Fraud Helps Dole in Nicaragua Banana Pesticide Case

A couple of weeks ago a judge in Los Angeles threw out a pair of lawsuits against Dole Food Co. involving Nicaraguan banana workers who claimed they suffered health problems because of the chemical pesticide DBCP (known locally in Nicaragua by the brand name Nemagon).

The latest update is that the lawyer representing these workers faces contempt charges and could even go to prison. It turned out that many of the plaintiffs he represented had never worked a day in a banana field, and it looks like the lawyer himself might have been the one recruiting poor Nicaraguans to play the role of pesticide victims in order to suck money out of Dole.

To me, this is not a shocking turn of events. I was in Nicaragua five years ago covering this story, and there were two different groups supporting banana workers — each group accusing the other of being full of frauds and liars.

“Other groups are bringing in busloads of people who have never even peeled a banana,” lawyer Walter Gutierrez told me in his Managua office. In the end, he said, this fraud would discredit the real victims, directly benefiting Dole and the other companies (Dow Chemical and Shell, who produced the pesticide).

It looks like he was right. In this latest case, investigators uncovered an extensive ring of corruption, including doctors who forged medical records, Nicaraguan judges who accepted bribes, etc. So Judge Victoria Chaney in California responded by throwing out the entire case. “This fraud was so pervasive it has undermined our ability to know the truth,” she said.

Dole has already lost similar lawsuits and been ordered to pay millions of dollars to DBCP victims, but the latest move could help the company on appeal, as well as thwarting lawsuits that are still pending. “We think this is critical evidence that should have a devastating effect on any efforts to enforce any Nicaraguan judgments in the United States,” Dole attorney Scott Edelman said.

Some background on the case:

DBCP was banned in the United States in 1977 after workers in California started getting sick, but Standard Fruit (which later became Dole) continued using the product in Latin America and the Caribbean, where no such laws existed.

This worried Dow Chemical, which tried to stop selling it, but Standard Fruit threatened to sue for breach of contract. Dow agreed to continue shipments only after Standard Fruit agreed to indemnify Dow in the case of any lawsuits. When the lawsuits came up in the 1990’s, however, it seems Dow jumped back to arguing that there was no proof DBCP was dangerous.

My guess is that the original round of lawsuits were brought by actual former banana workers who actually suffered from sterility and other problems, or whose children actually had birth defects. Dole, Dow and Shell blocked those suits on grounds that the United States was not the proper place to try them, since the alleged crimes occurred in Nicaragua and other countries. Conveniently, none of these countries had the legal infrastructure to try foreign corporations.

Until Nicaragua passed Law 364 in 2001, specifically designed for those affected by DBCP. Then when a group of alleged victims there won a $490 million settlement, Dole, Dow and Shell changed their tune and argued that Nicaragua had an inadequate legal system so the case needed to be tried in the United States.

By that time, I guess, word had gotten around Nicaragua that this could be a lucrative deal for those without ethics, and the number of former banana workers in the country mysteriously started to grow.

In the end, that may work out quite nicely for Dole. The cases recently thrown out represented only a small portion of the thousands of claims against Dole, all of which could now be in jeopardy. “This court questions the authenticity and reliability of any documents that come from Nicaragua,” Chaney said. “I can’t believe in lab reports, work certificates, medical reports — what is there for me to believe? Nothing.”

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