The opinion of the court was delivered by: James C. Francis IV United States Magistrate Judge
The defendants in this case, known collectively as the Lago Agrio plaintiffs (the "LAPs"), obtained a multi-billion dollar judgment against Chevron Corporation ("Chevron") in Ecuador based on claims of environmental pollution caused by Texaco, Inc. ("Texaco"), which was subsequently acquired by Chevron. In this proceeding, Chevron seeks a declaration that the Ecuadorian judgment is not enforceable outside Ecuador and an injunction preventing its enforcement. Chevron has sought support for its claims by, among other things, serving subpoenas on attorneys involved in the representation of the LAPs: Laura Garr, Andrew Woods, Joseph C. Kohn, and the firm of Kohn, Swift & Graf, P.C. (collectively, the "Respondents"). The Respondents objected to the subpoenas, asserted the attorney-client privilege and the work product doctrine, and provided privilege logs. The LAPs join the Respondents and assert privileges on their own behalf.*fn1 Chevron contends that none of the documents at issue may be withheld because, among other reasons, (1) any discovery immunity was forfeited by the lead attorney in the Lago Agrio litigation, Steven R. Donziger, when he failed to provide a timely privilege log and
(2) the crime-fraud exception to the attorney-client privilege and the work product doctrine apply to the documents at issue. Chevron has moved to compel the production of the withheld documents. Background*fn2
In November 1993, a group of Ecuadorian individuals filed a class action in this Court, alleging that Texaco's oil operation activities had caused massive environmental damage to the rain forest in that nation. Aguinda v. Texaco, Inc., 303 F.3d 470, 473 (2d Cir. 2002). While that action was pending, the government of Ecuador released Texaco from any claims for environmental damage in return for Texaco's completing certain remediation. Chevron Corp., 768 F. Supp. 2d at 598. In connection with that agreement, the government of Ecuador represented that the claims asserted in the Aguinda action belonged solely to it. Id. However, in 1999, Ecuador enacted the Environmental Management Act of 1999, creating a private right of action for damages for environmental harms. Id. at 599.
On the motion of Texaco, the Aguinda case was dismissed on forum non conveniens grounds, and that decision was affirmed by the Second Circuit. Aguinda, 303 F.3d at 480. Accordingly, the LAPs, who included many of the Aguinda plaintiffs, filed suit in Lago Agrio, Ecuador. Chevron Corp., 768 F. Supp. 2d at 600.
The Lago Agrio litigation, though it was brought on behalf of similar and, in many cases, the same individuals, was a fundamentally different lawsuit than Aguinda. Aguinda sought predominantly damages for the plaintiffs and class members for injuries to person or property that each allegedly had suffered. The LAPs, however, sued in something akin to a parens patriae capacity to require the defendants to perform, or to pay the cost of performing, environmental and other remediation methods.
Id. at 600-01. On February 4, 2011, the Ecuadorian court issued a judgment against Chevron of approximately 18 billion dollars. Id. at 620-21.
In the meantime, Chevron commenced an arbitration in 2009 under the Bilateral Investment Treaty between the United States and Ecuador (the "BIT") pursuant to United Nations Commission on Trade Law rules. In re Chevron Corp., 709 F. Supp. 2d at 288. It sought a declaration that it bore no liability for the alleged environmental damage at issue in the Lago Agrio litigation, and it charged that the government of Ecuador had abused its criminal justice system by bringing criminal charges against two of Chevron's lawyers who had been involved in the earlier agreement releasing Texaco from environmental claims. Id.
Chevron initiated a series of applications pursuant to 28 U.S.C. § 1782 to issue subpoenas in this country to obtain documents and testimony for use in foreign proceedings, namely the Lago Agrio litigation, the BIT arbitration, and the Ecuadorian criminal proceedings. Id. at 284; Chevron Corp., 768 F. Supp. 2d at 605. As will be discussed further below, Chevron unearthed information, including outtakes from a documentary film about the Lago Agrio case, that could prove useful in the foreign proceedings and in undermining the enforceability of the Ecuadorian court's judgment. According to Chevron, that information shows that the LAPs' attorneys sought to intimidate the Ecuadorian judiciary, Chevron Corp., 768 F. Supp. 2d at 611-12, discussed using mass demonstrations to bring pressure to bear on Chevron and on the Ecuadorian courts, id. at 612-13, provided a fictitious expert report to the Lago Agrio court, id. at 605-06, ghostwrote the report of a purportedly independent court-appointed expert, id. at 606-10, and then submitted a new, supposedly independent expert analysis that was merely a repackaged version of the court-appointed expert's tainted report, id. at 610-11.
In one of the Section 1782 proceedings filed in this district, Chevron
sought information from Mr. Donziger, who had represented the
plaintiffs in the Aguinda case and who effectively masterminded the
Lago Agrio litigation. This proceeding, 10 MC 2 (the "Section 1782
proceeding"), was assigned to the Honorable Lewis A. Kaplan, U.S.D.J.,
who had previously presided over the proceedings in which Chevron had
gained access to information related to the documentary film. See In
re Chevron Corp., 709 F. Supp. 2d 283. Mr. Donziger and the LAPs moved
to quash the Donziger subpoena, but Judge Kaplan denied the motion. In
re Chevron Corp., 749 F. Supp. 2d 170 (S.D.N.Y.) ("Chevron 11/30/10
Opinion"), aff'd, 409 Fed. Appx. 393 (2d Cir. 2010).*fn3
Then, when Mr. Donziger failed to submit a timely
privilege log with respect to the subpoenaed documents, Judge Kaplan
held that any privilege had been waived. In re Chevron Corp., 749 F.
