Summary of the Taipei District Court’s Verdict on Taiwan RCA's Second Group of Plaintiffs
Ya-Ying Tsai (Attorney at law) 27 December 2019
Translation by Paul Jobin (Academia Sinica) and Hsin-Hsing Chen (Shih-Hsing University)
On December 27, 2019, the Taipei District Court handed out a verdict for the lawsuit of the second group of former employees against Radio Corporation of America, Taiwan and its parent companies. Aside from affirming progressive legal precedence won by the first group of workers in their lawsuit since 2005, the Court has made progress in at least two vital points in this verdict: awarding a total sum to a group of victims for their collective damage, and recognizing genuine harm suffered by former workers who have been exposed to toxic substances but not yet diagnosed with serious physical illnesses. The following is a brief summary of this verdict.
Radio Corporation of America (RCA) closed its Taiwanese plants in 1992, leaving behind many injured workers and heavily contaminated land. Organized as the Taoyuan County Former Employees of Radio Corporation of America Care Association (also known as RCA Mutual Aid Association), the victims have launched two collective lawsuits, one started in 2005, and another in 2015.
On August 16 2018, the Supreme Court confirmed decisions by the lower courts for 262 plaintiffs among the 508 workers who joined the first lawsuit, mainly heirs of deceased workers (Group A of plaintiffs) and former workers with diagnosed severe diseases (Group B). 246 plaintiffs were sent back for retrial at the High Court, mainly Group C workers who had no apparent disease and Group B workers whose illness was not identified as related to the pollution at RCA. Final debate at this High Court trial was held on 5 December 2019 and the verdict will be pronounced on 6 March 2020.
The second group of 1,120 plaintiffs filed their collective lawsuit in 2015 after the Taipei District Court ruled in favor of the first group of RCA workers. On 27 December 2019, Taipei district Court finds for 1,115 plaintiffs among this second group and awarded a total of 2.333 billion of Taiwan Dollars (TWD, approximately 77.5 million USD) as collective damage.
[Highlights of the December 2019 Decision]
Q1. What is the total amount of compensation?
The three defendants RCA (Taiwan), Technicolor (of France), and Thomson Consumer Electronics (Bermuda) Ltd. Are found jointly and severally liable for TWD 2.333 billion in compensation to the plaintiffs, with 5% annual interest.
The defendant General Electric Company (of USA) has ceased to be a controlling company of RCA Taiwan since January 1989. It is therefore held liable, jointly and severally with the three other defendant companies, for TWD 2.285 billion in compensation to the plaintiffs, with 5% annual interest.
Joint and several liability, also known as all sum liability, means that damage payment by any one of the defendant companies will be deducted from the total amount of liability of other defendant companies. How the four defendant companies exactly divide up the total payments is for them to decide.
Q2. What is a “total sum for a collective damage”?
The court does not specify amount of damage awarded to each plaintiff. Instead, Taipei District Court cites Article 44-1 of the Civil Procedural Law and award a total sum to the RCA Mutual Aid Association as the appointed party of all plaintiffs. How this total sum is to be distributed among individual plaintiffs is left for the Association to decide according to agreements among its members.
Q3. Amounts awarded to each group of plaintiffs?
Group A plaintiffs; 82 heirs of deceased workers: TWD 492 million;
Group B1; 240 former workers with cancer or other severe illnesses: TWD 960 million;
Group B2; 106 former workers with other illnesses: TWD 212 million;
Group C; 639 former workers not yet diagnosed with severe illnesses: TWD 639 million.
Q4. Reasons for compensation?
1) During RCA’s operation in Taiwan, its factories have used, or had been found to exist in the working environment, a total number of 31 chemical substances. At least 22 of which are known to be pathogenic for humans. The company has repeatedly violated laws protecting other persons, exposing workers to hazardous chemicals through inhalation, ingestion, and skin contact. Concentrations of hazardous chemical substances left in the soil of the plant site still exceeds safety standard even years after the plant closed.
2) Scientific research has found that the health risks of cancer and other illnesses for residents downstream from the site of RCA Taoyuan Plant exceed the acceptable standards set by U.S. Environmental Protection Agency. And the health risks borne by workers must be higher than those borne by the residents because of their closer contact with hazardous chemicals at RCA.
3) The diseases suffered by Group A and B plaintiffs are related to combined exposure to these various chemical substances, and workers in group A died as a result.
4) Although group C plaintiffs have not yet been diagnosed with serious disease, they have been exposed over a long time to genotoxic substances such as trichloroethylene, which may go through the layers of defense mechanisms and cause genetic mutations, entailing "micro-level" damages to the integrity of the DNA sequence, and the damaged DNA may not be completely repaired. Due to the previous exposure, the integrity of the physiological functions has been damaged, with an increased risk of health problems for the workers and their offspring, causing unhealthy negative emotions, and the right to health has thus been violated.
