Chevron Corp. v. Donziger UNITED STATES COURT OF APPEALS 1 FOR THE SECOND CIRCUIT 2

131 Pages·2016·0.51 MB·English

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14-0826(L)
Chevron Corp. v. Donziger
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3 - - - - - -
4 August Term, 2014
5 (Argued: April 20, 2015 Decided: August 8, 2016)
6 Final briefs submitted June 1, 2015
7 Docket Nos. 14-0826(L), 14-0832(C)
8 _____________________________________________________________
9 CHEVRON CORPORATION,
10 Plaintiff-Appellee,
11 - v. -
12 STEVEN DONZIGER, THE LAW OFFICES OF STEVEN R. DONZIGER, DONZIGER
13 & ASSOCIATES, PLLC, HUGO GERARDO CAMACHO NARANJO, JAVIER
14 PIAGUAJE PAYAGUAJE,
15 Defendants-Appellants,
16 STRATUS CONSULTING, INC., DOUGLAS BELTMAN, ANN MAEST,
17 Defendants-Counter-Claimants,
18 Pablo Fajardo Mendoza, Luis Yanza, Frente De Defensa De La Amazonia aka Amazon
19 Defense Front, Selva Viva Selviva CIA, LTDA, Maria Aguinda Salazar, Carlos Grefa
20 Huatatoca, Catalina Antonia Aguinda Salazar, Lidia Alexandra Aguinda Aguinda, Patricio
21 Alberto Chimbo Yumbo, Clide Ramiro Aguinda Aguinda, Luis Armando Chimbo Yumbo,
22 Beatriz Mercedes Grefa Tanguila, Lucio Enrique Grefa Tanguila, Patricio Wilson Aguinda
23 Aguinda, Celia Irene Viveros Cusangua, Francisco Matias Alvarado Yumbo, Francisco
24 Alvarado Yumbo, Olga Gloria Grefa Cerda, Lorenzo José Alvarado Yumbo, Narcisa Aida
25 Tanguila Narváez, Bertha Antonia Yumbo Tanguila, Gloria Lucrecia Tanguila Grefa,
26 Francisco Victor Tanguila Grefa, Rosa Teresa Chimbo Tanguila, José Gabriel Revelo
27 Llore, María Clelia Reascos Revelo, María Magdalena Rodríguez Barcenes, José Miguel
Case 14-826, Document 484-1, 08/08/2016, 1834987, Page2 of 127
1 Ipiales Chicaiza, Heleodoro Pataron Guaraca, Luisa Delia Tanguila Narváez, Lourdes
2 Beatriz Chimbo Tanguila, María Hortencia Viveros Cusangua, Segundo Angel Amanta
3 Milán, Octavio Ismael Córdova Huanca, Elias Roberto Piyahuaje Payahuaje, Daniel Carlos
4 Lusitande Yaiguaje, Benancio Fredy Chimbo Grefa, Guillermo Vicente Payaguaje
5 Lusitante, Delfín Leonidas Payaguaje Payaguaje, Alfredo Donaldo Payaguaje Payaguaje,
6 Teodoro Gonzalo Piaguaje Payaguaje, Miguel Mario Payaguaje Payaguaje, Fermin
7 Piaguaje Payaguaje, Reinaldo Lusitande Yaiguaje, Luis Agustín Payaguaje Piaguaje,
8 Emilio Martín Lusitande Yaiguaje, Simon Lusitande Yaiguaje, Armando Wilfrido Piaguaje
9 Payaguaje, Angel Justino Piaguage Lucitante,
10 Defendants,
11 ANDREW WOODS, LAURA J. GARR, H5,
12 Respondents.*
13 _____________________________________________________________
14 Before: KEARSE, PARKER, and WESLEY, Circuit Judges.
15 Appeals from a judgment of the United States District Court for the Southern District
16 of New York, Lewis A. Kaplan, Judge, principally (1) enjoining defendants-appellants from seeking
17 to enforce in the United States an $8.646 billion Ecuadorian judgment against plaintiff-appellee
18 Chevron Corporation, and (2) imposing a constructive trust for Chevron's benefit on any property
19 defendants-appellants have received or may receive anywhere in the world that is traceable to the
20 Ecuadorian judgment or its enforcement. The district court found, following a bench trial, that the
21 Ecuadorian judgment had been procured through, inter alia, defendants' bribery, coercion, and fraud,
22 warranting relief against defendants Steven Donziger and his law firm under the Racketeer Influenced
23 and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968, and against all defendants-appellants under
24 New York common law. See 974 F.Supp.2d 362 (2014). Appellants challenge the district court's
25 judgment principally on grounds of Article III standing, international comity, judicial estoppel, lack
* The Clerk of Court is directed to amend the official caption to conform with the
above.
