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Chevron Corporation v. Donziger

United States District Court, Second Circuit

October 7, 2013

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

Randy Mastro, Andrea E. Neuman, William E. Thompson, GIBSON, DUNN & CRUTCHER LLP, Attorneys for Plaintiff.

Steven Donziger, Pro Se and Attorney for Defendant Donziger & Associates, PLLC.

Julio Gomez, GOMEZ LLC, Attorney for Defendants Hugo Gerardo Camacho Naranjo and Javier Piaguaje Payaguaje.

MEMORANDUM OPINION

LEWIS A. KAPLAN, District Judge.

This case, familiarity with which is assumed, [1] is set for trial on October 15, 2013. The complaint and amended complaint sought damages and equitable relief. All parties demanded trial by jury. The relief sought, however, has changed, which raises the question whether there now is any right to a jury trial in this case.

Recent Developments

On September 8, 2013, plaintiff Chevron Corporation ("Chevron") gave

"notice that it will not seek money damages against Hugo Gerardo Camacho Naranjo and Javier Piaguaje Payaguaje (LAP Defendants') in this action. At trial and in all other phases of this action, Chevron will seek only equitable relief against the LAP Defendants. Chevron waives all claims for money damages relief against the LAP Defendants for money damages that have accrued and are asserted in this action only." DI 1404.

It immediately took the position in its motion for a bifurcated trial that its waiver of damage claims against the LAP Defendants and its restriction of the relief sought against them to relief that would be equitable in nature eliminated any right to a jury trial with respect to its claims against the LAP Defendants and the defenses thereto. E.g., DI 1406.

On September 30, 2013, Chevron filed further:

"notice that, upon a finding from this Court under Fed.R.Civ.P. 39(a)(2) that all issues in this case will be tried by the Court: (i) Chevron will not seek money damages against Steven R. Donziger, The Law Offices of Steven R. Donziger, and Donziger & Associates, PLLC (Donziger Defendants') only in this action; (ii) at trial and in all other phases of this action, Chevron will seek only equitable relief against the
Donziger Defendants, and; (iii) Chevron will waive all claims for money damages relief against the Donziger Defendants only for money damages that have accrued and are asserted in this action only.1" DI 1469.[2]

In a telephonic Rule 16 conference on October 1, 2013, Chevron's counsel stated that it is Chevron's position that it does not and will not seek, and waives, any claim to money damages against the Donziger Defendants in this action and that it will seek against them in this action only equitable relief.[3] At that point, the defendants asked for an opportunity to submit additional papers in support of their contention that they nevertheless are entitled to a jury trial. Those submissions have been made, and the issue now is ripe for determination.

Discussion

Any right to jury trial in this case stems from the Seventh Amendment to the Constitution, which provides in relevant part that "the right of trial by jury shall be preserved" "[i]n Suits at common law, where the value in controversy shall exceed twenty dollars."[4] The question whether there remains any right to a jury trial thus depends upon whether the Seventh Amendment applies, given the change in the nature of the action from one seeking damages and equitable relief to a case seeking equitable relief alone.

As an initial matter, "[i]t is well settled that when a party withdraws its damages claims and pursues only equitable relief, a jury trial is no longer available and issues must be tried by the court."[5] Given Chevron's unequivocal commitment to "seek in this action only equitable relief, "[6] that is the end of the matter. The cases cited by the defendants are not to the contrary.[7]

Nor is there any merit in defendants' attempt to characterize the claims asserted or the limited relief still sought as legal. Equity long has granted relief in appropriate cases on the ground of fraud.[8] Cases seeking only injunctions, imposition of constructive trusts, and disgorgement - including RICO cases based on alleged mail and wire fraud seeking only such relief - all are purely equitable and carry no right to trial by jury.[9] Chevron unequivocally has surrendered any claim to money damages as well as to any other relief that is not equitable in nature. That too is an end to the matter

Defendants point to Judge McMahon's statement in Maersk as follows:

"The Seventh Amendment to the United States Constitution provides: In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved....' The Seventh Amendment protects the fundamental right to a jury trial for actions at law, not those in equity. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989). A two-step inquiry is required to determine when the jury right attaches: first, the court must consider whether the action would have been deemed legal or equitable in 18th-century England before the merger of courts of law and equity; second, the court must "examine the remedy sought and determine whether it is legal or equitable in nature." Id. at 42, 109 S.Ct. 2782 (quoting Tull v. United States, 481 U.S. 412, 417-18, 107 S.Ct. 1831, 95 L.Ed.2d 365 (1987)); Pereira v. Farace, 413 F.3d 330, 337 (2d Cir.2005). The second part of this test (the nature of the remedy) is more important than the first. Granfinanciera, 492 U.S. at 42, 109 S.Ct. 2782." Maersk, 687 F.Supp.2d at 338."[10]

That is an accurate statement of the law, but it does not support defendants' argument. Defendants cite no authority - and the Court is aware of none - for the proposition that a suit for an injunction and other purely equitable relief "would have been deemed legal [and therefore cognizable in the law courts]... in 18th-century England before the merger of courts of law and equity." And, for reasons already mentioned, the relief sought here is entirely equitable in nature.

Finally, defendants argue that they are entitled to a jury as a matter of fairness. But that argument - even if it had merit, which it does not[11] - is beside the point. Insofar as is relevant to this case, the availability of trial by jury depends on one thing alone - whether the Seventh Amendment to the United States Constitution requires it. The law is clear - it does not. In such circumstances, trial by jury is available only if the parties and the trial judge all agree to it. Under the plain language of Rule 39(c)(1), the trial court may not otherwise permit trial by jury even if some of the parties would prefer to obtain a jury verdict. As the parties do not all agree to trial by jury, the Court lacks the power to grant a jury trial.[12]

Conclusion

The Court has considered all of defendants arguments and concluded that all are without merit. Accordingly, the Court holds that there is no right to trial by jury. The Court declines to order a jury trial in this case.

SO ORDERED.


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