Republic of Ecuador v. Of (In re Republic Ecuador)

• Decision Date: 13 November 2013
• Docket Number: No. 12–1402.,12–1402.
• Citation: 735 F.3d 1179
• Parties: In re Application of the REPUBLIC OF ECUADOR; Diego Garcia Carrion, the Attorney General of the Republic of Ecuador, Petitioners–Appellees, v. FOR THE ISSUANCE OF A SUBPOENA UNDER 28 U.S.C. § 1782(a) for the Taking of a Deposition of and the Production of Documents by Bjorn Bjorkman for use in a foreign proceeding, Respondent–Appellant. Chevron Corporation, Intervenor–Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

735 F.3d 1179

In re Application of the REPUBLIC OF ECUADOR; Diego Garcia Carrion, the Attorney General of the Republic of Ecuador, Petitioners–Appellees,

v. FOR THE ISSUANCE OF A SUBPOENA UNDER 28 U.S.C. § 1782(a) for the Taking of a Deposition of and the Production of Documents by Bjorn Bjorkman for use in a foreign proceeding, Respondent–Appellant.Chevron Corporation, Intervenor–Appellant.

No. 12–1402.

United States Court of Appeals,Tenth Circuit.

Nov. 13, 2013.

Theodore J. Boutrous Jr. of Gibson, Dunn & Crutcher, L.L.P., Los Angeles, CA, (Ethan D. Dettmer of Gibson, Dunn & Crutcher, L.L.P, San Francisco, CA and Robert C. Blume of Gibson, Dunn & Crutcher, L.L.P., Denver, CO, with him on the briefs), for Respondent–Appellant and Intervenor Appellant.

Gene C. Schaerr (and Eric W. Bloom of Winston & Strawn, L.L.P., on the brief), Washington, D.C., for Petitioners–Appellees.

Before KELLY, McKAY, and MATHESON, Circuit Judges.

PAUL KELLY, Circuit Judge.

Intervenor–Appellant Chevron Corporation appeals from a district court order granting a motion to compel production of documents pursuant to subpoenas issued under 28 U.S.C. § 1782. Section 1782 allows for discovery of documents to be used in a foreign proceeding. Petitioners–Appellees, the Republic of Ecuador and its Attorney General, Dr. Diego García Carrión (collectively, “the Republic”) sought the discovery to defend an $18.2 billion judgment against Chevron by an Ecuadorian court. Chevron is seeking relief from that judgment pursuant to investment treaty arbitration under United Nations' rules. Our jurisdiction arises under 28 U.S.C. § 1291, and we affirm the district court's order.

Background

Since the early 1990s, Chevron and its predecessor company, Texaco, Inc., ¹ have defended litigation concerning Texaco's operation in Ecuador and the environmental contamination it allegedly produced. This litigation started in the Southern District of New York but eventually found its way to the courts of Lago Agrio, Ecuador. (For a detailed description of the New York litigation, see Aguinda v. Texaco, Inc., 303 F.3d 470 (2d Cir.2002)). In February 2011, the court in Lago Agrio entered an $18.2 billion judgment against Chevron, currently on appeal.

Prior to the Lago Agrio judgment, in September 2009, Chevron commenced arbitration proceedings against the Republic under the U.S.-Ecuador Bilateral Investment Treaty, pursuant to the rules of the United Nations Commission on International Trade Law. Chevron invoked this procedure to stop the alleged “due process, fair treatment, and international-law rights” violations it allegedly suffered at the hands of Ecuadorian courts. Aplt. Br. 12. In February 2011, immediately following the Lago Agrio judgment, the arbitral tribunal ordered that the Republic stay all efforts to enforce the Lago Agrio judgment, pending further order of the tribunal.

This is where the underlying litigation currently stands. However, gearing up for arbitration, both sides have filed numerous 28 U.S.C. § 1782 applications in district courts throughout the United States seeking discovery of evidence for use in a foreign proceeding. In June 2011, the Republic filed a § 1782 application in the District of Colorado seeking “discovery from Bjorn Bjorkman to aid the Republic in defending the validity of the Lago Agrio judgment.” I Jt. App. 42. The Republic alleged that Mr. Bjorkman served as one of Chevron's chief experts and that the Ecuadorian court explicitly relied on his opinions. Id. at 42–43. Mr. Bjorkman and Chevron, as an interested party, responded challenging discovery, and the district court referred the Republic's application to a magistrate judge.

During the Lago Agrio trial, Chevron retained Mr. Bjorkman, “an ecologist specializing in ecological and human health risk assessments, site investigations, and biological and biodiversity investigations.” Aplt. Br. 15. In this capacity, Mr. Bjorkman prepared and received documents and communications “created in anticipation of litigation with the intent that they would be kept confidential.” Id. at 15–16. These documents and communications came from a variety of sources in Chevron's litigation team, including “lawyers, in-house scientists, consultants, and expert witnesses.” Id. at 17. In the instant action, Chevron argued before the magistrate judge that the 2010 revisions to Fed.R.Civ.P. 26 brought materials prepared by or provided to Mr. Bjorkman under the protection of the work-product doctrine.

