Conrad & Scherer, Terrence P. Collingsworth; and David Seth Grunwald for Plaintiffs and Appellants. Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Andrea E. Neuman, William E. Thomson and KatieLynn B. Townsend for Defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC412620)
APPEAL from a judgment of the Superior Court of Los Angeles County, Anne I. Jones, Judge. Affirmed in part and reversed in part.
Conrad & Scherer, Terrence P. Collingsworth; and David Seth Grunwald for Plaintiffs and Appellants.
Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Andrea E. Neuman, William E. Thomson and KatieLynn B. Townsend for Defendant and Respondent.
This appeal concerns wrongful death and related claims arising out of an action by 183 heirs of 167 decedents, Colombian nationals, all of whom were murdered in or around banana plantations in Colombia by members of a paramilitary organization, the United Self-Defense Forces of Colombia, referred to as "AUC." The action was brought against defendant Dole Food Company, Inc., a corporation headquartered in California, because it was alleged that Dole was responsible for the operation of various banana plantations in Colombia, through a wholly-owned subsidiary, CI Tecnicas Baltime de Colombia SA, referred to as "Tecbaco" or "Baltime." Tecbaco is not a named defendant, but plaintiffs alleged that it functioned as "Dole in Colombia," either as Dole's alter ego or its agent. The gravamen of plaintiffs' claims is that as early as in 1994, Dole and Tecbaco hired the paramilitary groups that would eventually form the AUC to provide security and protection services to assist Dole in running its banana operations. Plaintiffs alleged Dole and Tecbaco representatives met with the AUC leaders and reached an agreement whereby Dole would pay the AUC for various security-related services that included the killing of persons—decedents in this action—who interfered with Dole's economic interests by, among other things, engaging in union organizing or attempting to hold or reclaim land Dole desired for banana cultivation.
The acronym derives from the organization's name in Spanish, Autodefensas Unidas de Colombia.
It is undisputed that all of plaintiffs' claims are governed by a two-year limitations period. The original complaint, filed on April 28, 2009, alleged wrongful death and related actions arising out of the AUC's murder of 51 persons, occurring between February 1994 and November 2007, on behalf of their 73 heirs. The first amended complaint (FAC), filed April 9, 2010, presented allegations against Dole of wrongful death, battery, assault, negligent hiring and supervision, intentional and negligent infliction of emotional distress, civil conspiracy, and negligence. Plaintiffs consisted of 185 heirs of 167 decedents, allegedly murdered by the AUC paramilitaries—67 of the 73 original plaintiffs, along with 118 new plaintiffs. The murders and related acts of violence on which the claims were based occurred as long ago as 1994 and as recently as 2007.
There was no prior demurrer. The trial court ordered the parties to meet and confer to informally resolve their pleading differences. Plaintiffs filed the FAC in an attempt to respond to Dole's concerns.
The April 2009 complaint had been filed anonymously. Of the 67 original plaintiffs who remained parties in the FAC, only two had claims that were facially timely. Plaintiffs Arelis Margarita Hernandez Rivera (Hernandez) and Julio Nestor Medina Coronado (Medina) alleged in the FAC that Hernandez's husband (Juan Carlos Junco Medina) and Medina's son (Manuel Francisco Medina Chamorro) were killed by the AUC paramilitaries on September 30, 2007.
Dole demurred on a variety of grounds, including failure to (1) comply with the two-year statute of limitations, (2) adequately allege Dole's alter ego and agency liability for conduct of Tecbaco, and (3) join Tecbaco as a necessary and indispensible party. In sustaining the demurrer, the trial court found all causes of action were time-barred except those alleged on behalf of plaintiffs Hernandez and Medina. The court also independently found in favor of Dole on the alter ego/agency and on the indispensible party grounds. The court sustained the demurrer without leave to amend on the statute of limitations ground as to all plaintiffs except Hernandez and Medina, permitting those two remaining plaintiffs to amend the operative pleading as to the other grounds. Neither of those two plaintiffs filed an amended pleading, and the action was dismissed.
Plaintiffs Hernandez and Medina are not parties to this timely appeal on behalf of the other plaintiffs. Dole contends the judgment should be affirmed on all three grounds ruled on below. Appellants' opening brief presented arguments as to the statute of limitations issue, pointing out that the trial court's ruling on agency/alter ego and indispensible parties was made only as to plaintiffs Hernandez and Medina, who are not parties to the appeal. Dole's respondent's brief argued that the judgment should be summarily affirmed because appellants failed to brief the alternative grounds of alter ego/agency and indispensible parties. We recognized that, as a practical matter, the trial court's findings on all three grounds are applicable to all plaintiffs, despite the fact that the order's terms did not apply to plaintiffs before us on appeal as to the latter two grounds. In order to prevent a forfeiture and to avoid a waste of judicial resources, the parties were permitted to file supplemental briefing on the alternative grounds.
We affirm the order sustaining the demurrer, but reverse the order's denial of leave to amend.
This original complaint was filed on April 28, 2009, by 73 anonymous plaintiffs against Dole, alleging wrongful death and related claims on behalf of the victims' heirs. On February 23, 2010, after extensive briefing, the trial court denied plaintiffs' motion to prosecute the action using pseudonyms, finding plaintiffs' generalized assertions of fear of retaliation were inadequate to justify the extraordinary request. Plaintiffs were given 45 days to identify themselves or dismiss the action. The trial court encouraged the parties to confer about Dole's anticipated demurrer so plaintiffs would have the opportunity to address defendant's substantive objections in the course of preparing an amended complaint.
I. Allegations in the FAC
A. Dole, Tecbaco, and the AUC
According to the FAC, since the late 1980's, leftist guerilla groups fought against the Colombian government and "exerted tremendous influence" in Colombia's banana growing regions where Dole maintained its business. Dole considered those groups' presence undesirable because they sought to redistribute the plantation lands to peasants, fomented worker dissatisfaction through union organizing and strikes, and disrupted business operations by encouraging thefts and violence against management employees. Various small, right-wing paramilitary organizations arose in the banana growing regions to retaliate against the leftist guerillas. In 1997, these violent organizations united under Carlos Castano as the AUC to drive out two major leftist guerrilla groups, but continued to operate extensively in the banana growing region after accomplishing that mission.
It was "universally acknowledged that the Colombian military and civil government not only tolerated the paramilitaries and allowed them to operate, but often cooperated and worked with them." Indeed, it was alleged, the AUC was provisioned and armed by the Colombian government. Through a 1994 government decree, the government authorized civilian convivir groups to petition for a license to operate paramilitary groups in areas of high security risk. Such groups, which fronted for the AUC, operated throughout Colombia with official military cooperation and support. The government considered trade unionists as terrorists. The AUC targeted such unionists for murder because they represented workers on Dole plantations and advocated land reform on behalf of farmers perceived as having leftist sympathies. The United States government designated the AUC as a terrorist organization in 2001, at a time when the AUC's illegal activities, including the kidnapping and murder of civilians, were widely known and publicized.
