Opposition Brief — Bi v. Union Carbide Chemicals & Plastics Co.
Supreme Court brief1993
Ask Donna
What actually matters in this document.
Text
No. 93-64
IN THE
Supreme Court of the United States
OcToBER TERM, 1993
BANO BI, individually and on behalf of the children of Rashid
Kahn, and as representative of the Estate of Rashid Kahn, et al.,
Petitioners,
VS.
UNION CARBIDE CHEMICALS AND PLASTICS COMPANY
INC., formerly known as Union Carbide Corp.; UNION CAR-
BIDE OF INDIA, LTD.; UNION CARBIDE EASTERN, INC. ;
ENSERCH CORPORATION; HUMPHREYS & GLASGOW
CONSULTANTS PVT., LTD.; HUMPHREYS & GLASGOW,
LTD.; EBASCO-HUMPHREYS & GLASGOW, INC.,
Respondents.
ABDUL WAHID, et ai.,
Petitioners,
VS.
UNION CARBIDE CHEMICALS AND PLASTICS COMPANY
INC., formerly known as Union Carbide Corp.; UNION
CARBIDE OF INDIA, LTD.,
Respondents.
ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
RESPONDENT UNION CARBIDE CHEMICALS AND
PLASTICS COMPANY INC.’S BRIEF IN-OPPOSITION
KELLEY DryE & WARREN
Attorneys for Respondent
Union Carbide Chemicals and
Bup G. HoLMAN* Plastics Company Inc.
L E. 101 Park Avenue
wees ese New York, New York 10178
* Counsel of Record (212) 808-7800
COUNTERSTATEMENT OF THE QUESTIONS
E E OR R
i. Whether the Second Circuit
Court of Appeals correctly ruled,
pursuant to comity principles that
govern the relationships among nations,
that the federal and state courts of
this country should defer to the
judgment of a democratic foreign
government that disputes arising from a
mass tort occurring within that foreign
government’s own borders can be best
resolved by according the foreign
government exclusive standing to
represent the victims of the disaster
in the courts of the world?
2. Whether the Second Circuit
Court of Appeals should have affirmed
the judgment of the Honorable John F.
Keenan dismissing the complaints or
waite
remanded to the District Court with
directions to remand the suits to the
Texas state court where such an act
would have been futile?
TEED Ae BET ATi Be ne
—
-iii-
CORPORATE DISCLOSURE STATEMENT
Union Carbide Chemicals and Plastics
Company Inc.’s ("Union Carbide") parent
company is Union Carbide Corporation.
Union Carbide Chemicals and Plastics
Company Inc. (or corporations in which
Union Carbide Chemicals and Plastics
Company Inc. has an ownership interest)
has less than 100% ownership interests
in the following subsidiaries and
affiliates that have issued shares to
the public:
Name
GenEx
UCAR Emulsion Systems
Union Carbide Industrial Gases Inc.
UCAR Polimero y Quimicos C.A.
UCIA Argentina S.A.I.C.S.
UCIA Chile
UCIA Costa Rica
-iv-
UCIA Peru
Union Carbide Canada Ltd.
Carbon Products
Union Carbide Commercial C.A.
Union Carbide France S.A.
Union Carbide Hellas S.A.
Union Carbide India Ltd.
Union Carbide Indonesia PT
Union Carbide InterAmerica
Union Italia S.p.A.
Union Carbide Korea Ltd.
Union Carbide Malaysia
Sdn. Bhd.
Union Carbide Navarra S.A.
Union Carbide Philippines Inc.
Union Carbide Singapore
Unisil S.p.A.
S.A. White Marlins
Union Carbide Chemicals & Plastics
Company Inc. Joint Venture
Baker Cummins Dermatologicals Inc.
Uni Carbide C tj Joint Vent
UCAR Carbon Company Inc.
-V=
TABLE OF CONTENTS
Page
COUNTERSTATEMENT OF THE QUESTIONS
PRESENTED FOR REVIEW .....-.-.-sei
CORPORATE DISCLOSURE STATEMENT .. iii
COUNTERSTATEMENT OF THE CASE ....1l1
Le The Nature of These
Consolidated Cases .....1
a. The Course of Proceedings at
the District Court Level .. 2
a. Petitioners’ Repeated
Request for
Reconsideration of Their
Remand Motion ..... 3
b. Union Carbide’s Motion to
ee ae ee se ee ee ee
Js Disposition at the Second
Circuit Court of Appeals . 11
4. Additional Facts Relevant to
the Instant Petition ... 13
SUMMARY OF ARGUMNENL «© © «© © e eo ee 19
ARGUMENT * * - _ o . 2 . - _ * . . 2 2
POINT I:
WELL~-ESTABLISHED PRINCIPLES OF
COMITY AND THE ACT OF STATE
DOCTRINE DICTATE THAT UNITED
STATES COURTS RESPECT THE UNION
OF INDIA’S DECISIONS REGARDING
STANDING ... ++ «© «© « «© 22
-vi-
POINT II:
THE COURT BELOW CORRECTLY
AFFIRMED THE DISTRICT COURT’S
DISMISSAL (+ ia ee ere 6
A. There Is No Conflict
Regarding the Burdens in
Fraudulent Joinder
CHG@O@Ge «© © ee wb eo oe 8 6 33
B. The Lower Courts Properly
Decided this Case Belonged
in Federal Court... 36
c. There Is No Conflict
Concerning the Futility
Exception to 28 U.S.C. §
M47 eas ew a tl CSS
D. The Court Below Properly
Applied the Futility
Exception ...... 47
POINT III:
EVEN IF PETITIONERS HAD
STANDING, THE DISTRICT COURT
CORRECTLY CONCLUDED THAT
THEIR CLAIMS WERE BARRED ON
COLLATERAL ESTOPPEL
oo ee ae ee ee ee er ee a ee |
CONCLUS ION . ° ° oa . . . . 7 e e ° ° 6 5
-vii-
821 F.2d 1147 (5th Cir. 1987), .
vacated on other grounds sub nom.,
Pan Am World Airways Inc. v. Lopez
490 U.S. 1032, aff’d in relevant
part and vacated in part, 883 F.2d
37 (30m Cae. 2968) « «© ts we th ee «6S
‘
’ ve a. WW.
Alpert’s Newspaper Delivery, Inc. v.
New York Times Co., 876 F.2d 266 wag
Cir. 1989) * * o eo a . « 7 . a 50
wie ek ake ae Co. Vv.
Flintkote Co., 565 F. Supp. 843
(S.D.N.¥. 1983) ~ —_ * s* * - * 2 _ . 35
cks ° iwu
Tariana No. CIV. S-93-820-WBSJFM,
1993 WL 287405 (E.D. Cal. July 27,
SU TS. 4 a aye ee 2 kk oe 6 OO
wi , 663
F.20 G46 €008 Cie. 8064) 5. ss st 3S
376 U.S. 398 (1964) pia kes ae ae
j , 922 F.2d 1418
(9th Cir. 1991) (oe 6’ ae fa: oo 28
Blanco v. Banco Indus. de Venezuela,
S.A., Nos. 242, 92-7523, 1993 WL 196173
(2d Cir. Apr. 30, 1993) ; ss « 6 ee
869 (9th Cir. 1974) ......e. 29
-viii-
Sarnegie-Mellon Univ. —y.—cohill, 484
U.S. 343 (1988) — : 57
Shick Kam Choo vy. Exxon Cox. 486 U.S.
140 (1988) ... i. lee
Siarkson So, y.—Shabean, 544 F.2d 624
(36 Cie. 2976) . 3 > : rice) a
Cunard Steamship Co. v. Salen Reefer
Servs. AB, 773 F.2d 452 (2d Cir. 1985)
. on . . . 7 . . oe . e . . 29
Dow Chemical Co. v. Alfaro, 786
S.W.2d 674 (Tex. 1990),
cert. denied, 498 U.S. 1024
GO eS a ie
East Texas Mack Sales, Inc. Vv.
Northwest Acceptance Corp., 819 F.2d
116 (5th Cir.
1987) wolte 0) So ae eee
Fahnestock & Co. v. Castelazo, 741 F.
