Chevron Corporation v. Salazar et al
Filing
180
MEMORANDUM AND ORDER: For the reasons discussed, Ms. Garr's objection to Chevron's subpoena based on the attorney-client privilege and the work products doctrine are overruled, and she shall produce each of the documents on her privilege lo g forthwith. Mr. Woods' objections are overruled except to the extent that they relate to documents which were created after 10/20/2010 but which are encompassed by the crime-fraud exception as described above. Mr. Woods shall produce all docume nts for which his objections have been overruled and shall submit for in camera review on 8/8/2011 all other documents identified in his privilege log and as set forth on this order. This memorandum and order resolves the motions identified as docket Nos. 25, 35, and 100. (Signed by Magistrate Judge James C. Francis on 8/3/2011) Copies Mailed By Chambers. (mbe)
<![CDATA[
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - -:
CHEVRON CORPORATION,
:
:
Plaintiff,
:
:
- against :
:
MARIA AGUINDA SALAZAR, et al.,
:
:
Defendants,
:
:
- and :
:
STEVEN DONZIGER, et al.,
:
:
Intervenors.
:
- - - - - - - - - - - - - - - - - -:
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
(ECF)
11 Civ. 3718 (LAK) (JCF)
MEMORANDUM
AND ORDER
The defendants in this case, known collectively as the Lago
Agrio plaintiffs (the “LAPs”), obtained a multi-billion dollar
judgment against Chevron Corporation (“Chevron”) in Ecuador based
on
claims
of
environmental
pollution
caused
by
Texaco,
(“Texaco”), which was subsequently acquired by Chevron.
proceeding,
Chevron
seeks
a
declaration
that
the
Inc.
In this
Ecuadorian
judgment is not enforceable outside Ecuador and an injunction
preventing its enforcement.
Chevron has sought support for its
claims by, among other things, serving subpoenas on attorneys
involved in the representation of the LAPs: Laura Garr, Andrew
Woods, Joseph C. Kohn, and the firm of Kohn, Swift & Graf, P.C.
(collectively, the “Respondents”). The Respondents objected to the
1
subpoenas, asserted the attorney-client privilege and the work
product doctrine, and provided privilege logs.
The LAPs join the
Respondents and assert privileges on their own behalf.1
Chevron
contends that none of the documents at issue may be withheld
because, among other reasons, (1) any discovery immunity was
forfeited by the lead attorney in the Lago Agrio litigation, Steven
R. Donziger, when he failed to provide a timely privilege log and
(2) the crime-fraud exception to the attorney-client privilege and
the work product doctrine apply to the documents at issue. Chevron
has moved to compel the production of the withheld documents.
Background2
In November 1993, a group of Ecuadorian individuals filed a
class action in this Court, alleging that Texaco’s oil operation
1
Only two of the Ecuadorian plaintiffs have appeared in this
lawsuit; the others have defaulted. Chevron Corp. v. Donziger, No.
11 Civ. 691, 2011 WL 1408386, at *1 n.2 (S.D.N.Y. April 6, 2011).
That fact, however, is not material to the instant motions.
2
The full factual background of this litigation has been
described in prior opinions in this case as well as in numerous
decisions in related cases in this district and elsewhere. See,
e.g., In re Chevron Corp., __ F.3d __, Nos. 10-4699, 11-1099, 2011
WL 2023257 (3d Cir. May 25, 2011); Chevron Corp. v. Salazar, No. 11
Civ. 3718, 2011 WL 2207555 (S.D.N.Y. June 2, 2011); Chevron Corp.
v. Donziger, No. 11 Civ. 691, 2011 WL 2150450 (S.D.N.Y. May 31,
2011); Chevron Corp. v. Donziger, 768 F. Supp. 2d 581 (S.D.N.Y.
2011); In re Chevron Corp., 749 F. Supp. 2d 141 (S.D.N.Y.), aff’d,
409 Fed. Appx. 393 (2d Cir. 2010); In re Chevron Corp., 709 F.
Supp. 2d 283 (S.D.N.Y. 2010), aff’d sub nom. Chevron Corp. v.
Berlinger, 629 F.3d 297 (2d Cir. 2011).
Accordingly, I will
summarize here only those facts necessary to resolution of the
current motions.
2
activities had caused massive environmental damage to the rain
forest in that nation.
(2d Cir. 2002).
Aguinda v. Texaco, Inc., 303 F.3d 470, 473
While that action was pending, the government of
Ecuador released Texaco from any claims for environmental damage in
return for Texaco’s completing certain remediation. Chevron Corp.,
768 F. Supp. 2d at 598.
In connection with that agreement, the
government of Ecuador represented that the claims asserted in the
Aguinda action belonged solely to it.
Id.
However, in 1999,
Ecuador enacted the Environmental Management Act of 1999, creating
a private right of action for damages for environmental harms. Id.
at 599.
On the motion of Texaco, the Aguinda case was dismissed on
forum non conveniens grounds, and that decision was affirmed by the
Second Circuit.
Aguinda, 303 F.3d at 480.
Accordingly, the LAPs,
who included many of the Aguinda plaintiffs, filed suit in Lago
Agrio, Ecuador.
Chevron Corp., 768 F. Supp. 2d at 600.
The Lago Agrio litigation, though it was brought on
behalf of similar and, in many cases, the same
individuals, was a fundamentally different lawsuit than
Aguinda. Aguinda sought predominantly damages for the
plaintiffs and class members for injuries to person or
property that each allegedly had suffered. The LAPs,
however, sued in something akin to a parens patriae
capacity to require the defendants to perform, or to pay
the cost of performing, environmental and other
remediation methods.
Id. at 600-01.
On February 4, 2011, the Ecuadorian court issued a
3
judgment against Chevron of approximately 18 billion dollars.
Id.
at 620-21.
In the meantime, Chevron commenced an arbitration in 2009
under the Bilateral Investment Treaty between the United States and
Ecuador (the “BIT”) pursuant to United Nations Commission on Trade
Law rules.
a
In re Chevron Corp., 709 F. Supp. 2d at 288.
declaration
that
it
bore
no
liability
for
It sought
the
alleged
environmental damage at issue in the Lago Agrio litigation, and it
charged that the government of Ecuador had abused its criminal
justice
system
by
bringing
criminal
charges
against
two
of
Chevron’s lawyers who had been involved in the earlier agreement
releasing Texaco from environmental claims.
Id.
Chevron initiated a series of applications pursuant to 28
U.S.C.
§
1782
to
issue
subpoenas
in
this
country
to
obtain
documents and testimony for use in foreign proceedings, namely the
Lago Agrio litigation, the BIT arbitration, and the Ecuadorian
criminal proceedings.
at 605.
Id. at 284; Chevron Corp., 768 F. Supp. 2d
As will be discussed further below, Chevron unearthed
information, including outtakes from a documentary film about the
Lago Agrio case, that could prove useful in the foreign proceedings
and in undermining the enforceability of the Ecuadorian court’s
judgment.
