Chevron Corp. v. Salazar

• Decision Date: 31 August 2011
• Docket Number: No. 11 Civ. 3718 (LAK).,11 Civ. 3718 (LAK).
• Citation: 807 F.Supp.2d 189
• Parties: CHEVRON CORPORATION, Plaintiff, v. Maria Aguinda SALAZAR, et al., Defendants,andSteven Donziger, et al., Intervenors.
• Court: U.S. District Court — Southern District of New York

807 F.Supp.2d 189

CHEVRON CORPORATION, Plaintiff,

v.Maria Aguinda SALAZAR, et al., Defendants,andSteven Donziger, et al., Intervenors.

No. 11 Civ. 3718 (LAK).

United States District Court, S.D. New York.

Aug. 31, 2011.

Randy M. Mastro, Andrea E. Neuman, Scott A. Edelman, William E. Thompson, Gibson, Dunn & Crutcher, LLP, for Plaintiff.

Julio C. Gomez, Gomez, Attorney at Law LLC, Carlos A. Zelaya, II, F. Gerald Maples, F. Gerald Maples, PA, for Defendants Hugo Gerardo Camacho Naranjo and Javier Piaguaje Payaguaje.

MEMORANDUM OPINION

LEWIS A. KAPLAN, District Judge.

This is an action by Chevron Corporation (“Chevron”) for, among other things, a declaration that a multibillion dollar judgment entered against it by a provincial court in Lago Agrio, Ecuador (the “Judgment”) is not entitled to recognition or enforcement and an injunction against its enforcement outside of Ecuador. The defendants include the Ecuadorian plaintiffs, referred to here and elsewhere as the Lago Agrio Plaintiffs (the “LAPs”) and others. The matter is before the Court on the motion of the two LAPs who have appeared in and are defending this action (the “LAP Representatives”) for judgment on the pleadings dismissing the amended complaint or, alternatively, dismissing many of the grounds on which Chevron contends the Judgment is not recognizable or enforceable.

The LAP Representatives' motion is disposed of in a summary order of even date. This memorandum opinion deals with their contentions that Chevron is judicially estopped to deny that (1) the Ecuadorian legal system provides impartial tribunals and procedures compatible with due process of law, and (2) the Ecuadorian court had jurisdiction over Chevron.

The prior proceedings in this and related actions have been extensive, and the Court assumes familiarity with its previous decisions.¹

Facts

The judicial estoppel argument rests principally on statements made in the Aguinda litigation, a lawsuit brought in this Court in 1993 by many of the LAPs and others against Texaco, Inc. (“Texaco”) —then an independent, publicly owned company—that was dismissed on the ground of forum non conveniens many years ago and, indeed, before the Lago Agrio litigation even began. Chevron never was a party to the Aguinda litigation. But in October 9, 2001, while the LAPs' appeal from the forum non conveniens dismissal of Aguinda was pending, Chevron acquired all of the common stock of Texaco. The LAP Representatives therefore attempt to impute to Chevron statements made by or on behalf of Texaco. In order to evaluate the LAP Representatives' contention, it therefore is helpful to focus briefly on three subjects: (1) the relevant facts concerning the Aguinda litigation, (2) the facts and allegations with respect to the relationship between Texaco and Chevron, and (3) the statements relied upon and the context in which they were made.

The Aguinda Litigation

For present purposes, it suffices, in the main, to quote a summary by Judge Sand in a related case of principal events in the Aguinda litigation, a case in which Texaco was the only defendant and to which Chevron never was a party:

“In 1993, an action captioned Aguinda v. Texaco was brought in the United States District Court for the Southern District of New York by a group of residents of the Oriente region of Ecuador (the “Aguinda Plaintiffs”), against Texaco, Inc., which has since become a wholly owned subsidiary of defendant Chevron–Texaco by merger. The Aguinda Plaintiffs ‘alleged that between 1964 and 1992 Texaco's oil operation activities polluted the rain forests and rivers in Ecuador....” Aguinda v. Texaco, Inc., 303 F.3d 470, 473 (2d Cir.2002). They ‘sought money damages under theories of negligence, public and private nuisance, strict liability, medical monitoring, trespass, civil conspiracy, and violations of the Alien Tort Claims Act,’ as well as extensive equitable relief to redress contamination of the water supplies and environment, including: financing for environmental cleanup to create access to potable water and hunting and fishing grounds; renovating or closing the Trans–Ecuadorian Pipeline; creation of an environmental monitoring fund; establishing standards to govern future Texaco oil development; creation of a medical monitoring fund; an injunction restraining Texaco from entering into activities that risk environmental or human injuries, and restitution. Id. at 473–474.

