chevron ecuador donzigermolmotion to quash1

8/8/2019 Chevron Ecuador DonzigerMOLmotion to Quash1

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

In re Application of:

CHEVRON CORPORATION, et al.,

Applicants ,

for an Order Pursuant to 28 U.S.C. 1782 toConduct Discovery for Use in ForeignProceedings

Index No. 10-mc-0002 (LAK)

________________________________________________________________________

THE ECUADORIAN PLAINTIFFS CONSOLIDATED REPLY MEMORANDUMOF LAW IN SUPPORT OF THEIR MOTIONS TO QUASH OR MODIFY

SUBPOENAS SERVED UPON STEVEN R. DONZIGER ________________________________________________________________________

Emery Celli Brinckerhoff & Abady LLP75 Rockefeller Plaza, 20 th Floor

New York, NY 10019(212) 763-5000

Case 1:10-mc-00002-LAK Document 47 Filed 09/07/10 Page 1 of 14


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TABLE OF CONTENTSPAGE NO.

TABLE OF AUTHORITIES .............................................................................................. ii

INTRODUCTION ...............................................................................................................1

ARGUMENT.......................................................................................................................4

I. Applicants Resort to the Crime Fraud Exception Fails ..............................4

II. The Chevron Parties Other Arguments Fail ...............................................9

CONCLUSION..................................................................................................................11



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TABLE OF AUTHORITIESPAGE NO(s).

CASES

Coeur DAlene Tribe of Idaho v. Hammond ,384 F.3d 674 (9th Cir. 2004) .................................................................................. 9

In re App. of Chevron Corp. , No. 10-mc-134,2010 U.S. Dist. LEXIS 50113 (S.D. Tex. May 20, 2010) ...................................... 8

In re Currency Conversion Fee Antitrust Litigation, No. MDL No. 1409,2002 WL 31458230 (S.D.N.Y. Nov. 4, 2002)........................................................ 9

In re Grand Jury Proceedings ,

219 F.3d 175 (2d. Cir. 2000)................................................................................... 9 In re Kidder Peabody Securities Litig.,

168 F.R.D. 459 (S.D.N.Y. 1996) ............................................................................ 9

In re Von Bulow ,929 F.2d 94 (2d Cir. 1984)...................................................................................... 9

Pravin Banker Assocs., Ltd. v. Banco Popular Del Peru, 109 F.3d 850 (2d Cir.1997)..................................................................................... 8

Republic of Ecuador v. ChevronTexaco Corp. ,

376 F. Supp.2d 334 (S.D.N.Y. 2005)...................................................................... 1

Republic of Philippines v. Pimentel ,553 U.S. 851, 128 S.Ct. 2180 (2008)...................................................................... 8

Royal & Sun Alliance v. Century Intl Arms, Inc .,466 F.3d 88 (2d Cir. 2006)...................................................................................... 8

Syverson v. Intl Bus. Mach. Corp. ,472 F.3d 1072 (9th Cir. 2007) ................................................................................ 8

Trudeau v. N.Y. State Consumer Protection Bd. ,237 F.R.D. 325 (N.D.N.Y. 2006)............................................................................ 9

United States v. Jacobs ,117 F.3d 82 (2d Cir. 1997)...................................................................................... 9

United States v. Zolin ,491 U.S. 554 (1989).................................................................................................5



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Agrio Court, and that court has given no indication that such contacts are improper; (ii)

(ii) Chevron has still not denied it that also had ex parte contacts with court experts in

Lago Agrio; and (iii) Chevron still cannot point to a single order, rule, regulation, or law

prohibiting such contact; to the contrary; it is reduced to relying on lengthy expert

opinions to resolve what it had claimed was a cut and dry example of fraud under

Ecuadorian law.

Chevron complains about the ghostwriting of expert reports, yet it has become

clear that Chevrons private expert, John A. Connor, ghostwrote part of the report of

another independent, neutral court expert in Lago Agrio: Mr. Barros. Attached as Exhibit67 is a report Chevrons private expert, Mr. Connor, prepared dated June 16, 2005 titled

Prcticas y Reglamentos Internacionales Para el Uso y la Remediacin de Piscinas de

Campos Petroleros . Apparently without any attribution, the neutral and independent

expert appointed by the Lago Agrio Court, Mr. Barros, copied entire pages of Chevrons

report, word for word. In his expert report submitted to the Court, Barros included a five-

page passage with the same title as the Connor report: Prcticas y Reglamentos

Internacionales Para el Uso y la Remediacin de Piscinas de Campos Petroleros . Ex.

