Tuesday, November 4, 2008

Sahu v. Union Carbide Corporation

Nov 3: In the U.S. Court of Appeals, Second Circuit, Case No. 065694. In this case involving an appeal from a judgment of the United States District Court for the Southern District of New York that granted a summary judgment in favor of defendants Union Carbide Corporation and Warren Anderson on all the claims of the plaintiffs related to water pollution allegedly caused by the operations at a factory owned and operated by a former Union Carbide subsidiary in Bhopal, India.

According to the Appeals Court, with respect to the plaintiffs' claims for injunctive relief and their theories of liability other than their attempt to pierce the corporate veil between Union Carbide and its subsidiary, the district court, sua sponte [taking action on its own], converted the defendants' motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) to one for summary judgment
under Federal Rule of Civil Procedure 56 and granted the motion.

The Appeals Court said, "We conclude that the district court did not give the plaintiffs sufficient notice to allow them adequately to respond to the converted summary judgment motion." Therefore, the Appeals Court vacated the district court action and remanded the case for further consideration consistent with its opinion.

According to their complaint, "the plaintiffs have suffered a variety of ailments caused by 'the highly carcinogenic chemicals and toxic pollutants in the drinking water supply emanating from the premises of the former UCIL plant'. . . The plaintiffs also contend that Union Carbide was aware of the danger of water pollution and other environmental damage yet failed to take adequate precautions to prevent it. . . [and] Finally, the plaintiffs fault Union Carbide's response to the 1984 disaster. They contend that the cleanup effort undertaken by the company was only 'a site-based project, undertaken at minimal expense, which would conceal both the seriousness of on-site pollution and the potential risks of off- site contamination, while enabling Union Carbide to recover money from the sale of its remaining assets at UCIL.'"

The Appeals Court concluded in part, ". . . we view this as a close case. But we think there is a reasonable likelihood that, in light of the peculiarly difficult procedural history of this and related litigation, the plaintiffs were not aware that they were in danger of an adverse grant of summary judgment based on the submissions prior to the district court's order converting the motion and then deciding it. We conclude that further notice was required and that consequently it is appropriate to remand for what would appear to be relatively limited further proceedings in connection with consideration of summary judgment."

Access the complete opinion (click here).