Supp. 2d 135, 140 (S.D.N.Y.) ("Chevron 10/20/10 Opinion"), aff'd, 409
Fed. Appx. 393 (2d Cir. 2010); Chevron 11/30/10 Opinion, 749 F. Supp.
2d at 185. As will be seen, the scope of that waiver is critical to
the analysis of privilege in this case.
Shortly before judgment issued in the Lago Agrio litigation, Chevron filed an action in this Court, alleging that the LAPs, their attorneys, various consultants, and a number of environmental activist groups had engaged in a racketeering conspiracy "to coerce Chevron into paying billions of dollars" to them "through a multi-faceted campaign of lies, fraud, threats and official corruption," in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. (11 Civ. 691, Complaint, ¶ 306). In the ninth cause of action in the complaint, Chevron sought a declaratory judgment pursuant to 28 U.S.C. § 2201(a) establishing that any judgment by the Lago Agrio court would be unenforceable on the ground that it would have been obtained through fraud and without procedures compatible with due process.
(11 Civ. 691, Complaint, ¶¶ 392-96).
On June 1, 2011, Judge Kaplan severed the ninth cause of action from the RICO complaint and directed that it proceed as a separate case under its own docket number. (Order dated June 1, 2011). That became the instant action. Meanwhile, Chevron served on Ms. Garr, Mr. Woods, Mr. Kohn, and Kohn, Swift & Graf, P.C. the subpoenas that are the subject of these motions. (Subpoena to Laura J. Garr dated May 20, 2011, attached as Exh. 1 to Declaration of Kristen L. Hendricks dated June 10, 2011 ("Hendricks 6/10/11 Decl."); Subpoena to Andrew Woods dated May 20, 2011, attached as Exh. 2 to Hendricks 6/10/11 Decl.; Subpoena to Joseph C. Kohn dated May 20, 2011, attached as Exh. 1 to Declaration of Anne Champion dated June 15, 2011 ("Champion 6/15/11 Decl."); Subpoena to Kohn, Swift & Graf, P.C., attached as Exh. 2 to Champion 6/15/11 Decl.). The Respondents objected to the subpoenas, asserting the attorney-client privilege and the work product doctrine, and submitted privilege logs identifying the documents at issue. Chevron then filed the instant motions to compel.
On July 19, 2011, I held a hearing to permit counsel to expand upon the arguments raised in their briefs and to explore the relationships between each Respondent and Mr. Donziger. At the conclusion of that proceeding, I reserved decision but issued tentative determinations designed to guide the parties and facilitate final resolution of the motions. (Transcript of Proceedings dated July 19, 2011 ("Tr.") at 152-54). With respect to the impact of Mr. Donziger's waiver of privileges in the Section 1782 proceeding, I found that it applies to "all documents that Donziger should have produced or logged in response to Chevron's subpoena, in the 1782 proceeding." (Tr. at 152). And, because Mr. Donziger had the practical ability to obtain documents from each of the Respondents, I determined that any documents within their possession that he had failed to log in a timely manner were subject to the forfeiture of privilege he was deemed to have committed. (Tr. at 152).
As to the crime-fraud exception, I concluded that Judge Kaplan had made findings that required application of that exception to information relating to three different subjects: (1) the report to which an expert's name had fraudulently been appended (the "Calmbacher report"); (2) the report that was purportedly independent but had been ghostwritten by agents of the LAPs (the "Cabrera report"); and (3) the memoranda that were purportedly independent reports intended to supercede the Cabrera report, but which in fact simply repeated that report's findings (the "cleansing memos"). (Tr. at 152-53). I further found that the crime-fraud exception was limited to these areas and that there was not sufficient evidence to support Chevron's assertion that the entire Lago Agrio litigation was fraudulent from its inception. (Tr. at 153). Finally, I concluded that there was no evidence of criminal or fraudulent intent on the part of the Respondents but noted that such evidence would not be necessary for the crime-fraud exception to apply. (Tr. at 153).
I then turned to applying my findings to the documents at issue. I directed the Respondents first to identify any documents that they believed fell outside the forfeiture of the privilege caused by Mr. Donziger. (Tr. at 153). Chevron was then to identify from that list any documents that it argued fell within the crime-fraud exception because they were in furtherance of the alleged frauds related to the Calmbacher report, the Cabrera report, or the cleansing memos. (Tr. at 154). Then, to the extent that any dispute remained, I agreed to review the controverted documents in camera. (Tr. at 153, 155-56).
In compliance with my directives, counsel for Ms. Garr and Mr. Woods submitted a letter discussing the relationship between my preliminary rulings and the documents within their possession. (Letter of Elliot R. Peters dated July 22, 2011 ("Peters Letter")). Counsel interpreted my findings as imposing a subject matter waiver with respect to the conduct of the Lago Agrio litigation, as a consequence of which Ms. Garr and Mr. Woods had no responsive documents not covered by the waiver. (Peters Letter at 1-2).*fn4
Counsel also noted that he did not understand the waiver to apply to communications between himself and his clients in this ...