According to Chevron, that information shows that the
LAPs’ attorneys sought to intimidate the Ecuadorian judiciary,
4
Chevron Corp., 768 F. Supp. 2d at 611-12, discussed using mass
demonstrations to bring pressure to bear on Chevron and on the
Ecuadorian courts, id. at 612-13, provided a fictitious expert
report to the Lago Agrio court, id. at 605-06, ghostwrote the
report of a purportedly independent court-appointed expert, id. at
606-10, and then submitted a new, supposedly independent expert
analysis that
was
merely
a
repackaged
version
of
the
court-
appointed expert’s tainted report, id. at 610-11.
In one of the Section 1782 proceedings filed in this district,
Chevron sought information from Mr. Donziger, who had represented
the plaintiffs in the Aguinda case and who effectively masterminded
the Lago Agrio litigation.
This proceeding, 10 MC 2 (the “Section
1782 proceeding”), was assigned to the Honorable Lewis A. Kaplan,
U.S.D.J., who had previously presided over the proceedings in which
Chevron had gained access to information related to the documentary
film.
See In re Chevron Corp., 709 F. Supp. 2d 283.
Mr. Donziger
and the LAPs moved to quash the Donziger subpoena, but Judge Kaplan
denied the motion.
In re Chevron Corp., 749 F. Supp. 2d 170
(S.D.N.Y.) (“Chevron 11/30/10 Opinion”), aff’d, 409 Fed. Appx. 393
(2d Cir. 2010).3
Then, when Mr. Donziger failed to submit a timely
3
Because more than one of the opinions issued in this case
appear in the same volume of the Federal Supplement, I am
identifying them by date to avoid confusion.
5
privilege log with respect to the subpoenaed documents, Judge
Kaplan held that any privilege had been waived.
In re Chevron
Corp., 749 F. Supp. 2d 135, 140 (S.D.N.Y.) (“Chevron 10/20/10
Opinion”), aff’d, 409 Fed. Appx. 393 (2d Cir. 2010); Chevron
11/30/10 Opinion, 749 F. Supp. 2d at 185.
As will be seen, the
scope of that waiver is critical to the analysis of privilege in
this case.
Shortly before judgment issued in the Lago Agrio litigation,
Chevron filed an action in this Court, alleging that the LAPs,
their attorneys, various consultants, and a number of environmental
activist groups had engaged in a racketeering conspiracy “to coerce
Chevron into paying billions of dollars” to them “through a multifaceted campaign of lies, fraud, threats and official corruption,”
in violation of the Racketeer Influenced and Corrupt Organizations
Act (“RICO”), 18 U.S.C. § 1961 et seq.
306).
(11 Civ. 691, Complaint, ¶
In the ninth cause of action in the complaint, Chevron
sought a declaratory judgment pursuant to 28 U.S.C. § 2201(a)
establishing that any judgment by the Lago Agrio court would be
unenforceable on the ground that it would have been obtained
through fraud and without procedures compatible with due process.
(11 Civ. 691, Complaint, ¶¶ 392-96).
On June 1, 2011, Judge Kaplan severed the ninth cause of
action from the RICO complaint and directed that it proceed as a
6
separate case under its own docket number.
2011).
That became the instant action.
(Order dated June 1,
Meanwhile, Chevron served
on Ms. Garr, Mr. Woods, Mr. Kohn, and Kohn, Swift & Graf, P.C. the
subpoenas that are the subject of these motions.
(Subpoena to
Laura J. Garr dated May 20, 2011, attached as Exh. 1 to Declaration
of Kristen L. Hendricks dated June 10, 2011 (“Hendricks 6/10/11
Decl.”); Subpoena to Andrew Woods dated May 20, 2011, attached as
Exh. 2 to Hendricks 6/10/11 Decl.; Subpoena to Joseph C. Kohn dated
May 20, 2011, attached as Exh. 1 to Declaration of Anne Champion
dated June 15, 2011 (“Champion 6/15/11 Decl.”); Subpoena to Kohn,
Swift & Graf, P.C., attached as Exh. 2 to Champion 6/15/11 Decl.).
The Respondents objected to the subpoenas, asserting the attorneyclient privilege and the work product doctrine, and submitted
privilege logs identifying the documents at issue.
Chevron then
filed the instant motions to compel.
On July 19, 2011, I held a hearing to permit counsel to expand
upon the arguments raised in their briefs and to explore the
relationships between each Respondent and Mr. Donziger.
At the
conclusion of that proceeding, I reserved decision but issued
tentative
facilitate
determinations
final
designed
resolution
of
the
to
guide
motions.
the
parties
(Transcript
Proceedings dated July 19, 2011 (“Tr.”) at 152-54).
and
of
With respect
to the impact of Mr. Donziger’s waiver of privileges in the Section
7
1782 proceeding, I found that it applies to “all documents that
Donziger should have produced or logged in response to Chevron’s
subpoena, in the 1782 proceeding.”
(Tr. at 152).
And, because Mr.
Donziger had the practical ability to obtain documents from each of
the Respondents, I determined that any documents within their
possession that he had failed to log in a timely manner were
subject to the forfeiture of privilege he was deemed to have
committed.
(Tr. at 152).
As to the crime-fraud exception, I concluded that Judge Kaplan
had made findings that required application of that exception to
information relating to three different subjects: (1) the report to
which
an
expert’s
“Calmbacher
name
report”);
had
(2)
fraudulently
the
report
been
that
appended
was
(the
purportedly
independent but had been ghostwritten by agents of the LAPs (the
“Cabrera report”); and (3) the memoranda that were purportedly
independent reports intended to supercede the Cabrera report, but
which
in
fact
simply
“cleansing memos”).
repeated
that
(Tr. at 152-53).
report’s
findings
(the
I further found that the
crime-fraud exception was limited to these areas and that there was
not sufficient evidence to support Chevron’s assertion that the
entire Lago Agrio litigation was fraudulent from its inception.
(Tr. at 153).
Finally, I concluded that there was no evidence of
criminal or fraudulent intent on the part of the Respondents but
8
noted that such evidence would not be necessary for the crime-fraud
exception to apply.
(Tr. at 153).
I then turned to applying my findings to the documents at
issue.
I directed the Respondents first to identify any documents
that they believed fell outside the forfeiture of the privilege
caused by Mr. Donziger.
(Tr. at 153).
Chevron was then to
identify from that list any documents that it argued fell within
the crime-fraud exception because they were in furtherance of the
alleged frauds related to the Calmbacher report, the Cabrera
report, or the cleansing memos.
(Tr. at 154).
Then, to the extent
that any dispute remained, I agreed to review the controverted
documents in camera.
(Tr. at 153, 155-56).
In compliance with my directives, counsel for Ms. Garr and Mr.
Woods submitted a letter discussing the relationship between my
preliminary rulings and the documents within their possession.
(Letter of Elliot R. Peters dated July 22, 2011 (“Peters Letter”)).
Counsel interpreted my findings as imposing a subject matter waiver
with respect to the conduct of the Lago Agrio litigation, as a
consequence of which Ms. Garr and Mr. Woods had no responsive
documents not covered by the waiver.
(Peters Letter at 1-2).4
Counsel also noted that he did not understand the waiver to apply
4
As will be discussed below, this construction of my ruling
is somewhat too broad and creates a logistical complication.
