Case of the Day: In re Application of Chevron Corp.

From the Blogatory Lago Agrio desk, and from my home base here in Massachusetts, comes today’s case of the day, In re Application of Chevron Corp., Civ. A. No. 10-MC-30022 (D. Mass. 2010). We reviewed the background of the epic Ecuadoran environmental litigation in the January 14 post on Chevron Corp. v. Berlinger. Bonifaz, once the lead lawyer for the Ecuadoran plaintiffs, lives in Massachusetts, which accounts for the Massachusetts proceeding.

Judge Neiman proceeded with a healthy amount of skepticism towards the hyperbole on both sides of the case:

[Chevron and its executives] have asked this court to draw inferences that the Ecuador Plaintiffs and the Republic have engaged in improper collusion, fraud and manipulation of the judicial, legislative and political processes in Ecuador, all the while claiming that they themselves are free of any responsibility, whether civil or criminal, for the pollution of the Ecuadorian rain forest or the failure to remediate that pollution in accord with a prior settlement entered into between TexPet and the Republic. In response, the Ecuador Plaintiffs claim that Chevron and the Individual Applicants “have no intention of slowing down their novel § 1782 cottage industry that their lawyers have created.” “The process,” the Ecuador Plaintiffs assert, “is simply too effective at directing the limited resources of the Ecuadorian Plaintiffs—members of the indigenous communities of the Ecuadorian basin—and at serving as a deterrent to any consultant or lawyer who dares take up their seventeen year plight.”

The only party that played it straight, according to the judge, was the Republic of Ecuador itself:

For its part, the Republic, eschewing hyperbole, has taken a more measured approach, one that facilitates the court’s reliance on the Republic’s representations made in partial opposition to the two applications.

The court found that the applications satisfied the statutory requirements of the judicial assistance statute, and it exercised its discretion under the multi-factor test of Intel v. Advanced Micro Devices to grant the applications for discovery with respect to the Lagio Agrio suit itself and the Ecuadoran criminal prosecutions. Bonifaz was not a party to either proceeding; Bonifaz might have exculpatory evidence; and the executives facing the criminal charges were not attempting to evade fact-gathering restrictions in Ecuador.

But while Chevron’s application for discovery for use in the BIT arbitration also, in the court’s view, met the statutory requirements of § 1782, the court refused, it is discretion, to grant that portion of the application.  While some courts have held that the target of the discovery requests has the burden to show that the foreign tribunal would be unreceptive to the discovery sought, Judge Neiman, following the lead another Massachusetts judge had taken in a 2008 case, held that both parties should provide at least some proof of the foreign tribunal’s receptivity to the discovery sought. He found that neither party had offered adequate evidence on this point and that it was not even clear that the evidence sought was relevant to the limited issues pending in the arbitration.

The court limited the scope of the discovery that could be taken from Bonifaz, and it held, as have several other courts hearing Lago Agrio-related  § 1782 applications, that Chevron and the other applicants had failed to show that the crime-fraud exception to the attorney-client privilege applied.

No doubt we haven’t seen the last of Lago Agrio here at Letters Blogatory!

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 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is 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, 2014, and 2015.

3 thoughts on “Case of the Day: In re Application of Chevron Corp.

  1. For those who are interested in the Chevron saga, Louis M. Solomon has a post up about a recent Maryland decision under Section 1782 that parallels the Massachusetts decision.

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