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In re Application of Republic of Ecuador

United States District Court, D. Massachusetts

December 18, 2015

In re Application of: THE REPUBLIC OF ECUADOR and DR. DIEGO GARCÍA CARRIÓ N, the Attorney General of the Republic of Ecuador, Applicants, 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 DR. GREGORY S. DOUGLAS for Use in a Foreign Proceeding, Respondent, and CHEVRON CORPORATION, Intervenor

          For Republic of Ecuador, Diego Garcia Carrion, Plaintiffs: Eric W. Bloom, PRO HAC VICE, LEAD ATTORNEY, Gregory L Ewing, Richard A Lapping, Winston & Strawn LLP, Washington, DC; Stephen R. Smerek, LEAD ATTORNEY, Winston & Strawn LLP (CA), Los Angeles, CA.

         For Gregory S Douglas, Respondent: Heather B. Repicky, Robert L. Ullmann, LEAD ATTORNEY, Nutter, McClennen & Fish, LLP, Boston, MA; Peter E. Seley, PRO HAC VICE, Gibson, Dunn & Crutcher, LLP, Washington, DC.

         For Chevron Corporation, Intervenor: Heather B. Repicky, Robert L. Ullmann, LEAD ATTORNEY, Nutter, McClennen & Fish, LLP, Boston, MA; Peter E. Seley, PRO HAC VICE, Gibson, Dunn & Crutcher, LLP, Washington, DC.

         MEMORANDUM AND ORDER

         DOUGLAS P. WOODLOCK, UNITED STATES DISTRICT JUDGE.

         The Republic of Ecuador and its civil attorney general, Dr. Diego García Carrión (collectively, the " Republic" ) submitted an application under 28 U.S.C. § 1782(a) for an order allowing them to serve a subpoena on Dr. Gregory S. Douglas. They seek to require Dr. Douglas to produce documents for use in Chevron Corporation and Texaco Petroleum Corporation v. The Republic of Ecuador, PCA Case No. 2009-23, a foreign Bilateral Investment Treaty arbitration. Dr. Douglas and Chevron Corporation, as intervenor, have moved for a protective order, which the Republic opposed, modifying the scope of the Republic's requested discovery. For the reasons stated below, I will grant the Republic's motion for a substitute subpoena and grant the motion of Dr. Douglas and Chevron for a protective order but only to the extent of providing protection from production to draft reports and specified attorney-client communications.

         I. BACKGROUND

         In 1993, indigenous Ecuadorians brought an environmental suit in the Southern District of New York against Texaco Inc., and its subsidiary Texaco Petroleum Corporation, for polluting the Oriente region of the Amazon rain forest while operating oil wells there from 1964-1992. The plaintiffs contended that operations resulted in the illness and death of numerous people. The case was dismissed in the district court on forum non conveniens grounds, Aguinda v. Texaco, Inc., 945 F.Supp. 625, 627 (S.D.N.Y. 1996). The Second Circuit vacated and remanded to consider dismissal upon the condition that Texaco consent to Ecuadorian jurisdiction, Jota v. Texaco, Inc., 157 F.3d 153, 155 (2d Cir. 1998). On remand, the case was again dismissed by the district court, Aguinda v. Texaco, Inc., 142 F.Supp.2d 534, 536 (S.D.N.Y. 2001), on the conditions identified by the Second Circuit, which thereafter affirmed. Aguinda v. Texaco, Inc., 303 F.3d 470, 473 (2d Cir. 2002).

         In 2003, some of the Ecuadorian plaintiffs re-filed their suit in Ecuador's Lago Agrio Court against Chevron. Republic of Ecuador v. Chevron Corp., 638 F.3d 384, 390 n.5 (2d Cir. 2011). As the Third Circuit put it, " [i]t is an understatement to characterize the Lago Agrio litigation as contentious, as both sides of the litigation vigorously have opposed nearly every move by the other, and have accused the other side of criminal or fraudulent conduct in the course of the litigation." In re Chevron Corp., 633 F.3d 153, 157 (3d Cir. 2011). On February 14, 2011, the Lago Agrio court entered judgment for the Ecuadorian plaintiffs in the amount of $18 billion.

         In 2009, while the Lago Agrio litigation was still pending, Chevron commenced arbitration under the United Nations Commission on International Trade Law (UNCITRAL). Chevron Corp. And Texaco Petroleum Corp. v. The Republic of Ecuador, PCA Case No. 2009-23. Chevron alleged that the Lago Agrio litigation was unfair and denied it due process as required under the U.S.-Ecuador Bilateral Investment Treaty. Specifically, Chevron alleged that the Lago Agrio court was corrupt, was not independent or impartial, acted in collusion with the plaintiffs, and unjustifiably denied Chevron's defense that Ecuador had released Chevron from liability, all in violation of Chevron's due process rights. Chevron sought to obtain a judgment from the Arbitration panel that would preclude international enforcement of what became the $18 billion award by the Lago Agrio court. See In re Chevron Corp., 633 F.3d at 158-59 (giving factual history of this dispute in addressing an application by Chevron for a subpoena to conduct discovery using 28 U.S.C. § 1782(a) for the Arbitration).

         Unlike the Lago Agrio litigation, the Republic of Ecuador, not the Ecuadorian plaintiffs, is opposing party to Arbitration with Chevron. As preparation for the Arbitration, Chevron brought " an extraordinary series of at least 25 requests to obtain discovery from at least 30 different parties" under 28 U.S.C. § 1782(a) in district courts throughout the United States. Id. at 159.

         In response, the Republic has filed at least nine applications for discovery pursuant to the same statutory authority. This is one of those applications. Here, to defend against Chevron's claims in the Arbitration, the Republic seeks discovery from Dr. Gregory S. Douglas, a resident of Rockland, Massachusetts with twenty-five years of experience in environmental labs analyzing crude oil samples from water, waste, and biota. Dr. Douglas submitted a number of expert reports on Chevron's behalf rebutting both court-appointed experts and experts for the Ecuadorian plaintiffs in the Lago Agrio litigation. He also submitted an expert report in support of Chevron's merits brief to the Arbital Tribunal. The Republic seeks broad discovery of the bases of Dr. Douglas's reports and expert opinions.

         Chevron moved for a protective order, arguing that the Republic's application was unduly burdensome, overbroad, and beyond the scope of Federal Rule of Civil Procedure 26. The Republic opposed Chevron's motion, claiming that it was an attempt to " close the shades on this case denying to the Republic . . . the sunlight [Chevron] has enjoyed."

         At a hearing held on January 3, 2012, I provided guidance on how the Republic of Ecuador was to limit its subpoena to appropriate bounds. Subsequently, the parties made substantial progress in resolving their discovery disputes. On May 9, 2012, the Republic filed a motion to substitute its subpoena. The proposed subpoena was much narrower, requesting fewer categories of document and better shaping the bounds of those categories. Protected categories of documents, such as draft reports or attorney-client communications, are no longer sought. The proposed substitute subpoena addresses the concerns this Court raised in the hearing. Although the parties are now closer to agreement on the proper scope of remaining discovery, a number of disputes endure.

         II. ...


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