Supe. 72 (8.0.8.9. 1900) 2.6 ses 6S
Ss 7 t a Vv
Comercio Exterior de Cuba, 462 U.S. 611
(1983) _ * _ - > * . 48
Fitzgerald v. Texaco, Inc., 521 F.2d
448 (2d Cir. 1975), cert. denied, 423
U.S. 1052
(1976) . . . ° . . e ° 7 o ° . . - 56
, 153 F.2d 883
silbert sulf oil ¢
(2d Cir. 1946), rev’d on other grounds,
330 U.S. 501 (1947) or ares ee
, 707 F.2a
Green v. Amerada Hess Corp.
201 (5th Cir. 1983), cert. denied, 464
U.S. 1039
(1984) e . 2 a - cm 7 o e . . * . . 33
, 330 U.S. 501
(1947) . 7. . . 7 . . . * e ° * . * 61
-, 710 F.2d
2236 (Stn Cir. 3983) ...-s+s-es 61
, 927 F.2d 1401
(7th Cir. 1991) . . 7 . = . . ° . . 23
F.2d 1000 (9th Cir. 1987) o © © © 48
, 334 F.
Supp. 1141 (E.D. Mo. 1971) .... 56
Herbert v. National Academy of
Sciences, 974 F.2d 192 (D.D.C. 1992) 37
CTT ae 981 F.2d 821 (5th
Cir. 1993) . ad 7 e s e . J . 46
Hicks v. Quaker Oats Co., 662 F.2d 1158
(Sth Cir. Unit A Dec. 1981) see sa
uyot, 159 U.S. 113
(1895) . . . . * . . ° . a 7. * > 7 24
,» B82
F.2d 463 (10th Cir. 1976) .... 29
’
W , 649 F.2d
Aerospace Workers v. OPEC
1354 (9th Cir. 1981), cert. denied, 454
ee are iio ao 2
international Primate Protection League
Fund, 111 S. Ct. 1700 (1991) . 21, 42
Jhirad v. Ferrandina, 536 F.2d 478 (2d
Cir.), cart. denied, 429 U.S. 833
(1976) .. Peau tc «so 2
-xX=
Maine Association of Interdependent
Neighborhoods v. Commissioner, Maine
Department of Human Services, 876 F.2d
eG Ee eee ee
Vv Ss ’
784 F.2d 1313 (5th Cir. 1986) ~ « 64
Metropolitan Prop. & Cas. Ins. Co. v.
J.C. Penney Cas. Ins. Co., 780 F. Supp.
885 (D. Conn. 1991) oe 8 oe « « 34
Mignogna Vv. Sair Aviation, wane 937
F.2d 37 (2d Cir. 1991) ...... 45
, 919 F.2d 1058 (5th
Nolan v. Boeing Co.
Cir. 1990), cart.deniad, 233 8.¢é.
1587 (1991) ... ie cea tae
Norwalk v. Air-Way Electric Appliance
Corp., 87 F.2d 317 (2d Cir. 1977) 34
Nu-Way Systems of Indianapolis, Inc. v.
Belmont MiGs. INGs, 635 F.2d 617 (7th
a Sur eure ke ee ie ee
Pa rklane Hosiery Co. Vv. = gees 439 U.S.
338 (3078) 04 fk : aes
Pennzoil Co. v. Texaco. Inc., 481 U.S.
1 (1984) .. 7 5 ae
Piper Aircraft Co. v. Reyno, "454 U.S.
235
(1981) ° . . . e . om . ° ° * . ° cm 63
ubli aq v irst Nat’ it
Bank, 353 F.2d 47 (2d Cir. 1965),
cert. denied, 382 U.S. 1027
(1966) > 7 . eo ” 7 > . * . . 7 . . 48
Republic of Philippines v. Marcos, 806
F.2d 344 (1986), cart. denied, 481 U.S.
1048 (1987) ee a
906 F.2d 45 (lst Cir. 1990) - « « 58
Sahagian v. U.S., 864 F.2d 509 (7th
Cir. 1988), cert. demic d, 489 U.S.
1087 (1989) .. . 4 & + *« © ~- 26
earso ehman Hutto ne. ¥.
Wagoner, 944 F.2d 114
(2d Cir. 1991) “Se a a a a ae ee
Sibaja v. Dow Chem. Co., 757 F.2d 1215
(11th Cir.), ce rt , ~denie ed, 474 U.S. 948
(1985) ... wee
Sige tee Sis SOOT) 6 tk ce
blanca de Aguilar v oei oe
806 F. Supp. 139 (E.D. Tex. 1992) 57
Underhill v rere 168 U.S. 250
(1897) . a >. e . o o . 7 7 e > 7 29
in_re Union Carbide Corp. Gas Plant
Disaster, 634 F. Supp. 842 (S.D.N.Y.
1986), aff’d as modified, 809 F.2d 195
(2d Cir.), cert. de d, 484 U.S. 871
ts Se eee eee ee 1
n Carbide Corp. Gas ant
Disaster, 809 F.2d 195 (2d Cir.), cert.
denied, 484 U.S. 871 (1987) e « « 65
United States v. Merit, 962 F.2d 917
U3 | ae.
Vanity Fair Mills v. T. Eaton Co., 234
F.2d 633 (2d Cir.), cert. denied, 352
U.S. 871 (1956) a os) 6 & we eee BF
-xii-
Villar v. Crowley Maritime Corp., 990
F.2d 1489 (5th Cir. 1989), reh’g en
banc denied, Nos. 92-7162, 93-7036
(June 30, 1993) . . « «© « © « « 9S, 57
Walker v. Savall, 335 F.2d 536 (5th
rr en a
Warth v. Seld in, 422 U.S. 490
7 |e Ss
Washington v. Norton Mfg., Inc -, 588
F.2d 441 (5th Cir.), ce rt. den nied, 442
0.8. O63 (4970) «. ss aru.
Weiss v. Routh, 149 F.2d 193 (2d Cir.
1945) ape ite ae ae ae
Wilson v. Republic on Steel Co.,
Se © ae a errr ee
Wyatt v. Kaplan, 686 F.2d 276
(1982) os ° . ° o - . . sd e e . . * 38
STATUTES
Civil Practice and Remedies Code,
Subchapter D, 1993 Tex. Sess. Law Serv.
11 (Vernon) (effective August 31,
1993) e . 7 . . >. oO e - * e e e e * 60
28 U.S.C. § 1404(a) _* 0 © & «& «2S
28 U.S.C. § 1447(c) ..... 42, 46
MISCELLANEOUS
Bhopal Gas Leak Disaster Disaster
(Processing of
Ciaine) Age, 1966 1. 4 ss 8 es © ee oF
Compensation for Bhopal Set, N.Y.
Times, June 22, 1992, at D7... . .18
-xlii-
15 Charles Wright, A. Miller, et al.,
Federal Practice and Procedure § 3828,
(2d ed. 1986) es 2 5 5 eo (62
Restatement (Third) of the Foreign
Relations Law of the United States §
Se
COUNTERSTATEMENT OF THE CASE
1. The Nature of These
Consolidated Cases _
These are two tag-along actions to
the 1984 MDL 626 Litigation ("MDL 626")
previously consolidated for pre-trial
proceedings before the District Court
for the Southern District of New York.
All of those actions, some 145 in
number, were dismissed seven years ago
on forum non conveniens grounds. See
In re Union Carbide Corp. Gas Plant
Disaster, 634 F. Supp. 842 (S.D.N.Y.
1986), aff'd as modified, 809 F.2d 195
(2d Cir.), cert. denied, 484 U.S. 871
(1987). As in MDL 626, the petitioners
herein seek recovery for personal
injuries, wrongful death and loss of
property arising from the gas release
from the Union Carbide India Limited
("UCIL") plant in Bhopal, India on the
night of December 2-3, 1984. (JA6746-
473."
This was not the first time the
named plaintiffs in these actions had
been before the District Court, seeking
the same relief against, inter alia,
Union Carbide. Petitioners have not
disputed Union Carbide’s contention
below that they are the same plaintiffs
who were previously before the District
Court. (JA6745-46, 6070-6133).
2. The Course of Proceedings at
the District Court Level
The first of the actions, short
captioned Wahid v. Union Carbide (the
"Wahid action"), was filed on October
References to "JA_" refer to
designated pages of the Joint
Appendix filed with the Second
Circuit Court of Appeals,
references to "A_™“™ refer to
designated pages of the Appendix
filed with this Court, and
references to "P_"™ refer to the
Petition.
15, 1990, in Bexar County, Texas.
