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Chevron Corp.. v. Donziger, 11 Civ. 0691(LAK).

Document Cited authorities 94 Cited in 62 Precedent Map Related
Vincent
Decision Date07 March 2011
Docket NumberNo. 11 Civ. 0691(LAK).,11 Civ. 0691(LAK).
Citation768 F.Supp.2d 581
PartiesCHEVRON CORPORATION, Plaintiff,v.Steven DONZIGER et al., Defendants.
CourtU.S. District Court — Southern District of New York

768 F.Supp.2d 581

CHEVRON CORPORATION, Plaintiff,

v.Steven DONZIGER et al., Defendants.

No. 11 Civ. 0691(LAK).

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

March 7, 2011.

OPINION TEXT STARTS HERE

Randy M. Mastro, Andrea E. Neuman, Scott A. Edelman, Kristen L. Hendricks, William E. Thompson, Gibson, Dunn & Crutcher, LLP, for Plaintiff.Julio C. Gomez, Julio C. Gomez, Attorney at Law LLC, for Defendants Hugo Gerardo Camacho Naranjo and Javier Piaguaje Payaguaje.Gordon Mehler, Law Offices of Gordon Mehler, P.L.L.C., for Defendants Stratus Consulting, Inc., Douglas Beltman, and Ann Maest.Steven R. Donziger Defendant Pro Se.John W. Keker (pro hac vice pending), Elliot R. Peters, Keker & Van Nest, LLP, for Defendant Donziger.

OPINION

LEWIS A. KAPLAN, District Judge.

+-----------------+
                ¦Table of Contents¦
                +-----------------¦
                ¦                 ¦
                +-----------------+
                
I  The Background                                                       597
                   Texaco's Former Operations in Ecuador                                597
                   The Beginning—the Aguinda Class Action in this Court                 597
                
        Texaco Settles All Pollution Claims With Ecuador                598
                        The Aguinda Plaintiffs and Lawyers Make A Deal With Ecuador     598
                        Ecuador's Environmental Management Act of 1999                  599
                
   The Lago Agrio Litigation—2003–2008                                  600
                
        The Complaint                                                   600
                        Donziger's Role                                                 601
                        Early Stages                                                    602
                
             The Initial Criminal Investigation—An Attempt to Defeat
                             the Settlement                                             602
                             The Early Expert Inspections                               602
                             Donziger Solicits Berlinger to Make Crude                  603
                             The Global Assessment—The Cabrera Report                   603
                
   The Release of Crude Leads to U.S. Discovery Revealing Misconduct    604
                
        The Release of Crude                                            604
                        Dr. Calmbacher Disavows Report the LAPs Filed Over His Name     605
                        The Cabrera Report Exposed                                      606
                
             Cabrera's Appointment                                      606
                             The LAPs Ghost–Wrote All or Much of Cabrera's Report       607
                             The “Cleansing” Operation                                  610
                
   The LAPs' Use of Pressure Tactics and Political Influence in this    611
                   Case
                
        Intimidation of the Ecuadorian Judges                           611
                        The Plan to Pressure the Court With an “Army”                   612
                        Killing the Judge?                                              613
                        Political Influence to Use the Criminal Process Against Former  614
                        TexPet Lawyers to Extort a Settlement
                
   The Legal and Political Climate in Ecuador—Fair Trial Becomes
                   Impossible and the ROE, at the LAPs, Urgings, Seeks to Prosecute     616
                   Chevron Lawyers for Tactical Reasons
                
        The Ecuadorian Judiciary                                        616
                
             The 2004 Purge of the Supreme Court                        617
                             President Correa's Influence Over the Judiciary            617
                             Donziger Admits Corrupt Nature of the Ecuadorian Judiciary 620
                
   The Lago Agrio Judgment and the LAPs' Enforcement Plan               620
                
        The Judgment                                                    620
                        Appellate Remedies in Ecuador                                   621
                        The LAPs' Enforcement Plan                                      622
                
   The UNCITRAL Arbitration                                             624
                
   This Case                                                            625
                
        The Complaint                                                   625
                
             Parties                                                    625
                             Claims                                                     625
                
        Proceedings to Date                                             626
                
II Legal Analysis and Additional Facts                                  626
                
   A.   Chevron Is Threatened With Immediate and Irreparable Injury     626
                
        1.   The Threatened Harm Would Be Irreparable                   627
                        2.   The Threatened Harm Is Imminent                            629
                             The Availability of Appellate Remedies and a Possible Stay
                        3.   in Ecuador Do Not Preclude a Finding of Threatened         631
                             Irreparable Injury
                
   B.   The Balance of Hardships Tips Decidedly Toward Chevron          631
                   C.   Likelihood of Success on the Merits—The Substantive Claims      632
                
        1.   The Claim for a Declaration that the Judgment is Not       632
                             Entitled to Recognition or Enforcement
                
             a.   Standards Governing Recognition and Enforcement       632
                                  Chevron Has Shown the Requisite Likelihood of Success
                             b.   on its Claim that Ecuador Does Not Provide Impartial  633
                                  Tribunals and Due Process
                                  There Are At Least Serious Questions Going to the
                             c.   Merits of the Claim that the Judgment Was Procured By 636
                                  Fraud
                             d.   This Is an Appropriate Case for Declaratory Relief    637
                
