Dear Ted,

Thanks for this reply. I agree entirely with your first paragraph.

I haven’t looked at the libel question, but it strikes me as beside the point for the issue at hand — whether Chevron has constitutional standing to bring the RICO case. Since there was, is, and will continue to be reputational harm, that satisfies the harm prong for standing.

I agree that a Canadian ruling against Chevron would not help the company’s reputation. But again, that is not the issue in regard to constitutional standing. The issue is whether the relief sought by Chevron in the RICO case would help to redress the harm to its reputation caused by Donziger. It would.

Best wishes – doug

Thanks, Doug. I guess my point about “undermining” the RICO action is this: suppose the Canadian court enforces the judgment. By hypothesis, the Canadian courts are fabulous and would not enforce a judgment that was not entitled to recognition and enforcement. So if the gist of the RICO claim is that the Ecuadoran litigation is a fraud and a sham, then isn’t that claim undercut by a Canadian finding that rests on a determination that the Ecuadoran litigation was not a fraud and a sham? (This, by the way, is just the mirror of an argument I think we can expect Chevron to make if it wins the RICO case before the Canadian court makes a decision on recognition and enforcement. Won’t Chevron say that the RICO case outcome shows that the Canadian court cannot recognize and enforce the Ecuadoran judgment?)

I quote Chevron’s claim about reputational harm in my post. The notion of reputational harm is just odd here, to me at least, because Chevron has not brought a defamation claim, and the defamation torts are the usual remedy for those seeking to remedy harm to reputation. (Of course, there would be challenges to a defamation claim, e.g., the litigation privilege, and probably a malice requirement). Could Chevron have brought a defamation claim that avoided a jury trial, i.e., that sought only an injunction? I don’t see how, but maybe I am missing something. (Off-the-cuff, I assume that you can’t avoid a jury trial by saying that you’re just seeking nominal damages, but I could be wrong about that). In any case, I still don’t get the force of the reputational harm point, because Chevron is not seeking to enjoin foreign recognition and enforcement proceedings, and if, say, the LAPs obtain recognition and enforcement in Canada, wouldn’t that be reason to think that the hit Chevron says it has taken to its reputation was justified? (Here again I assume that the Canadian courts can be relied on not to recognize and enforce fraudulent judgments).

Last, I wasn’t attributing the view that Chevron “faces a risk of harm only if the Ecuadorian judgment could be recognized” to Chevron. That was my interpretation of where things stand, but obviously it’s not a view that Chevron would accept.

Anyway, I think this is a complicated issue, and I’m not sure that what you’ve written is wrong.

Correction to mangled sentence: The middle sentence in the second paragraph of my above comment should read as follows: “And, as I noted in that comment, it is difficult to argue that Chevron’s winning the relief it seeks — including an order imposing a constructive trust on any profits Donziger earns from his scheme — will not assuage the reputational harm.”

You attribute to Chevron the position that “it faces a risk of harm only if the Ecuadorian judgment could be recognized.” That is not what I read Chevron’s brief to argue; nor is it true in fact.

Take two examples. First is reputational harm. In a prior comment on your post on Donziger’s standing brief, I made the point that Chevron has suffered and will continue to suffer ongoing reputational harm from Donziger’s propaganda campaign. Chevron’s brief, too, invokes the reputational harm. And, as I noted in that comment, it Chevron’s winning the relief it seeks — including an order imposing a constructive trust on any profits Donziger earns from his scheme — will not assuage the reputational harm. Yet neither the harm, nor the reputational value of the requested relief, depends on any future enforcement action in Canada or anywhere else outside Ecuador. Ordering the constructive trust, by itself, gives Chevron reputational relief.

Equally telling is that Donziger and his team have already extracted from the “independent” Ecuadorian courts an order turning over to them any damages Chevron wins from Ecuador in the currently pending BIT arbitration. In other words, thanks to their friends in Ecuador’s judiciary, plaintiffs stand to reap large sums, not if they win an enforcement proceeding in Canada or elsewhere, but if their ally (Ecuador) loses the arbitration (where Ecuador vigorously defends the legitimacy of Donziger’s Lago Agrio judgment). Again, by imposing a constructive trust on any funds Donziger thereby receives — not as a result of plaintiffs’ winning an enforcement action, but as a result of plaintiffs’ arguments losing before the arbiters — Chevron would earn real relief.

You append to your conclusion that Chevron’s losing an enforcement action somewhere would “undermine the RICO action.” But the harms and the redress noted above — reputational harm and the harm due to turning over whatever Chevron may win in the arbitration to Donziger and team — would not undermine the RICO action. The Lago Agrio plaintiffs’ propaganda campaign rolls on, independently of any court actions. They accuse Judge Kaplan of bias. They have similarly tried to discredit the arbiters. They will similarly dismiss any future court that rules against them as mistaken or worse. They are fighting in the court of public opinion, where they hope to win, even if no court outside Ecuador ever credits their fraudulent Ecuadorian judgment.

Similarly, if Chevron wins the arbitration and Ecuador’s courts require Ecuador’s government to turn over any damages won by Chevron to Donziger et al., the result will hardly undermine the validity and credibility of the RICO action. Such an order by Ecuadorian courts — that ironically makes Donziger et al. win by losing — will simply confirm what is already apparent: that Donziger and team are in bed with pliant Ecuadorian courts and with an Ecuadorian government eager to do (or at least appear to do) anything it can to support their cause.

The bottom line for standing purposes, then, is that the remedy Chevron seeks will afford the company relief from the wrongs, past, present and expected, that Donziger’s crew seeks to inflict. Article III standing requires no more.