Lago Agrio: The Guerra Testimony in the Second Circuit

As predicted, Steven Donziger has brought the recently disclosed Guerra testimony to the Second Circuit’s attention. He did so by way of a motion asking the court to take judicial notice of the testimony. What does that mean? Donziger is not asking the court to make any findings about the truth of falseness of Guerra’s testimony. Instead, he is just asking the court to take notice of the fact that the testimony happened, which seems okay as far as it goes—the fact of the testimony can’t really be disputed by anyone.

One of Donziger’s main points is that the Guerra testimony highlights the risk of inconsistent outcomes: the arbitral tribunal and the Canadian court could refuse to credit Guerra’s testimony where Judge Kaplan credited it. The problem is only complicated by the question whether the Canadian court is required to give preclusive effect to Judge Kaplan’s findings.

There is some sense to this, though I wonder whether the point is really that strong. After all, in the arbitration Chevron is seeking relief against the Republic of Ecuador, in New York it sought relief against Donziger and the LAPs, and in Canada the battle is just with the LAPs. And Chevron didn’t really have a choice about this. The investment treaty claim against Ecuador could only proceed in the arbitration provided for in the BIT itself. Neither the LAPs nor Donziger could be joined as a party. The Canadian claim, or rather the defense to the LAPs’ claim to enforcement, could not really rope in either Donziger or Ecuador. And the RICO claim against Donziger and the LAPs could not be brought against Ecuador itself.

It seems to me the risk of inconsistent results is just part of what happens when you have claims against parties that can’t be sued in the same forum even though the claims arise out of the same facts. The law has ways of dealing with this, e.g., doctrines of claim and issue preclusion, forum non conveniens, and so forth. So while Donziger is probably right to raise the issue, because one of the Second Circuit judges raised it at oral argument, I wonder whether there’s much there there.

The subtext of the new filing, I suppose, is that the Second Circuit should see that Guerra is an out-and-out liar and therefore reject Judge Kaplan’s conclusions. The trouble with this, of course, is that the Donziger has not argued on appeal that Judge Kaplan’s findings of fact were clearly erroneous. It’s too late to bring a motion for a new trial under FRCP 59, but I wonder why Donziger doesn’t seek relief from the judgment under FRCP 60(b). The answer, perhaps, is that Donziger’s lawyers could have made much of the case Ecuador’s lawyers made in their cross-examination of Guerra, and that in any event everyone already knew during the trial in New York that Guerra was a liar, and yet Judge Kaplan credited his testimony anyway. Which is, I guess, just another way of saying that maybe there isn’t much there there.

2 responses to “Lago Agrio: The Guerra Testimony in the Second Circuit”

  1. I had the same thought about FRCP 60(b). Donziger is pulling out all the stops (understandably) and it’d seem natural. I suppose he doesn’t like that it’d probably go straight to Judge Kaplan, who’d then be able to rule on it, make factual findings, etc.

    1. Thanks, Max. For “probably,” read “certainly.”

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