        2.   The Other Claims                                           638
                
   D.   Likelihood of Success on the Merits—Procedural Issues           639
                
        1.   Chevron Is Likely to Establish Personal Jurisdiction As to 639
                             the Two Foreign Defendants Who Have Not Waived the Defense
                
             a.   Service of Process                                    639
                             b.   The Exercise of Jurisdiction over the LAP             640
                                  Representatives
                
                  (1) Amenability to Service                            640
                
                      (a) N.Y. CPLR § 301                                640
                                      (b) N.Y. CPLR § 302                                642
                
                  (2) Due Process                                       643
                
                      (a) Minimum Contacts                               644
                                      (b) Reasonableness                                 644
                
             c.   The Other Defendants                                  645
                
        2.   Comity and Abstention                                      646
                        3.   Donziger's Judicial Estoppel Argument Lacks Merit          648
                        4.   Donziger Was Afforded an Adequate Opportunity to Respond   649
                
             a.   The Argument and Scheduling of the Motion             649
                                  The Denial of the Adjournment and the Briefing
                             b.   Schedule Were Consistent With Rule 65(a) and Due      650
                                  Process
                
        5.   No Evidentiary Hearing Was Required                        654
                        6.   The LAP Representatives Waived Their Unclean Hands Defense 656
                             for this Motion
                
   E.   The Bond                                                        656
                
III The Record on this Motion                                           657
                
   A.   The Filings                                                     657
                   B.   Analysis                                                        658
                
IV Conclusion                                                           660

A provincial court in Ecuador has entered a multibillion dollar judgment against Chevron Corporation (“Chevron”) in an action brought by indigenous peoples in the Amazonian rain forest (the “Lago Agrio Plaintiffs” or “LAPs”).1 The gravamen of their case is alleged pollution of the rain forest in years ending in 1992 by Texaco, Inc. (“Texaco”), the stock of which Chevron acquired at the end of 2001.2

This claim originated in the United States. Three American lawyers began the original litigation in this Court many years ago.3 After the New York suit was dismissed in 2001 on forum non conveniens grounds, they brought a successor lawsuit on a different legal theory (the “Lago Agrio” case) in Ecuador. The judgment at issue here was entered in that case.

The LAPs' attorneys and other representatives have stated that they intend to seek to collect on that judgment in multiple jurisdictions around the world, including by ex parte attachments, asset seizures, and other means, as promptly as possible, starting before completion of the Ecuadorian appellate process. 4 The purpose of such multiplicitous and burdensome proceedings against a company like Chevron, which would be good for the money if the judgment ultimately stands up, is plain. By their own admissions, it is to exert pressure on Chevron by means of this litigation strategy to force a quick and richer settlement.

Chevron contends that the judgment is not enforceable outside Ecuador because (1) the Ecuadorian legal system does not provide impartial tribunals or procedures compatible with the requirements of due process of law, and (2) it was obtained by fraud led in major degree by a New York City lawyer, Steven Donziger, substantial parts of which were conducted in the United States. It brought this case for, among other relief, a declaration that the judgment is not entitled to recognition or enforcement. It now seeks a preliminary injunction principally to bar the enforcement of the judgment outside Ecuador pending the resolution of this case on the merits or, at least, the resolution of its prayer for a declaratory judgment.

This is an extraordinary case. The amount involved is large. Chevron challenges the fairness and integrity of the judicial system of Ecuador and thus implicates considerations of international comity. There are issues concerning the reach of U.S. law and questions pertaining to the conduct of the New York lawyer and others. There are...

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  • Chevron Corp. v. Donziger
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    • U.S. District Court — Southern District of New York
    • July 31, 2012
    ...aff'd sub nom., Lago Agrio Plaintiffs v. Chevron Corp., 409 Fed.Appx. 393 (2d Cir.2010). Other decisions: Chevron Corp. v. Donziger, 768 F.Supp.2d 581 (S.D.N.Y.2011) (“Donziger I ”) (granting preliminary injunction), rev'd, Chevron Corp. v. Naranjo, 667 F.3d 232 (2d Cir.2012); Chevron Corp.......
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    • May 14, 2012
    ...aff'd sub nom., Lago Agrio Plaintiffs v. Chevron Corp., 409 Fed.Appx. 393 (2d Cir.2010). Other decisions: Chevron Corp. v. Donziger, 768 F.Supp.2d 581 (S.D.N.Y.2011) (“Donziger I ”) (granting preliminary injunction), rev'd, Chevron Corp. v. Naranjo, 667 F.3d 232 (2d Cir.2012); Chevron Corp.......
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    • U.S. District Court — Southern District of New York
    • March 4, 2014
    ...was premature. Moreover, as the appeal in this case later proceeded, that understanding proved incorrect. See Chevron Corp. v. Donziger, 768 F.Supp.2d 581, 621 (S.D.N.Y.2011). Further, the Patton Boggs Invictus Memo stated its understanding that “the standard of review is not de novo.” PX 2......
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    ...acquired all the stock of Texaco, Inc. in 2001. 5 Aguinda v. Texaco, Inc., 303 F.3d 470 (2d Cir. 2002). 6 Chevron Corp. v. Donziger, 768 F. Supp. 2d 581 (2011). Despite the fact that the injunction sought by Chevron would prevent the LAPs from commencing enforcement litigation, the district......
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    • University of Whashington School of Law University of Washington Law Review No. 86-3, March 2017
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