Plaintiffs alleged Dole formed Tecbaco as a wholly-owned Colombian subsidiary to serve as "DOLE in Colombia." It was merely Dole's alter ego or, alternatively, Dole's agent in Colombia, acting in the scope of that agency by providing support to the AUC. Dole "exercised relatively complete management and control" of Tecbaco. As such, plaintiffs referred to Dole and Tecbaco collectively as Dole throughout the FAC.
For purposes of this factual summary, we follow plaintiffs' convention and refer separately to Tecbaco only in those allegations where the subsidiary was differentiated from Dole. As we explain, however, it is precisely this pleading convention that is largely responsible for creating the ambiguities that justified the trial court's findings in support of sustaining the demurrer.
According to the FAC, Dole conducted its banana business by operating its own plantations comprising 3,400 hectares in Colombia and by purchasing bananas from approximately 68 independent Colombian farms over which Dole exercised "substantial control" by having its personnel present at harvesting and maintaining audit rights. Key requirements for Dole's profitability included maintaining low labor costs by limiting the influence of organized labor, quelling political unrest and instability, and opposing the Colombian land reform movements that would encroach on land Dole desired for banana production.
In order to further Dole's business goals, Dole engaged the AUC to use violence and force to "quell labor movements and guarantee 'security' to DOLE's employees and operations in Colombia including protection to the 'independent' farms operated, controlled and managed by DOLE." For instance, in January 2001, the AUC executed the president of the Sintrainagro union that had been effectively representing banana workers, eliminated its leadership, and appointed new members who were friendly to the AUC.
Beginning no later than 1994, Dole hired various groups of paramilitaries that subsequently unified as the AUC to assist Dole in driving out the two leftist guerrilla groups from the banana growing area. In 1997, Dole paid the AUC to provide security on the plantations, to prevent labor disruptions, and to suppress labor movements in Dole's operations. Protection services to the plantations included "dealing out reprisals against real or suspected thieves, . . . social undesirables, suspected guerilla sympathizers," and those suspected of opposing the AUC's agenda.
Plaintiffs alleged that representatives of Tecbaco and Dole met with the AUC leaders to arrange a system of payment and cooperation. AUC member Raul Hasbun negotiated with Tecbaco and Dole representatives to forge the agreement. Dole was responsible for all decisions to fund the AUC, and all of Tecbaco's actions with respect to the AUC were ultimately the decision of Dole and "all actions taken by [Tecbaco] with respect to the AUC were directly controlled by DOLE or done on DOLE'S behalf."
Pursuant to one such agreement, Dole made "security" payments contingent on the amount of bananas produced in the AUC-controlled territory—"one cent on the dollar for every crate [of bananas] that went out of the country," according to Salvatore Mancuso, the last person to head the AUC. Pursuant to the Colombian government's "Justice and Peace Process," Jose Gregorio Mangones Lugo (Mangones), a commander of an AUC paramilitary unit, testified that Dole directed the AUC to provide security on the plantations, restrain organized labor, and defeat one of the leftist groups. Mangones received 70,000 pesos per hectare annually from Dole.
In order to demonstrate the AUC's pervasive presence on Dole's plantations, plaintiffs alleged: "The AUC set up security check points and sub-command posts throughout the banana zone, and no person entering or leaving a DOLE owned or controlled plantation could do so without passing through AUC security." Dole administrators gave the AUC forces free access to the plantations, company vehicles, and provided them with land for the AUC encampments, making for "a major, visible presence of the AUC security forces in and around the DOLE plantations." Additionally, all bananas shipped from Colombia under the Dole name travelled from the plantations to shipment facilities under armed security provided by the AUC. The "AUC's murders in the banana region were often highly publicized, including an April 26, 2002 massacre of banana workers."
Therefore, Dole "knew or should have known of the AUC's use of violent tactics, including extrajudicial killings, to terrorize innocent civilians living in areas under FARC control because this information and reputation was well known in Colombia and was widely reported in the press in Colombia and the United States." Despite that knowledge, Dole continued to make payments to the AUC in order to further its banana business.
On March 19, 2007, Dole's major competitor in Colombia, Chiquita Brands International, entered a guilty plea in the United States District Court for the District of Columbia, in which it admitted making payments to the AUC from 1997 to 2004. Chiquita agreed to pay a $25 million fine and sever its ties to the Colombian entities working directly with the AUC.
The FAC does not allege the day and month of the plea agreement, or the court in which it was filed. However, plaintiffs attached a copy of the agreement itself as an exhibit to a declaration by plaintiffs' counsel filed in opposition to the demurrer. The agreement's penalties were based on violations of federal anti-terrorism regulations.
Plaintiffs alleged generally that none of them had reason to suspect Dole financed the AUC killings at any time before May 2007, when Salvatore Mancuso, a jailed AUC leader, "testified to investigators that Dole made payments to the AUC in exchange for 'security' in the banana-producing region of Colombia." However, "[m]any of the Plaintiffs did not learn of this first revelation of the DOLE-AUC relationship until much later than the Mancuso statement as they did not have access to media." In early 2008, Mancuso repeated those statements and testified that Dole, along with Del Monte and Chiquita, had provided support to the AUC since its inception. Mancuso repeated those statements "on various media, including a September 2008 appearance on '60 Minutes.'"
As justification for plaintiffs' failure to file their action sooner, plaintiffs alleged any attempt to seek redress through the Colombian justice system would have been futile because the government was effectively allied with the paramilitaries and anyone seeking to challenge paramilitary violence would be at great risk from retaliation. As support, plaintiffs point to human rights reports and assertions that independent Colombian organizations were unable to obtain assistance from the government. Further, it was alleged the Colombian justice system did not recognize the kind of remedies capable of providing plaintiffs with complete relief. Plaintiffs also alleged any investigation of Dole's complicity would have been futile because Dole concealed its payments to the AUC by paying convivirs as fronts.
B. The AUC's Acts of Violence
The FAC contains allegations on behalf of each plaintiff, describing the circumstances in which the AUC committed the murders and other acts of violence that support each claim. As those allegations comprise some 127 pages of the pleading, we summarize those pertaining to only a few representative plaintiffs.
Alicia Matilde Tovar Lopez is the wife and heir of Reinaldo Alfonso Maiguel Gamero, the general secretary of the banana workers' union, Sintrainagro. Gamero was murdered at home by paramilitaries in control of the banana zone on February 14, 1994. At that time, Gamero was one of the union leaders demanding a collective bargaining agreement with Dole concerning labor conditions at plantations owned or controlled by Dole. On information and belief, it was further alleged that the paramilitaries had acted at Dole's behest in order to intimidate the union in anticipation of the collective bargaining negotiations scheduled to begin 10 days after the murder.
