Steven Donziger has filed his petition for a writ of certiorari seeking Supreme Court review of the Second Circuit’s decision affirming Judge Kaplan’s decision in the RICO case. One point of immediate interest: until now, Donizger and the LAPs have been separately represented. Now, Donziger’s lawyer, Deepak Gupta, represents one of the LAPs, too, and it seems that most of the LAPs have not sought review. The explanation for this change is not immediately apparent to me.
The brief’s best argument is the argument that the court should take the case to resolve a circuit split on the question whether a private party has standing to bring a RICO action that seeks only equitable relief. I’ve said before that I think this is a cert-worthy issue that might well lead to review. And if the Court takes the case to resolve the split, and it rules in Donziger’s favor, then Chevron’s lawyers will have outsmarted themselves for the second time (the first time was the argument for forum non conveniens, which led the US courts to defer to Ecuador’s courts). Recall that Chevron dropped its damages claims at the last minute so as to ensure a trial to the court, i.e., to Judge Kaplan, rather than to a less-predictable jury.
The brief also makes a less persuasive point, namely, that the Court should correct the Second Circuit’s decision to allow a collateral attack on the Ecuadoran judgment. Donziger’s brief suggests that this is inconsistent with the Second Circuit’s own decision in Naranjo itself as well as scattered older decisions. I am not really persuaded by this for two reasons. First, I am not really persuaded that Naranjo was rightly decided. Why shouldn’t a judgment debtor be able to use the Declaratory Judgment Act to raise defenses to a prospective claim for recognition and enforcement of a judgment? (On the other hand, the LAPs suggested they never intended to seek recognition in the United States, which raises a point about standing; but the main argument here is not standing, but whether collateral attacks, as Donziger characterizes things, are permissible at all). You might say that a US court shouldn’t be able to rule one whether a judgment is entitled to recognition or enforcement under the law of a third country, but that’s precisely what the courts haven’t done here. Second, Donziger himself, the principal petitioner, is not one of the judgment creditors. Whatever the rule may be about Chevron’s assertion of preemptive claims against the judgment creditors, it can’t really apply to Donziger, since Donziger has no affirmative claims to bring against Chevron. Thus Chevron can’t wait to be sued by Donziger before asserting its claims.
All this said, I think it is difficult to predict what will happen. The only prediction I am comfortable making is this: if the Court takes the case, it will likely be to resolve the point about RICO standing rather than about collateral attacks. I will keep you posted.