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Chavez v. Occidental Chemical Corp.

United States District Court, S.D. New York

January 10, 2018

TOBIAS BERMUDEZ CHAVEZ, et al, Plaintiffs,
v.
OCCIDENTAL CHEMICAL CORPORATION, Defendant.

          OPINION & ORDER

          PAUL A. ENGELMAYER UNITED STATES DISTRICT JUDGE.

         In 1993, a group of individuals from countries including Costa Rica, Ecuador, and Panama filed a putative class action in Texas state court against a number of chemical manufacturers including, among others, the defendant here, Occidental Chemical Corp. ("Occidental"). The plaintiffs had all lived or worked on banana plantations. They alleged that they had suffered adverse health consequences as a result of exposure to a chemical pesticide called dibromochloropropane ("DBCP"). In 2010, some 17 years later, after a long train of procedural misadventures, the plaintiffs dismissed their claims voluntarily.

         This case was filed in 2011, and, as filed, involved similar claims against substantially the same defendants. The plaintiffs here, however, were not parties to the original 1993 action. Nor are they subject to the 2010 dismissal. They were, however, absent members of the putative class: They are foreign nationals from Costa Rica, Ecuador, and Panama who, like the named plaintiffs in the 1993 lawsuit, allege tortious exposure to DBCP between the 1960s and early 1980s. Their claims against Occidental were transferred to this District in May 2017, following a circuitous procedural path that led from Louisiana (where the case was brought) to Delaware to (as against Occidental only) this Court. Occidental now moves for judgment on the pleadings, arguing that plaintiffs' claims are time-barred under New York law.

         For the following reasons, the Court finds plaintiffs' claims timely and therefore denies Occidental's motion. The Court's ruling, however, turns on an important and unresolved question of New York law that has divided courts in this District: whether New York law tolls the statute of limitations for purported class members during the pendency of a class action filed in another state. The Court holds that New York law does provide for such tolling. Therefore, the Court holds, based on the long-running Texas litigation initiated in 1993, plaintiffs' claims were long tolled and are timely today. Further, in the interest of economy, the Court certifies this order for interlocutory appeal to the United States Court of Appeals for the Second Circuit.

         I. Background[1]

         A. Factual Background

         Occidental manufactured and distributed DBCP, a pesticide known to cause sterility, sexual and reproductive abnormalities, and cancer. Compl. ¶¶ 8-10, 65. Plaintiffs allege that they were exposed to Occidental's DBCP when they lived and worked on or around DBCP-treated banana plantations in Costa Rica, Panama, and Ecuador. Id. ¶¶ 66-68. Because they were never informed of the dangers posed by DBCP, Plaintiffs allege, they did not wear any protective covering or respiratory equipment to prevent exposure. Id. ¶ 5. As a result, they suffered a host of DBCP-related injuries, including sterility and increased risk of cancer. Id. ¶¶69, 186.

         B. Procedural History

         The procedural history of this case is baroque. The Court first reviews the two-decade-long history of the putative class actions (styled as Carcamo and, later, Delgado) brought by plaintiffs bringing similar claims against defendants including Occidental. As explained, these cases have proceeded in Texas, Costa Rica, and Hawaii; none, however, resulted in the certification of a class. The Court then turns to the procedural history of this lawsuit (Chavez), which arrived in this Court after pit stops in Louisiana and Delaware.

         1. The Earlier Putative Class Actions in Texas, Costa Rica, and Hawaii

         In August 1993, a putative class action was filed in Texas state court, captioned Carcamo v. Shell Oil Co., 93-C-2290. See JSPH ¶¶ 1-4; id. Exs. 1-4. The Carcamo complaint sought relief against Occidental and other chemical concerns for the exposure to DBCP of the named plaintiffs and the putative class. Id. Ex. 4. The Carcamo plaintiffs proposed to represent a class defined, as relevant here, as "[a]ll persons exposed to DBCP, or DBCP-containing products, designed, manufactured, marketed, distributed or used by [defendants including Occidental] between 1965 and 1990 in [countries including Costa Rica, Panama, and Ecuador]." Id. Ex. 6 at 2.

         Before a motion for class certification was filed or resolved, however, the Carcamo defendants impleaded Dead Sea Bromine, a corporation indirectly owned in part by the State of Israel. Id. ¶ 7; id. Ex. 7. Dead Sea Bromine then removed the case to federal court, asserting jurisdiction under the Foreign Sovereign Immunities Act ("FSIA"). Id. ¶ 7; id. Ex. 7.[2]

         The Carcamo case was assigned to Judge Sim Lake of the United States District Court for the Southern District of Texas. In June 1994, it was consolidated with a related matter, which together were re-captioned Delgado v. Shell Oil Co., No. H-94-1337. JSPH ¶ 8; id. Ex. 8 at 15.

