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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

In re Application of

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CHEVRON CORPORATION, a

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Delaware corporation,

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Case No. 3:10-cv-00686

Applicant,

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Judge Nixon/Brown

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MARK QUARLES, an individual,

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Respondent.

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O R D E R

Presently pending before the Magistrate Judge are Chevron’s Motion to Compel and

accompanying memorandum (Docket Entries 96, 97) and Respondent Mark Quarles’s Motion

for a Telephonic Hearing. (Docket Entry 105). Respondent has filed a Response to Chevron’s

Motion, and Chevron has in turn filed a Reply. (Docket Entries 104, 107). At the request of the

Magistrate Judge, Respondent has submitted a privilege log and documents for in camera

review, as well as an ex parte brief in support of its claims of privilege and work product

protection. (Docket Entries 90, 91, 100). For the reasons set forth below, Chevron’s Motion is

GRANTED in part, and Respondent’s Motion is DENIED.

Chevron essentially raises four categories in which they allege Respondent’s testimony

and document production have been inadequate or improperly withheld. First, Chevron believes

Respondent and his attorneys, who also represent the Ecuadorian Plaintiffs, have improperly

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claimed that all documents related to Respondent’s 2007 declaration, submitted on behalf of the

Republic of Ecuador in Repub. of Ecuador v. ChevronTexaco Corp., No. 04 Civ. 8378

(S.D.N.Y.), are subject to work product and/or attorney-client privilege protection. Second,

Chevron also believes Respondent and his attorneys have improperly claimed that documents

related to Respondent’s 2008 work for the Ecuadorian Plaintiffs are subject to work product

and/or attorney-client privilege protection. Third, Chevron asserts Respondent declined to

testify about matters Respondent’s attorneys improperly characterized as privileged, subject to

work-product protection, or outside the scope of the subpoena in his deposition testimony.

Finally, Chevron alleges Respondent has not thoroughly examined the materials in his custody or

control in responding to the subpoena.

The Magistrate Judge believes it is important to note at the outset that this proceeding,

initiated pursuant to 28 U.S.C. § 1782, is not an opportunity to put on a full trial. Chevron has

raised accusations that would indeed be subject to intense scrutiny had they occurred in this

Court or in any court of the United States. The simple fact remains, however, that this

proceeding is limited to the statutory relief provided in § 1782--namely, discovery for use in a

foreign proceeding. Chevron had an opportunity to litigate this matter in the United States and

strongly opposed jurisdiction in favor of litigating in the Ecuadorian courts. While fraud on any

court is a serious accusation that must be investigated, it is not within the power of this court to

do so, any more than a court in Ecuador should be used to investigate fraud on this court. The

Magistrate Judge has found that § 1782 relief is appropriate in this matter, and Chevron is

entitled to discovery from Respondent. Neither party is entitled, however, to use this court to try

a dispute that is already pending in a foreign jurisdiction. This limited proceeding is quickly

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spiraling out of control. 1

I. Claimed Privilege and Work-Product Protection

As to the first two categories of issues, the Magistrate Judge believes Quarles was

retained by the Ecuadorian Plaintiffs as a consulting, non-testifying expert in 2006 and remained

such through 2008. The Ecuadorian Plaintiffs were involved in the Lago Agrio litigation in

2006, and Quarles was clearly retained in anticipation of litigation. The requirements of Fed. R.

Civ. P. 26(b)(4)(B) are met, and Quarles’s work in that capacity is generally subject to work-

product protection.

Chevron argues that the Ecuadorian Plaintiffs have waived any protection over Quarles’s

work with regard to the 2007 declaration submitted on behalf of the Republic of Ecuador’s

Response to a Motion to Dismiss and, consequently, they are entitled to examine the materials

underlying Quarles’s declaration. The Magistrate Judge has not located any cases on all fours

with this situation, i.e., where a consulting expert retained by a non-party to the lawsuit (the

Ecuadorian Plaintiffs) provided, at the request of the non-party, a declaration in support of a

party’s preliminary pleading in a related proceeding.