(JA6745). The second action, short
captioned Bi v. Union Carbide (the "Bi
action"), was originally filed on
October 19, 1990 in Jefferson County,
Texas. (JA6746).
a. Petitioners’ Repeated Request
for Reconsideration of Their
Remand Motion
Union Carbide has always contended
that UCIL, Union Carbide Eastern, Inc.
("UCE") and the Enserch defendants?
were fraudulently joined in order to
defeat diversity and removal
* The "Enserch defendants" include
Enserch Corporation ("Enserch"),
Ebasco-Humphreys & Glasgow, Inc.
("H&G-Texas"), Humphreys & Glasgow,
Ltd. ("H&G-London"), and Humphreys &
Glasgow Consultants, Pvt., Ltd.
("H&G-India") (collectively "Enserch
defendants"). These four defendants
were fraudulently joined by
plaintiffs in the Bi action for the
purpose of defeating the District
Court’s diversity and removal
jurisdiction.
jurisdiction. Accordingly, on November
13, 1990, Union Carbide removed the
Wahid and Bi actions to federal court.
(JA6745-46) .
By Orders dated December 5 and 7,
1990, Judge Joe J. Fisher dismissed the
Enserch defendants from the Bi action.
(JA6579-80, 6749). On December 7,
1990, plaintiffs moved to remand the Bi
case. After full briefing and a
January 2, 1991 hearing, Judge Fisher
issued an Order denying remand
(JA6749), and at the hearing, orally
denied the Bi plaintiffs’ motion for a
new trial, reconsideration and
reinstatement of these dismissals.
(JA6749).
On January 30, 1991, the Judicial
Panel on Multi-District Litigation
issued an Order transferring the
actions to the Southern District of New
York for pre-trial proceedings, and
they were thereafter assigned to Judge
Keenan. (JA6749). The Bi plaintiffs
subsequently moved the District Court
to reconsider Judge Fisher’s dismissal
of certain defendants and his denial of
their remand motion. (JA6750). During
an April 8, 1991 status conference, the
District Court stated that it would not
re-visit the remand issue. (JA6750).
Despite this oral order, the Bi
plaintiffs attempted to resurrect the
remand issue for the fourth time in
their response to Union Carbide’s
motion to dismiss. The Bi plaintiffs
cross~-moved to remand and to
"reconsider" Judge Fisher’s Orders of
dismissal of the Enserch defendants.
(JA255-410).
Plaintiffs in Wahid had similarly
moved to remand their action on
December 19, 1990.* That motion was
fully briefed, but was not decided
prior to the transfer of that action.
(JA6749).
On June 20, 1991, the then counsel
for the Wahid plaintiffs, acting
responsibly, moved for a dismissal of
their claims against UCIL (JA1106-08),
acknowledging that the plaintiffs were
"incorrect" in their earlier contention
that UCIL "had done business in Texas
and was subject to the liberal
provisions of our long-arm statute."
The dismissal of UCIL was, counsel for
the Wahid plaintiffs wrote, a
"responsible act." (JA6278-79).
Counsel also stated that he "still
UCIL was the only other named
defendant in the Wahid action.
UCIL, UCE, UCC and the Enserch
defendants were named as defendants
in the Bi action.
ree
d{id] not know to what extent" the
Wahid plaintiffs had participated in
MDL 626 but that he was “endeavoring to
find out." (JA6279).
b. Union Carbide’s Motion To
Dismiss
On May 24, 1991, Union Carbide
filed its motion to dismiss or, in the
alternative, for summary judgment.
(JA1109-1339, 6287-6686, 6725-64).
Union Carbide’s final ground for
dismissal, among many, many others, was
that plaintiffs and their attorneys
lacked standing and authority to
maintain these actions in light of the
Supreme Court of India’s rulings
upholding the Bhopal Gas Leak Disaster
(Processing of Claims) Act, 1985 (the
"Bhopal Act"), which gave the Union of
India ("UOI") authority to represent
all Indian claimants and exclusive
ieee
ia i
8
authority to settle on behalf of all.
The Second Circuit chose to affirm the
\ District Court’s judgment of dismissal
| on this ground, without reaching any of
the other clear grounds, to reach the
same conclusion. (A10-11).
Following the motion to dismiss in
the District Court, the Bi plaintiffs
served a lengthy discovery request (the
"demands") and requested an extension
to the briefing schedule. (JA696-702).
Union Carbide was compelled to move for
a protective order when the Bi
plaintiffs refused to withdraw these
demands. (JA639-702). The Bi
plaintiffs did not respond to that
motion, thus waiving their right to
seek this discovery.
In August, 1991, the Wahid
plaintiffs filed a brief in opposition
to the motion to dismiss. (JA525-75).
The Wahid plaintiffs offered an
affidavit from an individual who was
not a plaintiff, asserting that the
Wahid plaintiffs had not participated
in either the UOI’s action in India or
MDL 626. No Wahid plaintiff stepped
forward to attest to these
representations.‘ (JA576-77).
Subsequently, Union Carbide
received a copy of another Bi motion
for a further extension of time to
substitute a promised affidavit for
another. (JA250-54). The assertions in
The assertions of Ms. Laughlin, a
Rice University anthropology
student, were not based on firsthand
knowledge and included claims --
such as the assertion of UCIL’s
presence in Texas (JA457) -- that
are at odds with the position of
plaintiffs’ counsel in the Wahid
action. (JA6278-79). The
affidavits of Ms. Laughlin and Abdul
Jabbar Khan were contradicted by
Union Carbide below. (Contra Pi2).
10
this motion contradicted counsel’s
previous representation that the
original affidavit was in transit from
India. (JA251-53). On October 4,
1991, the Enserch defendants served a
brief and affidavits in response to the
Bi plaintiffs’ cross-motion (JA6237-
68), Union Carbide served its reply
papers (JA6070-6122, 6123-6214) and set
forth that most, if not all, of the
Wahid and Bi plaintiffs had previously
filed claims in MDL 626. (JA6123-33).
On February 18, 1992, the District
Court granted Union Carbide’s motion to
dismiss, applied federal forum non
conveniens law, held that the analysis
and results of its 1986 opinion were
still appropriate, refused to
reconsider Judge Fisher’s rulings and
also denied the Wahid plaintiffs’
motion to remand. (A9-19).
:
3. Disposition at the Second
Circuit Court o eals
On January 26, 1993, the Second
Circuit Court of Appeals ruled that it
would defer to the statute of a
democratic country to resolve disputes
created by a disaster of mass
proportions that occurred within that
country. The court held that when a
recognized democracy determines that
the interests of the victims of a mass
tort that occurred within its borders
will be best served if the government
exclusively represents the victims in
courts around the world, it would not
pass judgment on that determination,
and would permit only the foreign
government access to our courts to
litigate those claims, subject of
course to the standing requirements of
our courts. As the court noted, such a
12
result is "especially compelling in a
case such as this where almost all of
the victims are Indian citizens."
(A44). The court also determined that
courts in our federal system must
respect an act of a foreign country
which purports to deprive the victims
of a mass tort of standing to sue in
our courts as a question of federal
common law binding on state and federal
courts alike. As the court stated,
"(tjhe considerations underlying this
determination implicate the
relationship between our nation and
India and are uniquely federal in
nature." (A45). The court continued,
"permitting individual states to
develop rules to determine the Bhopal
Act’s effect on standing in their
courts would frustrate the need for a
uniform policy on matters of foreign
aeeenmneiennimenisiiel
13
relations." (A45-46). The court
concluded that since the Texas state
courts, applying federal common law,
would be obliged to reach the same
conclusion regarding petitioners’ lack
of standing that the appellate court
had reached, a remand would be
"pointless." (A46).
4. Additional Facts Relevant to
the Instant Petition
Petitioners ignore the fact that
their claims were dismissed on forum
non conveniens grounds in 1986, and
then later, the UOI commenced suit in
India against Union Carbide on their
behalf. The UOI prosecuted the Bhopal
litigation to its conclusion in India.
Petitioners’ claims pene thereafter
fully, fairly and finally resolved by
the highest court in India.
14
Petitioners assert that the
Indian proceedings were inadequate,
without disputing the material facts
concerning the Indian proceedings.°
The Indian Parliament’s promulgation of
the Bhopal Act facilitated the UOI’s
prosecution of all Bhopal-related
claims. (JA6583-84, 6754).
