Case of the Day: In re Chevron Corp.

The Third Circuit returns to Lago Agrio in today’s case of the day, In re Chevron Corp. (3d Cir. 2011); previously the court had approved Chevron’s request for judicial assistance to obtain discovery from UBR, a New Jersey environmental firm that the Ecuadorian plaintiffs had hired in the underlying case. Our previous coverage of the case is here.

In today’s case, Chevron and two of its attorneys, Rodrigo Pérez Pallares and Ricardo Reis Veiga, sought discovery from Joseph C. Kohn, a lawyer, and from his firm, Kohn, Swift & Graf, P.C., for use in the Lago Agrio civil case in Ecuador, the criminal case against Pérez and Veiga in Ecuador, and the BIT arbitration.  The district court had granted Chevron’s application for judicial assistance, and Kohn and his firm appealed. The main issue on appeal was whether the district court had erred when it held that the filming of the documentary Crude, including outtakes highly embarrassing to the Ecuadorian plaintiffs, had waived the attorney-client privilege due to the presence of filmmakers at the time of the filming. The district court reversed, handing the Ecuadorians and their lawyers what is, by my tally, a rare victory in their fight against Chevron’s wide-ranging efforts to obtain discovery in the United States. The victory comes, however, with a caveat: the court remanded for consideration whether any of the communications Chevron sought to discover came within the crime-fraud exception to the attorney-client privilege.

According to the court, the Crude outtakes, which Chevron obtained after filing a successful application for judicial assistance in the Southern District of New York, contained somewhat less than two hours of footage showing Kohn, but among the footage was a discussion between Kohn and Donziger, one of the Ecuadorian’s other lawyers and Chevron’s bête noire,  in which Donziger told Kohn that the Ecuadorian plaintiffs’ lawyers had submitted a report to the Ecuadorian attorney general stating that Texaco (Chevron’s predecessor in interest) had not completed the environmental remediation it was required to do but nevertheless claimed that it had. In the same clip, Kohn said, somewhat mysteriously: “So, again, that may be something that we could facilitate going away at the right time … if [Chevron] wanted it to go away.” Chevron claimed that Kohn was saying that the plaintiffs’ lawyers could make the criminal charges against Chevron and its lawyers “go away.” Kohn says he was saying that the report submitted to the attorney general could be withdrawn if a settlement was reached.

Chevron’s position was that by “inviting a documentary film crew to attend and record attorney meetings and other events where confidential matters were discussed, the Lago Agrio plaintiffs waived any otherwise applicable privilege or work-product protection for documents relating to the Lago Agrio Litigation.” The Ecuadorians turned this on its head and argued that because the filmmakers were present, the attorney-client privilege had never attached to the communications that took place in their presence, and thus that the privilege that did attach to other communications had never been waived.

The court basically bought the Ecuadorian’s argument, noting that the communications recorded in the outtakes were not made in confidence and thus were not privileged in the first instance. Thus there could be no waiver, since a waiver requires the voluntary disclosure by the client of a privileged communication.

However, Kohn and the Ecuadorians are not out of the woods. The court remanded for a consideration of the crime-fraud exception, though in dicta, it expressed doubt that Chevron had made a prima facie showing that the exception applied.

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 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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