68. The first two pages of this section mirror the Connor report exactly . Cf. Ex. 67 at 1-

3; Ex. 68 at 2-3. Barros then follows this introductory section with three other passages

directly cut from different sections of Connors report, all without attribution. Compare

Ex. 67 at 8-9, 15, 19; Ex. 68 at 3-6. Nowhere does Barros appear to acknowledge that he

has cut and pasted Chevrons experts materials into his own avowedly neutral and

independent report. Does Chevron deny it had ex parte conduct with Barros? It does not.



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this very discovery plaintiffs submissions to Cabrera but the Lago Court rebuffed it.

Ex. 47 at 4; Ex.17 at 9; Ex. 12. If, as Chevron claims, it is entitled to these documents

under the Lago Courts own orders, why did the Lago Court deny Chevrons application?

Transparency in a civil law system such as Ecuadors plainly means something

different than it does here, and this Court should reject the invitation (hastily and

imprudently accepted by a couple of magistrates) to opine on the meaning of the Lago

Courts prior rulings to make a finding, of all things, of a crime/fraud.

In a recent Fifth Circuit argument, Judge Crone summed it up best:

Youre not getting what you want there, so now you cometo the United States and where theres more liberaldiscovery allowed perhaps than in Ecuador, and I and Ithink that you, in the first place got a forum non conveniensdismissal from in the United States in favor of having

procedures in Ecuador, and now maybe this is kind of whatyou bargained for. 4

Chevron and its lawyers seek a first in their Section 1782 cavalcade: discovery,

primarily of privileged material, from an active lawyer in this ongoing litigation. This is

1782 beyond the breaking point. The motion to quash should be granted.

ARGUMENT

I. Applicants Resort to the Crime Fraud Exception Fails

Realizing, of course, that the overwhelming majority of the discovery it seeks is

privileged, the Chevron parties make the sweeping argument that the crime fraud

exception justifies all of this discovery. This argument fails on a number of levels.

4 Ex. 62 at 31.



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First, the Chevron parties have made no showing that particular, responsive

materials satisfy the crime fraud exception. Even if the Chevron parties had such a

factual basis adequate to support a good faith belief by a reasonable person, United

States v. Zolin , 491 U.S. 554, 572 (1989), which they do not, the appropriate procedure

would be in camera review of particular documents the Chevron parties allege come

within the exception. Id. at 572, 574-75 (before a district court may engage in in

camera review at the request of the party opposing the privilege, that party must present

evidence sufficient to support a reasonable belief that in camera review may yield

evidence that establishes the [crime fraud] exceptions applicability.).Second, the Chevron parties fail to identify specifically the alleged crime or fraud,

and which specific documents are in furtherance of it. Is the fraud the submissions to

Cabrera, already before the Lago Court? Is the fraud materials relating to Calmbacher?

Is the fraud the whole case? The Chevron parties briefs are a moving target on this

topic; thus, it is difficult to know which specific documents they believe come within the

exception. This is particularly difficult on a cold record, absent a privilege log and a

motion to compel production of specific documents the Chevron parties believe come

within the exception. See 10 MC 00002, Dkt. #52, at 14 (Order of Judge Kaplan). 5

If the argument, however, is that the entire case is a fraud, plaintiffs suggest that

the Court review the entire transcript of the Cabrera meeting, not just Chevrons one or

5 Unlike in the Berlinger case, however, Donziger has claimed that the volume of responsive documents is so great that the burden of enumerating them and making

particularized claims of privilege with respect to each would be unreasonable. Cf . id n.33. Indeed, in their opposition, the Chevron parties did not dispute the immense burdenthese subpoenas would place on Donziger, and instead blamed him for spending asubstantial portion of his professional life on this case.