         In November 1994, Judge Lake issued a scheduling order directing the parties to provide, inter alia, their views on class certification, and stating the court's intention to resolve a series of dispositive motions, including any motions to dismiss for forum non conveniens. Id. ¶ 9; id. Ex. 9. Although the plaintiffs never filed a motion for class certification under Federal Rule of Civil Procedure 23, their letter to Judge Lake asserted that class treatment would be appropriate. Id. ¶ 10; id. Ex. 10. In their response, the defendants disputed that plaintiffs could satisfy Rule 23, id. ¶ 11; id. Ex. 11; the plaintiffs, in reply, reiterated their position, id. ¶ 13; id. Ex. 13. Several months later, but before class certification was briefed or decided, defendants moved to dismiss fox forum non conveniens. Id. ¶ 14; id. Ex. 14.

         On July 11, 1995, the court resolved the motion to dismiss in a published memorandum and order. See Delgado v. Shell Oil Co., 890 F.Supp. 1324 (S.D. Tex. 1995). It held first that jurisdiction was proper, including under the FSIA. It then conditionally granted the motion to dismiss on forum non conveniens grounds, reasoning that adequate alternative for a existed in the plaintiffs' home countries. Id. at 1372-73. The Court conditioned dismissal on, among other things, defendants participating in expedited domestic discovery and waiving certain procedural and jurisdictional defenses abroad. Id. The Court also issued an injunction barring plaintiffs from commencing any new DBCP-related actions. Id. at 1374-75. Finally, the Court noted that "a number of other motions" were pending. It held that "all pending motions ... not otherwise expressly addressed in this Memorandum and Order are DENIED as MOOT." Id. at 1375. The opinion did not address the merits of class certification.

         The order did, however, include a "return jurisdiction" clause. It stated:

Notwithstanding the dismissals that may result from this Memorandum and Order, in the event that the highest court of any foreign country finally affirms the dismissal for lack of jurisdiction of any action commenced by a plaintiff in these actions in his home country or the country in which he was injured, that plaintiff may return to this court and, upon proper motion, the court will resume jurisdiction over the action as if the case had never been dismissed for (forum non conveniens].

Id.

         On October 27, 1995, after the defendants had satisfied the conditions the Court had set for dismissal, the Court entered a "Final Judgment" dismissing the consolidated actions and permanently enjoining plaintiffs and others with knowledge of the judgment from commencing new DBCP-related litigation. JSPH ¶ 17; id. Ex. 17. Significantly, in a separate order issued the same day, Judge Lake clarified that the injunction applied only to "plaintiffs (and intervenor plaintiffs) in the actions before the court, " rather than "any potential plaintiff not before it." Id. ¶16; Id. Ex. 16.

         The plaintiffs immediately appealed the Court's exercise of subject-matter jurisdiction to the United States Court of Appeals for the Fifth Circuit. Id. ¶ 17.

         Meanwhile, the Costa Rican plaintiffs prosecuted their claims in Costa Rica. However, they were rebuffed by Costa Rica's Supreme Court, which held that the Costa Rican courts lacked jurisdiction over the DBCP claims. See Id. Ex. 21 at ¶ 14. As a result of that dismissal, in 1996, the Costa Rican plaintiffs moved for reinstatement of their claims before Judge Lake pursuant to the return jurisdiction clause. Id. Judge Lake denied the motion without prejudice, deferring final judgment on the motion pending resolution of the plaintiffs' appeal to the Fifth Circuit. See Id. Ex. 24 at ¶ 4.

         On October 19, 2000, the Fifth Circuit affirmed Judge Lake's judgment. See Delgado v. Shell Oil Co., 231 F.3d 165 (5th Cir. 2000). In April 2001, the United States Supreme Court denied certiorari. JSPH ¶ 19.

         All the while, parallel litigation was underway in Hawaii. In 1997, a separate set of plaintiffs filed a DBCP class action in Hawaii state court. Id. ¶ 42. The case followed roughly the same procedural trajectory as the Delgado action: defendants impleaded Dead Sea Bromine; Dead Sea Bromine removed; the federal district court dismissed plaintiffs' claims on forum non conveniens grounds; and the plaintiffs appealed. Id. ¶¶ 43-46. In that case, however, the Ninth Circuit reversed, holding the district court lacked subject matter jurisdiction under the FSIA. Id. ¶47; see Patrickson v. Dole Food Co., 251 F.3d 795 (9th Cir. 2001).

         This decision created a circuit split with the Fifth Circuit. The Supreme Court granted certiorari. JSPH ¶ 49. Siding with the Ninth Circuit, the Supreme Court held that Dead Sea Bromine was not an instrumentality of the State of Israel and therefore its removal of the case to federal court under the FSIA had been improper. Dole Food Co. v. Patrickson, 538 U.S. 468, 480 (2003).

         The Hawaii plaintiffs therefore returned to state court. There, the First Circuit Court of Hawaii denied the plaintiffs' motion for class certification, and, in 2009, granted defendants' motion for summary judgment on limitations grounds. JSPH ¶¶ 50-58. In 2014, the Hawaii Intermediate Court of Appeals affirmed. Id. ¶ 59. In 2015, however, the Supreme Court of Hawaii vacated the limitations holding, thereby reinstating the case. Id. ¶ 60; Patrickson v. Dole Food Co., 137 Hawai'i 217 (2015).