9
to
communications
proceeding.5
Counsel
between
himself
and
his
clients
in
this
Graf,
P.C.
(Peters Letter at 2 n.1).
for
Mr.
Kohn
and
Kohn,
Swift
&
(collectively, the “Kohn Respondents”) also submitted a letter,
likewise indicating that all of the documents they had logged were
subject to waiver of privilege under my ruling, with the exception
of certain documents that were logged inadvertently and which are
not responsive to the subpoenas.
dated
July
22,
2011
(“Hamill
(Letter of Patricia M. Hamill
Letter”)).
The
issue
of
the
inadvertently logged documents will be resolved below.
Finally, Chevron’s counsel submitted his response. (Letter of
Randy M. Mastro dated July 27, 2011 (“Mastro Letter”)). Since none
of the Respondents had identified documents beyond the scope of the
waiver, it was unnecessary for him to identify residual documents
that, in Chevron’s view, would be subject to the crime-fraud
exception. (Mastro Letter at 1). Chevron did, however, take issue
with the attempt of counsel for the Kohn Respondents to “claw back”
purportedly non-responsive documents.
The
pending
motions
are
now
(Mastro Letter at 1-2).
ripe
for
a
full
decision,
facilitated by counsel’s responses to my preliminary rulings.
5
In this respect he is correct.
10
Discussion
A.
Attorney-Client Privilege and Work Product Doctrine
Traditionally, the attorney-client privilege applies:
“(1) where legal advice of any kind is sought (2) from a
professional legal advisor in his capacity as such, (3)
the communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or
by the legal advisor, (8) except the protection be
waived.”
United
States
v.
International
Brotherhood
of
Teamsters,
Chauffeurs, Warehousemen and Helpers of America, AFL-CIO, 119 F.3d
210, 214 (2d Cir. 1997) (quoting
In re Grand Jury Subpoena Duces
Tecum Dated Sept. 15, 1983, 731 F.2d 1032, 1036 (2d Cir. 1984));
accord United States v. Daugerdas, 757 F. Supp. 2d 364, 369
(S.D.N.Y. 2010); Amnesty International USA v. C.I.A., 728 F. Supp.
2d
479,
518-19
(S.D.N.Y.
2010);
see
also
Kingsway
Financial
Services, Inc. v. Pricewaterhouse-Coopers LLP, No. 03 Civ. 5560,
2007 WL 473726, at *7 (S.D.N.Y. Feb. 14, 2007); In re Rivastigmine
Patent Litigation, 237 F.R.D. 69, 73-74 (S.D.N.Y. 2006).6
The
party invoking the privilege bears the burden of “establish[ing]
6
The test is sometimes truncated to three elements such that
the party invoking the privilege must show “(1) a communication
between client and counsel that (2) was intended to be and was in
fact kept confidential, and (3) was made for the purpose of
obtaining or providing legal advice.” In re County of Erie, 473
F.3d 413, 419 (2d Cir. 2007) (citing United States v. Construction
Products Research, Inc., 73 F.3d 464, 473 (2d Cir. 1997)).
11
those facts that are the essential elements of the privileged
relationship, a burden not discharged by mere conclusory or ipse
dixit assertions.”
In re Grand Jury Subpoena Dated Jan. 4, 1984,
750 F.2d 223, 224-25 (2d Cir. 1984) (internal quotation marks and
citations
omitted);
accord
William
A.
Gross
Construction
Associates, Inc. v. American Manufacturers Mutual Insurance Co.,
262 F.R.D. 354, 360-61 (S.D.N.Y. 2009).
The work product doctrine, codified in part by Rule 26(b)(3)
of the Federal Rules of Civil Procedure, “is intended to preserve
a zone of privacy in which a lawyer can prepare and develop legal
theories and strategy ‘with an eye toward litigation,’ free from
unnecessary intrusion by his adversaries.”
United States v.
Adlman, 134 F.3d 1194, 1196 (2d Cir. 1998) (quoting Hickman v.
Taylor, 329 U.S. 495, 510-11 (1947)); accord Gruss v. Zwrin, No. 09
Civ. 6441, 2011 WL 2946376, at *6 (S.D.N.Y. July 14, 2011); see
also In re Steinhardt Partners, L.P., 9 F.3d 230, 234 (2d Cir.
1993) (“The logic behind the work product doctrine is that opposing
counsel should not enjoy free access to an attorney’s thought
processes.”).
To warrant protection, a document or communication
must have been prepared in anticipation of litigation by or for a
party, or by his representative.
Gruss, 2011 WL 2946376, at *7;
Gulf Islands Leasing, Inc. v. Bombardier Capital, Inc., 215 F.R.D.
466, 474 (S.D.N.Y. 2003).
The party resisting disclosure carries
12
“the heavy burden of establishing its applicability.”
In re Grand
Jury Subpoena Dated July 6, 2005, 510 F.3d 180, 183 (2d Cir. 2007).
B.
The “Claw Back” Documents
As discussed above, the Kohn Respondents seek to remove from
their privilege logs 78 documents that are allegedly communications
between them and the law firms of Conrad, O’Brien, Gellman & Rohn,
PC (“Conrad O’Brien”), their litigation counsel in this case, and
Susman Godfrey LLP, their litigation counsel “in a potential action
against Steven Donziger or his firms.” (Hamill Letter at 2 & n.1).
The
Kohn
Respondents
maintain
that
these
responsive to the subpoenas served on them.
documents
are
not
(Hamill Letter at 2).
Chevron agrees that any documents reflecting the Kohn Respondents’
“communications
with
counsel”
responsive to the subpoenas.
are
likely
privileged
(Mastro Letter at 2 n.1).
and
not
Chevron
has already consented to the Kohn Respondents’ withholding 59 of
these documents but requests that I conduct an in camera review of
the remaining 19 to determine whether they are, in fact, responsive
to the subpoenas.
(Mastro Letter at 1-2).
Having reviewed the 19 documents, I am satisfied that they
reflect communications between the Kohn respondents and Conrad
O’Brien. Therefore, they are not within the scope of the subpoenas
and need not be produced to Chevron.
13
C.
Waiver
Chevron claims that any privileges the Respondents seek to
protect here have already been waived by order of Judge Kaplan.
Specifically, they argue that Judge Kaplan’s orders of October 20,
2010 and November 30, 2010 -- which held that any privilege
asserted by Mr. Donziger on behalf of the LAPs in response to the
subpoena
served
on
him
in
the
Section
1782
proceeding
(the
“Donziger subpoena”) had been waived by his failure to produce a
timely privilege log (the “Donziger waiver”) -- also waived any
privilege the Respondents might otherwise assert here on behalf of
the LAPs.
(Memorandum of Law in Support of Chevron’s Motion to
Compel the Production of Documents from Third-Parties Laura J. Garr
and Andrew Woods (“Pl. Garr/Woods Memo.”) at 7-8; Memorandum of Law
in Support of Chevron Corporation’s Motion to Compel Production of
Documents from Joseph C. Kohn and Kohn, Swift & Graf P.C. (“Pl.
Kohn Memo.”) at 5-7); Chevron 11/30/10 Opinion, 749 F. Supp. 2d at
176-79, 185.