2
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1 of legal authority for the granting of equitable relief, and/or lack of personal jurisdiction over
2 defendants other than Donziger and his firm. Noting, inter alia, that appellants do not challenge the
3 sufficiency of the evidence to support the district court's factual findings, that the Ecuadorian
4 appellate courts declined to hear and resolve the above charges of corruption and expressly preserved
5 the parties' rights to litigate those charges in United States courts, and that the district court's judgment
6 has imposed in personam restrictions on the appellants without disturbing the Ecuadorian judgment,
7 we find no basis for overturning the judgment of the district court.
8 Affirmed.
9 THEODORE B. OLSON, Washington, D.C. (Randy M. Mastro,
10 Andrea E. Neuman, Caitlin J. Halligan, Gibson, Dunn &
11 Crutcher, New York, New York, William E. Thomson, Gibson,
12 Dunn & Crutcher, Los Angeles, California, on the brief), for
13 Plaintiff-Appellee.
14
15 DEEPAK GUPTA, Washington, D.C. (Gregory A. Beck, Jonathan E.
16 Taylor, Gupta Beck, Washington, D.C.; Justin Marceau, John
17 Campbell, Denver, Colorado, on the brief), for Defendants-
18 Appellants Steven Donziger, The Law Offices of Steven R.
19 Donziger, and Donziger & Associates, PLLC.
20
21 BURT NEUBORNE, New York, New York, for Defendants-
22 Appellants Hugo Gerardo Camacho Naranjo and Javier
23 Piaguaje Payaguaje.
24 Winston & Strawn, Washington, D.C. (Eric W. Bloom, Lauren B.
25 Schuttloffel, Eric M. Goldstein, Nassim H. Hooshmandnia, of
26 counsel), filed a brief for Amicus Curiae The Republic of
27 Ecuador, in support of neither party.
28 Gross Belsky Alonso, San Francisco, California (Jonathan Moore,
29 Terry Gross, Adam C. Belsky, Monique Alonso, San
30 Francisco, California; Thomas Bennigson, Public Good Law
31 Center, Berkeley, California, of counsel), filed a brief for
32 Amici Curiae Amnesty International, Amazon Watch, 350 Bay
33 Area, Center for Environmental Health, CT Citizen Action
34 Group, Food and Water Watch, Friends of the Earth, Global
3
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1 Exchange, The Global Initiative for Economic, Social and
2 Cultural Rights, Greenaction for Health and Environmental
3 Justice, The International Accountability Project, Justice in
4 Nigeria Now!, Marin Interfaith Task Force on the Americas,
5 Media Alliance, Pachamama Alliance, Rainforest Action
6 Network, Rights Action and Sunflower Alliance, in support of
7 Defendants-Appellants.
8 Donald K. Anton, Canberra, Australia, filed a brief for Amici Curiae
9 International Law Professors, in support of Defendants-
10 Appellants.
11 G. Robert Blakey, Paradise Valley, Arizona, filed a brief as Amicus
12 Curiae, in support of Plaintiff-Appellee.
13 Christopher J. Walker, Columbus, Ohio (Kate Comerford Todd, Tyler
14 R. Green, U.S. Chamber Litigation Center, Inc., Washington,
15 D.C., of counsel), filed a brief for Amicus Curiae Chamber of
16 Commerce of the United States of America, in support of
17 Plaintiff-Appellee.
18 Faegre Bakers Daniels, Minneapolis, Minnesota (Aaron D. Van Oort,
19 Jeffrey P. Justman, of counsel), filed a brief for Amici Curiae
20 Keith S. Rosenn, Francisco Reyes, and Raul Nunez Ojeda, in
21 support of Plaintiff-Appellee.
22 Holwell, Shuster & Goldberg, New York, New York (Richard J.
23 Holwell, of counsel), filed a brief for Amici Curiae Human
24 Rights and Anti-Corruption Jurists, in partial support of
25 Plaintiff-Appellee.
26 Richard A. Samp, Washington, D.C. (Cory L. Andrews, Washington
27 Legal Foundation, of counsel), filed a brief for Amicus Curiae
28 Washington Legal Foundation, in support of Plaintiff-Appellee.
29 Roger P. Alford, Notre Dame, Indiana, filed a brief for Amici Curiae
30 Business Roundtable and International Law Scholars, in
31 support of Plaintiff-Appellee.
32
33 Jesse P. Levine, New York, New York (William B. Shipley, Genthod,
34 Switzerland, of counsel), filed a brief for Amici Curiae Richard
35 Janda, Juan C. Pinto, and Carolina Cruz Vinaccia, in support of
36 Defendants-Appellants.
4
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1 Richard L. Herz, Washington, D.C. (Marco B. Simons, Jonathan G.