Petitioners must also concede that the
Bhopal Act gave the UOI the "exclusive
right to" represent its citizens in all
Bhopal-related claims, including the
exclusive right to institute, withdraw
or compromise such claims. (JA6585,
6754). Based on the Bhopal Act, the
UOI has consistently maintained that it
> Petitioners’ counsel does not
dispute that he had his chance to
represent plaintiffs in India. No
American attorneys ever participated
in the litigation commenced in the
Bhopal district court, although they
could have made such an application
to do so. (JA6589-91, 6734).
|
1S
is the exclusive representative of all
Claimants. (A27).
Petitioners also cannot dispute
that litigation proceeded intensely in
India for almost two and a half years,
with lengthy hearings, numerous
applications and petitions before all
levels of the Indian judiciary,
commencing in the Bhopal district
court.°®
After lengthy briefing and months
of oral argument by Union Carbide and
the UOI on appeals, the Supreme Court
of India on February 14, 1989
effectuated by Order, a settlement of
* The High Court of Madhya Pradesh and
the Supreme Court of India heard
appeals on the matter. From
September, 1986 to February, 1989,
the litigation was conducted on
behalf of the victims by the
Attorney General of India and other
highly competent Indian lawyers.
(JA6755-59).
16
"all claims, rights, and liabilities
related to and arising out of the
Bhopal . . . disaster." (JA6592-93,
6758). Pursuant to that Order and an
Order dated February 15, 1989 (JA6594-
96), Union Carbide and UCIL agreed to
pay $470 million to the Registrar of
the Supreme Court of India (JA6758-59),
and it was paid by Union Carbide and
UCIL on or about February 24, 1989.
(JA6597-99, 6759).
The Terms of Settlement set forth
the details for the final disposition
of the litigation and were incorporated
into the February 15, 1989 Order.
(JA6596, 6760-61). By Order dated May
4, 1989, the Supreme Court set forth
the reasons that had persuaded it that
the Settlement Orders issued in
February, 1989 were "just and
reasonable." (JA6604-13, 6761).
ee
17
On December 22, 1989, following
lengthy hearings (and after challenge
by, among others, the claimants the UOI
represented under the authority granted
to it under the Bhopal Act), the
Supreme Court issued an eighty-seven
page judgment upholding the
constitutional validity of the Bhopal
Act. The Supreme Court confirmed the
UOI’s exclusive authority to compromise
all claims made or that could be made
against Union Carbide and UCIL arising
from the Bhopal tragedy. (JA6615-84,
6761-63).
Thereafter, the Supreme Court
entertained challenges to the
settlement and on October 3, 1991,
issued a judgment upholding the terms
of the settlement, thus fully and
18
finally resolving all civil claims
against Union Carbide and UCIL.’
All of the counsel who represented
petitioners below have now withdrawn.
(JA6269-73). Petitioners’ alleged
counsel has presented no evidence that
the Indian nationals he purports to
represent authorized either the
substitution of counsel or the pursuit
of this petition. In fact, the
attorney pursuing this petition could
not conduct the litigation below
because he was suspended from the
practice of law for professional
misconduct, although it has become
7 As reported in the New York Times at
D-7 (June 22, 1992), the UOI has now
fixed compensation for the Bhopal
claimants, and the UOI’s seventeen
(17) special courts set up to hear
individual claims for relief have
already addressed thousands of
claims. Id. Distributions to
claimants have now occurred.
19
clear that he was directing the course
of that litigation behind the scenes.
(JA1114).
SUMMARY OF ARGUMENT
The Second Circuit correctly
ruled, pursuant to comity principles
that govern the relationships among
nations, that the federal and state
courts of this country should defer to
the judgment of the UOI, a democratic
foreign government, that disputes
arising from a mass tort occurring
within that foreign government’s own
borders can be best resolved by
according the foreign government
exclusive standing to represent the
victims of the disaster in the courts
of the world. The petition should be
denied because the Second Circuit’s
dismissal of the actions for lack of
standing is in accordance with well-
20
settled authority of this Court
respecting comity principles and the
act of state doctrine. Moreover, the
Second Circuit correctly decided the
issue of petitioners’ standing to bring
suit in the first instance.
Nor does the petition present any
issues of federal law which should be
addressed by this Court. The court
below applied sound, uniform principles
of federal law to determine that these
cases were properly removed to federal
court and, thereafter, properly
dismissed rather than remanded to state
court. Moreover, there is no conflict
among the courts with respect to the
standards and burdens in fraudulent
joinder removal cases. The lower
courts properly decided the fraudulent
joinder issue in favor of respondents
and petitioners’ arguments concerning
OO
21
veil-piercing, alter ego and agency do
not raise any issues concerning a
conflict among the courts and do not
concern an important question of state
law. There is also no conflict among
the federal courts concerning the
futility exception recognized by this
Court in International Primate
Protection League v. Administrators of
ulane ucatio yee, 111 8. Ct.
1700 (1991), where, as the Second
Circuit correctly determined here, the
Texas state court would also be bound
by the same rules of standing.
Finally, petitioners do not raise
any question regarding the doctrine of
forum non conveniens. The District
Court properly determined that
petitioners were estopped from raising
the forum non conveniens issue, which
had been fully and fairly litigated
22
under federal common law in MDL 626.
This Court declined to grant certiorari
at that time to review the Second
Circuit’s decision affirming the
dismissal. Even assuming that the
collateral estoppel doctrine did not
bar re-litigation of the forum non
conveniens issue, the petition does not
raise an issue of federal law as the
federal common law doctrine of forum
non conveniens applies in a diversity
case removed from state court.
ARGUMENT
POINT I
WELL~-ESTABLISHED PRINCIPLES OF
COMITY AND THE ACT OF STATE DOCTRINE
DICTATE THAT UNITED STATES COURTS
RESPECT THE UNION OF INDIA’S
DECISIONS REG NG NG
In dismissing petitioners’
actions for lack of standing, the
Second Circuit acted in accordance with
well-settled authority of this Court
23
concerning comity principles and the
act of state doctrine.* Petitioners
The Second Circuit was correct in
deciding the issue of standing
first. As this Court has stated,
"standing imports justiciability:
whether the plaintiff has made out a
‘case or controversy’ between
himself and the defendant within the
meaning of Art. III. This is the
threshold question in every federal
case, determining the power of the
court to entertain the suit." Warth
v. Seldin, 422 U.S. 490, 498 (1975).
See also Shearson Lehman Hutton,
Inc. v. Wagoner, 944 F.2d 114, 117
(2d Cir. 1991)("it is necessary
first to address the question of
standing... . Because
standing is jurisdictional under
Article III of the United States
Constitution, it is a threshold
issue in all cases since putative
plaintiffs lacking standing are not
entitled to have their claims
litigated in federal court.")
(citation omitted) ; i
of Zion, 927 F.2d 1401, 1404 (7th
Cir. 1991).
There is no conflict among the
circuits on the issue of\whether in
a removed case the court should
address a plaintiff’s remand motion
first. (P35-39). The one decision
cited in which the court addressed
the remand motion first expressly
(continued...)
24
present no issue of federal law which
should be addressed by this Court.
Our courts have long recognized
the doctrine of comity, which has been
defined as "the recognition which one
nation allows within its territory to
the legislative, executive, or judicial
acts of another... ." Hilton v.
Guyot, 159 U.S. 113, 164 (1895).
United States courts do not interfere
in the internal affairs of foreign
states in cases where such involvement
would have a negative impact on U.S.
relations with a foreign country.
Comity is thus invoked in cases where
the acts of foreign countries are
implicated, not as a matter of
§(...continued)
assumed the correctness of Walker v.
Savell, 335 F.2d 536 (5th Cir.
1964), which held courts are free to
determine other motions before
addressing a remand motion.
25
obligation, but out of deference and
mutuai respect. Id.
This case presents the paradigm
situation that requires application of
comity principles. The Bhopal Act was
promulgated by the legislative branch
of a democratic foreign state, the UOI,
in response to a mass tort occurring
within its borders. It grants the UOI
exclusive standing to represent its
citizens in courts around the world.
The highest court of India has upheld
the validity of the Bhopal Act and the
settlement made pursuant to the Act.