Ana Del Carmen Sarmiento Granados is the wife and heir of Jairo Alfonso Charris Jimenez, an employee of a small plantation that supplied bananas to Dole. Jimenez, an active member of Sintrainago, was murdered by AUC paramilitaries. In the early morning hours of August 5, 1999, four paramilitaries awoke him and demanded to know where he had hidden weapons. When Jimenez denied having weapons, the paramilitaries forced him to walk approximately 200 yards from his home and murdered him with two gunshots. The Zona Bananera Municipal issued a certificate on September 9, 2002, confirming that Jimenez and another Sintrainago member had been killed by the same paramilitaries "as part of a selective massacre carried out for ideological and political reasons in the context of internal armed conflict." At the time of the killings, the AUC paramilitary unit responsible was receiving substantial support from Dole.
Emperatriz Marina Mendoza Gomez and Iluminada Escorcia de Silva are the first and second wives and heirs of Emilio Alfonso Villera Duran, who was murdered by a group of six AUC paramilitaries on March 6, 2002. Duran was a security guard at a banana plantation owned or controlled by Dole and an active member of the Sintrainagro trade union. The paramilitaries asked for Duran and waited for him to arrive at the plantation. Upon Duran's arrival, they demanded his identification papers. After verifying his identity, they shot him six times, killing him instantly. A December 20, 2002 letter from the Zona Bananera Municipal stated that Duran was murdered for ideological and political reasons during the country's internal armed conflict. Plaintiffs allege on information and belief the killing was motivated by Duran's refusal to resign in the face of pressure from the plantation's management. In public testimony on July 11, 2008, Mangones admitted responsibility for the murder and was convicted of aggravated homicide on December 19, 2008. At the time of the killing, Mangones's AUC unit was receiving substantial support from Dole.
Petrona Merion Caceres is the wife and heir of Jose Concepcion Kelsi Carrera, who lived with his family on land adjacent to a plantation owned or controlled by Dole. He was fatally shot by two AUC paramilitaries on March 14, 2004, after a neighbor identified him to the paramilitaries. It was alleged on information and belief that Carrera and his family were squatters on land that Dole wanted to recover for banana production. Three days before the murder, armed paramilitaries had threatened him and the other squatters that they had three days to vacate the land. On January 15, 2007, the Colombian government's Presidential Agency for Social Action and International Cooperation notified Petrona Caceres that it would compensate her family for Carrera's death—implicitly acknowledging that he had been "murdered in the context of internal armed conflict." At the time of the murder, the paramilitary unit responsible was receiving support from Dole.
Hilda Dolores Rodriguez Ramos is the mother and heir of Efrain Antonio Pacheco Rodriguez, who was killed on November 9, 2007, by "remnants" of an AUC paramilitary unit that had "failed to demobilize" or "had returned to activity" in control of the banana zone and surrounding areas where Ramos and her son lived. Rodriguez was sitting outside his home when a paramilitary approached him and killed him without provocation or warning. The AUC paramilitary unit was receiving support from Dole at the time.
II. Demurrer and Trial Court Ruling
Dole demurred to the FAC on a variety of grounds including lack of timeliness under the two-year statute of limitations applicable to all claims, failure to adequately allege alter ego and agency liability as to Tecbaco, and failure to join Tecbaco as a necessary and indispensible party. The trial court sustained the demurrer, finding all causes of action were time-barred except those alleged on behalf of plaintiffs Hernandez and Medina.
In so doing, the trial court found all of plaintiffs' claims other than Hernandez's and Medina's were presumptively time-barred, as the predicate injuries of the remaining plaintiffs had occurred more than two years before April 28, 2009, the date of the original complaint. It rejected plaintiffs' equitable tolling argument, finding plaintiffs' own allegations as to the AUC's ubiquitous presence within Dole plantations and in conducting its operations for Dole's benefit were sufficient to put plaintiffs on inquiry notice as to Dole's complicity with the AUC's violent actions prior to any direct public disclosures of Dole's complicity with the AUC. In rejecting plaintiffs' argument for equitable tolling and delayed accrual based on Dole's alleged fraudulent concealment of its involvement, the court found plaintiffs failed to allege with particularity the facts justifying their conclusory assertions as to due diligence and justified delay.
Plaintiffs did not assert the claims raised for the first time in the FAC "related back" to the original complaint. "The relation-back doctrine requires that the amended complaint must (1) rest on the same general set of facts, (2) involve the same injury, and (3) refer to the same instrumentality, as the original one." (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 408-409.)
As stated supra, the trial court also independently ruled in favor of Dole on the alter ego/agency and the indispensible party grounds. The court sustained the demurrer without leave to amend on the statute of limitations ground, but permitted the remaining plaintiffs Hernandez and Medina to amend the operative pleading as to the other grounds. Neither Hernandez nor Medina filed an amended pleading, and their actions were dismissed.
Standard of Review
"On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. We give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126 [(Zelig)].) Further, we treat the demurrer as admitting all material facts properly pleaded, but do not assume the truth of contentions, deductions or conclusions of law. (Ibid.; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967 (Aubry).)When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. (Zelig, supra, 27 Cal.4th at p. 1126.)" (City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865.) "In ruling on a demurrer, the court may '"take judicial notice of a party's earlier pleadings and positions as well as established facts from both the same case and other cases. . . ." [Citations.]' (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1491.)" (Wilkinson v. Zelen (2008) 167 Cal.App.4th 37, 43; Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) "Where a conclusion is alleged and also the special facts from which the conclusion is drawn, if the special facts are inconsistent with and do not support the conclusion, the former control, and the sufficiency of the complaint is to be determined from the special facts pleaded." (Iverson, Yoakum, Papiano & Hatch v. Berwald (1999) 76 Cal.App.4th 990, 995 (Iverson))
"'When a ground for objection to a complaint, such as the statute of limitations, appears on its face or from matters of which the court may or must take judicial notice, a demurrer on that ground is proper.' (Cochran v. Cochran (1997) 56 Cal.App.4th 1115, 1120.) '[W]hen "the relevant facts are not in dispute, the application of the statute of limitations may be decided as a question of law."' (Sahadi v. Scheaffer (2007) 155 Cal.App.4th 704, 713, quoting International Engine Parts, Inc. v. Feddersen & Co. (1995) 9 Cal.4th 606, 611-612.)" (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1391.)
