Lago Agrio: Cards On The Table

Texas Holdem

Letters Blogatory Puts its Cards on the Table

I have been hearing criticism off-line about the editorial slant of my coverage of the Lago Agrio case (though nothing compared to the drubbing I took from unsuccessful litigants in the Belfast Project case). Why has my coverage become so favorable to Chevron, and so unfavorable to the Lago Agrio plaintiffs? I figure it’s time to put my cards on the table in the hopes of clarifying the editorial stance of Letters Blogatory, to the extent it has one. And so, in the interests of full disclosure, here are some editorial thoughts on where I think things stand in the Lago Agrio case, and where I stand on it.

  • I hear sometimes from people without a role in the Lago Agrio litigation itself, but more often, I hear from people who are involved in various capacities with one side of the dispute or the other. Most or all of them are paid advocates. Just to be perfectly clear, I am not paid by anyone to write, or not to write, anything. I have no stake in the case. No one has offered me anything at all to take any particular stance. The blogosphere has a bunch of blogs sponsored by the litigants, and there are “real” reporters (e.g., Roger Parloff, Michael Goldhaber, and Alison Frankel, to name some of my favorites) who cover the case in some detail. I think I am one of the few, if not the only, law bloggers who provides extensive but independent coverage of the case for an English-speaking audience.
  • My coverage of issues concerning whether there was fraud in the Ecuadoran proceedings has been favorable to Chevron because, having read lots and lots of papers filed in courts around the country, including deposition transcripts, exhibits, affidavits and declarations, and briefs, I am persuaded that the representatives of the Lago Agrio plaintiffs acted wrongfully and egregiously in Ecuador. The key examples, which I have focused on in my coverage, are the Cabrerra and Calmbacher reports. The new allegations from Judge Guerra are also highly troubling, though I have noted serious doubts about his credibility. It doesn’t help that various former allies, such as Calmbacher, Burford Capital, and Reyes, now also accuse the LAP team of misconduct. Nor do the claims of the Huaorani against Donziger put the LAP team’s conduct in a good light. I am not an Ecuadoran lawyer, but I am not persuaded that what apparently happened with Cabrerra or Calmbacher was permissible under Ecuadoran law, and if it was, it calls the impartiality of Ecuadoran law into substantial question in my mind.
  • On the other hand, my coverage of what I see as the most interesting legal issues has been generally favorable to the LAPs, not to Chevron. Take the Naranjo case. While I did not agree with the Second Circuit’s reasoning, I came out strongly in favor of the outcome on grounds of comity (and on the grounds that, by signaling that they did not intend to seek recognition of the Ecuadoran judgment in the United States, there was no true case or controversy). But perhaps more importantly, I have consistently argued, unlike almost every commentator I know, that even if the courts of Ecuador were not impartial or did not provide parties with due process, the LAPs still have strong arguments in favor of recognition and enforcement on an estoppel theory. The notion is that Chevron, by pushing so hard to have the case transferred to Ecuador, cannot be heard to complain about the quality of Ecuador’s courts, even if there was a change for the worse in the quality of the courts when President Correa came to power. And I have argued that Chevron should not be allowed to make case-specific arguments of fraud, since such issues should be left to the Ecuadoran courts to sort out. These arguments were the focus of my contributions to the Letters Blogatory on-line symposium on Forum Non Conveniens and Recognition and Enforcement of Judgments. I haven’t just made these arguments here at Letters Blogatory—I made them in a talk I gave at the University of Pennsylvania Law School and in a forthcoming short essay in the Penn Journal on International Law. Sure, there are complications, such as the wording of the stipulation Chevron entered into as a condition of the forum non conveniens dismissal, and the possibility of an unclean hands defense to the equitable argument I am proposing. Still, I think it is fair to say that my coverage of the legal issues has been consistently favorable to the plaintiffs.
  • Okay, but why did I have to call Chevron’s lead lawyer, Randy Mastro, “Maestro?” Why did I have to say he hit a “home run?” Look, I think that Gibson Dunn has done something pretty remarkable. They recovered from the worst litigation strategy decision in history (the forum non conveniens motion) and engaged in a pathbreaking discovery effort that has led to evidence that has a realistic shot of making the Ecuadoran judgment worthless in the United States and perhaps elsewhere. (The second worst litigation strategy decision in history, by the way, was bringing the film crews along for the ride in Ecuador). I mean, that’s just pretty darned impressive, both as a legal matter on account of the novel uses of § 1782 and the novel (though ultimately unsuccessful) arguments in Naranjo, and as a PR matter. I’m talking about Mastro’s skill as a surgeon, and not commenting on the moral qualities of the patient etherized upon his table.
  • It may be that the LAPs are significantly outgunned in the North American judicial proceedings (though I note that they have excellent and highly reputable counsel in the United States and in Canada). I get that. But they are playing in the big leagues for billions of dollars. Life is unfair. Surely if the expected value of the case is high enough, there is litigation funding to be had. One could say that the absence of litigation funding provides a signal about what the market thinks about the LAPs’ ultimate likelihood of collection.
  • In general, I would say that the direction of my coverage has varied with the success or lack of success the parties have had in court at various times. So one answer to any LAP partisan who is concerned about the direction of my coverage is: win more cases! If you win recognition and enforcement of the judgment in Canada, I guarantee a big flashy article. Better yet, seek recognition and enforcement in the United States, and take my estoppel theory for a spin! I understand why you don’t think that’s a real option in Judge Kaplan’s courtroom, given his leanings, but hey, you’ve won in the Second Circuit before!

I hope this clarifies Letters Blogatory’s stance on this case. I strive to be fair and objective, and I welcome comments, on-line or off-line, from readers who think I can do better.

Photo credit: Todd Klassy

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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