2 Kaufman, Michelle Harrison, Benjamin Hoffman, of counsel),
3 filed a brief for Amicus Curiae EarthRights International, in
4 support of Defendants-Appellants.
5 G. Elaine Wood, New York, New York, filed a brief for Amicus
6 Curiae Legal Momentum, in support of Plaintiff-Appellee.
7 Schwarcz, Rimberg, Boyd & Rader, Los Angeles, California (K. Lee
8 Crawford-Boyd, Los Angeles, California; Judith Kimerling,
9 New York, New York, of counsel), filed a brief for Amici
10 Curiae Proposed Huaorani Intervenors, in partial support of
11 Defendants-Appellants.
5
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1 KEARSE, Circuit Judge:
2 Defendants-appellants Steven Donziger, Donziger & Associates, PLLC, and the Law
3 Offices of Steven R. Donziger (collectively the "Donziger Firm" or "Firm"), and defendants-
4 appellants Hugo Gerardo Camacho Naranjo ("Camacho") and Javier Piaguaje Payaguaje ("Piaguaje"),
5 appeal from a judgment of the United States District Court for the Southern District of New York,
6 Lewis A. Kaplan, Judge, granting certain relief against them in favor of plaintiff-appellee Chevron
7 Corporation ("Chevron"), in connection with an $8.646 billion judgment obtained against Chevron
8 in Ecuador ("Ecuadorian Judgment"), by several dozen named plaintiffs from Ecuador's Lago Agrio
9 area (the "Lago Agrio Plaintiffs" or "LAPs") represented by the Donziger Firm, for environmental
10 damage in connection with 1960s-1990s oil exploration activities in Ecuador by Texaco, Inc.
11 ("Texaco"), whose stock was later acquired by Chevron. The district court's judgment, entered after
12 a bench trial, principally (1) enjoins defendants-appellants from seeking to enforce the Ecuadorian
13 Judgment in any court in the United States, and (2) imposes a constructive trust for Chevron's benefit
14 on any property defendants-appellants have received or may receive anywhere in the world that is
15 traceable to the Ecuadorian Judgment or its enforcement, based on the court's findings that the
16 Ecuadorian Judgment was procured through, inter alia, defendants' bribery, coercion, and fraud,
17 warranting relief against Steven Donziger ("Donziger") and his Firm under the Racketeer Influenced
18 and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968, and against all defendants-
19 appellants under New York common law. See Chevron v. Donziger, 974 F.Supp.2d 362 (S.D.N.Y.
20 2014) ("Donziger"). Without challenging the sufficiency of the evidence to support any of those
21 factual findings, defendants-appellants challenge the district court's judgment, arguing principally that
22 the action should have been dismissed on the ground that Chevron lacks Article III standing, and/or
6
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1 that the judgment should be reversed on the grounds, inter alia, that it violates principles of
2 international comity and judicial estoppel, exceeds any legal authorization for equitable relief, and
3 was entered without personal jurisdiction over defendants other than Donziger and his Firm. For the
4 reasons that follow, including the absence of challenges to the district court's factual findings, the
5 express disclaimers by the Ecuadorian appellate courts of their own jurisdiction to "hear and resolve"
6 the above charges of corruption, "preserving the parties' rights" to pursue those charges in actions in
7 the United States (Ecuadorian intermediate appellate court clarification order dated January 13, 2012,
8 at 4; see also Opinion of Ecuadorian National Court of Justice at 120 ("preserving the rights and
9 actions of the parties" in "acknowledge[ment of] the lack o[f] jurisdiction to decide whether or not
10 there has been procedural fraud")), and the district court's confinement of its injunction to a grant of
11 in personam relief against the three defendants-appellants without disturbing the Ecuadorian
12 judgment, we find no basis for dismissal or reversal, and we affirm the judgment of the district court.