III. Statute of Limitations
Plaintiffs' claims are subject to the two-year limitations period, applicable to actions "for assault, battery, or injury to, or for the death of, an individual caused by the wrongful act or neglect of another." (Code Civ. Proc., § 335.1.) "The limitations period commences when the cause of action accrues. (Code Civ. Proc., § 312; Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806 (Fox); Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397 (Norgart).)'Generally speaking, a cause of action accrues at "the time when the cause of action is complete with all of its elements."' (Fox, [supra,]at p. 806, quoting Norgart, [supra,]at p. 397.)" (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1317-1318 (E-Fab, Inc.).)
An important exception to the bar of the statute of limitations is the discovery rule, which "postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action." (Norgart, supra, 21 Cal.4th at p. 397.) Such "inquiry notice is triggered by suspicion. . . . The court recently reaffirmed the suspicion rule in Fox, saying 'under the delayed discovery rule, a cause of action accrues and the statute of limitations begins to run when the plaintiff has reason to suspect an injury and some wrongful cause, unless the plaintiff pleads and proves that a reasonable investigation at that time would not have revealed a factual basis for that particular cause of action.' (Fox, supra, 35 Cal.4th at p. 803, italics added.)" (E-Fab, Inc., supra, 153 Cal.App.4th at p. 1319; see Leaf v. City of San Mateo (1980) 104 Cal.App.3d 398, 408-409 ["It would be contrary to public policy to require that plaintiffs file a lawsuit against City of San Mateo at a time when the evidence available to them failed to indicate a cause of action against this defendant."].)
"The time bar of a statute of limitations may be raised by demurrer '[w]here the complaint discloses on its face that the statute of limitations has run on the causes of action stated in the complaint, [for the reason that] it fails to state facts sufficient to constitute a cause of action. [Citation.]' [Citation.]" (County of Los Angeles v. Commission on State Mandates (2007) 150 Cal.App.4th 898, 912.) "'Resolution of the statute of limitations issue is normally a question of fact.' (Fox, supra, 35 Cal.4th at p. 810.) More specifically, as to accrual, 'once properly pleaded, belated discovery is a question of fact.' (Bastian v. County of San Luis Obispo [(1988)] 199 Cal.App.3d [520,] 527.) As our state's high court has observed: 'There are no hard and fast rules for determining what facts or circumstances will compel inquiry by the injured party and render him chargeable with knowledge. [Citation.] It is a question for the trier of fact.' [Citation.]" (E-Fab, Inc., supra, 153 Cal.App.4th at p. 1320.) On the other hand, "'whenever reasonable minds can draw only one conclusion from the evidence, the question becomes one of law.' [Citation.] Thus, when an appeal is taken from a judgment of dismissal following the sustention of a demurrer, 'the issue is whether the trial court could determine as a matter of law that failure to discover was due to failure to investigate or to act without diligence.' [Citation.]" (Ibid.)
As an important corollary, where a plaintiff seeks to rely on the discovery rule because the complaint shows on its face that the plaintiff's claim is barred by the applicable statute of limitations, the plaintiff "'must specifically plead facts which show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. [Citations.] Mere conclusory assertions that delay in discovery was reasonable are insufficient and will not enable the complaint to withstand general demurrer. [Citation.]' [Citations.]" (CAMSI IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1536-1537 (CAMSI IV).)
Here, as the trial court found, the causes of action of all plaintiffs before this court accrued prior to April 28, 2007, and were thus untimely on their face under the two-year statute. That is, the predicate killings and acts of violence all occurred before that date. As they did below, plaintiffs rely on the discovery rule and principles of equitable estoppel to delay the time of accrual. They concede timely knowledge that decedents had been wrongfully killed by the AUC paramilitaries but contend they had no reason to suspect Dole's involvement until June 7, 2008, when AUC leader Mangones made unambiguous admissions as to Dole's complicity with the AUC in committing the underlying killings.
That argument, however, tends to conflict with allegations in the FAC that the earliest date on which plaintiffs had reason to suspect Dole financed the AUC's murders was in May 2007, when jailed AUC leader Mancuso testified that Dole made payments to the AUC in exchange for "security" in the banana fields.
In rejecting that argument, the trial court found plaintiffs' own detailed, specific factual allegations were inconsistent with their general, conclusory allegations of lack of a reasonable suspicion as to Dole's complicity. (See Iverson, supra, 76 Cal.App.4th at p. 995.) Thus, plaintiffs' allegations as to the AUC's pervasive presence in the Dole plantations and the AUC's notorious acts of violence against Dole employees, persons squatting on land Dole sought to develop, and union organizers on behalf of Dole employees, would have put plaintiffs on inquiry notice as to Dole's complicity in those acts of violence—especially because those acts were alleged to have been committed to serve Dole's economic interests. The court implicitly found it would be futile to give plaintiffs leave to amend because these allegations were essential to all their claims.
For instance, the FAC alleged: "The AUC set up security check points and subcommand posts throughout the banana zone, and no person entering or leaving a DOLE owned or controlled plantation could do so without passing through AUC security." Dole administrators gave the AUC forces free access to the plantations, company vehicles, and provided them with land for the AUC encampments, making for "a major, visible presence of the AUC security forces in and around the DOLE plantations." Additionally, all bananas shipped from Colombia under the Dole name travelled from the plantations to shipment facilities under armed security provided by the AUC. The "AUC's murders in the banana region were often highly publicized, including an April 26, 2002 massacre of banana workers." The trial court reasoned that, assuming the truth of the allegations that a primary purpose of the underlying acts of violence was to intimidate Dole workers and sympathetic trade unionists, the inference of complicity between Dole and the AUC would be obvious and would have arisen more than two years before April 28, 2009, when the original complaint was filed.
However, for purposes of sustaining a demurrer on limitations grounds, the issue of delayed discovery cannot be decided as a matter of law unless reasonable minds can draw only a single conclusion from the evidence. (E-Fab, Inc., supra, 153 Cal.App.4th at p. 1320; Snow v. A. H. Robins Co. (1985) 165 Cal.App.3d 120, 128; see Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 637-638 ["'[W]hether reliance was reasonable is a question of fact for the jury, and may be decided as a matter of law only if the facts permit reasonable minds to come to just one conclusion.' [Citation.]"].)
Our review of the FAC shows that this is not a case in which only one reasonable inference can be drawn from the allegations. Although the trial court undoubtedly identified one reasonable inference, plaintiffs' allegations supported another: that the AUC was acting independently of Dole, pursuant to its own ideological motivations. According to the FAC, the AUC's presence was ubiquitous throughout all the banana plantations, encompassing plantations owned by companies other than Dole, and the AUC's guiding political ideology called for the murder of union leaders and suspected sympathizers of leftist groups as a means of supporting government interests. Plaintiffs therefore had good reason to believe their relatives were killed by the AUC as part of its ongoing civil conflict with leftist guerillas. Accordingly, the fact that the violence conduced to Dole's benefit did not lead to the sole conclusion that the AUC was acting on Dole's behest.