(A37-38).° In reference to the courts
° The Texas Uniform Foreign Money
Judgment Act and cases concerning
standing for collateral attack are
irrelevant here. (P57-58). The
Bhopal Act granted exclusive
standing in this matter to the UOI.
Petitioners therefore lack standing
to invoke the Texas statute to
collaterally challenge the
(continued...)
26
of India, the Second Circuit had
earlier pronounced that "[{i}t is not |
the business of our courts to assume |
the responsibility for supervising the
integrity of the judicial system of
another sovereign nation. Such an
assumption would directly conflict with
the principle of comity... ."
Jhirad v. Ferrandina, 536 F.2d 478,
484-85 (2d Cir.), cert. denied, 429
U.S. 833 (1976). And, as the Second
9(...continued)
proceedings in India. Similarly,
whether the Bhopal Act provides for
all of the rights and benefits
provided to members of a class in
United States litigation is also
i irrelevant. No two judicial systems
are alike in all respects. Comity
compels deference and respect to
those differences. See, e.g.,
Blanco v. Banco Indus. de Venezuela,
S.A., Nos. 242, 92-7523, 1993 WL
196173, at *8 (2d Cir. Apr. 30,
1993); Sahagian v. U.S., 864 F.2d
509, 514 (7th Cir. 1988), cert.
denied, 489 U.S. 1087 (1989).
27
Circuit later ruled with reference to
this litigation, "[t]o grant the
victims of the Bhopal disaster, most of
whom are citizens of India, access to
our courts when India has set up what
it believes to be the most effective
method of dealing with a difficult
problem would frustrate India’s
efforts." (A41-42). Refusing to
recognize and defer to the disposition
of the issue of standing by the highest
court in India would thus be an affront
to the doctrine of comity.’ See,
0 Petitioners argue the Second Circuit
improperly applied the act of state
doctrine rationale to this case. (P
53-56). None of the cases they cite
however, involved a legislative act
like the Bhopal Act, which was
promulgated in the "public interest"
to give effect to the interests of a
foreign people in the wake of a
tragedy which occurred in their
country. The validity of that Act
was upheld by their own Supreme
Court.
(continued...)
28
10’... .continued)
None of the exceptions cited by
petitioners apply. The exception
for acts which come to fruition
outside the confines of a foreign
state’s territory does not apply
because, as discussed above, all
relevant events occurred in India.
None of petitioners’ authorities
support their argument that the
doctrine does not apply when a
foreign government is the exclusive
representative of its citizens. So
too, the Sabbatino exception for
transactions as to which there is a
reasonable "degree of international
consensus" (P55-56) has no
application here. Petitioners fail
to establish -- and could not
establish -- that there is a
reasonable degree of international
consensus contrary to the view held
by the Indian Supreme Court and our
Second Circuit.
Indeed, the Second Circuit
implicitly recognized that the UOI
had attempted to deal with a problem
of "mass proportions" (A41) never
encountered before, and concluded
that it would not pass judgment on
the manner in which that problem has
been resolved, because “it would
disrupt our relations with that
country and frustrate the efforts of
the international community to
develop methods to deal with
problems of this magnitude in
(continued...)
29
e.g., Banco Nacional de Cuba v.
Sabbatino, 376 U.S. 398 (1964); Cunard
Steamship Co. v. Salen Reefer Servs.
AB, 773 F.2d 452 (2d Cir. 1985);
Clarkson Co. v. Shaheen, 544 F.2d 624
(2d Cir. 1976); Jhirad v. Ferrandina,
536 F.2d 478; IIT v. Lam (In re
Colorado Corp.), 531 F.2d 463 (10th
Cir. 1976); British Midland Airways
Ltd. v. International Travel, Inc., 497
F.2d 869 (9th Cir. 1974).
Principles of comity are embodied
in the act of state doctrine. As noted
in Banco Nacional de Cuba v. Sabbatino,
376 U.S. at 416, the "classic American
statement of the act of state doctrine"
is contained in Underhill v. Hernandez,
0. continued)
the future." (A43).
30
168 U.S. 250, 252 (1897), where this
Court held:
Every sovereign State is
bound to respect the
independence of every other
sovereign State, and the
courts of one country will not
sit in judgment on the acts of
the government of another done
within its own territory.
Redress of grievances by
reason of such acts must be
obtained through the means
open to be availed of by
sovereign powers as between
themselves.
See also United States v. Merit, 962
F.2d 917 (9th Cir. 1992); Vanity Fair
Mills v. T. Eaton Co., 234 F.2d 633 (2d
Cir.), cert. denied, 352 U.S. 871
(1956). These principles, enunciated
in the Restatement (Third) of the
Foreign Relations Law of the United
States § 443 (1987), provide that
courts will refrain from sitting in
"Judgment on other acts of a
governmental character done by a
31
foreign state within its own territory
and applicable there."
According deference to the acts of
the UOI and the decisions of the Indian
Supreme Court is consistent with the
promotion of uniform federal policy on
issues of international concern. As
the Ninth Circuit has stated, "[t]o
participate adeptly in the global
community, the United States must speak
with one voice and pursue a careful and
deliberate foreign policy."
International Ass’n of Mach. and
Aerospace Workers v. OPEC, 649 F.2d
1354, 1358 (9th Cir. 1981), cert.
denied, 454 U.S. 1163 (1982). The
Second Circuit has also noted the
importance of a uniform federal foreign
policy in this regard, stating with
regard to the instant cases,
“permitting individual states to
32
develop rules to determine the Bhopal
Act’s effect on standing in their
courts would frustrate the need for a
uniform policy on matters of foreign
relations." (A45-46).
POINT II
THE COURT BELOW CORRECTLY AFFIRMED
THE DISTRICT COURT’S DISMISSAL
Petitioners’ rhetoric concerning
the "sacred principle of federalism"
and the "total anarchy .. . when it
comes to multi-national corporations"
(P19, 20; see also id. at 28-29, 47-
48), ignores the fact that the courts
below applied sound, uniform principles
of federal law to find: (1) that this
case belonged in federal court; and (2)
that this case was properly dismissed
rather than remanded to state court.
33
A. There Is No Conflict
Regarding the Burdens
in Fraudulent Joinder Cases
Petitioners recognize (P39-41)
that the Fifth Circuit has found that
there are two circumstances when a
court will find fraudulent joinder.
The removing party must prove
that there is absolutely no
possibility that the
plaintiff will be able to
establish a cause of action
against the in-state
defendant in state court, or
that there has been outright
fraud in the plaintiff’s
pleadings of jurisdictional
facts.
Green v. Amerada Hess Corp., 707 F.2d
201, 205 (5th Cir. 1983), cert. denied,
464 U.S. 1039 (1984). See also East
exas ck Sales c. Vv orthwest
Acceptance Corp., 819 F.2d 116, 119
(Sth Cir. 1987).
However, contrary to petitioners’
assertions (40-41), this Court’s
decision in Wilson v. Republic Iron &
34
Steel Co., 257 U.S. 92 (1921), is not
inconsistent with the cases cited
above. Indeed, Wilson merely addresses
the procedure for challenging
fraudulent joinder and not the
standards or burdens necessary for
making such a case. Id. at 97.
Further, the Second Circuit’s
finding in Norwa v. Air-Way Electric
Appliance Corporation, 87 F.2d 317, 320
(2d Cir. 1937), that "proof of fraud
must be clear and convincing," does not
conflict with the "no possibility"
rule. Rather, it is indicative of the
same exacting burden placed upon
defendants in fraudulent joinder cases
by the Fifth Circuit. Petitioners
failed to discuss decisions from the
district courts of the Second Circuit
which clearly show the burdens are the
same. See, e.g., Metropolitan Prop. &
35
Cas. Ins. Co. v. J.C. Penney Cas. Ins.
Co., 780 F. Supp. 885, 889 (D. Conn.
1991) (joinder may be fraudulent where
""no factual basis exists for an honest
belief on the part of plaintiff that
there is liability’", quoting Quinn v.
Post, 262 F. Supp. 598 (S.D.N.Y.
1967)); Fahnestock & Co. v. Castelazo,
741 F. Supp. 72, 74 (S.D.N.Y. 1990)
(citing Green v. Amerada Hess, 707 F.2d
201 (5th Cir. 1983), among other cases,
for proposition that "defendants must
show bad faith with sufficient
certainty that there is no ‘reasonable
basis for predicting that state law
might impose liability on the non-
diverse defendant.’"); American Mutual
Liab. Ins. Co. v. Flintkote Co., 565 F.
