Case of the Day: In re Veiga

In today’s case of the day, In re Veiga (D.D.C. 2010), we return to the Lago Agrio epic. In this installment, Chevron and its lawyers, Rodrigo Pérez Pallares and Ricardo Reis Veiga, sought to compel the deposition in the United States of Alberto Wray Espinosa, and the production of documents. Ecuador and the Lago Agrio plaintiffs intervened in the case. Chevron and its lawyers sought the evidence for use in the Lago Agrio civil case in Ecuador, the Ecuadoran criminal case against Chevron’s lawyers, and the BIT arbitration between Ecuador and Chevron. Our prior Lago Agrio coverage can be found here. If you’re not familiar with the case, I suggest reading some of the earlier posts before proceeding, because I’m going to jump right in. By way of providing a road map, I’m going to review the case and the judge’s application of the Intel analysis before reaching what I think is the most interesting part of the decision: does § 1782 allow the court to order a person within its jurisdiction to produce evidence, even if the evidence is not located in the United States?

Chevron and its lawyers wanted Wray’s testimony and documents  because Charles W. Calmbacher, Ph.D., who had been a technical expert for the Lago Agrio plaintiffs, had earlier testified that two expert reports the plaintiffs had filed in his name in the Ecuadoran case “purport to reach conclusions—namely, that there was harmful environmental contamination—that he did not actually reach.” Dr. Calmbacher testified that the reports had been prepared in Wray’s office. Chevron evidence about the Calmbacher report and, more generally, the expert reports used in the Lago Agrio case.

Judge Kollar–Kotelly began with the first challenge Ecuador and the Lago Agrio plaintiffs presented: they claimed the evidence was not “for use” in the foreign proceedings, as required by the statute. The judge’s inclination was to avoid engaging in a searching analysis:

Although the discovery sought must be “for use” in a foreign proceeding, district courts need not determine that the evidence would actually, or even probably, be admissible in the foreign proceeding. In fact, courts should generally refrain from doing so, and leave it to the foreign tribunal to decide what use it wants to make of the evidence obtained. That is not to say that the district court is free to accept an applicant’s request on blind faith; but the burden imposed upon an applicant is de minimis. 

The Interested Parties cannot credibly dispute that the Applicants seek discovery with the intention of submitting it for consideration in the Lago Agrio Litigation, the Criminal Proceedings, and the BIT Arbitration. Their resistance, at its core, reduces to a quarrel as to the Applicants’ theory of those proceedings and the underlying validity of the claims and defenses asserted therein, supported with little more than alternative interpretations of the evidence relied upon by Applicants. These objections are better left for the foreign tribunals to resolve. Surely, in enacting § 1782(a), Congress did not intend for district courts to assess the weight of individual pieces of evidence in excruciating detail, and then attempt to discern the precise nexus between such evidence and the claims and defenses raised in the foreign proceeding. Indeed, such an effort would run counter to the salutary statutory objective of providing fair and efficient assistance to participants in international litigation.

(Citations omitted). However, the judge went on to consider in detail the various topics on which the applicants sought discovery and concluded that as to each of them, Chevron and its lawyers had met the minimal burden imposed by the statute.

The judge also rejected the second challenge to her power to grant the application, namely the argument that the BIT arbitration was not a proceeding before a “tribunal.” The judge followed the other district court cases that had held that it was, and she expressly noted that cases rejecting application of the statute in private international arbitrations were inapposite. (Speaking editorially, I think that this is right. I have previously explained why I think the statute should not be read to extend to foreign private arbitrations, but I think the arguments against application of the statute in that context do not really apply in the BIT arbitration context).

Turning to the Intel discretionary factors, the judge ruled that they favored granting the application. Although Wray represented that he would submit himself to the jurisdiction of the Ecuadoran courts for purposes of their discovery orders (this is an amusing role reversal given Chevron’s representations about submitting to the Ecuadoran courts when Chevron argued for dismissal of the original New York proceedings on forum non conveniens grounds). But the court noted that Wray had not actually done anything to submit himself to the Ecuadoran courts and found the prospect that he would do so merely hypothetical. Thus the first discretionary factor—the jurisdiction of the foreign court—favored Chevron. The second factor, the receptivity of the foreign court to the evidence, also favored Chevron. While the Lago Agrio plaintiffs might well turn out to be right that the Ecuadoran courts would not accept evidence tending to show that the Ecuadoran proceedings had been riddled with corruption, they did not meet their burden of offering “authoritative proof” that the evidence would be rejected. The judge summarily rejected the plaintiffs’ weak arguments on circumvention of foreign proof-gathering restrictions and the scope of the discovery sought.

This brings us to what I think is the most interesting part of the opinion. Some of the documents Chevron sought were not located in the United States. While in Norex Petroleum Ltd. v. Chubb Insurance Co. of Canada, 384 F.Supp.2d 45 (D.D.C. 2005), Judge Kollar–Kotelly rejected an application for judicial assistance on the grounds that the statute did not authorize discovery of documents not located in the U.S. But she noted that since Norex, a split of authority had developed. Compare In re Application of Eli Lilly & Co., 2010 WL 2509133, at *4 (D.Conn. June 15, 2010); In re Application of Gemeinshcaftspraxis Dr. Med. Schottdorf, (rejecting geographic limitation on production of documents) with In re Application of Godfrey, 526 F.Supp.2d 417, 423 (S.D.N.Y.2007); In re Application of Microsoft Corp., 428 F.Supp.2d 188, 194 n. 5 (S.D.N.Y.2006) (respondent cannot be compelled to produce documents located outside the United States). But rather than revisiting her earlier ruling, Judge Kollar-Kotelly held that whether or not the statute had a per se bar to discovery of documents located abroad, she had discretion to deny the application to the extent it sought documents outside the United States. She denied the application to the extent it sought documents located in Ecuador and deferred to the Ecuadoran court:

In this instance, this Court will defer to the sovereign courts of Ecuador to determine the propriety of the discovery of documents located exclusively within its jurisdiction. Indeed, particularly in light of the allegations made against a sovereign state, the Court is reticent to intrude upon what is more properly the province of the Ecuadorian courts.

The judge’s decision on this point was not surprising—she avoided having to reconsider her own precedent but still reached the same result she would have reached had the precedent applied. But this developing split of authority will bear watching. My preliminary view is that there should not be a pre se rule. Comity is generally a matter of discretion and weighing the relevant factors. As long as the person from whom discovery is sought is “found” within a judicial district of the United States, as the statute requires, the court’s jurisdiction over the person of the respondent should be enough to give the court the power to order him or her to produce documents in his or her possession, custody, or control, wherever located. But comity considerations will sometimes suggest that the court should not make such an order.

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.

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