Tag Archives | Ecuador

Roger Parloff is reporting that Judge Nicolás Zambrano Lozada did not appear at a scheduled deposition today in Peru where he was scheduled to testify. Recall that theLago Agrio plaintiffs had submitted a declaration from Judge Zambrano rebutting the claims of corruption made by Judge Alberto Guerra Bastidas in a declaration that Chevron had earlier filed.

Now before anyone gets too excited, let’s bear in mind that Judge Zambrano lives and works in Ecuador, and as far as I can tell from Roger’s reporting, he was not under any compulsory process (I don’t know the Peruvian equivalent of a subpoena) to appear. Let’s think about how this would play out in a simpler lawsuit here in the United States. Suppose I sue you in the federal court in Boston, and in opposition to my motion for summary judgment you submit a declaration by a witness who lives and works in California. If I want to take the deposition of the declarant, and if the declarant isn’t someone you control (e.g., your employee or your agent), I am going to have to go to California. You, I, and the declarant could negotiate some other arrangement—we could meet in St. Louis—but the basic rule is that a non-party declarant can’t be compelled to travel to suit the convenience of the parties. If you are interested in the details of this, take a look at FRCP 45(b)(2), which spells out the rule and which states the handful of exceptions, e.g., the 100-mile “bulge jurisdiction” that comes in handy in my neck of the woods pretty often, given that bits of all of the New England states are within 100 miles of Boston. Sure, the case in Judge Kaplan’s court is complex and sprawling and difficult to get your arms around, but it’s governed by the same rules of civil procedure that govern all proceedings in the District Court, and the rule is that you can’t compel the attendance of a non-party at a deposition, with very limited exceptions, absent a subpoena, full stop.

So in an ordinary case, it seems to me that Judge Zambrano would be entirely within his rights to refuse to travel to Peru to testify, and indeed, to refuse to testify without compulsion even in Ecuador, if he chose. Let Chevron obtain a letter rogatory requesting judicial assistance in Ecuador. The twist in this case is that Judge Kaplan has ordered the depositions of Ecuadoran witnesses to take place in Peru because Chevron has asserted that its lawyers “would face reprisals and possible criminal prosecution if they set foot in Ecuador,” according to Roger’s report. Let’s assume that that’s so: I don’t see how it changes the obligations of Judge Zambrano.

Chevron has moved for leave to assert counterclaims against the Lago Agrio plaintiffs’ US law firm, Patton Boggs.

I have to say I think Chevron may have jumped the shark with this latest claim. I don’t want to go through the details of the counterclaim’s allegations, but let’s just take a look at the three counts.

Count one is a count for fraud. This is yet another example of a fraud claim that lacks any allegation that the party making the claim relied on the supposed truth of a misstatement of fact made by the party it’s suing. As I noted in the earlier post, Judge Kaplan has held that New York law permits such claims, and maybe it does. I don’t think much of this theory. If this is what New York law provides, then it’s clearly an outlier, and I see no real policy behind permitting a recovery for fraud in the absence of reliance.

Count two is a count for deceit under §487 of the New York Judiciary Law. This seems to me to be potentially the strongest of Chevron’s three claims, because unlike the fraud claim, § 487 seems squarely aimed at the kind of misconduct of which Chevron is accusing Patton Boggs. (I qualify that remark by reminding readers that I’m not a New York lawyer and am not really familiar with the precedents under § 487). Some of the factual allegations are difficult to understand. For example, in ¶ 75, Chevron accused Patton Boggs of “actively conceal[ing] its representation of the LAPs before the Southern District of New York.” Aside from the question of damages—how did this harm Chevron?—the very same paragraph alleges that another lawyer “revealed to the court” at the outset of the case that Patton Boggs was involved. Similarly, Chevron accuses Patton Boggs of arranging for litigation funding and taking a contingent interest in the outcome of the case, but so what? That’s how every big contingent fee case works. Chevron accuses Patton Boggs of seeking a continuance of the trial date for Chevron’s injunction claim on untrue grounds, but again, so what? Chevron, as we now know, wasn’t entitled to the injunction in the first place. And Chevron accuses Patton Boggs of misstating the evidence in oral argument at the Second Circuit; again, couldn’t Chevron have brought the misrepresentation to the Court’s attention? I’m not condoning misstatements to the courts, ever. I’m simply suggesting that maybe a complaint to the New York equivalent of the Board of Bar Overseers rather than a lawsuit is the appropriate remedy.