Supp. 843, 845 (S.D.N.Y. 1983) ("the
stringent test for fraudulent joinder
has uniformly been at least whether
36
there is any reasonable basis for
predicting that state law might impose
liability on the non-diverse
defendant," and citing B., Inc. v.
ille rewery Co., 663 F.2d 545 (5th
Cir. 1981), among others, for the
proposition that "[(o]ther courts have
expressed the evidentiary test (for
fraudulent joinder] in equally exacting
terms").
B. The Lower Courts Properly
Decided this Case Belonged
, in Federal Court
No questions of importance are
raised by petitioners’ attempt to re-
argue the District Courts’ decisions
concerning whether this case should be
remanded. (P41-48). Petitioners
advance various theories concerning
corporate veil-piercing, alter ego and
agency (see id.) in support of their
argument that joinder of certain of the
37
defendants was not fraudulent. They
also argue that they were denied
discovery with respect to these
jurisdictional issues. (See id. at 14,
45-47).'' Such arguments are advanced
'' Petitioners’ contention that the
courts below were required to permit
discovery with respect to in
personam jurisdictional issues
overlooks the incontrovertible fact
that discovery was abandoned by
petitioners when faced with a motion
for a protective order. Although a
court "must bear in mind what
procedural protections could be
required to assure that a full
airing of the facts pertinent to a
decision on the jurisdictional
question may be given to all
parties," Herbert v. National
Academy of Sciences, 974 F.2d 192,
198 (D.D.C. 1992), a court may deny
a plaintiff an opportunity to engage
in such discovery where, as here,
the plaintiffs chose to waive their
opportunity for discovery and their
jurisdictional claims are frivolous.
Singletary v. B.R.X., Inc., 828 F.2d
1135, 1137-38 (5th Cir. 1987)
(plaintiff failed to appeal order of
magistrate limiting scope of
discovery, failed to use ten
additional interrogatories and
failed to present issue of
(continued...)
38
in an attempt to raise issues for this
Court where none exist.
l(...continued)
incomplete answer to district
court); Wyatt v. Kaplan, 686 F.2d
276, 284 (5th Cir. 1982) (frivolous
jurisdictional claims); Washington
v. Norton Mfg., Inc., 588 F.2d 441,
447 (Sth Cir.), cert. denied, 442
U.S. 942 (1979).
The record establishes that ;
petitioners waived their right to
seek discovery on jurisdictional
issues by failing to respond to
Union Carbide’s motion for a
protective order. (JA639-702). The
motion was made when the Bi
plaintiffs sought discovery from
Union Carbide on jurisdictional
issues, among others (JA696-702).
Their failure was a concession that |
their discovery demands were
frivolous and an unjustified waste
of the District Court’s and the
litigants’ time and expense.
Moreover, petitioners’ claim rings
hollow in light of the Wahid
plaintiffs’ voluntary dismissal of .
their claims against UCIL (deemed by
Wahid counsel to be a “responsible
act" (JA6278-79)) because their
attorneys had concluded they were
"incorrect" in their claim that UCIL
was subject to the in personam
jurisdiction of the Texas state
court. (Id.)
39
It is implicit in Judge Fisher’s
orders dismissing the Enserch
defendants and denying the Bi
plaintiffs’ motion to remand that
petitioners fraudulently pled a cause
of action against Enserch and H&G-Texas
and that petitioners fraudulently pled
jurisdictional facts against UCE, UCIL,
H&G-London and H&G~India. Judge
Keenan’s decision denying the Wahid
remand motion also confirms that the
defendants amply demonstrated
fraudulent joinder.
It is also incorrect for
petitioners to suggest that a factual
record had not been developed by the
defendants. (P14, 45-47). UCIL, UCE,
H&G-London and H&G-India all submitted
detailed, competent and uncontroverted
evidence in the form of sworn
affidavits concerning their lack of
40
Texas contacts. (JA6237-68). In
contrast, petitioners wholly failed to
set forth any facts to support their
allegations that these defendants were
subject to the in personam jurisdiction
of the Texas state court. In addition,
Enserch and H&G Texas, the in-state
defendants, demonstrated through
uncontroverted affidavits that there
was no possibility that a valid cause
of action could be asserted against
them. (JA6248-56).
Apart from the issue of fraudulent
joinder, the alien citizenship of UCIL,
UCE, H&G-London and H&G-India was
properly disregarded as personal
jurisdiction over these defendants was
lacking. See Nu-Way Sys. v. Belmont
Mktg., Inc., 635 F.2d 617, 621 (7th
Cir. 1980).
41
With respect to petitioners’
contention that UCIL was subject to in
personam jurisdiction because it was
doing continuous and systematic
business in the State of Texas through
its parent, Union Carbide, they have
not offered a single fact in support.
(See P42-48). It is well established
that "the mere existence of a parent-
subsidiary relationship is not
sufficient to warrant the assertion of
jurisdiction over the foreign parent."
Hargrave v. Fibreboard Corp., 710 F.2d
1154, 1159 (5th Cir. 1983). Such
exercise of jurisdiction is only
warranted when "the parent corporation
exerts such domination and control
- + »« ‘that they do not in reality
constitute separate and distinct
corporate entities but are one and the
same corporation for purposes of
42
jurisdiction.’" Id. (quoting J. Moore
& J. Lucas, Moore’s Federal Practice 4
4.25[6], at 4-272 (2d ed. 1982)). Once
again, petitioners have completely
failed to offer any facts in support.
Rather, they incorrectly allege that
they were "denied discovery" on the
issue (P45-47), when, in fact, they
have clearly waived their right to it.
C. There Is No Conflict Concerning
the Futility Exception to 28
U.8.C. § 1447(c)
This Court recognized the
"futility exception" to section 1447(c)
in International Primate Protection
League v. Administrators of Tulane
Educational Fund, 111 S. Ct. 1700, 1710
(1991), noting that dismissal rather
than remand is appropriate where a
court is "certain" that remand pursuant
to 28 U.S.C. section 1447(c) would
prove futile. There, the futility
43
question arose when this Court
concluded that the National Institutes
of Health lacked authority to remove to
federal court the petitioners’ suit
seeking an injunction against
experimentation on monkeys. This
Court, however, refused to dismiss the
case because of "uncertainties that a
remand would be futile." Id. at 1710.
The futility exception was first
recognized in Maine Association of
Interdependent Neighborhoods v.
Commissioner, Maine Department of Human
Services, 876 F.2d 1051 (1st Cir. 1989)
("M.A.I.N."). The M.A.I.N. court held
that "we are unwilling to read...
discretion into the statute, here,
because we cannot say with absolute
certainty that remand would prove
futile." Id. at 1054.
o4
Subsequently, in Bell v. City of
Kellogg, 922 F.2d 1418 (9th Cir. 1991),
the Ninth Circuit applied M.A.I.N.’s
futility exception. The court stated
that "(w)here the remand to state court
would be futile . . . the desire to
have state courts resolve state law
issues is lacking. We do not believe
Congress intended to ignore the
interest of efficient use of judicial
resources." Id. at 1424-25. The court
found that remanding the case would be
futile because the plaintiff’s claim
would be dismissed by the state court
for failure to comply with the election
law’s bond posting requirement. See
also Awbrey v. Jackson Band o
Indians, No. CIV. S-93-820-WBSJFM, 1993
WL 287405 (E.D. Cal. July 27, 1993)
(futility exception recognized).
45
Subsequent to International
Primate, the Second Circuit, in
Mignogna v. Sair Aviation, Inc., 937
F.2d 37, 41 (2d Cir. 1991), recognized
that "remand might be improper if it
would be futile, as it would be if the
state court could not exercise
jurisdiction over [the plaintiff’s}]
Claim against [one of the defendants]."
(citation omitted). The court then
applied the "certainty" standard set
forth in M.A.I.N. and International
Primate and reversed the district
court’s dismissal of the case because
it was not certain whether the
plaintiff’s tort claims against a
"nonappropriated fund instrumentality
of the United States," could be heard
in state court. Id. at 42-43.
Several other circuits have also
recently relied upon M.A.I.N. and
46
International Primate. Their holdings
do not present a conflict with respect
to invocation of the futility doctrine
in this case. See Hexamer v. Foreness,
981 F.2d 821, 824 (5th Cir. 1993)
(implicit in court’s holding was
recognition that domestic
relations/garnishment action was the
type of case which could proceed in
state court).
