708 F.3d 651 (5th Cir. 2013), 12-20122, Republic of Ecuador v. Connor

Docket Nº:12-20122, 12-20123.
Citation:708 F.3d 651
Opinion Judge:EDITH H. JONES, Circuit Judge:
Party Name:REPUBLIC OF ECUADOR; Diego Garcia Carrion, Plaintiffs-Appellants v. John A. CONNOR, Defendant-Appellee Chevron Corporation, Intervenor-Appellee. Republic of Ecuador; Diego Garcia Carrion, Plaintiffs-Appellants v. GSI Environmental, Incorporated, Defendant-Appellee Chevron Corporation, Intervenor-Appellee.
Attorney:Gene C. Schaerr, Eric W. Bloom, Winston & Strawn, L.L.P., Washington, DC, Sheryl Anne Falk, John E. O'Neill, Winston & Strawn, L.L.P., Houston, TX, for Plaintiffs-Appellants. James C. Ho, Ashley E. Johnson, Gibson, Dunn & Crutcher, L.L.P., Dallas, TX, for Defendant-Appellee/Intervenor-Appellee.
Judge Panel:Before DAVIS, JONES and SMITH, Circuit Judges.
Case Date:February 13, 2013
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 651

708 F.3d 651 (5th Cir. 2013)

REPUBLIC OF ECUADOR; Diego Garcia Carrion, Plaintiffs-Appellants

v.

John A. CONNOR, Defendant-Appellee

Chevron Corporation, Intervenor-Appellee.

Republic of Ecuador; Diego Garcia Carrion, Plaintiffs-Appellants

v.

GSI Environmental, Incorporated, Defendant-Appellee

Chevron Corporation, Intervenor-Appellee.

Nos. 12-20122, 12-20123.

United States Court of Appeals, Fifth Circuit.

February 13, 2013

Page 652

         Gene C. Schaerr, Eric W. Bloom, Winston & Strawn, L.L.P., Washington, DC, Sheryl Anne Falk, John E. O'Neill, Winston

Page 653

& Strawn, L.L.P., Houston, TX, for Plaintiffs-Appellants.

          James C. Ho, Ashley E. Johnson, Gibson, Dunn & Crutcher, L.L.P., Dallas, TX, for Defendant-Appellee/Intervenor-Appellee.

         Appeals from the United States District Court for the Southern District of Texas, USDC No. 4:11-MC-516.

          Before DAVIS, JONES and SMITH, Circuit Judges.

          EDITH H. JONES, Circuit Judge:

         The Republic of Ecuador (" Appellant" ) seeks discovery from Appellees John Connor and GSI Environmental, his company, for use in a foreign arbitration against Chevron. See 28 U.S.C. § 1782. During the course of extended litigation with Ecuador, Chevron,1 an intervenor in the district court, has benefitted repeatedly by arguing against Ecuador and others that the arbitration is a " foreign or international tribunal." Because Chevron's previous positions are inconsistent with its current argument, judicial estoppel is appropriate to make discovery under § 1782 available to Ecuador. The district court's order is REVERSED and REMANDED for determination of the scope of discovery.

         INTRODUCTION

         Chevron, as successor to Texaco, became embroiled in litigation over the alleged environmental contamination of oil fields in Ecuador. The litigation spans nearly two decades and dozens of courts. A court in Lago Agrio, Ecuador finally issued a multi-billion dollar judgment against Chevron. During the Lago Agrio litigation, Chevron filed for arbitration under the rules of UNCITRAL, as allowed by the US-Ecuador Bilateral Investment Treaty (" BIT" ). Chevron charged that miscarriages of justice in the Ecuadorian courts and participation by Ecuador in the plaintiffs' fraud violated its rights. Ecuador applied to the district court for ancillary discovery from Appellees for use in the arbitration and Chevron intervened to protect its interests.

         In connection with the BIT arbitration and ongoing Lago Agrio litigation in Ecuador, both parties have repeatedly sought discovery through United States courts pursuant to § 1782. At least twenty such orders have been issued on behalf of Chevron. No previous discovery request has been denied on the grounds raised in the district court here— that the BIT arbitration is not an " international tribunal." The district court, however, felt compelled by prior Fifth Circuit decisions to deny Ecuador's discovery request. Following those cases, the court concluded, the BIT arbitration represents a bilateral investment dispute that is not pending in a " foreign or international tribunal" as the statute requires. See Republic of Kazakhstan v. Biedermann Int'l, 168 F.3d 880 (5th Cir.1999); El Paso Corp. v. La Comision Ejecutiva Hidroelectrica Del Rio Lempa, 341 Fed.Appx. 31 (5th Cir.2009).

         DISCUSSION

         On appeal from the denial of its discovery request, Ecuador asserts that the BIT arbitration is indeed a foreign proceeding covered by the statute but, in the alternative, that Chevron, having benefitted repeatedly from agreeing to this assertion, should be judicially estopped to deny it now when discovery would aid its bitter opponent. Because the underlying facts are not in dispute, we review the district court's order de novo. Biedermann, 168 F.3d at 881.

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          Judicial estoppel is an equitable doctrine designed to protect the integrity of judicial proceedings by preventing litigants from asserting contradictory positions for tactical gain. The precise rationale for and consequences of the doctrine vary. 18B CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 4477 (2d ed. 2002 & Supp. 2012) [hereinafter " WRIGHT & MILLER" ]. Recognizing this, the Supreme Court examined the doctrine extensively in New Hampshire v. Maine, 532 U.S. 742, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001), but in the end refused to establish an " inflexible formula." Relying instead on several factors that often indicate the propriety of the sanction, the Court held that a party may be estopped from asserting a position in a judicial proceeding where it has previously persuaded a court to adopt a clearly contrary position to the disadvantage of an opponent. See also Reed v. City of Arlington, 650 F.3d 571 (5th Cir.2011) (en banc). Reed also notes, " Because judicial estoppel is an equitable doctrine, courts may apply it flexibly to achieve substantial justice." Id. at 576.

         The predicate for the exercise of judicial estoppel against Chevron is easily described. To promote international dispute resolution and comity, § 1782 authorizes federal district courts to issue discovery orders ancillary to proceedings in " foreign or international tribunals." 2 In numerous district courts, and on appeal in other circuits, Chevron asserted that the BIT arbitration is an international proceeding. Chevron explicitly distinguished this court's Biedermann decision as involving a purely " private" international arbitration between...

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