Contrary to the trial court finding that the circumstances of the underlying killings pointed directly to Dole's complicity, our review of the FAC shows that a substantial number of decedents were killed in circumstances in which there was no apparent anti-union or any other motive that would appear to favor Dole's interests. For instance, victim Jorge Luis de la Hoz Perez was an occasional worker at a Dole plantation who was killed on the way to work one morning, and whose wife (plaintiff Alidys Esther Rodriguez Arzuaga) was later informed that he was killed by one of the paramilitaries on the road. Victim Yair Castillo Correa, a student, was killed after leaving his house to play soccer. Victim Jaime Alberto Agudelo Melendrez, a fisherman, was killed at a public dance. Victim Alexi Astrid Parejo Valencia, a judicial assistant, was killed at home. There would appear to be nothing in the circumstances of those killings that obviously implicated Dole.
It follows that plaintiffs must be afforded the opportunity to make specific factual allegations in support of delayed discovery. At oral argument, plaintiffs' counsel represented that he could make such allegations by further amendment. It is an abuse of discretion to sustain a demurrer without leave to amend "'if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. . . . [Citation.]'" (Friedman v. Southern Cal. Permanente Medical Group (2002) 102 Cal.App.4th 39, 44.) That question is "reviewable on appeal 'even in the absence of a request for leave to amend' [citation] . . . . [Citation.]" (Aubry, supra, 2 Cal.4th at p. 971; Code Civ. Proc., § 472c, subd. (a).)
We further note that the necessity for specific allegations to justify the late discovery are especially acute for those plaintiffs who were first named in the FAC, filed April 9, 2010, because the circumstances became fundamentally different in May 2007, with Mancuso's public disclosure of Dole's payments to the AUC in exchange for security in the banana-producing region of Colombia. At that point, there was a publicized statement raising a reasonable suspicion as to the critical connection between Dole and the AUC's acts of violence. For purposes of the discovery rule, inquiry notice is triggered by suspicion—"'when the plaintiff has reason to suspect an injury and some wrongful cause, unless the plaintiff pleads and proves that a reasonable investigation at that time would not have revealed a factual basis for that particular cause of action.' (Fox, supra, 35 Cal.4th at p. 803, italics added.)" (E-Fab, Inc., supra, 153 Cal.App.4th at p. 1319.)
As the FAC implicitly concedes, at least some plaintiffs were aware of the statement at the time it was made. Despite plaintiffs' conclusory and unsupported allegations of lack of awareness, knowledge that an AUC commander implicated Dole in the AUC's violent acts would certainly provide reason to suspect it shared responsibility for the underlying killings. Again, plaintiffs are required to plead specific, non-conclusory facts showing the time and manner of discovery and the inability to have made earlier discovery despite reasonable diligence. (CAMSI IV, supra, 230 Cal.App.3d at pp. 1536-1537; see also Dujardin v. Ventura County Gen. Hosp. (1977) 69 Cal.App.3d 350, 356 ["In order to properly raise the issue of belated discovery, the plaintiff must state in his complaint when the discovery was made, the circumstances surrounding the discovery, and facts which show that the failure to make an earlier discovery was reasonable, justifiable and not a result of plaintiff's failure to investigate or to act."].)
The mere allegation that "[m]any of the Plaintiffs did not learn of this first revelation of the DOLE-AUC relationship until much later than the Mancuso statement as they did not have access to media" is nonspecific and conclusory. Further, as the trial court found, the FAC failed to allege when each plaintiff learned of the Dole/AUC relationship and provided no particularized explanation as to why such discovery was delayed. We cannot accept plaintiffs' argument that the Mancuso statement was insufficient to put them on inquiry notice because he did not identify the murders that Dole "paid for or directed," leaving them to "sort out" which company was responsible.
That is not the test for inquiry notice. "'A plaintiff need not be aware of the specific "facts" necessary to establish the claim; that is a process contemplated by pretrial discovery. Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit on her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.' (Jolly [v. Eli Lilly & Co. (1988)] 44 Cal.3d [1103,] 1111.)" (Nelson v. Indevus Pharmaceuticals, Inc. (2006) 142 Cal.App.4th 1202, 1207.) Mancuso's statement certainly raised a reasonable suspicion as to Dole's complicity in the deaths of these plaintiffs, all of whom are alleged to be Dole employees or to have significant ties to Dole. The statement therefore triggered the duty to investigate. (See Fox, supra, 35 Cal.4th at pp. 806-807 [under the discovery rule, suspicion of one or more of the elements of a cause of action, coupled with knowledge of any remaining elements, will generally trigger the statute of limitations period]; Norgart, supra, 21 Cal.4th at p. 398; E-Fab, Inc., supra, 153 Cal.App.4th at p. 1319.)
Plaintiffs argue Dole is estopped from relying on the statute of limitations because it actively concealed its complicity with the AUC. "[A] defendant may be equitably estopped from asserting the statute of limitations when, as the result of intentional concealment, the plaintiff is unable to discover the defendant's actual identity." (Bernson v. Browning-Ferris Industries (1994) 7 Cal.4th 926, 936 (Bernson).) Dole's alleged misconduct in that regard consists of concealing its payments to the AUC by funneling those payments through convivirs, failing to disclose the AUC payments in Dole's corporate financial records, as well as by failing to voluntarily admit their alleged wrongful conduct. Plaintiffs identify no authority in which a defendant's failure to spontaneously admit the alleged wrongdoing has been found adequate to support a claim of intentional concealment. For instance, in Bernson, a defamation case, when the plaintiff first accused the defendant of authoring the offending document, the defendant denied authorship both to the plaintiff personally and in a letter printed in the Los Angeles Times. (Id. at p. 929; see Cuadros v. Superior Court (1992) 6 Cal.App.4th 671, 677 ["While we do not impose upon defendants an affirmative duty to disclose to petitioner her error, defense counsel is prohibited from taking willful action to mask that error from petitioner."].) Plaintiffs, however, allege no such direct misrepresentation, nor do they allege that they made any effort to request information from Dole concerning involvement in the underlying acts of violence or any relationship with the AUC.
Moreover, in Bernson, our Supreme Court cautioned that "[t]he rule of equitable estoppel includes, of course, the requirement that the plaintiff exercise reasonable diligence. [Citation.] Thus, under our holding the statute will toll only until such time that the plaintiff knows, or through the exercise of reasonable diligence should have discovered, the defendant's identity. Lack of knowledge alone is not sufficient to stay the statute; a plaintiff may not disregard reasonably available avenues of inquiry which, if vigorously pursued, might yield the desired information." (Bernson, supra, 7 Cal.4th at p. 936.) Thus, in asserting that investigative efforts would have been futile absent Dole's public admission to making payments to the AUC, plaintiffs fail to address the obvious question of whether information could have been obtained from other sources, such as Mancuso.