5) RCA Taiwan had conducted measurements on the levels of concentration of organic solvents on the shop floor, and sent the records back to the parent companies at least on a yearly basis during its operation. However, RCA has failed to produce such evidences during the entire course of the litigation. Instead, the company may very well be concealing the evidence all along. Given the vast disparity in wealth, access to information, professional knowledge and expertise between the company and the workers that has combined to produce a systemic bias in favor of the companies, the burden of proof should be shifted away from the plaintiffs for the sake of equity. The court has decided that it is sufficient for the plaintiffs to prove the existence of “reasonable possibility” of causation.
6) It can be deducted that a certain chemical substance is a pathogenic factor of a certain disease, and that general causation exists between such a substance and such a disease, as long as there are reports from scientific authorities such as the International Agency for Research on Cancer (IARC), the U.S. Environmental Protection Agency (U.S. EPA) and U.S. Centers for Disease Control and Prevention (CDC) showing such a link.
Q5. Why should companies other than RCA Taiwan be responsible?
1) Thomson (Bermuda) has always been a controlling company of RCA Taiwan. Before GE transferred the consumer electronics business to Thomson SA (later renamed Technicolor) on December 31, 1988, GE was the controlling company of RCA. GE should also assume all rights and obligations of RCA after it acquired the company. Since Technicolor indirectly holds 99.5% of Thomson (Bermuda), it is also a controlling company of RCA.
2) Throughout the years, the chairman of the board, directors and supervisors of RCA are mostly foreigners. The company’s shareholders' meeting and board of directors meetings were almost all held in the United States, France, Singapore and other places. It can be recognized that GE and Technicolor, through Thomson (Bermuda) exercised complete control of RCA Taiwan.
3) Before GE transferred its consumer electronics department to Thomson S.A., it commissioned a consulting company to investigate the environment as part of the due diligence process. At the time of the contract, the two companies must therefore be aware, or in a position to become aware, of the pollution problem. However, both companies failed to disclose this information, condemning the workers to further exposure to the polluted environment.
4) Underground water wells No. 3 and No. 5 in the factory area still functioned normally in 1990. However, during the 1996 environmental investigation, they have both been sealed off and buried. This is a proof of RCA’s active concealment of evidence for its pollution.
5) RCA and its parent companies colluded in remitting more than USD 150 million abroad, in the name of reducing capital, between July 1988 and November 1989, and more than USD 100 million between July 1998 and December 2001, after the pollution problem was publicly revealed, in violation of the Foreign Investment Act. Thus, when the plaintiffs filed a motion for provisional attachment of the assets of RCA Taiwan in 2002 for the purpose of litigation, the company had only several million TWD left in its bank accounts in Taiwan. This is an obvious malicious transfer of assets for the purpose of evading debt. Thus, according to the legal principle of “piercing the corporate veil,” GE, Thomson (Bermuda), and Technicolor shall be held jointly liable for the damages.
Q6. Why did the judges reject the statute of limitations argued by the defendants?
For the sake of public interest and equity, the defendants’ claim to apply the statute of limitations (prescription period, or the time limit for a plaintiff to take legal action against a defendant) shall be seen as an abuse of rights and shall not have any legal effect.
1) In the present case, the defendants had continuously and illegally polluted the environment with chemicals which remained toxic for a prolonged period, resulting in a lot of diseases among the workers. The workers had no idea about their being exposed to such dangerous chemicals, since the information was in the hands of RCA and its parent companies.
2) The damage suffered by workers due to exposure to chemical substances is very special. Causation can only be established through data acquired through scientific research such as epidemiology. Such burden of proof is not affordable to individual workers. Therefore, the workers should not be expected to exercise their rights in time.
3) RCA has not only neglected its duty of care to its employees, but it has also failed to inform them of possible harm, and even concealed relevant evidence after knowing it, and maliciously avoided debts by means of capital reduction and transfer of assets abroad. RCA has never provided information about the list of chemicals used in its plant, how much they are used, how they were disposed, and how long they were used. This resulted in epidemiological studies on workers studies failing to find sufficient data to determine the causation, which impeded the victims’ ability to take legal actions.
Q7. Why are the cases of 5 plaintiffs rejected by the court?
Two Group A workers failed to prove that the disease they have suffered from are related to chemical exposure at RCA. One failed to produce proof of employment at RCA.
One Group B2 worker was employed for only 11 days by RCA. One Group C worker was employed for only 6 days. The Court considers it impossible to recognize their health damages are related to chemicals used at the RCA plant.