Update: Lago Agrio Plaintiffs’ Press Conference

I listened in today on a press briefing the Lago Agrio plaintiffs’ PR team organized to discuss the state of their efforts to obtain recognition and enforcement of the Ecuadoran judgment. The briefing was expressly timed to come shortly before the beginning of Chevron’s annual meeting of shareholders on May 29. (Psst…Chevron…expect protesters!) We heard from the lawyers heading up the LAPs efforts: Juan Pablo Saenz of Quito, Enrique Bruchou of Buenos Aires, Brendan Morrison of Toronto, 1 and Fabiano Robalinho of Rio de Janeiro.

There were two main messages. The first was: the LAPs are in it to win it and are going to proceed with their current actions, and with actions in a total of 30 states, to obtain “every last penny” due under the Ecuadoran judgment. The second was that Chevron has been misleading its shareholders about the risks Chevron faces. Apparently a new letter is on its way to the SEC from unhappy Chevron shareholders complaining about the company’s disclsoures to investors.

Let me pause on the second message for a moment. I’ve previously reported on earlier variations on the theme. But I have to say I don’t get it. Nothing we are hearing from the LAPs is new or previously unreported and unavailable to the public. Yet no shareholders have sued Chevron for securities fraud as far as I know, and Chevron’s share price seems to be doing okay. Assuming that the LAPs are right and that Chevron’s disclosures regarding its litigation risk understate the true risk to the company, isn’t there enough information publicly known about the case to allow the market to make its own judgments?

There were a couple of questions from the folks listening in on the call. One reporter asked how the recognition and enforcement cases were being funded. Mr. Saenz didn’t really answer the question: he said that the LAPs are in “constant negotiations” with litigation funders, but he didn’t identify any funders and didn’t really say whether they had funding. Given the Burford Capital situation and the motion of the US lawyers to withdraw from the US litigation on account of nonpayment of fees, I think whether the LAPs do have third-party funding is a real question.

I also chimed in with a question. I wanted to nail down what Mr. Bruchou and Mr. Robalinho were saying about the laws of Argentina and Brazil, respectively. From both of them, I heard that there is no possibility of challenging the Ecuadoran judgment on grounds that the Ecuadoran judiciary was systematically inadequate. I pressed on this point: is it really the case that neither Argentina nor Brazil would allow a systematic challenge like this in any circumstances? The answer I got was that an Argentine or Brazilian court would never, in any circumstances, refuse to recognize a judgment on such grounds because it would require their courts to sit in judgment on the courts of another sovereign state. (That’s not a quote, but that was the gist of the message).

Can this really be right? If Chevron proved that judges in Ecuador threw darts at a board to determine how to rule in a case, would Brazil and Argentina really feel obligated to recognize the judgment? You can come up with your own hypotheticals, too: would Brazil really recognize a judgment from the courts of a state that did not permit witnesses to testify unless they were members of the forum state’s official church? Would Argentina really recognize a judgment from the courts of a state that used trial by ordeal? I just think this can’t be right. But if it is right, then I think Chevron ought to worry about its future in Argentina and Brazil.

A couple of pieces of actual news from the conference: The appeal of the LAP’s defeat in Canada is likely to be heard in September of this year. The LAPs are going to have some “very exciting news” about their efforts to attach Chevron’s intangible property in Ecuador in the near future.

Notes:

  1. Morrison is not actually the lead Canadian lawyer; he works with Alan Lenczner.

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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