To address this claim, I will first consider whether
the Donziger waiver is applicable here and then construe its scope.
1.
Transferability of Waiver
The Donziger subpoena, which Chevron served on August 9, 2010,
sought various categories of documents and communications that had
been created, received, or conveyed by Mr. Donziger, anyone “acting
in [his] interest or on [his] instructions or assisting [him],
14
including . . . [his] agents, servants, and representatives,” or
“any lawyer, attorney or counselor, or [person] acting on their
behalf or assisting them, that has at any time represented or
advised [the LAPs] . . . , or having a financial interest of any
kind
in
the
proceeding].”
[Lago
Agrio
litigation]
or
the
[Section
1782
(Subpoena to Steven Robert Donziger (“Donziger
Subpoena”), attached as Exh. 1 to Proof of Service of Subpoena
dated Aug. 9, 2010 in No. 10 MC 2, at 9-10, 13, 15-23).
Its return
date was August 18, 2010. (Donziger Subpoena). Mr. Donziger filed
a motion to quash the subpoena on August 27, 2010, arguing in part
that numerous responsive documents were covered by the attorneyclient privilege
and
the
work
product
doctrine.
(Steven
R.
Donziger’s Memorandum of Law in Support of His Motion to Quash or
Modify Subpoenas at 13-16, No. 10 MC 2).
On October 20, 2010,
Judge Kaplan found that those privileges had been waived by Mr.
Donziger’s failure to file a timely privilege log pursuant to Rule
26(b)(5) of the Federal Rules of Civil Procedure and Local Civil
Rule 26.2 of the Southern and Eastern Districts of New York.
Chevron 10/20/10 Opinion, 749 F. Supp. 2d at 140.
Judge Kaplan
noted that
Mr.
he
might
reconsider
this
finding
if
Donziger
submitted “a complete privilege log on or before October 29, 2010.”
Id. at 140 n.17.
Mr. Donziger failed to meet that deadline,
although he did submit “a purported privilege log -- which is over
15
2,000 pages long and claims privilege as to 8,652 documents” on
November 15, 2010.
173.
Chevron 11/30/10 Opinion, 749 F. Supp. 2d at
Judge Kaplan found this submission insufficient to warrant
revisiting his earlier order and, on November 30, 2010, confirmed
that Mr. Donziger had forfeited his right to assert any privileges
on behalf of the LAPs in opposing the Donziger subpoena.
Id. at
176-85.
The Respondents and the LAPs argue that this waiver does not
vitiate
any
of
the
privileges
they
seek
to
assert
in
this
proceeding because (1) it was imposed in a different proceeding
under
different
voluntary.
circumstances
and
(2)
it
was
compelled,
not
(Third-Parties Andrew Woods’ and Laura J. Garr’s
Corrected Memorandum of Law in Opposition to Chevron Corporation’s
Motion to Compel the Production of Documents (“Garr/Woods Resp.
Opp. Memo.”) at 5-8; [Corrected] Hugo Gerardo Camacho Naranjo and
Javier Piaguaje Payaguaje’s Memorandum of Law in Opposition to
Chevron Corporation’s Motion to Compel the Production of Privileged
Documents from Laura J. Garr and Andrew Woods (“Def. Garr/Woods
Opp. Memo.”) at 5-6; Memorandum of Law of Defendants Hugo Gerardo
Camacho Naranjo and Javier Piaguaje Payaguaje in Opposition to
Chevron Corporation’s Motion to Compel Documents from Joseph C.
Kohn and Kohn, Swift & Graf P.C. (“Def. Kohn Opp. Memo.”) at 7-11).
Chevron disagrees, arguing that (1) the Donziger waiver applies
16
here notwithstanding the fact that this proceeding is distinct from
the one in which it was imposed and (2) the Donziger waiver was not
compelled because it resulted from Mr. Donziger’s intentional
behavior
and
because
objections to it.
Mr.
Donziger
voluntarily
withdrew
his
(Reply Memorandum of Law in Further Support of
Chevron Corporation’s Motion to Compel the Production of Documents
from Third-Parties Laura J. Garr and Andrew Woods (“Pl. Garr/Woods
Reply Memo.”) at 3-5; Chevron Corporation’s Reply Memorandum of Law
in Further Support of Its Motion to Compel Documents from Joseph C.
Kohn and Kohn, Swift & Graf P.C. (“Pl. Kohn Reply Memo.”) at 3-5).
Where a party voluntarily discloses privileged documents to an
adversary in one proceeding, it cannot withhold the same documents
on the basis of privilege in a subsequent proceeding, even if that
subsequent proceeding involves a different adversary.
See In re
Steinhardt Partners, 9 F.3d at 235 (“The waiver doctrine provides
that voluntary disclosure of work product to an adversary waives
the privilege as to other parties [in a subsequent proceeding].”);
Urban Box Office Network, Inc. v. Interfase Managers, L.P., No. 01
Civ. 8854, 2004 WL 2375819, at *3-4 (S.D.N.Y. Oct. 21, 2004)
(applying same principle to waive attorney-client privilege).
Moreover, where a party “voluntarily undertakes actions that will
predictably lead to the disclosure of [a] document, then waiver
will follow.”
Rattner v. Netburn, No. 88 Civ. 2080, 1989 WL
17
223059, at *9 (S.D.N.Y. June 20, 1989), aff’d, 1989 WL 231310
(S.D.N.Y. Aug. 23, 1989); see also Bowne of New York City, Inc. v.
AmBase Corp., 150 F.R.D. 465, 480 (S.D.N.Y. 1993) (“[T]he intent of
the party and its attorney not to cause an implied waiver is
immaterial if they intentionally undertake actions that have the
effect of causing such a waiver.”); cf. Urban Box Office, 2004 WL
2375819, at *3 (“A party which seeks to uphold the privilege must
take
affirmative
measures
to
maintain
the
confidentiality
of
attorney-client communications.”). In contrast, where a party does
not have the opportunity to assert a privilege before production of
the corresponding document is compelled, the privilege is not
waived.
See Transamerica Computer Co. v. International Business
Machines Corp., 573 F.2d 646, 648, 651-53 (9th Cir. 1978) (finding
no waiver for privileged documents defendant accidentally produced
while complying with court-ordered turnover of 17 million pages
within three-month period where district judge had held that “the
timetable he himself had imposed was so stringent that, as a
practical matter, it effectively denied [producing party] the
opportunity
to
claim
the
attorney-client
privilege”);
In
re
Parmalat Securities Litigation, No. 04 MD 1653, 2006 WL 3592936, at
*4 (S.D.N.Y. Dec. 1, 2006) (finding no waiver of privilege where
documents were seized before privilege holder had opportunity to
assert privilege).
18
This case lies somewhere between these guideposts.
Mr.
Donziger did not volunteer to disclose privileged documents in
response to the Donziger subpoena, but he also was not deprived of
the opportunity to assert his objections due to the sort of
circumstances presented in Transamerica or Parmalat.7
Chevron
11/30/10 Opinion, 749 F. Supp. 2d at 173, 182 (noting that Mr.
