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

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

In re Application of:
Index No. 10-mc-0002 (LAK)
CHEVRON CORPORATION, et al.,

Applicants,

for an Order Pursuant to 28 U.S.C. § 1782 to

Conduct Discovery for Use in Foreign
Proceedings

________________________________________________________________________

THE ECUADORIAN PLAINTIFFS’ CONSOLIDATED REPLY MEMORANDUM

OF LAW IN SUPPORT OF THEIR MOTIONS TO QUASH OR MODIFY
SUBPOENAS SERVED UPON STEVEN R. DONZIGER
________________________________________________________________________

Emery Celli Brinckerhoff & Abady LLP

75 Rockefeller Plaza, 20th Floor
New York, NY 10019
(212) 763-5000
 Case 1:10-mc-00002-LAK Document 47 Filed 09/07/10 Page 2 of 14

TABLE OF CONTENTS
PAGE 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 AUTHORITIES
PAGE NO(s).
CASES

Coeur D’Alene 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 Int’l Arms, Inc.,

466 F.3d 88 (2d Cir. 2006)...................................................................................... 8

Syverson v. Int’l 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

ii
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INTRODUCTION

In order to justify their request for effectively all of the files of their opposing

counsel from a seventeen year litigation – irrespective of attorney-client, work-product,

or any other privilege – the Chevron parties are forced to argue that the entire Lago Agrio

case is a fraud, a figment of plaintiffs’ imagination. Thus, in its petition, Chevron

represented unabashedly that “there is no evidence that Chevron is responsible for any

environmental damage” in Ecuador. Mot at 1. This is a fraudulent misrepresentation if

there ever were one. See, e.g., Ex. 49 at E-1-2 (Chevron audit finding “contamination

requiring remediation at all production facilities”). Now, just one brief later, Chevron

changes its tune, admitting it caused environmental damage, but claiming (incorrectly)

that it was all remediated.1 Abandoning its claims on the merits,2 Chevron attempts to

reduce a seven-year litigation and 200,000-page record to a few highly-edited snippets of

jokes, hyperbole, and a few de-contextualized stray comments from Mr. Donziger. But a

few quotes, however colorful, exaggerated, or even ill-considered, do not justify the

production of thousands of privileged documents from a lawyer in the midst of a hotly-

contested litigation.

“Ex parte” contacts with Mr. Cabrera remain at the heart of this petition, yet (i)

the matter of contacts between Plaintiffs and Cabrera is undisputedly before the Lago

1
Ch. Br. 6-7 (arguing that Chevron’s audits predated its “remediation”).
2
Chevron resurrects its claim, litigated for years in Lago Agrio, that the Republic of
Ecuador released Chevron, and that this has some relevance to this case brought by
private parties. Chevron, of course, omits that ROE’s agreement “shall apply without
prejudice to the rights possibly held by third parties,” including the Lago Agrio plaintiffs.
Ex. 66, at 4 (Section VIII); see also Republic of Ecuador (“ROE”) v. ChevronTexaco
Corp., 376 F. Supp.2d 334, 374 (S.D.N.Y. 2005) (“it is highly unlikely that a settlement
entered into while Aguinda was pending would have neglected to mention the third-party
claims being contemporaneously made in Aguinda if it had been intended to release those
claims or to create an obligation to indemnify against them”).
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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 Chevron’s private expert, John A. Connor, ghostwrote part of the report of

another independent, neutral court expert in Lago Agrio: Mr. Barros. Attached as Exhibit

67 is a report Chevron’s private expert, Mr. Connor, prepared dated June 16, 2005 titled

Prácticas y Reglamentos Internacionales Para el Uso y la Remediación 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 Chevron’s

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: Prácticas y Reglamentos

Internacionales Para el Uso y la Remediación 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 Connor’s 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 Chevron’s expert’s materials into his own avowedly neutral and

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

2
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Is it a miraculous coincidence that an entire section of the Barros report is a clever cut

and paste of disparate portions of Chevron’s work product? It is not.

By Chevron’s argument, this is fraud on the court, collusion with a neutral,

independent expert, and criminal conduct that should send the people at Chevron who

engineered the fraud to jail.

Chevron also fails to refute the now-undisputed declarations that Chevron’s

lawyers met secretly and repeatedly not just with experts, but with the Court, and

specifically discussed the Lago case. When this ex parte conduct was exposed,

Chevron’s security guards tried to keep plaintiffs’ representative away. Exs. 52, 60.3

This secret contact was pursued by Chevron’s counsel, yet counsel is completely silent in

Chevron’s opposition: not one declaration, not one response on the facts. If it is

acceptable for Chevron’s lawyers to meet ex parte with the Court itself, why is it

unacceptable for plaintiffs to meet “ex parte” with an expert? Chevron does not and

cannot explain.

Chevron’s argument that “independence” “neutrality” and “transparency”

precluded private contacts, collaboration, or submissions to an expert in a civil law

system such as Ecuador is a legal question of sufficient complexity that Chevron is forced

to submit thirty-one pages of opinion on the topic from two hired experts – opinions

better filed in the Lago Court, if at all. Missing entirely from Chevron’s presentation,

however, is the plain fact that, in Ecuador (unlike the general practice in the United

States), parties do not share submissions to court experts with their adversaries. Ex. 43, ¶

9; Ex. 46, ¶ 9. Also missing from Chevron’s brief is the plain fact that Chevron requested

3
Chevron describes the allegations in the sworn declarations as a “smear,” Ch. Br. 7, but
does not dispute any of them.

3
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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 Court’s own orders, why did the Lago Court deny Chevron’s application?

