Chevron Seeks Relief in the Second Circuit

Here’s an update on the quickly-moving Lago Agrio case, following on yesterday’s decision by the Ecuadoran appellate court affirming the multi-billion dollar judgment against Chevron.

  • Here is a copy of the Ecuadoran judgment, in Spanish, with portions translated.
  • Chevron has filed a motion with the Second Circuit asking the court to grant relief from its earlier order vacating Judge Kaplan’s preliminary injunction, which purported to enjoin the Lago Agrio plaintiffs from seeking recognition or enforcement of the Ecuadoran judgment anywhere in the world. Both the Kluwer Arbitration Blog and Opinio Juris have commentary about the new motion.
  • Chevron’s motion indicates that it has also asked the District Court to grant a temporary restraining order, though that motion does not appear on the District Court’s electronic docket as of now.
  • Chevron has asked the arbitral tribunal hearing its BIT claim against Ecuador to require Ecuador to inform it of the steps it has taken to prevent the enforcement of the Lago Agrio judgment, as the tribunal had earlier ordered.

A few observations:

First, what is the procedural hook for Chevron’s motion? It is not a petition for a panel rehearing or a petition for a rehearing en banc—both are now time-barred. Chevron has not cast it as a petition for an extraordinary writ. Instead, Chevron describes it simply as a motion under Rule 27 of the Rules of Appellate Procedure. Is it proper to seek what is, in essence, a full reconsideration of the earlier decision under Rule 27 in this way? I’m not sure—no doubt the Lago Agrio plaintiffs’ brief will let us know.

Second—I preface this by saying that I don’t know whether the Ecuadoran judgment is the product of fraud, as Chevron has alleged, or whether Chevron is in fact guilty of the environmental torts alleged. It may well be that the judgment is the product of fraud and that Chevron committed the torts. In any event, it seems to me that Chevron’s motion is unfair to the Lago Agrio plaintiffs insofar as it characterizes their promise to begin seeking to enforce the judgment right away in multiple jurisdictions as an “extortionate threat.” The Lago Agrio plaintiffs have won, in Ecuador at least, and it’s routine and unobjectionable for judgment creditors to start chasing judgment debtors’ assets wherever they may be found. That’s especially so when, as in this case, there is essentially zero chance that the judgment debtor will pay anything voluntarily.

Third, I think Chevron’s position—and Judge Kaplan’s original injunction—are not really consistent with comity. If the Ecuadoran judgment is as bad as Chevron says it is, why not make that case to the courts in the places where the Lago Agrio plaintiffs go to seek recognition and enforcement? Another way of putting this is that perhaps Chevron has not shown a risk of irreparable harm, as it must to justify a preliminary injunction.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012.

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