Donziger was on notice of his obligation to produce a privilege log
by, at the latest, September 1, 2010 but did not produce one until
November 15, 2010).
Where an attorney is precluded from asserting
privileges on behalf of his client due to his failure to produce a
privilege log, courts in other circuits have characterized the
resulting waiver as “implied,” Precision Airmotive Corp. v. Ryan
Insurance Services, Inc., No. 2:10-mc-244, 2011 WL 148818, at *6
(D. Me. Jan. 17, 2011), and not “accidental or inadvertent,”
Mansourian v. Board of Regents of University of California at
Davis, No. S-03-2591, 2007 WL 4170819, at *2 (E.D. Cal. Nov. 19,
7
Chevron’s argument that Mr. Donziger consented to the waiver
by voluntarily withdrawing his opposition to it is disingenuous.
(Pl. Garr/Woods Reply Memo. at 4). Unlike Westinghouse Electric
Corp. v. Republic of the Philippines, 951 F.2d 1414 (3d Cir. 1991),
the case Chevron cites, Mr. Donziger did not withdraw his objection
to waiver of the privilege; rather, he withdrew his motion for
reconsideration of one of Judge Kaplan’s orders so that he could
immediately proceed with his appeal of that order to the Second
Circuit. Chevron 11/30/10 Opinion, 740 F. Supp. at 175. Although
Mr. Donziger was unsuccessful in the Circuit, see Lago Agrio
Plaintiffs v. Chevron Corp., 409 Fed. Appx. 393 (2d Cir. 2010), he
at no point consented to Judge Kaplan’s finding of waiver.
19
2007).
Here,
Judge
Kaplan
explicitly
found
that
Mr.
Donziger’s
behavior in failing to produce a privilege log was intentional:
This Court is satisfied [] that the [tardy production of
Mr. Donziger’s privilege log] was not simply a
consequence of errors made and positions taken for benign
reasons. The Court finds and concludes that they have
intended, at least since September 1, to achieve that
tactical
advantage
at
their
adversaries’
expense. . . .
This Court finds that the failure to
submit a privilege log, at least from September 1,
2010, . . . was a deliberate attempt to structure the
response to the subpoenas in a way that would create the
maximum possibility for delay.
Chevron 11/30/10 Opinion, 749 F. Supp. 2d at 184, 185.
While the
result might be different absent this finding, where intentional
conduct leads to a sanction in the form of an implied waiver, that
waiver carries over to a related case, see In re Steinhardt
Partners, 9 F.3d at 235; Urban Box Office, 2004 WL 2375819, at *34, and a fortiori, it carries over to a related case involving the
same parties.
Thus, any document within the scope of the Donziger
waiver is stripped of its privileges for the purposes of this
action.
2.
Scope of Waiver
Subpoenas issued pursuant to Rule 45 of the Federal Rules of
Civil Procedure may require respondents to “produce designated
documents, electronically stored information, or tangible things in
that person’s possession, custody, or control.”
20
Fed. R. Civ. P.
45(a)(1)(A)(iii); see also Linde v. Arab Bank, PLC, 262 F.R.D. 136,
141 (E.D.N.Y. 2009).
“Control” is construed broadly to encompass
documents that the respondent has “the legal right, authority, or
practical ability to obtain . . . upon demand.”
Dietrich v. Bauer,
No. 95 Civ. 7051, 2000 WL 1171132, at *3 (S.D.N.Y. Aug. 16, 2000),
adhered to on reconsideration, 198 F.R.D. 397 (S.D.N.Y. 2001);
accord In re NTL, Inc. Securities Litigation, 244 F.R.D. 179, 195
(S.D.N.Y. 2007), aff’d sub nom. Gordon Partners v. Blumenthal, No.
02
Civ.
7377,
2007
WL
1518632
(S.D.N.Y.
May
17,
2007);
Export-Import Bank of the United States v. Asia Pulp & Paper Co.,
233 F.R.D. 338, 341 (S.D.N.Y. 2005); see also Shcherbakovskiy v. Da
Capo Al Fine, Ltd., 490 F.3d 130, 138 (2d Cir. 2007) (“[I]f a party
has access and the practical ability to possess documents not
available
to
required.”).8
the
party
seeking
them,
production
may
be
Thus, “‘[t]he test for the production of documents
8
Many cases define the term “control” as it pertains to Rule
34(a)(1) of the Federal Rules of Civil Procedure. However, the
phrase “possession, custody or control” carries the same meaning
under both Rules. See Atwell v. City of New York, No. 07 Civ.
2365, 2008 WL 5336690, at *1 (S.D.N.Y. Dec. 15, 2008) (“Rule 45
requests for production are subject to the limits on discovery
under Rules 26 and 34.”); United States v. Stein, 488 F. Supp. 2d
350, 360-61 (S.D.N.Y. 2007) (noting phrase “possession, custody or
control” appears in Rule 16 of the Federal Rules of Criminal
Procedure and Rules 34 and 45 of the Federal Rules of Civil
Procedure and finding “no hint in the history of these rules that
the meaning of the phrase differs depending upon which rule is in
question”); Dietrich, 2000 WL 1171132, at *2 n.2 (“[T]he scope of
discovery, and the meaning of ‘control,’ under [Rules 34 and 45] is
21
is control, not location,’” In re Flag Telecom Holdings, Ltd.
Securities Litigation, 236 F.R.D. 177, 180 (S.D.N.Y. 2006) (quoting
Marc Rich & Co., A.G. v. United States, 707 F.2d 663, 667 (2d Cir.
1983)), and the respondent may be required to produce materials
that are not in its physical possession, Leser v. U.S. Bank
National Association, No. 09 CV 2362, 2010 WL 1945806, at *1
(E.D.N.Y. May 13, 2010) (“[T]he Federal Rules of Civil Procedure
require parties to produce items in their ‘possession, custody, and
control,’
not
simply
those
in
their
immediate
possession.”);
Securities and Exchange Commission v. Strauss, No. 09 Civ. 4150,
2009 WL 3459204, at *7 (S.D.N.Y. Oct. 28, 2009) (“‘Control’ is
construed broadly and may cover materials that are not in a party’s
actual physical possession.”).
Where the respondent contests its
ability to produce a document, “[t]he party seeking the production
bears the burden of demonstrating that the other party has control
over the documents sought.” In re Flag Telecom Holdings, Ltd., 236
F.R.D. at 180.
Chevron
maintains
that
all
of
the
documents
on
the
Respondents’ privilege logs fall within the subject matter areas
identified in the Donziger subpoena. (Pl. Garr/Woods Memo. at 6-7;
Pl. Kohn Reply Memo. at 1).
Moreover, it argues that these
coextensive at least with respect to documentary discovery.”).
22
documents
control
were
due
therefore,
subpoena.
within
to
that
Mr.
Donziger’s
possession,
his
relationship
with
they
were
the
within
the
scope
custody,
Respondents
of
the
or
and,
Donziger
(Pl. Garr/Woods Memo. at 7-8; Pl. Kohn Memo. at 5-7).
As a result, it concludes that all of these documents were subject
to the Donziger waiver.
Memo. at 5-7).
