Attorney F. Lee Bailey's firm is based in Boston. The location was incorrectly listed in a story Sunday.
Union Carbide Corp. has reached a tentative settlement with lawyers representing victims of the December 1984 chemical leak from its plant in Bhopal, India, that killed nearly 2,000 persons and injured tens of thousands more, sources said last night.
The settlement has not been approved by U.S. District Court Judge John Keenan and Union Carbide will not give final approval to the settlement unless it "settles all claims with finality," the sources said.
If the settlement becomes final, it will cover the more than $100 billion in claims that have been filed in the United States against Union Carbide -- both for those injured or killed in the disaster as well as claims by the government of India and the Indian state of Madhya Pradesh, where Bhopal is located.
The sources, who are aware of the broad outlines of the settlement, asked not to be identified.
Early on Dec. 3, 1984, a cloud of the highly toxic gas methyl isocyanate leaked from the Union Carbide plant and spread over the city of Bhopal. Union Carbide controlled 50.9 percent of Union Carbide India Ltd., which owned the chemical plant.
More than 120 personal injury suits have been filed in the United States on behalf of 103,000 Indian plaintiffs. The Indian government filed its own suit a year ago. Another 4,000 suits have been filed in India.
The New York Times, in today's editions, reports that Union Carbide has agreed to pay $350 million to victims of the disaster but that the tentative settlement does not include the government of India. Sources familiar with the settlement said last night that $350 million is likely to be too high an estimate and that the settlement, if it becomes final, will include all claims, not just those of victims.
Settlement talks between Union Carbide and attorneys representing the victims collapsed last summer, and the case had threatened to bog down into a protracted legal struggle that would delay for years any compensation for the victims of the worst industrial accident in history.
Both the Indian government and the state of Madya Pradesh incurred substantial costs as a result of the leak of methyl isocyanate, which is used in making pesticides.
The Indian government filed suit last March, arguing that it, not the hundreds of U.S. lawyers, should represent the victims. It argued that victims' claims should be heard in the United States.
Keenan, of the U.S. District Court for Southern New York, has yet to rule on whether the claims of victims should be heard in the United States or in India. Both the Indian government and the U.S. lawyers wanted the cases heard in the United States because the damage awards were likely to be bigger than those rendered in India.
Sources said Keenan has held off ruling on where the cases should be heard to put pressure on both sides to settle. "He recognized that 98 percent of these types of cases get settled and was very positive in feeling that this was the best way that the Bhopal claims can be taken care of," according to one source familiar with the case.
Union Carbide lawyers negotiated the tentative settlement with an executive committee of lawyers representing the plaintiffs. Attorneys F. Lee Bailey of San Francisco and Stanley Chesley of Cincinnati represented the victims. Michael Ciresi, representing the Indian government, also was on the panel. A Carbide spokesman told Reuter news service last night that the Indian government agreed to the tentative settlement but was not party to it. Attorney Jack Hoffinger represented Keenan on the panel.
The bickering in the legal case had become so severe that even after the company agreed with Keenan last summer to channel $5 million in emergency aid to the victims, it took seven months more to agree on how to transfer the money to India.
Carbide had insisted that the Indian government provide a detailed listing of how the funds were spent, a condition the government rejected as "insulting and onerous." Last November both sides finally agreed to channel the funds through the Indian Red Cross.
Apparently the $5 million emergency payment will be applied to the final settlement, if plaintiffs, Union Carbide and Keenan approve it. Most of the Bhopal lawsuits have been consolidated in Keenan's court.
Carbide had also pledged $5 million immediately after the disaster. Whether that $5 million would apply to the settlement is not clear.
Union Carbide, based in Danbury, Conn., estimated last January that it will spend $185 million on legal costs, including the lawsuits stemming from the Bhopal leak. The estimate was charged against the company's earnings for the final three months of 1985, a year in which Carbide reported a loss of $582 million.
Much of that loss was attributable to a massive reorganization of the company as well as the cost of fending off a takeover bid by GAF Corp., a building products and chemical company.