Alternatively, plaintiffs argue their delayed discovery was justified by deficiencies in the Colombian justice system that prevented them from seeking legal redress there. Once again, plaintiffs merely make general and conclusory allegations to the effect that such action would have been futile because the government was effectively allied with the paramilitaries and therefore any investigative efforts would have placed plaintiffs at risk of retaliation. Not only do plaintiffs fail to satisfy their pleading obligation of alleging with specificity each plaintiff's inability to have made earlier discovery despite reasonable diligence (CAMSI IV, supra, 230 Cal.App.3d at pp. 1536-1537), but it would appear that plaintiffs' general allegations concerning fear of retribution conflict with allegations that they "reported their decedents' deaths to the authorities and cooperated with government investigations to identify the murderers." Moreover, plaintiffs' allegations concerning the limitations of the Colombian justice system fail to explain or justify the failure to seek relief in California, where Dole was presumably available for service at all relevant times.
In a related argument, plaintiffs invoke Code of Civil Procedure section 354 for the proposition that they were unable to file the action sooner due to the existence of a "state of war" within Colombia that rendered it too dangerous for plaintiffs to act. Section 354 provides: "When a person is, by reason of the existence of a state of war, under a disability to commence an action, the time of the continuance of such disability is not part of the period limited for the commencement of the action whether such cause of action shall have accrued prior to or during the period of such disability." As Dole points out, however, that section has been uniformly interpreted to apply only when active hostilities made it impossible for the party to file an action in the United States.
Thus, in Estate of Caravas (1952) 40 Cal.2d 33, the plaintiff was an alien and a "resident of Greece during the period when the United States was at war with Germany. As a resident of an enemy-occupied country she came within the provisions of section two of the Trading With the Enemy Act. [Citations.] She was thus unable to maintain a proceeding in a California court for the recovery of her property. [Citations.] Moreover, section 3 of the Trading With the Enemy Act prohibited residents of Greece from communicating with anyone in this country 'except in the regular course of the mail' and during the German occupation mail service with Greece was suspended. [Citations.] It thus was impossible for Foteini Caravas or her heirs in Greece to communicate with persons in this country, or to file an action in a California court if communication could be had." (Id. at pp. 38-39; see also Taketa v. State Board of Equalization (1951) 104 Cal.App.2d 455, 459 [giving § 354 its "fullest effect" would toll statute during the time the petitioner, a Japanese-American, had been forcibly evacuated following the attack on Pearl Harbor, pursuant to Executive Order, No. 9066, as ratified on Mar. 21, 1942, by Act of Congress, 56 Stat. 173].)
Unlike the parties in those cases, plaintiffs identify no statutory or other war-related proscription to filing the present action. As below, plaintiffs rely primarily on the allegation that gathering information in Colombia "about past and ongoing U.S. multinationals and the AUC remains very difficult, but was impossible until the AUC leadership demobilize, a process that began in 2007 and was largely complete by the end of 2008." We agree with the trial court that such allegations fail to demonstrate that it was unsafe to file the lawsuit in California or that plaintiffs were otherwise barred from doing so.
Plaintiffs' reliance on federal authorities is unavailing. For instance, in Arce v. Garcia (11th Cir. 2006) 434 F.3d 1254, the court applied equitable tolling principles under the federal Torture Victim Protection Act (28 U.S.C. § 1350) and held: "Congress clearly intends that courts toll the statute of limitations so long as the defendants remain outside the reach of the United States courts or the courts of other, similarly fair legal systems. [¶] Justice may also require tolling where both the plaintiff and the defendant reside in the United States but where the situation in the home state nonetheless remains such that the fair administration of justice would be impossible, even in United States courts." (Id. at p. 1262.) Whatever bearing federal case law might have on the application of California equitable tolling principles to state tort claims, it would not appear to apply in this case. There is no reason to think Dole was outside the reach of California courts at any relevant time or that the situation in Colombia was such that it would be impossible for plaintiffs to obtain fair access to justice in California courts against Dole.
Finally, plaintiffs argue the trial court misapplied the presumptions and burdens proper to demurrers based on its contemporaneous ruling on Dole's motion for cost bond under Code of Civil Procedure 1030. In granting that motion, the court found Dole sustained its evidentiary burden of showing a reasonable probability that it would prevail at trial by presenting "competent evidence that overwhelmingly refutes plaintiffs' primary claim, i.e., that Dole and its Col[o]mbian subsidiary, Tecbaco, conspired with, and made payments to, the AUC in exchange for violent security services." Plaintiffs assert the court acted inconsistently by failing to defer to plaintiffs' allegations in the FAC that Dole fraudulently concealed its payments to the AUC for violent security services for purposes of the demurrer, while crediting Dole's evidence that it made no such payments and had no relationship with the AUC for purposes of the cost bond motion.
"'The purpose of the statute is to enable a California resident sued by an out-of-state resident "'to secure costs in light of the difficulty of enforcing a judgment for costs against a person who is not within the court's jurisdiction.'" [Citation.] The statute therefore acts to prevent out-of-state residents from filing frivolous lawsuits against California residents.' [Citation.]" (Alshafie v. Lallande (2009) 171 Cal.App.4th 421, 428, quoting Yao v. Superior Court (2002) 104 Cal.App.4th 327, 331.)
As Dole explains, however, there is nothing contradictory in the two rulings. The two independent motions were governed by different legal standards. While evaluation of the demurrer required deference to all material facts properly pleaded, it is well established that where special facts are inconsistent with and do not support the pleading's conclusion, "the former control and the sufficiency of the complaint is to be determined from the special facts pleaded." (Iverson, supra, 76 Cal.App.4th at p. 995.) Moreover, because plaintiffs' claims were facially time-barred, plaintiffs had the burden of pleading specific, non-conclusory facts showing the time and manner of discovery and the inability to have made earlier discovery despite reasonable diligence. (CAMSI IV, supra, 230 Cal.App.3d at pp. 1536-1537.) On the other hand, with regard to the cost bond motion, the parties were entitled to present extra-record evidence—and those findings are not at issue in this appeal.
In sum, the trial court erred in finding all claims (save those of Hernandez and Medina) barred by the two-year statute of limitations. For pleading purposes, the claims in the original pleading are viable under the discovery rule because it was not until May 2007 that Mancuso's statement gave plaintiffs reason to suspect Dole's complicity in the underlying killings. The claims first brought in the FAC, however, having been brought more than two years after that disclosure, are presumptively time-barred and plaintiffs have failed to allege with specificity a legitimate basis for delayed discovery. Because the trial court dismissed plaintiffs' claims without leave to amend and because plaintiffs represent on appeal that they can amend the FAC to adequately plead delayed discovery, we remand the matter to permit plaintiffs to file a second amended complaint.