(Pl. Garr/Woods Memo. at 7-8; Pl. Kohn
The Respondents assert that some number of the
documents on their respective privilege logs do not fall within the
scope of the Donziger subpoena -- either because the documents were
not within the categories sought by the Donziger subpoena or
because they were not within the possession, custody, or control of
Mr. Donziger -- and therefore that the LAPs’ privileges have not
been waived with respect to those documents.
(Tr. at 17, 23-25;
Hamill Letter at 1). I will address the claims of each Respondent,
and those of the LAPs, in turn.
a.
Ms. Garr
Ms. Garr identifies only one category of documents on her
privilege log that falls within the scope of the subpoena served on
her but outside the scope of the Donziger subpoena -- specifically,
she maintains that e-mails contained within her “personal Gmail
account” are not responsive to the Donziger subpoena because they
were not within Mr. Donziger’s possession, custody, or control.
(Tr. at 17, 24-25).
Chevron disputes this characterization,
23
claiming that Ms. Garr was effectively Mr. Donziger’s employee and,
therefore, that any documents responsive to the Donziger subpoena
that are in her possession are also within his control.
(Tr. at
39; Pl. Garr/Woods Memo. at 4-6).
Ms. Garr worked intermittently with Mr. Donziger from the
spring of 2007 until October of 2010.
During three distinct
periods -- May 2007 through August 2007, January 2009 through April
2009, and August 2009 through August 2010 -- she volunteered as a
legal intern9 with the Amazon Defense Coalition and Selva Viva
Selviva
Cia,
litigation.
Ltda.,
working
exclusively
on
(Garr Decl., ¶¶ 2-4; Tr. at 45-52).
the
Lago
Agrio
From August 2010
through October 2010, she continued to work on that litigation as
“a temporary, contract associate attorney for Steven Donziger,”
during which time she was paid by Mr. Donziger.
(Garr Decl., ¶ 5;
Tr. at 50, 51-52). Throughout this entire period, Ms. Garr “worked
with and under the supervision of Steven Donziger,” as well as
others involved in the Lago Agrio litigation. (Garr Decl., ¶¶ 2-4;
Tr. at 47-48, 50).
Although she spent the summer of 2007 working
in Ecuador, she was in the United States and Ecuador during the
9
Ms. Garr variously refers to her position as “intern” and
“extern.” (Declaration of Laura J. Garr dated June 16, 2011 (“Garr
Decl.”), ¶¶ 2-4). However, she has not asserted that there is any
distinction between these two roles, and she appears to have
performed the same tasks while in each. (Garr Decl., ¶¶ 2-4).
24
spring of 2009, and she worked mostly “out of Steven Donziger’s
kitchen” from August 2009 through October 2010.
(Tr. at 46-47,
51).
Despite
working
so
closely
with
Mr.
Donziger,
Ms.
Garr
maintains that the contents of her Gmail account were not within
the scope of the Donziger subpoena because Mr. Donziger did not
have “custody or control or access to her Gmail account.”
(Tr. at
25). Aside from the period during which she was an employee of Mr.
Donziger, however, Ms. Garr did not maintain a dedicated work email address, and thus she sent and received e-mails related to the
Lago Agrio litigation from her Gmail account.
(Tr. at 25; E-mail
from sdonziger@gmail.com to lauragarr@gmail.com dated Feb. 9, 2009,
attached as
Exh.
14 to
Hendricks 6/10/11
Decl.;
E-mail
from
lauragarr@gmail.com to Andrew Woods dated Sept. 11, 2009, attached
as Exh. 17 to Hendricks 6/10/11 Decl.).
Courts have repeatedly
found that employers have control over their employees and can be
required to produce documents in their employees’ possession. See,
e.g., Caston v. Hoaglin, No. 2:08–CV–200, 2009 WL 1687927, at *3
(S.D. Ohio June 12, 2009) (finding employer “has control over its
current employees and the records within their possession” (citing
In re Grand Jury Subpoenas Duces Tecum Dated June 13, 1983 and June
22, 1983, 722 F.2d 981, 984 (2d Cir. 1983))); Miniace v. Pacific
Martime Association, No. C 04-03506, 2006 WL 335389, at *2 (N.D.
25
Cal. Feb. 13, 2006) (“Numerous courts have found that corporations
have
control
corporations
over
may
be
their
officers
required
to
and
produce
employees
documents
and
that
in
their
possession.” (citing Herbst v. Able, 63 F.R.D. 135, 138 (S.D.N.Y.
1972) and Riddell Sports, Inc. v. Brooks, 158 F.R.D. 555, 558-59
(S.D.N.Y. 1994))); Schaaf v. SmithKline Beecham Corp., 233 F.R.D.
451,
455
(E.D.N.C.
2005)
(finding
employer
had
control
over
employee’s work-related documents, whether located at office or in
her home (citing In re Grand Jury Subpoenas, 722 F.2d at 984)).
Indeed, the subject of a subpoena is expected to seek documents
even from former employees.
See 8B Charles Alan Wright, Arthur R.
Miller, Mary Kay Kane & Richard L. Marcus, Federal Practice and
Procedure § 2210; Export-Import Bank of the United States, 233
F.R.D. at 341 (“[C]ourts insist that corporations, at the very
least, ask their former employees to cooperate before asserting
that they have no control over documents in the former employees’
possession.”). Ms. Garr admits that she would have turned over any
responsive e-mails from her Gmail account to Mr. Donziger had he
asked for them and had she been advised by counsel that compliance
was appropriate.
(Tr. at 57).
There is thus no evidence that she
was “‘unwilling or unable’” to provide Mr. Donziger with the
relevant contents of her Gmail account or that Mr. Donziger lacked
the practical ability to acquire it from her despite its being
26
located in her private e-mail account rather than on his law firm’s
server.
8B Charles Alan Wright, Arthur R. Miller, Mary Kay Kane &
Richard L. Marcus, Federal Practice and Procedure § 2210 (quoting
In re Folding Carton Antitrust Litigation, 76 F.R.D. 420, 423 (N.D.
Ill. 1977)).
Any responsive e-mails from Ms. Garr’s Gmail account
therefore fall within the scope of the Donziger subpoena and are
subject to the Donziger waiver.
b.
Mr. Woods
Unlike Ms. Garr, Mr. Woods admits that any documents in his
possession that fall within the subject matter of the Donziger
subpoena are also within Mr. Donziger’s possession, custody, and
control.
(Tr. at 16-17, 24).
However, he disputes that any such
documents created after September 29 or 30, 2010 -- the dates on
which his computer hard drives were imaged for production in
response to the Donziger subpoena -- are within the scope of the
Donziger subpoena.
(Declaration of Andrew Woods dated June 16,
2011, ¶ 4; Tr. at 17, 29).
The LAPs similarly argue that any
documents created by Mr. Woods after October 29, 2010 -- the final
deadline
Judge
Kaplan
had
set
for
Mr.
Donziger
to
submit
a
privilege log in the Section 1782 proceeding -- are outside the
scope of the Donziger subpoena and thus also outside the scope of
the Donziger waiver.
(Def. Garr/Woods Opp. Memo. at 6; Defendants
Hugo Gerardo Camacho Naranjo’s and Javier Piaguaje Payaguaje’s
27
Response to This Court’s July 19, 2011 Ruling and Directives (“Def.