Thus, the federal courts uniformly
recognize that when a case is removed
from state court to federal court, and
the federal court determines that it
lacks subject matter jurisdiction to
hear the case, the federal court should
remand, rather than dismiss the case
pursuant to 28 U.S.C. § 1447(c),
unless, as here, the court is
"absolutely certain" that a remand to
47
state court would prove pointless or
futile.
D. The Court Below Properly
Applied the Futility
Exception
The Second Circuit properly
decided it would be futile to remand
this case because the plaintiffs lacked
standing to prosecute their action in
state court. As the court stated,
"(t]jhe question whether courts in our
federal system must respect an act of a
foreign country that purports to
deprive the victims of a mass tort of
standing to sue in our courts is a
question of federal common law binding
on state and federal courts alike."
(A45).
This Court has made similar
pronouncements. In Sabbatino, this
Court noted:
48
(w]hatever considerations are
thought to predominate, it is
plain that the problems involved
are uniquely federal in nature.
If federal authority, in this
instance this Court, orders the
field of judicial competence in
this area for the federal
courts, and the state courts are
left free to formulate their own
rules, the purposes behind the
doctrine could be as effectively
undermined as if there had been
no federal pronouncement on the
subject.
376 U.S. at 424. See also First Nat’l
City Bank v. Banco Para el Comercio
Exterior de Cuba, 462 U.S. 611 (1983);
Harris v. Polskie Linie Lotnicze, 820
F.2d 1000, 1003-04 (9th Cir. 1987);
Republic of Philippines v. Marcos, 806
F.2d 344, 352 (2a Cir. 1986), cert.
denied, 481 U.S. 1048 (1987); Republic
of Iraq v. First Nat’l City Bank, 353
F.2d 47, 53 (2d Cir. 1965), cert.
denied, 382 U.S. 1027 (1966).
In light of this mandate, the
Second Circuit concluded in this case
ieee
49
that "[bjecause the Texas state courts,
applying federal commen law, would be
obliged to reach the same conclusion
regarding appellants’ lack of standing
that we have reached, a remand would be
pointless." (A46). Thus, this is a
paradigm case where futility, as
recognized in International Primate,
was properly invoked.
POINT III
EVEN IF PETITIONERS HAD STANDING, THE
DISTRICT COURT CORRECTLY CONCLUDED THAT
THEIR CLAIMS WERE BARRED ON COLLATERAL
ESTOPPEL GROUNDS
Petitioners ask this Court to
address the question of whether a
"federal court should, in a diversity
case, apply state forum non conveniens
law where the application of federal
forum non conveniens law would make a
difference in the outcome." (Pxi).
Petitioners are collaterally estopped
50
from raising this issue, previously
addressed and decided against them
under the federal common law doctrine
in MDL 626. This Court previously
denied petitions for writs of
certiorari to address that
determination. See Brief in Opp. at 1.
The doctrine of collateral
estoppel prohibits a party from
litigating any issue that has already
been litigated in a prior proceeding by
the same parties or their privies.”
2 Clearly, petitioners were parties to
or in privity with the parties in
the previously dismissed action as
the doctrine of privity is applied
liberally in the preclusive context.
Alpert’s Newspaper Delivery, Inc. v.
New York Times Co., 876 F.2d 266,
270 (2d Cir. 1989). Petitioners
blatantly attempt to re-litigate the
same claims in the face of unrefuted
evidence presented by Union Carbide
that these same petitioners had
filed claims in MDL 626. (JA6070-
6122, 6123-6133). Moreover, the
UOI, pursuant to the Bhopal Act,
(continued...)
ee
51
Parklane Hosiery Co. v. Shore, 439 U.S.
322, 326-27 (1979). The petitioners
continue to seek to undermine the
rationale behind the collateral
estoppel doctrine by attempting to re-
litigate the forum non conveniens
issue, which was previously resolved by
the District Court in its May 12, 1986
Opinion and Order. (JA5795-5857).
When presented with petitioners’
request that they be afforded yet
another opportunity to pursue settled
Claims, the District Court found the
requisite elements to be present.
(A13-18).
2(...continued)
claimed itself to be the exclusive
representative of and filed suit on
behalf of all the Bhopal claimants
in the District Court. Each and
every person with claims was
represented by the UOI and is bound
by the dismissal of the UOI’s
complaint in MDL 626.
52
It is clear that a prior
determination has collateral estoppel
effect upon subsequent actions if there
is identity of issues, the issue was
actually litigated in the prior action,
and its determination was a critical
and necessary part of the earlier
judgment. See Hicks v. Quaker Oats
Co., 662 F.2d 1158, 1166 (5th Cir. Unit
A Dec. 1981).
All elements were satisfied
here.’ In the original action, In re
3 Petitioners suggest that Judge
Fisher’s orders granting motions to
remand in Soni_v. Union Carbide
Corporation, ("Soni") raise a bar to
litigation of the fraudulent joinder
issue (A65-66, 67-68). Collateral
estoppel does not control resolution
of the fraudulent joinder issue
because Judge Fisher’s Soni orders,
unlike Judge Keenan’s order in MDL
626, failed to satisfy the
requirements for the application of
collateral estoppel. It does not
apply where, as in Soni, the
"judgment relied upon as a basis for
(continued...)
i
Union Carbide, 634 F. Supp. 842
(S.D.N.Y. 1986), as here, the issue
before the court was whether the United
States was a convenient forum to
entertain the litigation that arose in
the aftermath of the Bhopal tragedy.
Petitioners pled no new facts below
that would have resulted in a different
forum non conveniens analysis and the
District Court held, "[(d]espite
plaintiffs’ arguments, both the
analysis of the forum non conveniens
factors and the result of that analysis
'3(...continued)
the estoppel is itself inconsistent
with one or more previous judgments
in favor of the defendant."
Parklane, 439 U.S. at 330. In all
actions subsequent to Soni,
including Pandey, a case also
initially before Judge Fisher, where
fraudulent joinder allegations were
raised by defendants as a basis for
the federal court’s exercise of
jurisdiction, motions to remand were
denied. (JA6750-53).
are the same today as in 1986."
(Ai5).“ Thus, re-visiting the forum
non conveniens issue would have
required the repetition of a legal
inquiry identical to one it had already
performed.
Second, the forum non conveniens
issue was "actually decided" in the
original action. The District Court
issued a sixty-three page opinion after
three months of discovery on the issues
4 In an attempt to re-litigate the
balance of private interest factors,
petitioners belatedly offered the
District Court various stipulations
and conclusory hearsay affidavits.
(A69-98, 99-134, 135-138).
Petitioners could have offered the
stipulations in MDL 626 but failed
to do so, thus distinguishing this
case from those cited in the
petition. (P64-65 n.30). No case
cited even suggests that the
introduction of a stipulation
compels the re-opening of issues
already fully litigated. If
petitioners’ argument were taken to
its logical conclusion, no
litigation would ever end.
55
raised by the motion to dismiss, the
submission to the District Court of
answering, reply and Supplemental
briefs, and a full day of oral
argument. Finally, the issue was a
necessary and essential part of the
judgment below as forum non conveniens
was the sole ground for dismissal. In
re Union Carbide, 809 F.2q at 198 n.1.
The collateral estoppel doctrine’s
preclusive effect has been consistently
invoked where, as here, litigants have
attempted to avoid the effect of a
federal court’s forum non conveniens
dismissal by commencing litigation in
another court. See Villar v. Crowley
Maritime Corp., 990 F.2a 1489 (5th Cir.
1989) (based on two prior forum non
conveniens dismissals in California,
and in absence of demonstration of
change in objective facts materially
56
altering prior analysis, plaintiffs
barred from re-litigating), reh’g en
banc denied, Nos. 92-7162, 93-7036
(June 30, 1993); Fitzgerald v. Texaco,
Inc., 521 F.2d 448 (2d Cir. 1975) (to
same effect), cert. denied, 423 U.S.
1052 (1976).»
'S Petitioners raise the question of,
when a federal court determines it
is going to decline jurisdiction on
forum non conveniens grounds, it
should remand to state court rather
than dismiss the action. (P48-51).