Alter Ego and Agency Allegations
As mentioned supra, plaintiffs did not name Dole's wholly-owned subsidiary, Tecbaco, as a defendant. Instead, plaintiffs alleged Tecbaco functioned as "Dole in Colombia," either as Dole's alter ego or its agent. Based on those allegations, plaintiffs referred to "DOLE" collectively throughout the FAC as comprising both Dole and Tecbaco. Dole demurred on the ground that plaintiffs failed to adequately allege Dole's alter ego and agency liability as to Tecbaco's conduct. The trial court, having sustained the demurrer without leave to amend as to all plaintiffs except Hernandez and Medina (the two plaintiffs who are not parties to this appeal), found as to Hernandez and Medina that the FAC failed to allege agency and alter ego liability with sufficient specificity to overcome the legal presumption that Tecbaco functioned as a separate corporate entity. Nevertheless, the court ruled Hernandez and Medina were entitled to file an amended complaint to attempt to cure the pleading defects.
Plaintiffs are correct that a complaint "ordinarily is sufficient if it alleges ultimate rather than evidentiary facts." (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550 (Doe).) As plaintiffs point out in their supplemental briefing, as a general matter, there are no special pleading requirements for alleging agency and alter ego liability. "[A]n allegation of agency is deemed an allegation of ultimate fact. (Skopp v. Weaver (1976) 16 Cal.3d 432, 437, 439.)" (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 886.) "[T]he existence of an agency relationship is the 'essential fact,' and where alleged must be accepted as true." (Ibid.)"[I]t is the law of California that that issue [of alter ego] may be raised by a simple allegation that the defendant sought to be charged had made the contract involved." (Los Angeles Cemetery Assn. v. Superior Court (1968) 268 Cal.App.2d 492, 494; see also Zoran Corp. v. Chen (2010) 185 Cal.App.4th 799, 811 ["Whether a party is liable under an alter ego theory is normally a question of fact."].)
On the other hand, as the trial court recognized, the mere allegation of a parent/subsidiary corporate relationship is insufficient to support a finding of Dole's liability on alter ego or agency principles. "A parent corporation is not liable for the torts of its subsidiaries simply because of stock ownership. [Citation.] Liability may be imposed only where the parent controls the subsidiary to such a degree as to render the latter the mere instrumentality of the former." (Institute of Veterinary Pathology, Inc. v. California Health Laboratories, Inc. (1981) 116 Cal.App.3d 111, 119; see also Laird v. Capital Cities/ABC, Inc. (1998) 68 Cal.App.4th 727, 737 ["An employee who seeks to hold a parent corporation liable for the acts or omissions of its subsidiary on the theory that the two corporate entities constitute a single employer has a heavy burden to meet under both California and federal law. Corporate entities are presumed to have separate existences, and the corporate form will be disregarded only when the ends of justice require this result."], disagreed with on another ground in Reid v. Google, Inc. (2010) 50 Cal.4th 512, 524.)
To the extent the FAC premises Dole's alter ego and agency liability on nothing other than Dole's status as Tecbaco's corporate parent, it is subject to demurrer. (See Neilson v. Union Bank of Cal., N.A. (C.D.Cal. 2003) 290 F.Supp.2d 1101, 1116 ["Conclusory allegations of 'alter ego' status are insufficient to state a claim. Rather, a plaintiff must allege specifically both of the elements of alter ego liability, as well as facts supporting each."].) Consistent with the trial court's findings, however, our review of the FAC discloses a more fundamental problem—one which makes it exceedingly difficult to assess the adequacy of plaintiffs' allegations. By using a collective term for both Dole and Tecbaco—and by failing to differentiate between agency and alter ego liability— plaintiffs created an inherent ambiguity running throughout its factual allegations and rendering it all but impossible to distinguish the wrongful acts attributable to Dole directly from those in which liability depends on proof of an agency or alter ego relationship. As our Supreme Court explains, a plaintiff is required "'to set forth the essential facts of his case with reasonable precision and with particularity sufficient to acquaint a defendant with the nature, source and extent of his cause of action.'" (Doe, supra, 42 Cal.4th at p. 550, citing Doheny Park Terrace Homeowners Assn. Inc. v. Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1099.)
The closest plaintiffs come to differentiating between Dole and Tecbaco in terms of the allegations of actionable conduct is in paragraph 343 of the FAC: "Representatives of DOLE, both from the parent company and [Tecbaco], met with leaders of the AUC to reach an agreement to cooperate and to arrange a payment system." While that statement would appear to allege Dole's direct complicity with the AUC, the use of the collective term later in that same paragraph causes any such certainty to transform into ambiguity: "All decisions made to fund the AUC were ultimately the decision of DOLE and all actions taken by [Tecbaco] with respect to the AUC were directly controlled by DOLE and/or done on DOLE'S behalf."
The FAC consistently conflates and obscures the relationship between parent and subsidiary, thereby forcing Dole to guess at the nature, source, and extent of its liability. For instance, in paragraphs 361 and 362, the FAC alleges "Mangones identified various persons who dealt with the AUC who were employees, agents or otherwise acting on behalf of DOLE and its banana-growing interests, including Luz Estela Hernandez, who was head of human relations for DOLE in Magdalena between 1993 and 2009" and "a man with a last name of Hernandez, who was head of DOLE security in Magdalena." As Dole explains, because "DOLE" means both Dole and Tecbaco, defendant cannot tell whether to defend itself by proving its employees had no such meeting or by proving the absence of an alter ego and/or agency relationship with Tecbaco—or both. The FAC is therefore properly subject to demurrer for its failure to provide reasonable notice as to the extent to which Dole's liability is based on its own allegedly wrongful conduct (if any) and the extent to which its liability is based on Tecbaco's conduct as an alter ego or agent of Dole.
In sum, Dole is entitled to know what allegedly wrongful acts are being attributed to it directly. The use of "DOLE" as a collective term to encompass both Dole and Tecbaco is improper because it conflates Dole and Tecbaco so that the latter's acts are deemed to be the responsibility of the former. To the extent Dole's liability derives from Tecbaco's conduct, plaintiffs are entitled to present viable and specific allegations of alter ego or agency. Plaintiffs represent that they can amend the pleading to correct these defects. It may well turn out, as plaintiffs represent, that the amended pleading will not only provide fair notice of the legal and factual bases for Dole's liability, but in so doing will demonstrate that its liability on alter ego and/or agency principles is more than a mere conclusion arising out of the parent/subsidiary relationship.