7/22/11 Memo.”) at 2); Chevron 10/20/10 Opinion, 749 F. Supp. 2d at
140 n.17.
Chevron argues that the Donziger waiver applies to all
documents in Mr. Woods’ possession that fall within the subject
areas sought by the Donziger subpoena, regardless of when those
documents were created.
n.4).
(Tr. at 38; Pl. Garr/Woods Memo. at 7-8 &
In the alternative, Chevron has suggested that the scope of
the Donziger waiver includes all responsive documents produced
through February 1, 2011; it bases this position on an order issued
by Max Gitter, the special master appointed by Judge Kaplan to
oversee Mr. Donziger’s deposition, that Mr. Donziger produce his
hard drives on that date in order to comply fully with the Donziger
subpoena.
(Tr. at 38-39).
Rule 26(e) of the Federal Rules of Civil Procedure grants a
court the power to order a respondent to “supplement or correct its
disclosure
26(e)(1)(B).
or
response”
to
a
subpoena.
Fed.
R.
Civ.
P.
This includes the authority to order a respondent to
produce materials created after the return date of the subpoena.
See, e.g., United States v. International Business Machines Corp.,
83 F.R.D. 92, 96 (S.D.N.Y. 1979) (requiring respondent to produce
“[r]esponsive documents created after the return date of the
subpoena” because such documents were relevant to purpose of
subpoena).
The Donziger subpoena did not limit the scope of the
28
documents it sought based on when they were created, and Judge
Kaplan did not identify a date after which newly-created responsive
materials would not have to be produced.
(Donziger Subpoena).
Moreover, Mr. Donziger included documents that had been produced
months after the return date of the subpoena in his own privilege
log, which was submitted on November 15, 2010.
Opinion, 749 F. Supp. 2d at 173.
Chevron 11/30/10
Thus, it seems clear that the
Donziger subpoena sought responsive documents created after its
return date.
Yet
the
scope
of
the
Donziger subpoena is not
coextensive with the scope of the Donziger waiver. That waiver was
imposed on October 20, 2010 as a penalty for Mr. Donziger’s
violation of the rules of discovery. Chevron 10/20/10 Opinion, 749
F. Supp. 2d at 140; Chevron 11/30/10 Opinion, 749 F. Supp. 2d at
176 (explaining how Mr. Donziger’s failure to produce timely
privilege log in violation of procedural rules and court orders led
to waiver).
It is therefore conceptually distinct from the broad
subject matter waiver that can result where a party places the
substance
litigation.
of
its
privileged
communications
at
issue
in
a
E.g., In re Grand Jury Proceedings, 219 F.3d 175, 182
(2d Cir. 2000) (“[F]airness considerations arise when the party
attempts to use the privilege both as ‘a shield and a sword.’
.
.
.
[A]
party
cannot
partially
disclose
privileged
communications or affirmatively rely on privileged communications
29
to support its claim or defense and then shield the underlying
communications from scrutiny by the opposing party.”).
Moreover,
concern over prejudice to Chevron was not the animating factor
behind Judge Kaplan’s imposition of the Donziger waiver, and
Chevron has not alleged that it would suffer prejudice should that
waiver be limited to documents in existence at the time it was
imposed.
waived,
Id. at 188 (“[I]f the court finds that the privilege was
then
prejudice.”).
the
waiver
should
be
tailored
to
remedy
the
Finally, Mr. Gitter’s determination is not binding
in this proceeding, especially in the absence of any information
regarding the basis for his conclusion.
See In re Continental
Vending Machine Corp., 543 F.2d 986, 995 (2d Cir. 1976) (“[A
special]
master’s
findings
are
not
binding
on
review
unless
supported by substantial evidence.”); In re Austrian and German
Bank Holocaust Litigation, No. 98 Civ. 3938, 2001 WL 228107, at *5
(S.D.N.Y. March 8, 2001) (“A special master’s conclusions of law,
[] or conclusions on mixed questions of law and fact, are not
entitled to any special deference and are subject to de novo
review.”).
There is thus no justification for interpreting the
Donziger waiver to encompass documents that did not exist at the
time it was imposed.
Any privileged documents responsive to the
Donziger subpoena that were created after October 20, 2010 do not
30
fall within the Donziger waiver.10
c.
The Kohn Respondents
The Kohn Respondents admit that all of the documents on their
privilege log are within the subject matter sought by the Donziger
subpoena.
(Hamill Letter at 2).
Nevertheless, they argue that
these documents are not within the scope of the Donziger subpoena
because they were not in the possession, custody, or control of Mr.
Donziger.
(Hamill Letter at 1).
Because it is rare that documents in an attorney’s possession
arising out of a representation are subject to subpoena, I have
been unable to identify any case law illuminating the “possession,
custody or control” standard in that situation.
Nevertheless,
principles regarding this standard that arise in the context of
corporate
relationships
provide guidance here.
are
conceptually
applicable
and
will
In particular,
[c]ourts have found control by a parent corporation over
documents held by its subsidiary, by a subsidiary
corporation over documents held by its parent, and by one
sister corporation over documents held by another sister
corporation . . . .
One of the circumstances which
warrants a finding of control is where [one] corporate
entity has the ability in the ordinary course of business
to obtain documents held by [the other] corporate entity.
Securities and Exchange Commission v. Credit Bancorp, Ltd., 194
10
This date is germane only to Mr. Woods. Neither Ms. Garr
nor the Kohn Respondents have identified any responsive documents
created after that date that are within their possession.
31
F.R.D. 469, 472 (S.D.N.Y. 2000) (internal citations omitted).
It
together
is
undisputed
for
many
that Mr.
years
on
Kohn
and
litigation
Mr.
Donziger
involving
the
worked
LAPs.
(Excerpts from the Deposition of Steven Donziger (“Donziger Dep.”),
attached as Exh. 4 to Champion 6/15/11 Decl., at 610).
The Kohn
Respondents provided funding for Mr. Donziger’s work on the Lago
Agrio litigation (e.g., Letter of Joseph C. Kohn dated Oct. 18,
2007 and attachments, attached as Exh. 25 to Champion 6/15/11
Decl.; E-mail chain dated Aug. 14, 2007, attached as Exh. 29 to
Champion 6/15/11 Decl.), and Mr. Donziger was their primary source
of “information about the lawsuit and legal strategy” (Donziger
Dep. at 3546-49).
The two men also co-signed at least one contract
and regularly exchanged documents through e-mail. (Agreement dated
Jan. 2, 2006, attached as Exh. 5 to Champion 6/15/11 Decl.; E-mail
chain dated Aug. 20, 2007, attached as Exh. 10 to Champion 6/15/11
Decl.; E-mail of Richard Kamp dated May 12, 2007, attached as Exh.
17 to Champion 6/15/11 Decl.; E-mail of Steven Donziger dated May
16, 2007, attached as Exh. 19 to Champion 6/15/11 Decl.).
Thus,
there is sufficient documentary evidence to establish that Mr.
