Update on Chevron Corp. v. The Weinberg Group

E. Barrett Prettyman  U.S. Courthouse, Washington, D.C.What is Chevron Corp. v. The Weinberg Group (D.D.C. 2011), you may ask? That’s what I asked after reading today’s story in the BLT. In September 2011, Magistrate Judge Facciola, of the U.S. District Court in Washington, issued an order compelling the Weinberg Group to produce documents to Chevron. Why didn’t Letters Blogatory report on the decision? Simple—Westlaw did not publish the decision, so my daily query for all things Lago Agrio didn’t pick it up. Mea culpa!

Weinberg is timely because it deals with the Cabrera report, one of the expert reports whose authorship was one of the subjects of my recent post on Doug Cassel’s latest memorandum, and the authorship of the Ecuadoran judgment itself, which my post also addressed. According to Chevron, after problems with the Cabrera report emerged, the Lago Agrio plaintiffs hired experts to “cleanse” the Cabrera report. Weinberg was to coordinate the new experts’ work. Chevron asserted that the crime-fraud exception to the attorney-client privilege applied. The Lago Agrio plaintiffs say that Chevron has offered nothing more than suspicion and speculation and has not met its burden to prove an exception to the ordinary rules of privilege that would bar discovery of the Weinberg Group’s documents. 1

Although Chevron’s motion to compel was heard in Washington, the case arose on a subpoena issued in the New York litigation in Judge Kaplan’s court. (Under Rule 45(a)(2), subpoenas for the production of documents must issue “from the court for the district where the production … is to be made” rather than from the court where the action is pending). Judge Facciola’s basic decision was that since Judge Kaplan had already found that the work Weinberg had been hired to do was part of an effort to defraud the Ecuadoran court, he was more or less required by reasons of comity to adopt Judge Kaplan’s findings:

A judge in this case has concluded that there was sufficient evidence that the process by which one report was replaced by a second was fraudulent and a second judge, basing his conclusions on those findings, held that this prima facie showing meant that persons and groups involved in that process could not claim the attorney-client or work product privileges. The Weinberg Group does not even hint at a legal principle that would require me to disregard those findings. The most fundamental principles of comity and the efficient administration of justice compel the conclusion that when the court that will ultimately try a matter has reached conclusions that speak directly to a claim of privilege, another court should accept those conclusions except in the most extraordinary situations.

But Judge Facciola went on to say that “if the question were an open one, I would find that the evidence marshaled by Judge Kaplan … convinces me that there is more than sufficient evidence of a prima facie case that the Weinberg Group’s work was part of a fraud upon the Ecuadorian court.”

The Lago Agrio plaintiffs appealed. They sought and received an emergency stay, but the next day, the Court of Appeals dissolved the stay, though it restricted Chevron’s use of the documents to the New York litigation only.

Although some or all of the documents had already been produced to Chevron, the appeal went forward. For any die-hards out there, here is the plaintiffs’ brief and here is Chevron’s brief. Unfortunately, the D.C. Circuit does not post audio of oral arguments on its website. However, the BLT article suggests that the likely outcome is a loss for Chevron and a remand to the District Court for further proceedings. Judge Tatel seemed concerned about whether the District Court had asked the right question when evaluating the crime/fraud claim. According to him, the issue was not whether the Weinberg documents were simply related to the alleged fraud, but rather whether they were created in furtherance of the fraud. And Judge Kavanaugh seemed concerned about whether, in light of the Second Circuit’s later decision vacating Judge Kaplan’s preliminary injunction, Judge Facciola’s reliance on Judge Kaplan’s factual findings was still sound (though as noted, Judge Facciola was careful to indicate that he had an independent basis for his ruling).

Photo credit: U.S. Court of Appeals for the District of Columbia Circuit

Notes:

  1. I refer to the Lago Agrio plaintiffs, though actually the parties arguing against the motion to compel were the Weinberg Group, Hugo Gerardo Camacho Naranjo and Javier Piaguaje Payaguaje.

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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