Finally, the trial court sustained the demurrer with leave to amend on the ground that Tecbaco was a necessary and indispensible party within the meaning of Code of Civil Procedure section 389, such that the matter could not be prosecuted absent Tecbaco's joinder. Dole contends the trial court was correct, but that plaintiffs should not be granted leave to amend because they have effectively been given two opportunities to do so. As we explain, the trial court's finding that Tecbaco is a necessary and indispensible party was premature. The FAC is reasonably susceptible to the interpretation that Dole's liability is not merely derivative of Tecbaco's actions, but is based in significant part on Dole's own active complicity with the AUC in committing the underlying acts of violence. However, as we explain, because the FAC is inherently ambiguous in delineating the extent to which Dole's liability is direct, rather than based on theories of agency or alter ego, it is impossible for this court to make a conclusive determination of the compulsory joinder issue.
Code of Civil Procedure section 389, subdivision (a), provides that a party is "necessary" to a proceeding if "(1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest." Upon determination that a party is "necessary" under those criteria, "courts then determine if the party is also 'indispensable.' Under this analysis 'the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable. The factors to be considered by the court include: (1) to what extent a judgment rendered in the person's absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person's absence will be adequate; [and] (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for nonjoinder.' (Code Civ. Proc., § 389, subd. (b).)" (City of San Diego v. San Diego City Employees' Retirement System (2010) 186 Cal.App.4th 69, 83-84 (City of San Diego).)
Stated more succinctly, "[t]he controlling test for determining whether a person is an indispensable party is whether, if the affirmative relief sought by a plaintiff is granted, the relief granted would injure or affect the interest of a third person not joined." (Bradley v. Department of Corrections & Rehabilitation (2008) 158 Cal.App.4th 1612, 1628.) "A contracting party is the paradigmatic example of an indispensable party. [Citations.]" (Rojas v. Loewen Group Int'l, Inc. (D.P.R. 1998) 178 F.R.D. 356, 362.) The trial court's equitable assessment of these factors is discretionary and pragmatic, depending on the particular facts and circumstances of each case. (City of San Diego, supra, 186 Cal.App.4th at p. 84.) Moreover, "'[a] court has the power to proceed with a case even if indispensable parties are not joined. Courts must be careful to avoid converting a discretionary power or rule of fairness into an arbitrary and burdensome requirement that may thwart rather than further justice.' [Citation.]" (Ibid.)
Because Code of Civil Procedure section 389 tracks the language of its federal counterpart, rule 19 of the Federal Rules of Civil Procedure, it is "'appropriate to use federal precedents as a guide to application of the statute.' [Citations.]" (Countrywide Home Loans, Inc. v. Superior Court (1999) 69 Cal.App.4th 785, 792.)
In opposing mandatory joinder, plaintiffs rely on the well recognized principle that joint tortfeasors are not necessary parties. "'It has long been the rule that it is not necessary for all joint tortfeasors to be named as defendants in a single lawsuit.' (Temple v. Synthes Corp. (1990) 498 U.S. 5, 7, interpreting Fed. Rules Civ. Proc., rule 19.)" (Countrywide Home Loans, Inc. v. Superior Court (1999) 69 Cal.App.4th 785, 796 (Countrywide Home Loans).) Code of Civil Procedure section 389 "'limits compulsory joinder to those situations where the absence of a person may result in substantial prejudice to that person or to the parties already before the court. . . .' [Citation.]" (Countrywide Home Loans, supra, at p. 799.) That is not a concern with joint tortfeasors. "'[T]he doctrine of joint and several liability precludes characterizing a likely defendant as a party necessary to the plaintiff's action . . . .'" (Id. at p. 797, quoting Singer Co. v. Superior Court (1986) 179 Cal.App.3d 875, 892.) Additionally, a defendant can avoid any risk of multiple or inconsistent obligations by filing a cross-complaint against a concurrent tortfeasor for partial indemnity, even if that tortfeasor was not named in the original complaint. (Countrywide Home Loans, supra, at p. 797.) Because this procedure is available, a plaintiff's failure to include a joint tortfeasor in the complaint does not harm the interests of the named defendant. (Id. at pp. 798-799.)
It should be noted that the federal courts also accept the joint tortfeasor exception: "if one thing is clear in respect to Rule 19, it is that, unlike a person vicariously liable in tort, see Freeman, 754 F.2d at [page] 559, a person potentially liable as a joint tortfeasor is not a necessary or indispensable party, but merely a permissive party subject to joinder under Rule 20." (Pujol v. Shearson/American Express (1st Cir. 1989) 877 F.2d 132, 137.)
Dole seeks to rely on a line of federal authorities holding that joinder of a subsidiary is necessary when the subsidiary was the "primary participant" in the actionable conduct. For instance, in Freeman v. Northwest Acceptance Corp. (5th Cir. 1985) 754 F.2d 553, 559, the court explained: "The [plaintiffs] seek to impose liability on Northwest not for its own acts, but for those of First Commercial; thus, . . . First Commercial 'becomes more than a key witness whose testimony would be of inestimable value. Instead [it] emerges as an active participant in the alleged conversion.' [Citation.] First Commercial was more than an active participant in the conversion alleged by the Freemans; it was the primary participant. Case law in this and other circuits uniformly supports the proposition that joinder of the subsidiary is required in such a situation."
Contrary to Dole's assertions and the trial court's findings, the FAC is reasonably susceptible to the interpretation that Dole was a direct participant in the AUC's acts of violence because it made, or ratified, payments to that organization for "security" with knowledge the AUC would perform acts of violence, as well as by ratifying the AUC's violent acts. Once again, however, the problem with the FAC is that the convention of pleading "DOLE" collectively to include Tecbaco renders their allegations so ambiguous as to preclude an assessment of the key question of whether Dole and Tecbaco are joint tortfeasors or whether Tecbaco is the primary participant. Our ruling in no way forecloses Dole from bringing a motion to compel Tecbaco's joinder if plaintiffs' new complaint fails to adequately address this issue. At that time, Dole can argue other equitable factors, such as the ability to subpoena third party witnesses in light of the fact that Tecbaco is a Colombian entity and was sold by Dole in 2009.
As the court explained in Country Home Loans, it is generally improper to look behind the operative pleading to make the joint tortfeasor determination. (Countrywide Home Loans, supra, 69 Cal.App.4th at p. 797, fn. 9.) The appellate court in that matter also relied on longstanding authority that the goal of resolving the joinder question with "'reasonable promptness,'" is consistent with deferring that decision until adequate information is available: "'"Thus the relationship of an absent person to the action, and the practical effects of an adjudication upon him and others, may not be sufficiently revealed at the pleading stage; in such a case it would be appropriate to defer decision until the action was further advanced. . . ."'" (Id. at p. 793, fn. 5, quoting Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15, 22.)
The judgment is affirmed in part and reversed in part. We remand the matter to permit plaintiffs to amend the FAC to remedy the defects identified in this opinion. The parties are to bear their own costs on appeal.
ARMSTRONG, Acting P. J. MOSK, J.