Whether the underlying documents are subject to work-product protection in a related

lawsuit to which the non-party (the Ecuadorian Plaintiffs) is a party is a question that has not

been addressed by the courts. If the declaration were submitted on behalf of the Ecuadorian

Plaintiffs in a previous proceeding, the consulting expert’s underlying work likely remains

1 One symptom of the problem is reflected in the parties’ voluminous filings with the court. While the Magistrate Judge realizes this is a proceeding involving a large amount of background documents, the parties have not adequately edited their filings. For example, the Reply brief for the instant motion attached as an exhibit a 352-page deposition transcript, while citing only 8 pages of that transcript.

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subject to work-product protection. See, e.g., Intervet v. Merial Ltd., 2007 WL 1797643 (D.

Neb. June 20, 2007) (holding that a party was not entitled to discovery regarding a declaration

submitted by a consulting expert in a previous case in the context of a motion for a preliminary

injunction). 2 However, there is a fundamental difference when a non-party submits a non-

testifying expert’s declaration on behalf of a party, and there is a good argument that any work-

product protection related to that declaration may be waived.

Nevertheless, the Magistrate Judge believes Chevron is entitled only to documents or

testimony regarding Quarles’s observations, not his opinions. See, e.g., Trepel v. Roadway Exp.,

Inc., 40 Fed. App’x 104, 110 (6th Cir. 2002) (upholding admission of deposition testimony of

non-testifying expert that was limited “to only those matters observed by her or rationally based

upon [her] perceptions.”). Chevron is not entitled to pierce the work-product protection afforded

Quarles as a non-testifying expert, because it has not shown the “exceptional circumstances”

required by Fed. R. Civ. P. 26(b)(4)(B)(ii). Chevron has obtained much of the information

sought from Quarles from other sources. Moreover, whether or not the underlying documents

are protected work-product, Chevron has in effect waived any right to them in this action by not

seeking them in the SDNY action. Chevron failed to avail themselves of the aid of the court in

the SDNY action, and this proceeding–as has been noted repeatedly–is not a full-blown

2 In the Reply, Chevron argues that this case is distinguishable because the consulting expert in the previous litigation was not used as an expert in the case at issue. Chevron argues that this case should be analyzed more similar to cases involving experts giving declarations in motions for summary judgment. See, e.g., Sims v. Metropolitan Life Ins. Co., 2006 WL 3826716 (N.D. Cal. Dec. 27, 2006). The Magistrate Judge believes, however, that a “consulting” expert providing a deposition at the summary judgment stage is sufficiently distinguishable from a declaration submitted on behalf of a motion to dismiss, which is often made at the very early stages of litigation.

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litigation. The Magistrate Judge cannot reopen that case. Chevron is therefore entitled to any

documents or testimony regarding Quarles’s observations of Cabrera’s sampling in 2007, to the

extent the information has not already been produced by Quarles. The Magistrate Judge expects

Quarles and his attorneys to fully comply with this order. To the extent that Quarles’s notes,

emails, and other documents reflect both his observations and his opinions, they should be

redacted and produced. As has been previously noted, to the extent that any documents have

been provided to the Republic of Ecuador or any other third parties, all privilege and work-

product protection to those documents has been waived.

Because the Magistrate Judge believes Quarles was a non-testifying expert retained by

the Ecuadorian Plaintiffs, the 2008 materials at issue are entitled to work-product protection.

Quarles was hired by consultants retained by the Ecuadorian Plaintiffs, and his work was

procured in anticipation of litigation. Quarles has testified that he has no knowledge of his work

being sent to Cabrera or used in the Cabrera Report. Chevron is not entitled to these materials.

Chevron has repeatedly argued that the crime fraud exception applies to these documents,

and at least one court has agreed. E.g., In re Applic. of Chevron Corp., No. 10-mc-21 (D. N.M.)