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two snippets. 6 It is a serious, sober discussion concerning Chevrons massive

contamination, both before and after the so-called remediation. See Ex. 65, CRS 188-

1, at 3-4 (summarizing hundreds of contaminated samples, as found by both plaintiffs and

Chevron); at 5 (Here is all of the summary chart for the sites inspected. As we can see,

the majority of them are sites that supposedly underwent remediation by Texaco. All of

them currently show contamination.); id. (if they take out all of our evidence, I think

that well win this case. In other words, Texaco is proving our case. With all of their

manipulation of the sampling, as can be seen in the inspections, they are still drawing soil

and water samples that violate the laws of Ecuador.); at 7 (discussing remediation:They came in, they capped it off, took something out, poured water, planted trees and

that was the remediation. As you can see, there are 8 wells out of 64. The rest of the sites

are just as Texaco left them.); at 8-10 (discussing Chevrons manipulation of sampling

techniques to minimize findings of contamination); at 13 (describing how Chevron takes

water samples upstream to avoid findings of contamination); at 13 (For barium, weve

found 8,030 in soil. The permissible standard in Ecuador is 750 PPM. And in one sample

we found 8,030. For cadmium, 27. The permissible limit is one. Nickel, 199.37. The

permissible limit is 40. Zinc, 617.91. This sample is from Texaco. The permissible limit

is 200. Chromium, 232.8. The permissible limit is 63. Copper, 120.); CRS 188-2, at 2-3

(describing groundwater contamination); at 4-7 (challenges of remediation); CRS 189-1

at 4 (remediation is a 17 to 20 year project); 12 (17 to 20 years to remediate

6 Two cameras covered the meeting. Plaintiffs have thus far managed to get a completetranscription from Camera 1. Chevron has been in possession of these outtakes for anumber of weeks.



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groundwater contamination). The outtakes do not reveal a massive fraud; they reveal a

serious case to redress substantial harm caused by Chevron.

Third, the question is whether there is a fraud under Ecuadorian, not U.S., law.

The entire basis for Chevrons allegations of impropriety rests upon orders of the Lago

Court, concerning independence, impartiality, and the like. Ch. Br. at 25-26. Yet

Chevron would have this Court, somehow applying American law, determine that

plaintiffs violated the Lago Courts orders. In the context of this case, this backwards

approach has no jurisprudential basis and makes no sense.

The Lago Court is in the best, indeed the only, position to determine whether itsown orders were violated. Chevron chose the Ecuadorian court as the site for this case.

Chevron relies on the Ecuadorian courts orders for its claims of fraud. Chevron is before

the Ecuadorian court right now. Chevrons suggestion that an American court should

apply American law to determine whether plaintiffs violated court orders in Ecuador is

absurd, indeed, impossible. There is no American law on the topic of the meaning and

interpretation of the Lago Courts orders. 7

Realizing that its appeal to American law is absurd on its face, Chevron resorts to

two opinions of hired experts, who claim essentially that plaintiffs committed impropriety

under Ecuadorian law. First, it is telling that Chevron is compelled to resort to experts at

all. Because Chevron could find no order, rule, regulation, or law that prohibited

plaintiffs conduct, it must pay people to provide opinions on the topic. If the crime or

fraud were so plain, why must Chevron hire not one but two experts to prove it?

7 Chevrons presentation concerning alleged violations of U.S. law revolves around theuse of the word independent in filings in the United States a topic addressed in 10MC 00001, Dkt. # 15 at 5-8 (incorporated herein) and Mr. Calmbacher, addressed infra .



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In any event, given the comity concerns at the heart of Section 1782, and the

ongoing proceedings taking place in the court of a sovereign nation where this claim can

be and has been raised, the place for such a filing, if at all, is in Ecuador. 8 See, e.g. ,

Republic of Philippines v. Pimentel , 553 U.S. 851, 128 S.Ct. 2180, 2190 (2008) (The

dignity of a foreign state is not enhanced if other nations bypass its courts without right or

good cause.); Pravin Banker Assocs., Ltd. v. Banco Popular Del Peru, 109 F.3d 850,

854 (2d Cir.1997) (United States courts ordinarily . . . defer to proceedings taking place

in foreign countries.); Royal & Sun Alliance v. Century Intl Arms, Inc ., 466 F.3d 88, 94

(2d Cir. 2006) (In the context of parallel proceedings in a foreign court, a district courtshould be guided by . . . the proper respect for litigation in and the courts of a sovereign

nation).