In August 2011, the magistrate judge granted the Republic's application, rejecting Chevron's argument and noting that Rule 26 “does not preclude the disclosure of information constituting the basis for a report, even though prepared for use in trial.” I Jt.App. 21. The district court adopted and affirmed the magistrate's order. Pursuant to this order, Chevron produced “all of the facts and data [Mr. Bjorkman] considered in forming his expert opinions.” Aplt. Br. 2. However, Chevron withheld thousands of documents that it believed fell under Rule 26's work-product doctrine. Claiming this violated the discovery order, the Republic filed a motion to compel further production. In January 2012, the magistrate judge partially granted the Republic's motion. Relevant to this appeal, the magistrate judge held that:

(1) Chevron may properly withhold drafts of Mr. Bjorkman's expert reports and disclosures, in whatever form, under Rule 26(b)(4)(B);

(2) Chevron may properly withhold documents containing communications between Mr. Bjorkman and Chevron's attorneys under Rule 26(b)(4)(C); however,Chevron may not withhold communications between Mr. Bjorkman and non-attorneys; and

(3) Rule 26(b)(3) did not provide work-product protection to all documents in the hands of a reporting expert, only those documents specifically covered by Rules 26(b)(4)(B) and (C) were so protected.

Republic of Ecuador v. Bjorkman, No. 11–cv–01470, 2012 WL 12755, at *4–6 (D.Colo. Jan. 4, 2012); I Jt.App. 28–31. Specifically, the magistrate judge held that the intention of Rule 26 is to “protect the mental impressions and legal theories of a party's attorney, not its expert.” Id. at *6. With that premise, the magistrate judge concluded that Chevron “may not withhold any documents or information based upon the ‘work product doctrine’ set forth in Rule 26(b)(3), except those specifically protected by Rules 26(b)(4)(B) and (C).” Id. On October 4, 2012, the district court affirmed and adopted the magistrate judge's recommendation in full. I Jt.App. 35. Mr. Bjorkman and Chevron timely appealed the district court's October 4, 2012 order to this court.

Thereafter, Chevron sought to stay discovery pending review by this court. The district court denied this request and ordered Chevron to produce all documents subject to the October 4, 2012 order not yet produced. On the parties' motion, the magistrate judge entered a stipulated protective order, limiting the Republic's use of materials received from Mr. Bjorkman to “conducting the Bilateral Investment Treaty Arbitration.” I Jt.App. 36. While this appeal was pending, the Republic filed a second motion to compel, alleging that Chevron continued to improperly withhold documents that fell under the October 4, 2012 order. The magistrate judge issued two more orders, in January and April 2013, clarifying the scope of the October 4, 2012 order and compelling further production. See Republic of Ecuador v. Bjorkman, No. 11–cv–01470, 2013 WL 50430 (D.Colo. Jan.3, 2013). Chevron never objected to the January and April 2013 orders under Fed.R.Civ.P. 72, and the district court never adopted them.

Discussion

I. Jurisdiction

Although the parties did not challenge this court's jurisdiction, we raised the issue sua sponte and have the benefit of supplemental briefing. See Smith v. Rail Link, Inc., 697 F.3d 1304, 1312–13 (10th Cir.2012). Absent certain exceptions, “federal appellate courts have jurisdiction solely over appeals from final decisions of the district courts of the United States.” Rekstad v. First Bank System, Inc., 238 F.3d 1259, 1261 (10th Cir.2001) (internal quotation omitted). A decision is final if it “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” W. Energy Alliance v. Salazar, 709 F.3d 1040, 1047 (10th Cir.2013) (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978)). While the district court's October 4, 2012 order compelling the discovery at issue appears on its face “final,” the magistrate judge's January and April 2013 orders compelling further discovery call its finality into question.

Initially we note that in a § 1782 proceeding, there is nothing to be done “on the merits.” Section 1782 empowers a district court to order a person residing within its district to “give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal.” 28 U.S.C. § 1782. The only issue before the district court is discovery; the underlying litigation rests before a foreign tribunal. See Bayer AG v. Betachem, Inc., 173 F.3d 188, 189 n. 1 (3d Cir.1999).

In Phillips v. Beierwaltes, this court stated without qualification that § 1782 “orders are considered final and appealable to this court.” 466 F.3d 1217, 1220 (10th Cir.2006). However, we were not faced with the circumstances we face here—a § 1782 order by a district court followed by additional orders by a magistrate judge concerning the same § 1782 application.

The Republic argues that a § 1782 order is not a “final decision” so long as “further proceedings [are] still underway in the district court.” Aplee. Supp. Br. 7. However, the cases it cites do not hold that a district court's § 1782 order cannot be “final” if subject to ongoing dispute about its coverage and scope before a magistrate judge. The Ninth Circuit, in In re Premises Located at 840 140th Ave. NE, noted that a § 1782 order is...