Tuesday, December 7, 2010
Ninth Circuit Revives Contamination Suit Against Occidental Petroleum
Court Rejects Gutierrez Ruling That Peru Is More Convenient Forum
By SHERRI M. OKAMOTO, Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday revived an environmental contamination suit against the Occidental Petroleum Corporation based on its of a crude oil processing operations in Peru.
U.S. District Judge Philip S. Gutierrez of Central District of California abused his discretion in finding Peru provided a more convenient forum to hear the case and dismissing the matter without imposing any mitigating conditions, the panel said.
Several dozen members of an indigenous Peruvian community known as the Achuar filed a complaint in Los Angeles County Superior Court alleging that Occidental knowingly utilized unsafe methods for separating crude oil while operating a processing facility within the northern Peruvian rainforest, resulting in the discharge of millions of gallons of toxic oil byproducts into waterways which the Achuar relied upon for drinking, fishing, and bathing.
The plaintiffs asserted causes of action for common law negligence, strict liability, battery, medical monitoring, wrongful death, fraud and misrepresentation, public and private nuisance, trespass, intentional infliction of emotional distress, and violation of California’s Unfair Competition Law. They sought damages, injunctive and declaratory relief, restitution, and disgorgement of profits.
After Occidental removed the action to the federal court, the complaint was amended to add Amazon Watch—a nonprofit Montana corporation headquartered in San Francisco—as a plaintiff.
Occidental then filed a motion to dismiss based on the doctrine of forum non conveniens, which Gutierrez granted without the benefit of oral argument or affording plaintiffs the opportunity to conduct limited discovery on the adequacy of Peru as an alternative forum.
Writing for the appellate court, Judge Kim McLane Wardlaw began by criticizing Gutierrez for accepting Occidental’s stipulation to consent to jurisdiction in Peru “at face value” without “considering the glaring absence of a waiver of the statute of limitations, which Occidental’s own expert suggest[ed] may have run.”
She explained that dismissal on the basis of inconvenient forum is improper when a lawsuit would be time-barred in the alternative jurisdiction and “should be conditioned on waiving any statute of limitations defenses that would not be available in the domestic forum” if there is reason to believe a defendant will seek dismissal based on the foreign forum’s statute of limitations, as was the present case.
Wardlaw further posited that Gutierrez abused his discretion in finding Peru could offer the plaintiffs a satisfactory remedy, since “the district court did not find—and it appears it could not on this record—precisely what sort of damages would be available.”
Gutierrez also “erred by overlooking troubling evidence of potential inadequacy proffered by Occidental,” Wardlaw said, noting an affidavit from a defense expert which acknowledged the “low salaries of Judiciary personnel create a certain degree of tolerance for the phenomenon of corruption” in Peru.
Wardlaw opined that Gutierrez “consistently understated Occidental’s heavy burden” to override presumption in favor of the plaintiffs’ choice of forum and neglected to consider all of the factors relating to the private interests of the litigants
Joined by Judge Mary M. Schroeder, Wardlaw concluded “a proper balance of all the relevant factors at this stage of proceedings clearly demonstrates that this lawsuit should proceed in the Central District of California.”
Judge Pamela Ann Rymer, however, disagreed. She reasoned that Gutierrez had “not made a clear error of judgment” since “Occidental is amenable to service of process in Peru and furnished evidence that Peru provides ‘some remedy’ for the wrong at issue.”
She contended that Gutierrez could not be faulted for electing to weigh Peru’s interest in the action more heavily “given the suit involves Peruvian land and citizens,” and “both the alleged tort, and injury, occurred there.”
Rymer conceded that “[c]onditions such as accepting service, submitting to the jurisdiction, waiving the statute of limitations, making discovery, and agreeing to enforceability of the judgment may be appropriate” in the instant case.
“I would, therefore, remand for the court specifically to consider whether its dismissal should be conditioned. Otherwise, I would affirm,” she said.
The attorneys who argued the case, Carijano v. Occidental Petroleum Corporation, 08-56187, were Marco Simons of Earthrights International on behalf of the plaintiffs and Daniel P. Collins of Munger Tolles & Olson LLP for the defendant.
Copyright 2010, Metropolitan News Company