(Docket Entry 101-1). While the Magistrate Judge believes the crime fraud arguments require

the Magistrate Judge to make fact findings outside the scope of this § 1782 proceeding, the crime

fraud exception to privilege would not apply in this case in any event. The Magistrate Judge has

reviewed the documents submitted by the parties, including those submitted under seal for in

camera review. In contrast to some of the other § 1782 proceedings, the Magistrate Judge has

not seen sufficient evidence that Quarles had actual knowledge of or participated in the alleged

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fraud on the Ecuadorian court. 3

II. Deposition Testimony

On the advice of his counsel, Quarles did not answer a number of questions in his

deposition. Chevron has filed a copy of the deposition transcript highlighting the questions and

instructions of counsel, which the Magistrate Judge has reviewed. (Docket Entry 102-1). The

objections raised can be categorized as (1) outside the scope of the subpoena or (2) subject to

work-product protection or (3) subject to attorney-client privilege.

The Magistrate Judge believes the previous discussion should clarify the privilege and

work-product protection issues. Respondent must testify as to any factual knowledge he has,

provided they are not the result of attorney-client confidences between the Ecuadorian Plaintiffs

and their attorneys and are not subject to work-product protection.

Respondent’s counsel also objected to a number of questions being outside the scope of

the subpoena. The subpoena is appropriately narrow and tailored to discover what role, if any,

Quarles’s work played in drafting the Cabrera report. (Docket Entry 3-1). As such, Quarles is

not required to divulge information related to his 2006 technical submissions (as the undersigned

has already ruled) or information related to his visits to Havoc Labs in 2006. Because this

information, based on Quarles’s testimony, is apparently not related to any of the documents

3 Chevron has attached to its Reply emails that purport to show Quarles knowing ghostwrote portions of the Cabrera Report, thereby committing an intentional fraud on the Ecuadorian court. The Magistrate Judge believes these emails are not so clear on their face. In any event, the Magistrate Judge has allowed Chevron to take additional deposition testimony, which should provide more context for these documents.

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sought in the subpoena, Chevron is not entitled to discovery in these areas. 4 However, if further

deposition testimony confirms that Quarles’s work was used in the Cabrera report, Quarles must

testify regarding those subject areas.

III. Adequacy of Respondent’s Document Search

Respondent has testified regarding his examination of his computer and files, as well as

his ordinary procedures for preserving and backing-up data. While Chevron has received

additional documents from other sources suggesting Respondent had possession of additional

materials at one time, this does not reflect what is in Respondent’s custody or control at the

present time. There is no indication Respondent was under a duty to preserve documents related

to the Lago Agrio litigation or his work for the Ecuadorian Plaintiffs. Absent a showing by

Chevron that Respondent actually possesses materials not subject to privilege that were not

produced, the Magistrate Judge is unwilling to order more drastic remedies. Chevron may, of

course, ask Respondent about any documents obtained from other sources.

Conclusion

Based on the foregoing discussion, Chevron’s Motion to Compel is GRANTED in part.

Chevron may depose Respondent Quarles for up to an additional four (4) hours. Quarles is

expected to respond as fully and completely as possible, in light of the possible privilege asserted

over some of his work. Respondent is further ordered to produce any documents that are not

subject to attorney-client privilege or work product protection, as discussed above.

4 It is worth noting that the subpoena is somewhat limited because it assumes Quarles’s work was used, with his knowledge (either before or after the use), in the Cabrera report. Without establishing this conclusion as a prerequisite, it is difficult for Chevron to argue it is entitled to the additional information it seeks.

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Respondent’s Motion for a Telephonic Conference is DENIED.

It is so ORDERED.

Entered this 21st day of September, 2010.

is so ORDERED . Entered this 21st day of September, 2010. JOE B. BROWN United States

JOE B. BROWN United States Magistrate Judge

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