“The procedural history of the Aguinda litigation is outlined in detail in Aguinda v. Texaco, Inc., 303 F.3d 470 (2d Cir.2002), and Jota v. Texaco, Inc., 157 F.3d 153 (2d Cir.1998). Although it would be duplicative to recite that entire history here, a brief summary is appropriate. In November 1996, on Texaco's motion, the case was dismissed by the district court (Rakoff, J.) on grounds of forum non conveniens, international comity, and failure to join indispensable parties, specifically Ecuador and Petroecuador, whose presence was held to be necessary to effectuate the extensive equitable relief requested, but impossible to obtain in light of their sovereign immunity. Aguinda v. Texaco, Inc., 945 F.Supp. 625 (S.D.N.Y.1996). The Second Circuit in 1998 vacated the dismissal and remanded the case for reconsideration, Jota, 157 F.3d at 163, holding that a forum non conveniens dismissal was inappropriate absent a requirement that Texaco consent to Ecuadorian jurisdiction, id. at 159; that the comity determination had potentially been undermined by Ecuador's change from opposing litigation of the issue in a United States court to supporting that litigation, id. at 160–161; and that the indispensable-party theory, while perhaps correct as to some of the relief requested, was insufficient to support dismissal of the entire complaint, id. at 162. On remand, Texaco having consented to jurisdiction in Ecuador, the district court again dismissed the case on grounds of forum non conveniens. Aguinda v. Texaco, Inc., 142 F.Supp.2d 534 (S.D.N.Y.2001). The Second Circuit affirmed. Aguinda v. Texaco, Inc., 303 F.3d 470 (2d Cir.2002).” ²

And lest there be any doubt, the consent to jurisdiction in Ecuador was made by Texaco and Texaco alone.³

Texaco and Chevron

For the sake of clarity, it is important to emphasize that the pleadings in this case are entirely devoid of any allegations that Texaco merged with or into Chevron or, indeed, any subsidiary of Chevron. Nor are there any allegations that would support piercing the corporate veil of Texaco, treating Chevron as Texaco's alter ego, or otherwise disregarding the separate corporate existence of Texaco.

It is well to focus also on the fact that public records establish that Texaco did not merge with or into Chevron. Rather, on October 9, 2001, a wholly owned subsidiary of Chevron merged with and into Texaco.⁴ Texaco was the surviving entity.⁵ In accordance with the merger agreement, Chevron became the owner of all of the common stock of Texaco.⁶

The Statements Relied Upon

The LAP Representatives' judicial estoppel argument is based on statements made in briefs and in affidavits and declarations by witnesses submitted in the Aguinda litigation in support of Texaco's efforts to obtain a forum non conveniens dismissal.⁷ All were to the effect that the Ecuadorian courts were neither corrupt nor unfair and that Texaco would satisfy any judgment for plaintiffs, reserving its right to contest its validity in the circumstances permitted by New York's Recognition of Foreign Country Money Judgments Act, a New York codification of the Uniform Act of the same name. ⁸ Each and every one of these statements was made by Texaco. Indeed, each was made before Chevron acquired its stock.

The LAP Representatives rely also on Texaco's Second Circuit brief in Aguinda, in which, they say, “Chevron repeated all these claims to the Second Circuit.” ⁹ Although that brief was filed after Chevron acquired Texaco's stock, Chevron was not a party to that case.

Discussion

A. Standard

Rule 12(c) governs motions for judgment on the pleadings.¹⁰ When deciding a Rule 12(c) motion, the Court applies the same standard that would be applied to a Rule 12(b)(6) motion to dismiss.¹¹ The Court therefore views the pleadings in the light most favorable to, and draws all reasonable inferences in favor of, the non-moving party.¹² Judgment is appropriate if, based on the pleadings, the moving party is entitled to judgment as a matter of law.

B. Judicial Estoppel

The Supreme Court has defined judicial estoppel as follows:

“Where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position previously taken by him.” ¹³

In our Circuit, it applies:

“if: 1) a party's later position is ‘clearly inconsistent’ with its earlier position; 2) the party's former position has been adopted in some way by the court in the earlier proceeding; and 3) the party asserting the two positions would derive an unfair advantage against the party seeking estoppel.” ¹⁴

In addition, it is further limited to “situations where the risk of inconsistent results with its impact on judicial integrity is certain.” ¹⁵

The LAP Representatives' judicial estoppel argument fails at the outset because there is no inconsistency, clear or otherwise, between the positions Texaco took in the Aguinda case and Chevron's current contentions that (1) the Ecuadorian legal system did not provide impartial tribunals and procedures compatible with due process of law in the relevant time period, and (2) the Ecuadorian court did not have jurisdiction over Chevron. That, moreover, would be true even if Texaco's various statements, arguments and positions in Aguinda were entirely attributable to Chevron.

To begin with, the issue in Aguinda was whether Ecuador could provide an adequate forum for purposes of...