“Transparency” in a civil law system such as Ecuador’s 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

Court’s 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:

You’re not getting what you want there, so now you come
to the United States and –where there’s more liberal
discovery allowed perhaps than in Ecuador, and I – and I
think that you, in the first place got a forum non conveniens
dismissal from – in the United States in favor of having
procedures in Ecuador, and now maybe this is kind of what
you 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.

4
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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] exception’s 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 Chevron’s 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 burden
these subpoenas would place on Donziger, and instead blamed him for spending a
substantial portion of his professional life on this case.

5
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two snippets.6 It is a serious, sober discussion concerning Chevron’s 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 we’ll 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 Chevron’s 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, we’ve

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 complete
transcription from Camera 1. Chevron has been in possession of these outtakes for a
number of weeks.

6
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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 Chevron’s 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 Court’s 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 its

own orders were violated. Chevron chose the Ecuadorian court as the site for this case.

Chevron relies on the Ecuadorian court’s orders for its claims of fraud. Chevron is before

the Ecuadorian court right now. Chevron’s 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 Court’s 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
Chevron’s presentation concerning alleged violations of U.S. law revolves around the
use of the word “independent” in filings in the United States – a topic addressed in 10
MC 00001, Dkt. # 15 at 5-8 (incorporated herein) – and Mr. Calmbacher, addressed infra.

7
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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 Int’l Arms, Inc., 466 F.3d 88, 94

(2d Cir. 2006) (“In the context of parallel proceedings in a foreign court, a district court

should 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 its
own orders were violated. It is unclear whether the Ecuadorian court will be any more
interested in the opinion of an Ecuadorian “expert” concerning whether its own orders
were violated.
9
Chevron’s last-ditch argument – collateral estoppel – fails. First, it cannot apply to
Donziger, who was not a party to these other actions. Second, Chevron is cherry-picking
findings favorable to it while at the same ignoring other rulings favorable to Plaintiffs.
Syverson v. Int’l 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 collateral
estoppel discussion the fact that Chevron advanced a similar crime-fraud argument before
the Southern District of Texas, and that the court there did not find such an exception
applied. Instead, the Texas court ordered merely a “foundational deposition,” and
expressed substantial reservations about Chevron’s overbroad requests which, like here,
plainly impinge upon attorney-client and work-product privilege. In re App. of Chevron
Corp., 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

8
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II. The Chevron Parties’ Other Arguments Fail

Chevron claims that Donziger effected a blanket waiver of his clients’ privileges

by participating in Crude. That is not the law.

In In re Von Bulow, 929 F.2d 94 (2d Cir. 1984), a similar issue arose in the

context of a book by Alan Dershowitz revealing various discussions with his client. The

Second Circuit held: “though the district court correctly found a waiver by von Bulow as

to the particular matters actually disclosed in the book, it was an abuse of discretion to

broaden that waiver to include those portions of the four identified conversations which,

because they were not published, remain secret.” Id. at 103.10

Whatever communications or conversations Donziger had in outtakes now in

Chevron’s possession are already in Chevron’s possession, but such participation in the

documentary does not waive privilege to other communications not made in front of a

camera. Id. Nor, for the reasons set forth in plaintiffs’ moving brief, did plaintiffs’

Court instead permitted plaintiffs to review the documents and assert privilege on a
document by document basis. Taken together, the “final judgments” in these cases are all
very different, and do not present a clear body of law that can easily be estopped. See
Coeur D’Alene Tribe of Idaho v. Hammond, 384 F.3d 674, 690 (9th Cir. 2004) (collateral
estoppel should not be applied when it would “substantially thwart the development of
important questions of law”). In any event, each case relates to different respondents,
different communications, and different documents, and the rulings in one case are not
preclusive in another.
10
See also In re Currency Conversion Fee Antitrust Litigation, No. MDL No. 1409, 2002
WL 31458230, at * 3 (S.D.N.Y. Nov. 4, 2002) (applying In re von Bulow); In re Kidder
Peabody Securities Litig., 168 F.R.D. 459, 469-70 (S.D.N.Y. 1996) (same); United States
v. Jacobs, 117 F.3d 82, 89-90 (2d Cir. 1997) (“the extrajudicial disclosure of a portion of
an attorney-client conversation (as in the book) cannot in itself waive the privilege as to
the rest of the conversation.”) (citing In re von Bulow, 828 F.2d at 102); Trudeau v. N.Y.
State Consumer Protection Bd., 237 F.R.D. 325, 340 n. 11 (N.D.N.Y. 2006) (“The
extrajudicial disclosures of privileged information ‘results only in [a] waiver of the
communication revealed, but not of related communications.’”) (quoting In re Grand
Jury Proceedings, 219 F.3d 175, 189 (2d. Cir. 2000) (alterations in original).

9
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interaction with Mr. Cabrera waive any and all privileges concerning their consulting

experts.

Chevron’s 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 Chevron’s 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 Agrio
case. The full, relevant transcript is set forth at Ex. 8, 85-89. Chevron’s citation – “we
don’t really have a dog in that fight [in the Treaty Arbitration]” – obscures that plaintiffs
brought an entire case, along with ROE, to enjoin Chevron’s participation in the Treaty
Arbitration, which is itself a naked attempt to dismiss the Lago case.

10
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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

Donziger’s papers, the Lago Agrio Plaintiffs respectfully submit that the subpoenas be

quashed.

Dated: New York, New York

September 7, 2010

EMERY CELLI BRINCKERHOFF

& ABADY LLP

/s/ Ilann M. Maazel

_________________________
Jonathan S. Abady
Ilann M. Maazel
O. Andrew F. Wilson
Adam Pulver

75 Rockefeller Plaza, 20th Floor

New York, New York 10019
(212) 763-5000

Attorneys for Lago Agrio/

Ecuadorian Plaintiffs

11