the judgment and affirmance "comport with minimal requirements of due process," and

(3) be subject to discovery under the Federal Rules of Civil Procedure of the United States.

On June 12, 1986, UCC accepted these conditions subject to its right to appeal them; and on June 24, 1986, the district court entered its order of dismissal. In September 1986 the UOI, acting pursuant to its authority under the Bhopal Act, brought suit on behalf of all claimants against UCC and UCIL in the District Court of Bhopal, where many individuals suits by victims of the disaster were then pending.

In its opinion dismissing the actions the district court analyzed the forum non conveniens issues, applying the standards and weighing the factors suggested by the Supreme Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 91 L. Ed. 1055, 67 S. Ct. 839 (1947), and Piper Aircraft Co. v. Reyno, 454 U.S. 235, 70 L. Ed. 2d 419, 102 S. Ct. 252 (1981). At the outset Judge Keenan concluded, in accordance with the Court's expressed views in Piper that, since the plaintiffs were not residents of the United States but of a foreign country, their choice of the United States as a forum would not be given the deference to which it would be entitled if this country were their home. See Piper, 454 U.S. at 256. Following the dictates of Piper, the district court declined to compare the advantages and disadvantages to the respective parties of American versus Indian Laws or to determine the impact upon plaintiffs' claims of the laws of India, where UCC had acknowledged that it would make itself amenable to process, except to ascertain whether India provided an adequate alternative forum, as distinguished from no remedy at all. Judge Keenan reviewed thoroughly the affidavits of experts on India's law and legal system, which described in detail its procedural and substantive aspects, and concluded that, despite some of the Indian system's disadvantages, it afforded an adequate alternative forum for the enforcement of plaintiffs' claims.

The Indian judiciary was found by the court to be a developed, independent and progressive one, which has demonstrated its capability of circumventing long delays and backlogs prevalent in the Indian courts' handling of ordinary cases by devising special expediting procedures in extraordinary cases, such as by directing its High Court to hear them on a daily basis, appointing special tribunals to handle them, and assigning daily hearing duties to a single judge. He found that Indian courts have competently dealt with complex technological issues. Since the Bhopal Act provides that the case may be treated speedily, effectively and to the best advantage of the claimants, and since the Union of India represents the claimants, the prosecution of the claims is expected to be adequately staffed by the Attorney General or Solicitor General of India.

The tort law of India, which is derived from common law and British precedent, was found to be suitable for resolution of legal issues arising in cases involving highly complex technology. Moreover, Indian courts would be in a superior position to construe and apply applicable Indian laws and standards than would courts of the United States. Third parties may be interpleaded under Order 1, Rule 10(2) of the Indian Code of Civil Procedure, and defendants may seek contribution from third parties. The absence in India of a class action procedure comparable to that in federal courts here was found not to deprive the plaintiffs of a remedy, in view of existing Indian legal authorization for "representative" suits under Order 1, Rule 8 of the Indian Code of Civil Procedure, which would permit an Indian court to create representative classes. Judge Keenan further found that the absence of juries and contingent fee arrangements in India would not deprive the claimants of an adequate remedy.

In two areas bearing upon the adequacy of the Indian forum the district court decided to impose somewhat unusual conditions on the transfer of the American cases to India. One condition dealt with pre-trial discovery. Indian courts, following the British pattern, permit parties to have pre-trial discovery of each other through written interrogatories, liberal inspection of documents and requests for admission. Non-party witnesses can be interviewed and summoned to appear at trial or to produce documents. See India Code Civ. Proc., Order 16, Rule 6. Witnesses unable to appear at trial are sometimes permitted to give evidence by means of affidavits. See id. Order 19. Discovery in India, however, as in Britain, is limited to evidence that may be admitted at trial. Litigants are not permitted to engage in wide-ranging discovery of the type authorized by Fed. R. Civ. P. 26(b), which allows inquiry into any unprivileged matter that could reasonably lead to the discovery of admissible evidence.

Judge Keenan, concluding that the Indian system might limit the victims' access to sources of proof, directed that dismissal of the actions on grounds of forum non conveniens must be conditioned on UCC's consent to discovery of it in accordance with the Federal Rule of Civil Procedure after the cases were transferred to India. He added, "While the Court feels that it would ...


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