157 F.3d 153 (2nd Cir. 1998), 97-9102, Jota v. Texaco, Inc.

Docket Nº:97-9102, 97-9104, 97-9108.
Citation:157 F.3d 153
Party Name:Gabriel Ashanga JOTA, individually and as guardian for Raul Antonio Ashanga Casteno, Paula Nerida Ashanga Casteno, Christian Ashanga Casteno and Judith Reutegui Casteno, et al., Plaintiffs-Appellants, Republic Of Ecuador and Petroecuador, Movants-Appellants, v. TEXACO INC., Defendant-Appellee.
Case Date:October 05, 1998
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 153

157 F.3d 153 (2nd Cir. 1998)

Gabriel Ashanga JOTA, individually and as guardian for Raul

Antonio Ashanga Casteno, Paula Nerida Ashanga Casteno,

Christian Ashanga Casteno and Judith Reutegui Casteno, et

al., Plaintiffs-Appellants, Republic Of Ecuador and

Petroecuador, Movants-Appellants,


TEXACO INC., Defendant-Appellee.

Nos. 97-9102, 97-9104, 97-9108.

United States Court of Appeals, Second Circuit

October 5, 1998

Argued April 29, 1998.

Page 154

Cristobal Bonifaz, Amherst, Mass. (John C. Bonifaz, Amherst, Mass.; Joseph C. Kohn, Martin J. D'Urso, Craig W. Hillwig, Kohn Swift & Graf, Philadelphia, Penn.; Amy Damen, Sullivan & Damen, White Plains, NY, on the brief), for plaintiffs-appellants.

Ronald C. Minkoff, New York City (Jonathan S. Abady, Beldock Levine & Hoffman, New York City, on the brief), for movants-appellants.

George S. Branch, New York City (Griffin B. Bell, Daniel J. King, Edward G. Kehoe, Richard T. Marooney, Jr., King & Spalding, New York City; Paul J. Curran, Milton J. Schubin, Kaye, Scholer, Fierman, Hays & Handler, New York City; Lawrence R. Jerz, Texaco Inc., White Plains, N.Y., on the brief), for defendant-appellee.

(Arthur L. Berney, H. Kent Greenfield, Boston College Law School, Newton, Mass.; Elizabeth A. Broderick, Holocaust Human Rights Project, Julie Curan, Environmental Law Society, submitted a brief for amici curiae Owen M. Kupferschmid Holocaust Human Rights Project, et al.).

(J. Martin Wagner, EarthJustice Legal Defense Fund, San Francisco, Cal., submitted a brief for amicus curiae the Sierra Club).

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Before: NEWMAN and LEVAL, Circuit Judges, and WEXLER, [*] District Judge.

JON O. NEWMAN, Circuit Judge:

This appeal poses important issues concerning the appropriateness of a United States forum for litigation in which a foreign government is significantly interested. Issues of forum non conveniens, comity, and indispensable party all arise in an unusual context in that the foreign country, the Republic of Ecuador, initially expressed vigorous opposition to the maintenance of this litigation in a United States Court and now, after a change in the government, just as vigorously urges that the litigation proceed here. Two sets of putative class action plaintiffs who sued Texaco Inc. ("Texaco") appeal from the judgments of the District Court for the Southern District of New York (Jed S. Rakoff, District Judge), entered on November 13, 1996, and August 13, 1997, respectively. The Court dismissed both actions on the grounds of (i) forum non conveniens, (ii) international comity, and (iii) failure to join an indispensable party. The Republic of Ecuador and its state-owned corporation, PetroEcuador (together, the "Republic"), appeal from the Court's August 12, 1997, denial of their post-judgment motion to intervene, in order to cure their failure to be joined; one set of plaintiffs also appeals from the contemporaneous denial of its post-judgment motion for reconsideration.

We hold that dismissal on the ground of forum non conveniens was erroneous in the absence of a condition requiring Texaco to submit to jurisdiction in Ecuador and that the dismissal on this ground inappropriately rested entirely on adoption of another district court's weighing of the relevant factors in litigation that is arguably distinguishable. We similarly hold that dismissal on the ground of comity was erroneous in the absence of a condition requiring Texaco to submit to jurisdiction in Ecuador. We also hold that the District Court's reasoning regarding the plaintiffs' failure to join an indispensable party sufficed only to support dismissing so much of the complaint as sought to enjoin activities currently under the Republic's control. Finally, we note that upon the remand that is required as a consequence of our rulings, it will be appropriate for the District Court to reconsider the issues before it in light of Ecuador's changed litigating position. Accordingly, we vacate the judgments and remand for further consideration.


Understanding the issues requires a detailed outline of the procedural history of the litigation.

