US Court Refuses to Enforce Nicaraguan Judgment

by Trey Childress on October 21, 2009

On October 20, 2009, the United States District Court for the Southern District of Florida issued an order in the case of Osorio v. Dole Food Company denying recognition of a $97 million Nicaraguan judgment under the Florida Uniform Out-of-country Foreign Money-Judgments Recognition Act (Florida Recognition Act).  Fla. Stat. §§ 55.601-55.607 (2009).  The Nicaraguan judgment involved 150 Nicaraguan citizens alleged to have worked on banana plantations in Nicaragua between 1970 and 1982, during which time they were exposed to the chemical compound dibromochloropropane (DBCP).  DBCP is an agricultural pesticide that was banned in the United States after it was linked to sterility in factory workers in 1977.  Nicaragua banned DBCP in 1993.

Plaintiffs sued Dole Food Company and The Dow Chemical Company, both Delaware corporations, on account of personal injuries allegedly resulting from the use of DBCP.  The judgment in this case was rendered by a trial court in Chinandega, Nicaragua.  The court awarded plaintiffs $97 million under “Special Law 364,” enacted by the Nicaraguan legislature in 2000 specifically to handle DBCP claims.  The average award was approximately $647,000 per plaintiff.  According to the Nicaraguan trial court, these sums were awarded to compensate plaintiffs for DBCP-induced infertility and its accompanying adverse psychological effects.

Plaintiffs sought enforcement of the judgment in Florida state court, and defendants removed the case to federal court.  Defendants then raised several objections to domesticating the judgment.  They contended that under the Florida Recognition Act the federal court could not enforce the judgment because (1) the Nicaraguan trial court lacked personal and/or subject matter jurisdiction under Special Law 364, (2) the judgment was rendered under a system which does not provide procedures compatible with due process of law, (3) enforcing the judgment would violate Florida public policy, and (4) the judgment was rendered under a judicial system that lacks impartial tribunals.

In a lengthy opinion, Judge Paul C. Huck concluded that “the evidence before the Court is that the judgment in this case did not arise out of proceedings that comported with the international concept of due process.  It arose out of proceedings that the Nicaraguan trial court did not have jurisdiction to conduct.  During those proceedings, the court applied a law that unfairly discriminates against a handful of foreign defendants with extraordinary procedures and presumptions found nowhere else in Nicaraguan law.  Both the substantive law under which this case was tried, Special Law 364, and the Judgment itself, purport to establish facts that do not, and cannot, exist in reality.  As a result, the law under which this case was tried stripped Defendants of their basic right in any adversarial proceeding to produce evidence in their favor and rebut the plaintiffs’ claims.  Finally, the judgment was rendered under a system in which political strongmen exert their control over a weak and corrupt judiciary, such that Nicaragua does not possess a ‘system of jurisprudence likely to secure an impartial administration of justice.’” (citation omitted)

In light of these findings, the Court held that “Defendants have established multiple, independent grounds under the Florida Recognition Act that compel non-recognition of the $97 million Nicaraguan judgment.  Because the judgment was ‘rendered under a system which does not provide impartial tribunal or procedures compatible with the requirements of due process of law,’ and the rendering court did not have jurisdiction over Defendants, the judgment is not considered conclusive, and cannot be enforced under the Florida Recognition Act.  Fla. Stat. § 55.605(1)(a)-(c).  Additionally, the judgment will not be enforced because ‘the cause of action or claim for relief on which the judgment is based is repugnant to the public policy of this state.’ Fla. Stat. § 55.605(2)(c).  The Court, therefore, orders that Plaintiffs’ judgment shall be neither recognized nor enforced.”

This case is interesting on multiple levels.  First, the district court applied an “international concept of due process.”  Slip. op. at 23.  This standard was seen to be in concert with, but different than, US notions of due process.  Id. at 35-36.  Second, the court found that Nicaragua does not have impartial tribunals.  Id. at 54-58.  In so doing, the court relied not only on US State Department pronouncements but also on expert testimony regarding what law is like on the ground in Nicaragua “on paper and in practice.”  Id. at 57.  Finally, this case is perhaps most interesting because the general understanding is that it is hard to resist enforcement.  This case shows that US courts, if presented with appropriate evidence, are willing to ascertain the validity of foreign judgments, especially in countries facing political and social turmoil that may negatively impact the administration of justice in those countries.

