Lago Agrio: A Good Week For Chevron
Posted on April 4, 2014
Chevron had a good week this week, on two fronts.
First, the Supreme Court of Canada has granted leave to appeal from the decision of the Ontario Court of Appeal, which had set aside a lower court’s stay of the Ecuadoran plaintiffs’ action seeking recognition and enforcement of the Ecuadoran judgment in Ontario.
The application was decided by Justices LeBel, Karakatsanis, and Wagner. I am reliably informed that Justice LeBel in particular has a real interest in private international law. Perhaps the case was too interesting for him to turn away! This is an important development, because Canada is the relevant country where Chevron would, I think, have the hardest time criticizing the quality of the judiciary in the event of an adverse decision. I don’t say that because I know anything about the courts of Brazil or Argentina, but because one of the subtexts of the case as a whole is an implicit criticism of Latin American justice. Or at least that’s how it seems to me when Chevron says, for example, that “any jurisdiction that respects the rule of law will find it illegitimate and unenforceable.”
Second, in the hubbub surounding Judge Kaplan’s RICO decision last month, I missed a magistrate judge’s report and recommendation concluding that the claim Patton Boggs had brought against Chevron seeking damages on account of the erroneous preliminary injunction that Judge Kaplan had entered early in the RICO case. (You can find my main post about the case here). To make matters worse for Patton Boggs, Judge Kaplan has also allowed Chevron’s motion for leave to amend its pleadings to assert counterclaims against Patton Boggs for fraud. Patton Boggs, probably seeing which way the winds were blowing, argued that the court lacked jurisdiction over the action—which it had brought—on the grounds that some of its partners live abroad and that that fact deprives the court of diversity jursidiction. Patton Boggs may actually be right about this in the end, but Judge Kaplan refused to rule definitively on the issue at such an early stage of the case. So Patton Boggs is facing the unhappy prospect of having lost a lawsuit that it brought but still having to defend against Chevron’s counterclaims.