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Chevron Corporation v. Donziger

United States District Court, Second Circuit

August 22, 2013

CHEVRON CORPORATION, Plaintiff,
v.
STEVEN DONZIGER, et al., Defendants.

MEMORANDUM OPINION

LEWIS A. KAPLAN, District Judge.

An Ecuadorian court in 2011 entered an $18.2 billion judgment (the "Judgment") against Chevron Corporation ("Chevron")[1] in an action brought by 47 individuals referred to as the Lago Agrio Plaintiffs (the "LAPs"), two of whom, referred to as the LAP Representatives, have appeared in this action.[2] Chevron brought this action against the LAPs, their lead U.S. attorney, Steven Donziger and his law offices (the "Donziger Defendants"), and others involved in the Lago Agrio Litigation.[3] It claims among other things that the Judgment is the product of fraud and that acts associated with its procurement are significant parts of a pattern of racketeering activity that violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"). The pattern allegedly has included extortion, wire fraud, money laundering, and obstruction of justice, among other offenses.

The case is set for trial commencing on October 15, 2013. On August 16, 2013, Chevron moved - for the third time - for partial summary judgment. The motion is narrow. Even if granted, the ruling would not dispose of the entire case or, for that matter, even a single claim against a single defendant. In addition, the defendants, who repeatedly have sought to delay a trial in this case, separately have moved for a stay of all deadlines in this case. They claim, among other things, that they cannot respond to Chevron's motion and prepare for trial on the present schedule.

As the Court indicated only last month in denying the Donziger Defendants' motion for a three month stay of all proceedings in this case, there is substantial reason to be skeptical of defendants' claims that they have had insufficient time to prepare for trial, lack adequate resources, and so on.[4] Nevertheless, the Court has reviewed the latest partial summary judgment motion carefully in order to determine whether it should be denied even absent a response because it is insufficient on its face or as a matter of sound case administration. This memorandum opinion sets forth its analysis and conclusions.

Facts

This Litigation

Chevron brought this action on February 1, 2011 against the LAPs, the Donziger Defendants, [5] and a number of other individuals and entities. Chevron alleges among other things that the Judgment is the product of fraud and violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"). The RICO and, to some extent, the fraud claims rest on allegations that Mr. Donziger, a New York lawyer, and others based in the United States as well as Ecuador, here conceived, substantially executed, largely funded, and significantly directed a scheme to extort[6] and defraud Chevron by, among other things, (1) bringing the Lago Agrio case;[7] (2) fabricating (principally in the United States) evidence for use in that lawsuit and corrupting and intimidating the Ecuadorian judiciary in order to obtain a tainted judgment;[8] (3) exerting pressure on Chevron to coerce it to pay money not only by means of the Lago Agrio litigation and judgment, but also by subjecting Chevron to public attacks in the United States and elsewhere based on false and misleading statements;[9] (4) inducing U.S. public officials by false representations to investigate Chevron;[10] and (5) making false statements to U.S. courts and intimidating and tampering with witnesses in U.S. court proceedings to cover up their improper activities.[11]

Chevron's claim that the Judgment was procured by fraud rests in significant part on allegations that (1) the LAPs coerced the Ecuadorian judge to appoint a supposedly independent expert, Richard Stalin Cabrera Vega, as a global expert to prepare a damages assessment, (2) then colluded with Cabrera to the end that the LAPs and their consultants actually wrote Cabrera's report and passed it off as his independent work, and (3) ultimately bribed the Ecuadorian judge to rule in their favor and to sign a decision written by the LAPs. Chevron contends that the Judgment in any event incorporates extensive internal work product prepared by the LAPs that is not part of the record in the Ecuadorian case and was provided improperly to the judge ex parte. The voluminous evidence bearing on these and related contentions is discussed in detail in prior rulings, familiarity with which is assumed.[12]

Several counts of Chevron's complaint have been dismissed by this Court on motions by the defendants.[13] One count, which had been severed and became a separate action, was dismissed at the direction of the Court of Appeals (the "Count 9 Action").[14] The principal counts remaining are the RICO claims, which are asserted only against the Donziger Defendants, and the state law fraud count.[15]

Previous Partial Summary Judgment Motions

Chevron first moved for partial summary judgment in 2012. That motion sought dismissal of the affirmative defenses of res judicata and collateral estoppel on the grounds that (1) the Judgment may not be afforded any preclusive effect unless it may be recognized and enforced here, and (2) recognition and enforcement would be impermissible or inappropriate because (a) the Ecuadorian courts lacked personal jurisdiction over it, (b) the Judgment is penal in whole or in part, and (c) there was fraud in the procurement of the Judgment. The motion was denied in substantial part.[16]

Earlier this year, Chevron moved for partial summary judgment for a second time. That motion again sought dismissal of the collateral estoppel affirmative defense on the ground that the Judgment was procured by fraud, and submitted for the first time direct (albeit later partly controverted) evidence of the alleged bribery conspiracy. In the alternative, Chevron sought rulings under Fed.R.Civ.P. 56(g)[17] that there is no genuine issue as to a number of factual propositions ("56(g) Rulings"). Among other such rulings, it requested determinations concerning the Cabrera report and its procurement, the textual overlap between the Judgment and LAP work product documents that do not appear in the Ecuadorian court record, and that the Donziger Defendants had committed certain RICO predicate acts, proof of which would be an element of Chevron's substantive RICO claim, in addition to limited other relief.[18]

These defendants responded to the motion. The Court denied partial summary judgment without prejudice to renewal of that application after conclusion of the discovery period. The order provided also, however, that the alternative request for Rule ...


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