In the Lago Agrio RICO case in New York, you’ll recall that the court entered a final judgment against Steven Donziger and against the two Lago Agrio plaintiffs who appeared and defended in the action, Hugo Gerardo Camacho Naranjo and Javier Piaguaje Payaguaje. But there were many other LAPs who were named as defendants but who defaulted. A few days ago Chevron moved for entry of default judgment against those LAPs. It intends at least to seek to hold them liable for the costs Chevron has already been awarded against Donziger. It may have other purposes in mind, too, though they are less immediately apparent. (Perhaps Chevron is thinking ahead to a trial on the merits in Canada,1 and perhaps the entry of judgment is technically necessary to invocation of collateral estoppel in that action?)

Chevron’s counsel are usually very sophisticated on procedural matters. For the most part they have played three-dimensional chess to Donziger’s checkers—I have written about several examples of this, which I won’t recount here. But I find Chevron’s latest move puzzling and problematic. The ordinary rule in federal practice is that the Court enters a single final judgment rather than piecemeal judgments. And a court of appeals lacks jurisdiction to hear an appeal from a judgment that disposes but some but not all of the claims. There is an exception to the rule, of course. FRCP 54(b) provides:

When an action presents more than one claim for relief—whether as a claim, counterclaim, crossclaim, or third-party claim—or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities.

If the rule applies, then a party can immediately appeal from the partial judgment.

Now, I have looked through the docket. It’s very large, so I may have missed something, but I don’t see any motion for entry of a separate and final judgment under FRCP 54(b). So Chevron’s latest motion seems to highlight, to me, the possible non-final status of its judgment against Donziger and the two LAP representatives, and thus the possibility of a jurisdictional issue with the Second Circuit’s decision. On the other hand, the judgment itself includes language from FRCP 54(b) that suggests that Judge Kaplan had the rule in mind when he entered the judgment.

The case doesn’t seem like a good candidate for a separate and final judgment that separates the claims against the LAPs generally from the claims against the two LAP representatives, because the claims all stand on the same footing. So I have the following questions: (1) is it proper for a court to issue a separate and final judgment sua sponte rather than on the motion of a party? (2) assuming that such a judgment is permissible, would a decision to enter such a judgment here be a sound exercise of the court’s discretion, given the close relationship between the claims against all the LAPs? and (3) should the judgment be read as a separate and final judgment?

If after answering these questions we conclude that a separate and final judgment either didn’t enter or shouldn’t have entered, the question then is: what is the procedural consequence, if any? Certainly if Donziger or the LAP representatives wanted to raise an issue like this, the time to do it would have been in the Second Circuit appeal.

  1. See my comment below the post—this phrase may have confused you!