  1. The Complaints

    This case involves consolidated appeals from two actions filed on behalf of two putative classes. In one action, Aguinda v. Texaco Inc., Dkt. No. 93 Civ. 7527, 1994 WL 142006 (S.D.N.Y. April 11, 1994), certain residents of the Oriente region of Ecuador--primarily members of indigenous tribes--sued Texaco for environmental and personal injuries that allegedly resulted from Texaco's exploitation of the region's oil fields. In the other action, Ashanga v. Texaco Inc., S.D.N.Y. Dkt. No. 94 Civ. 9266, certain residents of Peru, who live downstream from Ecuador's Oriente region, assert similar injuries resulting from these activities.

    Both complaints allege that Texaco polluted the rain forests and rivers in Ecuador and Peru during oil exploitation activities in Ecuador between 1964 and 1992. In particular, they allege that Texaco improperly dumped large quantities of toxic by-products of the drilling process into the local rivers, contrary to prevailing industry practice of pumping these substances back into the emptied wells. Additionally, they allege that Texaco used other improper means of eliminating toxic substances, such as burning them, dumping them directly into landfills, and spreading them on the local dirt roads. They also allege that the Trans-Ecuadoran Pipeline, constructed by Texaco, has leaked large quantities of petroleum into the environment. The named plaintiffs allege that they and

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    their families have experienced various physical injuries, including poisoning and the development of pre-cancerous growths.

    The complaints sought money damages under theories of negligence, public nuisance, private nuisance, strict liability, "medical monitoring," 1 trespass, civil conspiracy, and violations actionable under the Alien Tort Act, 28 U.S.C. § 1350 ("ATA"). The plaintiffs also sought "equitable relief to remedy the contamination and spoliation of their properties, water supplies and environment." 2

  2. Texaco's Motion to Dismiss

    In December 1993, Texaco moved to dismiss on the grounds of (i) failure to join an indispensable party--the Republic of Ecuador, (ii) international comity, and (iii) forum non conveniens. Inherent in all three defenses was the close participation of the Ecuadoran government in the activities for which Texaco was sought to be held liable. Elaborating its grounds for dismissal, Texaco submitted an affidavit by the president of a Texaco subsidiary, averring the following facts. Texaco had participated in oil drilling in Ecuador exclusively through its fourth-level subsidiary, Texaco Petroleum Company ("TexPet"). Beginning in 1965, TexPet operated a petroleum concession for a consortium ("the Consortium") owned in equal shares by TexPet and Gulf Oil. 3 Oil was first discovered in the Oriente in 1969, and was extracted thereafter by the Consortium. In 1974, the Ecuadoran government, through its state-owned oil agency, currently known as PetroEcuador, obtained a 25 percent share of the Consortium. By 1992, PetroEcuador had become the sole owner of the Consortium. 4

    In addition to evidence presented by Texaco suggesting that the Republic had been heavily involved in the drilling operations and had eventually become the sole operator, Texaco submitted a copy of a letter written by Ecuador's ambassador to the United States and addressed to the United States Department of State. In that letter, Ambassador Edgar Teran asserted that the Republic considered this action (as well as a similar case brought by other plaintiffs in the Southern District of Texas, Sequihua v. Texaco, Inc., 847 F.Supp. 61 (S.D.Tex. 1994), an affront to Ecuador's national sovereignty). Ambassador Teran stated that Ecuador had a paramount interest in formulating its own environmental and industrial policies, and that Ecuador's courts were open to adjudicate such disputes.

  3. District Court's Initial Decision

    In an order filed in April 1994, the District Court (Vincent L. Broderick, District Judge), reserved decision on Texaco's motion. See Aguinda v. Texaco, Inc., No. 93 Civ. 7527, 1994 WL 142006 (S.D.N.Y.1994). The Court acknowledged that forum non conveniens dismissal might be appropriate as to the claims seeking money damages. Judge Broderick reasoned that "[d]isputes over class membership, determination of individualized or common damages, and the need for large

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    amounts of testimony with interpreters, perhaps often in local dialects, would make effective adjudication in New York problematic at best." Id. at * 2. However, he stated, any dismissal on this ground would be contingent on Texaco's first agreeing to submit to personal jurisdiction in the courts of Ecuador. The Court further suggested that even if Texaco filed such a stipulation, the Court might retain jurisdiction over the injunctive portions of the action.

    The Court also reserved decision as to dismissal on the basis of international comity, but noted that there appeared to be no conflict between the laws of Ecuador and the United States. Finally, the Court declined to consider dismissal for failure to join Ecuador and PetroEcuador, reasoning that the parties had yet to develop a sufficient record.

  4. District Court's Grant of Texaco's Motion to Dismiss

    Following Judge Broderick's death, the case was reassigned, ultimately to Judge Rakoff. After a significant period of discovery, Texaco renewed its motion to dismiss. Counsel for the Republic submitted an amicus brief, supporting Texaco's motion to dismiss, once again informing the Court that the Republic objected to United States jurisdiction over the case. That brief was accompanied by an affidavit to the same effect signed by Ambassador Teran, again expressing the Republic's position.

    In response, the plaintiffs submitted three documents...

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