Lago Agrio: Chevron Seeks Discovery From MCSquared
Posted on December 4, 2014
Update: I’ve made a minor correction in light of Mark Kantor’s helpful comment, printed below.
Remember MCSquared, the Republic of Ecuador’s US PR firm, which hired “ethically diverse” actors to protest at a Chevron meeting, and which initially failed to register as Ecuador’s agent under the Foreign Agent Registration Act. The MCSquared story was good comic relief, but it has now taken a more serious turn, as Chevron has brought an application for discovery under § 1782 seeking information from MCSquared for use in
its BIT arbitration . Bonus: since MCSquared is located in New York, Judge Kaplan is presiding.
I am not sure if Chevron really believes what it has written, but based on discussions I’ve had over time with people in the Donziger camp and with people in the Ecuadoran camp, I think the basic suspicion that motivates Chevron’s request will prove to be unfounded if the discovery actually goes forward. Chevron claims to think that the discovery it seeks will show collusion between the Ecuadoran government and Donziger and the LAPs. I suppose there may have been collaboration a long time ago, but in recent years my sense is that those two parties want nothing to do with each other. There is certainly no love lost between Donziger and the Ecuadoran government. Remember that the LAPs actually brought a claim against Ecuador before the Inter-American Commission on Human Rights in 2012.
I also think that even if Chevron’s suspicion proved true, its theory of relevance is questionable. Chevron says that it wants to show collusion because the impartiality of Ecuador’s courts is at issue in the arbitration. Suppose the executive branch of the Ecuadoran government was colluding with the LAPs to generate some really bad PR in the United States, all of course after the entry of the Ecuadoran judgment. What does that have to do with the impartiality of the Ecuadoran courts at the relevant times? Indeed, since Ecuador hired MCSquared only in 2013, and since MCSquared is a US public relations firm, it’s unclear why one would think that any supposed collusion was aimed at the Ecuadoran judiciary at all or why one would expect MCSquared to have the super-secret communications between Ecuador and the LAPs in which they discuss their plan to corrupt the Ecuadoran courts.
In short, I expect this will turn out to be a tempest in a teapot. Chevron has certainly gotten some good atmospherics out of this story, though, and I assume Chevron will continue to pursue it for as long as the courts allow.
Note that while Judge Kaplan granted Chevron’s application ex parte, the real fight, if there is going to be a fight, will take place when MCSquared seeks to quash the subpoena or when Donziger or the LAPs or Ecuador intervene in the case for that purpose.