The Cabrera issue is before the Lago Court, that Court has not found the conduct

fraudulent in any way, and Chevron engaged in similar conduct. 9 The Chevron parties do

not come close to establishing a fraud.

8 One could scarcely imagine hiring an American expert to tell the American court that itsown orders were violated. It is unclear whether the Ecuadorian court will be any moreinterested in the opinion of an Ecuadorian expert concerning whether its own orderswere violated.9 Chevrons last-ditch argument collateral estoppel fails. First, it cannot apply toDonziger, who was not a party to these other actions. Second, Chevron is cherry-pickingfindings favorable to it while at the same ignoring other rulings favorable to Plaintiffs.Syverson v. Intl Bus. Mach. Corp. , 472 F.3d 1072, 1080 (9th Cir. 2007) ([A]llowing [a

party] to cherry-pick favorable prior decisions to preclude issues in an ongoing or subsequent litigation raises serious fairness concerns.). Chevron omits from its collateralestoppel discussion the fact that Chevron advanced a similar crime-fraud argument beforethe Southern District of Texas, and that the court there did not find such an exceptionapplied. Instead, the Texas court ordered merely a foundational deposition, andexpressed substantial reservations about Chevrons overbroad requests which, like here,

plainly impinge upon attorney-client and work-product privilege. In re App. of ChevronCorp. , No. 10-mc-134, 2010 U.S. Dist. LEXIS 50113, at *11-*13 (S.D. Tex. May 20,2010). Chevron also repeatedly invoked crime-fraud in the District of Colorado, but that



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interaction with Mr. Cabrera waive any and all privileges concerning their consulting

experts.

Chevrons attempt to refute the common interest privilege plaintiffs have had (as

to certain matters) with the Republic of Ecuador is particularly ironic. For years, in

judicial filings too numerous to mention, Chevron has accused plaintiffs of colluding

with ROE. But now, other than citing an excerpt from a Second Circuit argument that

has nothing to do with the common interest privilege, Chevron speculates without any

knowledge at all that ROE and plaintiffs have no common interest in any of the various

litigations around the world.11

Chevrons speculation is simply wrong. By way of example, plaintiffs and ROE brought parallel litigations to enjoin Chevron from

participating in the BIT arbitration (itself a rearguard attack on the Lago case) and have

a common interest in pursuing the case. The parties with the common interest know the

existence and contours of the interest; not Chevron.

There is neither time nor space to address every single one of the Chevron parties

misleading use of effectively a few minutes of outtakes, a feat of editing that might make

even Joe Berlinger jealous. But one aspect of their papers deserves some mention:

Charles Calmbacher.

Mr. Calmbacher is a disgruntled former expert, who had a very minor role in the

Lago case, and who threatened to sue plaintiffs for unpaid fees. His deposition occurred

outside the presence of plaintiffs, he was never cross-examined, and his testimony was

11 The excerpt dealt with the source of payment to satisfy a judgment in the Lago Agriocase. The full, relevant transcript is set forth at Ex. 8, 85-89. Chevrons citation wedont really have a dog in that fight [in the Treaty Arbitration] obscures that plaintiffs

brought an entire case, along with ROE, to enjoin Chevrons participation in the TreatyArbitration, which is itself a naked attempt to dismiss the Lago case.



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less than candid. In order to avoid any arguable claim of waiver of privilege, plaintiffs

will file an exhibit reflecting correspondence between Calmbacher and Donziger under

seal.

CONCLUSION

For the foregoing reasons, and those set forth in plaintiffs moving brief and

Donzigers papers, the Lago Agrio Plaintiffs respectfully submit that the subpoenas be

quashed.

Dated: New York, New York

September 7, 2010EMERY CELLI BRINCKERHOFF

& ABADY LLP

/s/ Ilann M. Maazel _________________________

Jonathan S. AbadyIlann M. MaazelO. Andrew F. WilsonAdam Pulver

75 Rockefeller Plaza, 20th Floor New York, New York 10019(212) 763-5000

Attorneys for Lago Agrio/ Ecuadorian Plaintiffs


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