Union Carbide Wins Dismissal of Suit Over Bhopal Plant

Dow Chemical Co. (DOW)’s Union Carbide won dismissal of a lawsuit alleging polluted soil and water produced by its former chemical plant in Bhopal, India, injured area residents, one of at least two pending cases involving the facility known for the 1984 disaster that killed thousands.

U.S. District Judge John Keenan in Manhattan ruled on June 26 that Union Carbide and its former chairman, Warren Anderson, weren’t liable for environmental remediation or pollution- related claims made by residents near the plant, which had been owned and operated by a former Union Carbide unit in India.

Keenan asked the parties to submit papers on “the effect of this ruling, if any” upon a companion case pending before him, one filed by owners of property near the Bhopal plant. Richard Lewis, a lawyer for the plaintiffs in the dismissed case, didn’t immediately return a call seeking comment yesterday on the ruling or whether he would appeal.

A gas leak from the Union Carbide plant killed an estimated 22,000 people, according to an Amnesty International- commissioned study. Dow acquired Union Carbide in 2001, about 16 years after the accident and 10 years after the Indian Supreme Court approved a $470 million settlement paid by Union Carbide and its India unit.

The plaintiffs in the New York case claimed negligence and public and private nuisance, and sought punitive and compensatory damages as well as medical monitoring. They alleged they sustained injuries from exposure to soil and drinking water polluted by hazardous waste produced by Union Carbide India Ltd.

Years of Litigation

The ruling follows years of litigation over the plant. The U.S. Court of Appeals in New York in 2008 reinstated claims that were dismissed by a lower court against the unit of Midland, Michigan-based Dow Chemical. The appeals court ruled the judge, Keenan, didn’t give the plaintiffs enough notice to respond to the company’s motion to dismiss.

Union Carbide said yesterday in a statement that, after the 1984 disaster, Union Carbide India “obtained permission from the government to conduct clean-up work at the site.”

Ten years later, Union Carbide sold its stake in the Indian unit, which later changed its name to Eveready Industries India, Ltd., Union Carbide said, adding that in 1998, the state of Madhya Pradesh took over responsibility for the site and remediation efforts. Eveready isn’t involved in the litigation.

‘Court Decision’

“The court decision not only dismisses plaintiffs’ claims against UCC, but also clarifies that UCC has no liability related to the plant site and further acknowledges the matter of site ownership and liability as being the responsibility of the state government of Madhya Pradesh,” the company said.

E-mails after regular business hours seeking comment on the ruling from Eveready India’s media address and Tehnaz Punwani, of its investor relations department, weren’t immediately returned. Eveready said on its website that Union Carbide India was acquired by an Indian company belonging to the Williamson Magor Group, eventually becoming Eveready Industries India Ltd. (EVRIN)

Its present business “is manufacture and marketing of fast moving consumer goods and has no connection with the pesticides business of Union Carbide.” The company lists batteries, flashlights and packet tea among its products.

“Eveready is neither responsible for the pollution as reported, nor is it liable for the cleanup of the toxic material,” the company said on its website.

Liable For Injuries

The plaintiffs sought to hold Union Carbide and Anderson liable for injuries because they were “direct participants” in the activities that resulted in the pollution. The litigants said the company and Anderson worked in concert with the India subsidiary “to cause, exacerbate, or conceal the pollution.”

In his ruling, Keenan said that when the federal appeals court reinstated the case and sent it back to him, it directed that there be “limited” proceedings about discovery, or the exchange of evidence and information between parties prior to trial.

“Plaintiffs embarked on a discovery expedition that was worthy of Vasco de Gama,” Keenan wrote in his order granting the motion to dismiss. “More than two years and 12,000 pages of discovery later, defendants renewed their motion for summary judgment as to all theories of liability.”

The accident at the Union Carbide pesticide plant on Dec. 3, 1984, released methyl isocyanate gas into the streets of Bhopal, the capital of Madhya Pradesh in central India.

Union Carbide estimated that 3,800 people were killed by the leak. The study by Amnesty International, a human-rights group, showed 7,000 perished within days and another 15,000 died later from exposure to the gas.

The case is Sahu v. Union Carbide, 04-cv-08825, U.S. Court of Appeals for the Second Circuit (Manhattan).

To contact the reporters on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net; Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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