         Meanwhile, back in Texas, in light of the Supreme Court's 2003 decision in Patrickson, the Delgado plaintiffs filed a Rule 60 motion before Judge Lake requesting vacatur of the 1995 forum non conveniens dismissal, on the theory that the district court had lacked jurisdiction ab initio. Id. ¶ 21; id. Ex. 21. Judge Lake agreed that the permanent injunction was now void. However, Judge Lake denied the motion to vacate the forum non conveniens dismissal. Judge Lake reasoned that a subsequent change in decisional law did not require vacatur, because the court had had at least an "arguable" basis for exercising jurisdiction. Id. Ex. 22 at 8-10. And denying vacatur, he held, would not deny the plaintiffs their day in court given the return jurisdiction clause (which would enable him, as necessary, to remand the case to state court). Id. Ex. 22 at 14. Accordingly, on March 15, 2004, Judge Lake issued another "Final Judgment, " this one vacating the permanent injunction and dismissing the action for lack of jurisdiction. Id. ¶ 23.

         Shortly thereafter, the Costa Rican plaintiffs moved before Judge Lake for remand to state court, so that a court of competent jurisdiction could decide whether to reinstate their action. Id. ¶ 24; id. Ex. 24. On June 18, 2004, Judge Lake granted the motion. Id. ¶ 25; id. Ex. 25. In a memorandum and opinion addressing both the Costa Rican plaintiffs' original 1996 motion to reinstate and their 2004 motion to remand, Judge Lake explained, first, that under the return jurisdiction clause, the court had retained jurisdiction to "enforce the agreements on which the dismissal was premised and to ensure that an American forum remain[ed] available to adjudicate plaintiffs' claims if and when the highest court of a foreign country dismisse[d] them for lack of jurisdiction." Id. Ex. 25 at 30. The motion to reinstate, therefore, was "a direct continuation of the prior proceedings over which the court expressly stated its intent to retain jurisdiction." Id.

         Nevertheless, Judge Lake held, the court lacked jurisdiction to decide the plaintiffs' motion to reinstate for two reasons. First, review of such a motion was not necessary to enforce the agreements on which dismissal was premised; and second, after Patrickson, no other basis for federal jurisdiction remained. Id. Because the court lacked jurisdiction, Judge Lake stated, remand would be required so long as the court had not yet issued a "final judgment" within the meaning of 28 U.S.C. § 1447(c). JSPH Ex. 25 at 34-35. And the court had not issued such a judgment, Judge Lake reasoned, because the 1995 forum non conveniens dismissal had been "'final' only for purposes of appealing the [decision]"-it had not been "final" in the sense of "extinguish[ing] the court's duty either to continue examining its subject matter jurisdiction over this case, or to remand the underlying cases to state court when and if it determine[d] that it lack[ed] subject matter jurisdiction." Id. Ex. 25 at 35-36. Accordingly, Judge Lake granted the motion to remand. Id. Ex. 25 at 37-38.

         The case therefore returned to the Texas state courts. The parties disputed whether the plaintiffs' claims should be reinstated. Id. ¶ 26. The trial court granted the plaintiffs' motion to reinstate, id., and the Texas Court of Appeals affirmed, holding the case properly reinstated. Id. ¶27.

         In September 2009, the plaintiffs finally moved for class certification. Id. ¶ 30. The defendants, however, immediately removed the case once more to federal court. They argued that the plaintiffs' motion for class certification was subject to the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. §§ 1332(d), 1453(b). Id. Ex. 31. This time, however, the federal district court declined to find removal appropriate, because the lawsuit had predated CAFA: "[T]his action, " the court reasoned, "commenced with the filing of the state-court petition in 1993, not in 2009 when the [plaintiffs] submitted their class certification motion." Id. Ex. 33 at 5. Because the action long pre-dated CAFA, the defendants had no right to CAFA removal, and therefore no basis for federal jurisdiction. Id. The Fifth Circuit denied defendants leave to appeal. Id. ¶¶ 34-35.

         The plaintiffs therefore finally returned to state court, only to have their motion for class certification denied on June 3, 2010. Id. ¶ 37. The next day, plaintiffs voluntarily dismissed the complaint. Id. ¶ 38.

         2. Chavez

         One year later, in June 2011, plaintiffs in this case filed seven DBCP lawsuits in United States District Court for the Eastern District of Louisiana. Id. ¶ 61. In September 2012, these suits were dismissed on statute-of-limitations grounds under Louisiana law, id. ¶¶ 63-64; Chaverri v. Dole Food Co.,896 F.Supp.2d 556, 568-74 (E.D. La. 2012). While these cases were pending, however, the same plaintiffs, on June 1 and 2, 2012, filed eight separate DBCP suits in the United States District Court for the District of Delaware, id. ¶ 69. The Delaware cases were eventually consolidated, with Chavez designated the lead case. Id. ΒΆΒΆ 70-72. Because the then-pending Louisiana cases had been filed before the Delaware cases, the Delaware district court dismissed plaintiffs' claim against ...


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