First, this question is not
presented given the collateral
estoppel effect of the prior
dismissal. Second, the cases cited
by petitioners do not demonstrate a
conflict. Certain of the cases in
which dismissal was held to be
improper were decided before
Congress enacted 28 U.S.C.
§ 1404(a). Moreover, in none of the
cases cited was the alternative
forum a foreign court. It is
elementary that "28 U.S.C. § 1404(a)
- - « G@id not diminish the power of
the federal courts to dismiss cases
that should have been brought in
foreign forums." Harrison v.
Capivary, Inc. 334 F. Supp. 1141,
1142 (E.D. Mo. 1971). See also
(continued...)
57
Moreover, the circuit courts of
appeals agree that it is federal forum
non conveniens law -- not state law --
that governs when a federal court
considers the issue of the convenience
'S(...continued)
Vani j ills v aton Co.,
234 F.2d at 645. Here, dismissal
was proper because the most
convenient alternative forum is a
foreign court. See an v. Boei
Co., 919 F.2a 1058, 1070 (5th Cir.
1990), cert. denied, 111 S. Ct. 1587
(1991). See also Villar, 990 F.2d
at 1489; ebla llar v.
a
Boeing Co., 806 F. Supp. 139, 144-45
(E.D. Tex. 1992).
Finally, le-Mello iv. v.
Cohill, 484 U.S. 343 (1988), is
inapposite. Carnegie was a federal
question case removed from state
court. All federal claims were
dismissed, thus eliminating any
basis for subject matter
jurisdiction over the pendent state
Claims. This Court held that the
district court had discretion to
remand because remand to state court
would best promote the values of
economy, convenience, fairness and
comity. None of these
considerations is present here. See
Supra, Point II, Cc.
58
of a particular forum in a diversity
action. n re Ai as isaste
New Orleans, Louisiana on July 9, 1982,
821 F.2d 1147, 1159 (5th Cir. 1987) (en
banc), vacated on other grounds sub
nom., Pan Am World Airways Inc. v.
Lopez, 490 U.S. 1032, aff’d in relevant
part and vacated in part, 883 F.2d 17
(Sth Cir. 1989); Sibaja v. Dow Chemical
Co,, 757 F.2d 1218, 1239 {2508 Gees)
(per curiam), cert. denied, 474 U.S.
948 (1985); Royal Bed and Spring Co. v.
Famossul Industria, 906 F.2d 45, 50
(lst Cir. 1990).
Petitioners have distorted the
holding in Weiss v. Routh, 149 F.2d 193
(2d Cir. 1945), hoping to create the
appearance of a conflict among the
courts with respect to this issue.
Petitioners assert that the Second
Circuit in Weiss held that a federal
59
court sitting in diversity, after a
case has been removed from state court,
must, in determining the forum non
conveniens issue, apply state forum non
conveniens law if the outcome would be
different had the court applied federal
forum non conveniens law. (P60). To
the contrary, the Weiss court simply
held it would look to New York state
law for guidance on the issue of its
supervision over a foreign
corporation’s "internal affairs."
Petitioners also ignore subsequent
Second Circuit cases which have
narrowed Weiss. See, e.g., Gilbert v.
Gulf Oil Corp., 153 F.2d 883 (2d Cir.
1946), rev'd on other grounds, 330 U.S.
501 (1947) (applying federal common law
to forum non conveniens analysis).
In the absence of a conflict in
the law, petitioners argue in the
60
alternative that under Erie v.
Tompkins, Texas law applies because at
the time respondents moved for
dismissal, Texas law as construed in
Dow Chemical Co. v. Alfaro, 786 S.W.2d.
674 (Tex. 1990), would have prevented a
dismissal, thus giving rise to a
"different outcome".'® (P59-60).
Petitioners’ argument is beside the
point.”
6 The Texas Legislature has acted to
narrow the scope of section 71.031,
as construed in Alfaro. An
amendment to section 71.031 will
permit state court judges in Texas
to circumscribe unfettered access by
foreigners and citizens of other
states to Texas courts, endowing
them with discretion to consider
forum non conveniens factors. See
Ch. 71, Civ. Prac. and Rem. Code,
Subchapter D, 1993 Tex. Sess. Law
Serv. 11 (Vernon).
7 Even if Alfaro is controlling --
which it is not -- the narrow Alfaro
holding is inapplicable here because
the holding refers solely to cases
brought under section 71.031 of the
(continued...)
61
The raison d’etre of the forum non
conveniens doctrine is that a court may
resist imposition on its jurisdiction
even when jurisdiction is authorized by
the letter of the venue Statute. See
Gulf Oil Corp. v. Gilbert, 330 U.S. 501
(1947). It is thus clear that
application of the federal common law
doctrine of forum non conveniens in
diversity cases does not “operate as a
State substantive rule of law and thus
[fails to) transgress Erie’s
(...continued)
Texas Civil Practice and Remedies
Code. Section 71.031 provides that
the action must be brought within
the applicable statute of
limitations period, which
petitioners have failed to do.
(JA6198-99). Thus, neither section
71.031 nor the holding in Alfaro
applies. In view of this bar, the
lack of equal treaty rights between
the United States and India, yet
another obstacle to the
applicability of section 74.031,
need not be addressed.
62
constitutional prohibition." Sibaja,
757 F.2d at 1219 (footnote omitted).
The rationale for applying federal law
to forum non conveniens motions is that
Erie v. Tompkins is not implicated
because "(t]he forum non conveniens
doctrine is a rule of venue, not a rule
of decision." Id. See generally 15
Charles A. Wright, et al., Federal
Practice and Procedure, § 3828, at 294
("it seems quite clear" that state
notions of forum non conveniens should
not be binding on a federal court ina
diversity action).
Finally, petitioners’ argument
that federal courts are abusing the
forum non conveniens doctrine to
sanction outcome-determinative,
reverse-forum shopping by defendants
(P20), ignores this Court’s directive
that courts should not consider
63
defendants’ "reverse forum shopping" in
their analysis of the private interest
factors and this Court’s explicit
recognition of the necessity for the
doctrine given the overburdened federal
judiciary and the attractiveness of
American courts to foreign plaintiffs.
See Piper v. Reyno, 454 U.S. 235, 252
n.18, 253 (1981).'* Moreover,
'* Petitioners misrepresent the Court’s
holdings in j fe)
Corp., 486 U.S. 140 (1988) and
, 481
U.S. 1 (1984). Neither holding
addressed the issue of choice of
forum non conveniens law. The Chick
Kam Choo Court simply held that
because a pre-emption question was
not addressed in a prior federal
proceeding, the exception to the
Anti-Injunction Act did not apply
and therefore the pre-emption
question had to be decided by Texas
state courts. Pennzoil simply held
that Younger abstention required
that the lower courts defer decision
on federal constitutional claims
because the Texas courts should have
been given an Opportunity to
adjudicate those claims.
64
petitioners’ citation to cases as
"illustrative" of the lower court's
abuse of the forum non conveniens
doctrine is misleading. (P21-22, n.5).
In each instance, the lower courts
conducted a fact-specific analysis in
accordance with this Court’s guiding
precedents and, in cases where review
was sought, this Court denied
certiorari.”
Finally, it is clear that the
forum non conveniens doctrine was not
abused in this case. As the Second
Circuit stated in affirming the prior
forum non conveniens dismissal of these
9 Petitioners’ cases are essentially a
list of cases in which federal
courts have rejected petitioners’
counsel’s forum non conveniens
arguments. See, e.g., McClelland
Engineers, Inc. v. Munusamy, 784
F.2d 1313, 1317 (5th Cir. 1986)
(Fifth Circuit reversed lower court
for failure to follow this Court’s
forum non conveniens precedents).
65
Same petitioners’ claims, "it might
reasonably be concluded that it would
have been an abuse of discretion to
deny a forum non conveniens dismissal."
In re Union Carbide, 809 F.2d at 202.
CONCLUSION
The decision of the Second Circuit
Court of Appeals was fully consistent
with established legal principles.
Review is unwarranted.
Dated: New York, New York
August 11, 1993
Respectfully submitted,
Bud G. Holman
Counsel of Record for
Respondent
Union Carbide
Chemicals and
Plastics Company Inc.
101 Park Avenue
New York, NY 10178
(212) 808-7800
Of Counsel:
Lisa E. Cleary
Kelley Drye & Warren
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.