The only really serious allegations in count two, it seems to me, ¹ are that Patton Boggs misstated to the court the truth about the Cabrera report. But Chevron doesn’t seem to be saying that Patton Boggs itself was involved in the ghostwriting of the Cabrera report. Take a look at ¶¶ 88 and 89, which seem to distinguish very carefully between “the LAPs’ attorneys”—a general term—and Patton Boggs specifically. In short, this is the closest Chevron comes—it may be enough, though we will need to wait for the evidence.

Count three is a count for malicious prosecution. Patton Boggs has sued Chevron three times—twice seeking a declaration that its acquisition of the Breaux Lott Group, a lobbying firm that had previously represented Chevron, did not create an impermissible conflict of interest that would bar it from representing the LAPs, and once seeking a remedy under the bond Chevron had posted when it obtained the worldwide anti-suit injunction from Judge Kaplan that the Second Circuit later struck down. It seems to me that the second suit seeking a declaratory judgment pretty plainly lacked merit from the outset for the reasons I gave in a prior post (I also covered the DC Circuit’s decision affirming dismissal of the two declaratory judgment actions). But the first declaratory judgment suit and the claim on the bond, while ultimately lacking merit, hardly seem so beyond the pale as to justify a malicious prosecution claim. Frankly, I would say the same of the second declaratory judgment suit. Patton Boggs’s argument against giving the first decision preclusive effect was weak, but at least it had an argument. If lawyers went around suing their adversaries every time they made meritless claims, then I suppose Chevron might well be on the hook for seeking to attach Steven Donziger’s assets without any proof of damages, twice.

In short, I am not a fan of these claims.

A big development in the Lago Agrio case yesterday … Magistrate Judge James C. Francis IV has approved the Lago Agrio plaintiffs’ bid to take the depositions of Chevron’s chairman and CEO, John S. Watson, of Chevron’s VP and General Counsel of the Global Upstream and Gas Group, Edward B. Scott II, and of Kroll, Inc., a firm that Chevron hired in connection with the litigation and that the LAPs claim led a dirty tricks campaign of bribery and surveillance in Ecuador. The Watson and Scott depositions are so-called “apex depositions” of very high-ranking Chevron officials. Apex depositions are relatively rare, and they usually require a fairly detailed showing of necessity. Here, the magistrate judge applied a relatively relaxed standard in light of the short time remaining in discovery:

Under other circumstances, it might be prudent to defer Mr. Watson’s deposition until it could be determined whether his testimony would likely be redundant to that of other witnesses. Here, however, we do not have that luxury, as discovery is to be completed by the end of this month. Finally, this is far from a trivial case. Enough is at stake to justify the deposition of an apex witness like Mr. Watson.

The deposition of Kroll is particularly interesting. The main issue seems to be privilege and work product, and the judge refused to find a blanket privilege that would justify blocking the deposition altogether. It will be interesting what hay the LAPs can make with Kroll. The LAPs believe that Kroll was involved in an effort to bribe former Ecuadorian Judge Alberto Guerra, who gave a devastating declaration claiming that the Ecuadoran judgment was the product of fraud and corruption. I noted in my earlier post that in light of the serious reasons to doubt Guerra’s credibility, his declaration should not be accepted without corroboration. The flip side of corroboration is impeachment, and we will have to see whether Kroll’s testimony leads to effective impeachment of Guerra’s testimony.

Under FRCP 72(a), Chevron has a right to object to the magistrate judge’s order and seek a decision from Judge Kaplan. Will anyone be surprised if Chevron raises objections? And one more question: in light of the proposed withdrawal of counsel for Donziger and the LAPs, who will take these depositions, if they go forward?