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Dole Faces More Than 200 Lawsuits Over Pesticide Use

Dole Faces More Than 200 Lawsuits Over Pesticide Use By CARLOS MARTINEZ Staff Reporter Hundreds of lawsuits against the Dole Food Co. seeking more than $8 billion in damages will come to trial early next year, and could have a substantial impact on the company’s bottom line. Dole, based in Westlake Village, is embroiled in 297 lawsuits alleging that the company exposed banana workers to harmful pesticides. Some of the lawsuits are more than 10 years old, but with trial dates on the horizon, they could have an adverse impact on the company’s financial picture even if it decides to settle the cases, said Ron Naismith, an analyst with Bear Stearns. Naismith said it is likely that many of the lawsuits will never make it to court. Nevertheless, Dole will likely be forced to make decisions soon on which ones to settle and which to pursue further. A major factor in the equation is how much it is likely to cost. “It’s hard to tell what will happen, but it will have an impact,” Naismith said. “Any settlement could be very big.” At issue are suits involving more than 26,000 workers at plantations in Central America, the Philippines and Asia who claim exposure to the pesticide dibromochloropropane, known as DBCP. The substance was banned in the U.S. by the federal Environmental Protection Agency in 1979 after it was discovered that workers at Dow Chemical Co., which makes the pesticide, had become sterile from exposure to it. Dole is the last corporate defendant involved in the suits. Three manufacturers of DBCP have agreed in the last two years to pay $41.5 million to settle the cases. Dow Chemical paid $22 million, Shell Oil Co. paid $17 million and Occidental Chemical Co. $2.5 million. Charles Segel, a Texas-based attorney who has handled similar cases in the past, said manufacturers were considered less liable because of their claims that companies like Dole did not follow proper precautions in handling the pesticide. “It’s a different story if it’s deemed that a company doesn’t follow the warning labels,” he said. “It could be financially devastating if it goes against them.” As the company works through the ongoing litigation, Dole chairman and chief executive David H. Murdock is trying to acquire the 76-percent interest in the company that his family doesn’t already own for about $1.2 billion in cash and the assumption of $916 million in debt. Dole’s board of directors rejected his offer in September and asked a board committee to negotiate a higher offer from Murdock, who last week extended his deadline for a final decision to Dec. 4, after a Nov. 6 deadline had passed. Tim Drake, an analyst with Banc One Investment Advisers, said that, short of a resulting drastic drop in stock price, current litigation won’t likely affect Murdock’s efforts to acquire the company. Dole’s financial position has improved since the company was severely impacted last year by a European banana tariff and hurricanes that devastated its banana and pineapple crops in Central America. For the quarter ending Sept. 30, Dole reported net income of $14.7 million on $1.25 billion in revenue, compared to the same period last year when it lost $94.8 million on $1.33 billion in revenue Although Dole denies any wrongdoing involving the use of DBCP, it would not comment for this story other than to refer to a prepared statement that reads, “In the opinion of management, after consultation with legal counsel and based on past experience defending and settling DBCP claims, the pending lawsuits are not expected to have a material adverse effect on Dole’s financial condition or results of operation.” The DBCP was used by Dole to kill microscopic worms that eat the roots of banana plants. Workers would use the chemical by placing the spray nozzle into a hole in the ground around the affected plants. Duane Miller, a Sacramento-based attorney who is representing scores of workers in Central America in their suit against Dole, said the company did little to protect workers from the dangerous chemical. “There is evidence that Dole did not tell their workers of the danger and that they did not offer even the most minimal protection, allowing their workers to use jeans, T-shirts and bare feet,” he said. “It’s a unique contrast in the level of protection recommended by the manufacturers, which is tantamount to wearing a space suit.” One case before the U.S. 5th District Court of Appeals in Texas is an appeal by Dole over whether plaintiffs in other countries have the right to bring their cases before a U.S. court.

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