• Item #N252
  • ISBN: 0945257252
  • ISBN13: 978-0-945257-25-7
  • Copyright 1990
  • 161 pp.
  • Price: $10.00


Abuse of Power

Social Performance of Multinational Corporations: The Case of Union Carbide

By David Dembo and Lucinda Wykle

Blurbs

Content Sample

Forum Dodging: How Carbide Placed Itself Beyond the Law

Carbide and its high-priced lawyers began with their efforts to avoid a U.S. jury trial over the claims brought by victims and their survivors against the company for grossly negligent behavior. (Carbide, by its own admission, has spent $35-$40 million on legal fees in connection with Bhopal.) In the Federal District Court in New York, where various actions brought by lawyers representing the claimants and by the government of India on behalf of all of the victims were consolidated, the company argued that the U.S. courts were not the proper forum for the trial and that Indian courts were quite able to deal with such massive and complex litigation. This maneuver chewed up over a year and shifted the litigation to India.

Once the case was in India, Union Carbide switched its argument. The Indian courts were no longer capable and the company's rights of due process were being violated time and again. Virtually every decision of the trial court, even on minor procedural matters, was appealed --not just to the State High Court but even to the Indian Supreme Court. Five years after the disaster, the issue of who was liable for this terrible disaster had yet to be tried, and if the February 1989 settlement stands, will not be in the Indian courts.

The question of due process proved to be an extremely potent Damocles sword which Carbide and its platoon of lawyers, both Indian and American, used to try to intimidate the Indian courts and the Government or India as the sole representative of the victims in India. The Federal District Court in New York, when ordering that the litigation be sent to India for trial, specified that Union Carbide must agree to accept the jurisdiction of the Indian courts provided "minimal requirements of due process" were met. The U.S. Court of Appeals to which Carbide appealed the district court decision, deleted the world "minimal" (as well as the requirement that Carbide be subject to U.S. judicial rules of discovery in the Indian courts.) Thus, Carbide was able to threaten, at every turn in the Indian courts, that its due process rights were being violated and that, by refusing to obey the Indian court orders, it would force the Government of India to chase it back into the U.S. courts in order to compel it to obey those orders, thereby using up large additional chunks of time.

From the beginning, this was a key element in the Carbide strategy: namely, to outlast the victims. This was the same strategy followed by asbestos manufacturers and insurance companies since the 1950's - a lesson not wasted on Union Carbide. (In fact, Union Carbide, as we have seen, followed a similar tactic in the 1930's in the Gauley Bridge tragedy).

The District Court in Bhopal, recognizing the inherent injustice of a legal battle in which one party with deep pockets can outlast another,ordered Union Carbide to pay a substantive interim relief of $270 million. Predictably, Carbide refused to obey the interim relief order of the Bhopal District Court. It appealed that order to the Madhya Pradesh High Court (state court). When the High Court, in effect upheld the lower court ruling, the company refused to pay the order yet again - appealing this time to the Indian Supreme Court. This appeals process used up more than a year of additional time. It was in fact the appeal of the lower court orders on payment of interim relief that the Supreme Court was hearing when it "ordered" the February 1989 "settlement."