13 TABLE OF CONTENTS
14 I. BACKGROUND 10
15 A. The Scope of the Trial in the Present Case 14
16 B. Specific Findings by the District Court as to Donziger's Acts 17
17 1. Donziger Attempts To Intimidate Chevron Into Settling by Trumpeting a Huge
18 Remediation Cost Estimate Based Only on "SWAG" 17
19
20 2. Donziger Causes a Change to Less Probative Tests When the LAPs' Experts
21 Find Pollution that Likely Was Not Caused by Texaco 20
22 3. Donziger Knowingly Submits to the Court Reports that Falsify a LAPs'
23 Expert's Conclusions 21
7
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1 4. Donziger Secretly Hires Industry Experts To Offer Their Supposedly Neutral
2 Monitoring Services to the Court, But To Disagree With Any Pro-Chevron
3 Findings 23
4 5. Donziger, Anticipating Additional Pro-Chevron Testing Results, Coerces then-
5 Presiding Judge Yánez To Cancel Most of the Remaining Site Inspections 24
6 6. Donziger Coerces Judge Yánez To Appoint a "Global" Expert--Cabrera--Who
7 "[W]ould [T]otally [P]lay [B]all [W]ith" the LAPs 27
8 7. Donziger and the LAPs Plan the Cabrera Report and Begin To Pay Him
9 Secretly 30
10 8. Donziger and the LAPs' Team Control Cabrera's "Work," While Denying Any
11 Contact or Involvement 32
12 9. The LAPs' Consultant, Stratus, Writes Cabrera's Report 35
13 10. Donziger Has Stratus Fabricate Objections To Be Submitted By the LAPs to
14 the Cabrera Report that Stratus Wrote For the LAPs 37
15 11. When "Crude" Is Released and Chevron Gets Discovery Revealing the LAPs-
16 Cabrera Collaboration, Donziger Hires New Consultants To "Cleanse" the
17 Cabrera Report 38
18 12. The District Court's Summary 42
19 C. The February 14, 2011 Lago Agrio Judgment 43
20 D. Findings by the District Court as to the Sources and Authorship of the Lago Agrio
21 Judgment 45
22 1. The Lago Agrio Judgment Drew Heavily on the Cabrera Report 45
23 2. Then-Presiding Judge Zambrano Did Not Write the Lago Agrio Judgment 48
24 3. The Lago Agrio Judgment Was Written by the LAPs 51
25 a. The Judgment Copied Documents That Were Not in the Court Record
26 but Were LAPs' Internal Documents 51
27 b. The LAPs' Team Prepared the Judgment, Beginning Work on It as
28 Early as mid-2009 57
8
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1 4. The LAPs Bribed Zambrano To Sign the Judgment They Wrote 60
2 a. The Relationships Among Guerra, Zambrano, and the LAPs 61
3 b. Zambrano's Agreement With the LAPs 62
4 c. The LAPs-Written Judgment, Lightly Edited by Guerra 64
5 E. The Ecuadorian Appellate Proceedings 65
6 1. Appeals to an Appellate Panel 65
7 2. Appeal to the Ecuadorian National Court of Justice 67
8 F. The LAPs' Strategies To Enforce the Judgment 69
9 G. The Final Judgment in the Present Action 70
10 II. DISCUSSION 74
11 A. Challenges to Federal Jurisdiction 75
12 1. Article III Standing 75
13 2. Mootness: The Break-in-Causation Theory 81
14 B. The Judicial Estoppel Contention 86
15 C. Naranjo 90
16 D. The RICO-Based Rulings Against Donziger 94
17 1. RICO Injury and Causation 99
18 2. The Availability of Equitable Relief Under RICO 102
19 E. The Availability of Equitable Relief Under New York Common Law 108
20 F. Considerations of International Comity 113
21 G. Contentions of the LAP Representatives 116
9
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1 1. Personal Jurisdiction 117
2 2. Responsibility of the LAPs for the Misconduct of Their
3 Attorneys 124
4 H. Appropriateness of the Equitable Relief Granted 126
5 CONCLUSION 127
6
7 I. BACKGROUND
8 This appeal is the latest chapter in the litigation against Chevron by residents of the
9 Oriente region of Ecuador, which includes the canton of Lago Agrio, with respect to oil-exploration-
10 related activities in that region from the 1960s into the 1990s by Texaco, whose stock was acquired
11 by Chevron in 2001. In 1964, the Republic of Ecuador ("ROE") had granted to a joint venture--which
12 was then 50%-owned by a subsidiary of Texaco dubbed "TexPet"--a concession to explore for and
13 produce oil in the Oriente (the "Concession"). In the 1970s, Ecuador's state-owned oil company, now
14 known as PetroEcuador, acquired at first a minority, and then a majority, interest in the joint venture.
15 TexPet was the operator of the Concession until the early 1990s. In late 1989, PetroEcuador took over
16 operation of the Trans-Ecuadoran Pipeline, see Jota v. Texaco, Inc., 157 F.3d 153, 156 n.4 (2d Cir.
17 1998) ("Jota"); in mid-1990, PetroEcuador took over operation of the Concession drilling operations
18 as well, see id.; Aguinda v. Texaco, Inc., 303 F.3d 470, 473 (2d Cir. 2002) ("Aguinda"). In mid-1992,
19 when the Concession expired, TexPet's interest in the joint venture reverted to PetroEcuador, leaving
20 PetroEcuador as the sole owner and operator of the venture. See Donziger, 974 F.Supp.2d at 386.
10