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October 21, 2009 at 10:46 pm
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{ 5 comments }

Gilles Cuniberti October 22, 2009 at 8:56 pm

I wonder whether, if the plaintiffs had sued directly before Florida courts, they would have been told that Nicaragua is a perfectly adequate forum, and that really they should sue at home so that Florida tax payer’s money would not be wasted …

Any case law as to whether Nicaragua is an adequate forum for the purpose of forum non conveniens analysis ?

Ralf Michaels October 23, 2009 at 2:01 pm

Gilles, chemical defendants (incl. Dole) did successfully argue forum non conveniens in 1995, according to the article in bloomberg to which Trey cites. There is a lengthy discussion of the relevance for future plaintiffs of such earlier fnc dismissal, including the waiver that defendants signed not to contest jurisdiction of the Nicaraguan court, in the parallel case Osorio v. Dole Food Co., WL 48189.

The whole litigation (minus the recent developments) has made its way into a movie called Bananas!; Dole has just recently withdrawn its defamation lawsuit against the filmmaker. See http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202434738199&Go_iBananasi_Dole_Drops_Lawsuit_Against_Documentary_Maker#

Gilles Cuniberti October 23, 2009 at 3:47 pm

That’s the perfect crime, then, isn’t it?

Trey Childress October 26, 2009 at 5:35 pm

Gilles, note that the forum non motion would have come at a time much earlier in the proceedings, perhaps before the “law on the ground” in Nicaragua deteriorated. As such, it may have made sense at the time the forum non motion was made to go to the courts in Nicaragua. But, during the pendency of the trial, the due process guarantees in those courts evaporated, which thus makes the challenge to enforcement a reasonable position in my view.

Stefano Bertone October 27, 2009 at 12:54 am

Dear Sirs,

Gullone, Abad and Osorio (and many others) are all the same face of a very negative contemporary approach of US justice to foreign people who claim to have been damaged by illicit acts of US corporations.

De facto, this creates an immunity/impunity-inspired doctrine.

If these people claim in the US, they are told that they should have litigated the case elsewhere, in their home country. No decisions on the merits, no enforcement.
If they claim in their home country, they are told that their foras are corrupt, impartial, they lack due process, and so those judgements can’t have any binding effect. No enforcement again.

One could easily expect these motions to be filed by the defendants that are under scrutiny: in the very end, who is so crazy not to try escaping liability? It is however less easy to accept that judges fuel this approach.

So a number of questions arise at this point. They are true questions (meaning: I am truly curious to know), even when the answers are supposed to be quite straightforward under a majority opinion.

Do American judges agree that in an ideal model, an alleged tortfeasor must be amenable to trial somewhere?
Do agree American judges that at least from an historical experience, the best guarantees a defendant can find, are in its home country’s courts?
Are American judges aware of the fact that continuous forum non dismissals increase an already high isolationism of the U.S.A. in the world context?
Are they aware that only a very small percentage of the cases dismissed on forum non by US courts are refiled in the plaintiffs’ home country?
Are American jugdes aware that by way of keeping protecting American defendants from any kind of claims from foreign claimants (reads: impunity/immunity), they are giving green light to underinvestment on safety on products to be marketed abroad?
Are American judges aware that the doors of European justice are always open to American plaintiffs?
Are American judges aware that if an American citizen gets injured in Europe as a result of a defective product manufactured in Europe by an European company, he can set unamovable forum in the European company’s headquarters’s court?
Are American judges aware that the forum non doctrine is illegal in the EU since 2005, it is very rarely used in Australia and, with probably the exception of Canada, it is as such a resource used by only one country in the whole world? (Isolationism comeback)
In conclusion, would there be an American judge willing to explain where, when and how (if it at all possible…) Osorio should have filed its claim against the defendant?

Thank you very much.

Stefano Bertone, a plaintiff lawyer from Italy.

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