Donziger had the practical ability to obtain documents related to
the Lago Agrio litigation from the Kohn Respondents, and any such
documents that are responsive to the Donziger subpoena therefore
also fall within the Donziger waiver.
32
d.
The LAPs
The LAPs make one further argument regarding the scope of the
Donziger subpoena. Relying on distinctions between the language of
the Donziger subpoena and the language of the subpoenas served on
the Respondents, they argue that there must be some privileged
documents that fall within the latter but outside of the former.
(Def. 7/22/11 Memo. at 2-3).
However, the Respondents have not
indicated that there actually are any privileged documents that
fall into these alleged gaps.
Because the LAPs have failed to
identify any specific documents from the Respondents’ privilege
logs that do not fall within the subject matter descriptions
contained in the Donziger subpoena but are within the document
categories sought by the subpoenas served on the Respondents, I
have no basis for concluding that such documents exist.
The Donziger waiver therefore applies to every document on Ms.
Garr’s privilege log and on the Kohn Respondents’ privilege logs.
With respect to Mr. Woods’ privilege log, the privilege has been
waived for
any
documents
created
prior to October
20,
2010;
documents created after that date are not subject to the Donziger
waiver.
Therefore, I must determine whether those documents fall
within the crime-fraud exception.
D.
Crime-Fraud Exception
Chevron argues that any privilege Mr. Woods may have asserted
33
has been vitiated by the crime-fraud exception because the Lago
Agrio litigation was conducted pursuant to a “fraudulent scheme.”
(Pl. Garr/Woods Memo. at 11-12; Pl. Kohn Memo. at 1, 17-22).
1.
Legal Standard
“The crime-fraud exception removes the privilege from those
attorney-client
communications
that
are
‘relate[d]
to
client
communications in furtherance of contemplated or ongoing criminal
or fraudulent conduct.’”
United States v. Jacobs, 117 F.3d 82, 87
(2d Cir. 1997) (alteration in original) (quoting In re John Doe,
Inc., 13 F.3d 633, 636 (2d Cir. 1994)).
abrogates the work product doctrine.
168 F.3d 69, 71-72 (2d Cir. 1999).
The exception also
See In re Richard Roe, Inc.,
For the crime-fraud exception
to apply, there must be “‘probable cause to believe that a fraud or
crime has been committed and that the communications in question
were in furtherance of the crime or fraud.’”
In re Omnicom Group,
Inc. Securities Litigation, 233 F.R.D. 400, 404 (S.D.N.Y. 2006)
(quoting Jacobs, 117 F.3d at 87).
The burden of demonstrating
probable cause rests on the party invoking the exception.
Id.
The probable cause standard in this context is “not an overly
demanding” one.
A.I.A. Holdings, S.A. v. Lehman Brothers, Inc.,
No. 97 Civ. 4978, 1999 WL 61442, at *5 (S.D.N.Y. Feb. 3, 1999).
However, it “is not satisfied by a showing that the material in
question ‘might provide evidence of a crime or fraud.’”
34
In re
Fresh Del Monte Pineapple, No. 04 MD 1628, 2007 WL 64189, at *3
(S.D.N.Y. Jan. 4, 2007) (quoting In re Richard Roe, Inc., 168 F.3d
at 71), aff’d sub nom. American Banana Co. v. J. Bonafede Co., 407
Fed. Appx. 520 (2d Cir. 2010).
Rather, the evidence provided must
give “‘a prudent person [] a reasonable basis to suspect the
perpetration or attempted perpetration of a crime or fraud, and
that
the
communications
were
in
furtherance
thereof.’”
Id.
(quoting In re Grand Jury Subpoena Duces Tecum Dated Sept. 15,
1983, 731 F.2d at 1039).
“‘The crime or fraud need not have
occurred for the exception to be applicable; it need only have been
the objective of the [] communication.’”
Id. at *14 n.15 (quoting
In re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731
F.2d at 1039).
Generally, in determining whether the crime-fraud exception
applies, “the pertinent intent is that of the client, not the
attorney.”11 In re Omnicom Group, 233 F.R.D. at 404. However, even
11
Indeed, in the typical case, the crime-fraud exception may
apply even if the attorney is totally unaware of participating in
a crime or fraud. United States v. Kerik, 531 F. Supp. 2d 610, 617
(S.D.N.Y. 2008). The Respondents are all at pains to demonstrate
that, to the extent any crime or fraud exists in this case, they
were not aware of it. (Tr. at 96-97, 122; Garr/Woods Resp. Opp.
Memo. at 13-14; Kohn, Swift & Graf P.C. and Joseph C. Kohn’s
Memorandum of Law in Opposition to Chevron Corporation’s Motion to
Compel Production of Documents (“Kohn Resp. Opp. Memo.”) at 8-16).
Chevron did not produce persuasive evidence of such knowledge, but
it was not obliged to.
35
though the privilege belongs to the client, it may be pierced by
wrongdoing of the attorney, even without the knowledge or intent of
the client.
See United States v. Kaplan, No. 02 Cr. 883, 2003 WL
22880914, at *6-9 (S.D.N.Y. Dec. 5, 2003) (applying crime-fraud
exception where defendant law firm was accused of insurance fraud);
United States v. Rivera, 837 F. Supp. 565, 569 (S.D.N.Y. 1993)
(applying crime-fraud exception where defendant law firm engaged in
immigration fraud, though noting clients were likely aware of the
fraud); United States v. $1.5 Million Letter of Credit as a
Substitute Res for Seized Bank Accounts, No. 90 Civ. 4450, 1992 WL
204357, at *5 (S.D.N.Y. Aug. 7, 1992) (finding that “the government
is not precluded from relying on the crime/fraud exception by the
mere fact” that lawyer is accused of fraud rather than client);
Duttle v. Bandler & Kass, 127 F.R.D. 46, 56 (S.D.N.Y. 1989)
(“[L]egal advice that furthers a fraudulent goal is not privileged,
regardless of the innocence of the client seeking the advice.”);
see also In re Impounded Case (Law Firm), 879 F.2d 1211, 1213 (3d
Cir. 1989) (noting “[w]e cannot agree” that “the crime-fraud
exception does not apply to defeat the client’s privilege where the
pertinent alleged criminality is solely that of the law firm”); cf.
In re Sealed Case, 107 F.3d 46, 49 n.2 (D.C. Cir. 1997) (“In nearly
all cases, a client’s innocence will bar application of the crimefraud exception.
We say ‘nearly all’ because there may be rare
36
cases . . . in which the attorney’s fraudulent or criminal intent
defeats a claim of privilege even if the client is innocent.”);
State
Farm
Mutual
Automobile
Insurance
Co.
v.
Hawkins,
No.
08-10367, 2011 WL 595810, at *5 (E.D. Mich. Feb. 10, 2011) (finding
that an attorney’s “allegedly improper conduct may allow the
piercing of this privilege, but not where the only defendant is the
client, and where the only relevant material, and therefore the
only discoverable material, would be material that inculpates
her”); but see In re Grand Jury Proceedings, 417 F.3d 18, 23 (1st
Cir.
2005)
(“The
crime-fraud
exception
requires
the
client’s
engagement in criminal or fraudulent activity and the client’s
intent with respect to attorney-client communications.”).
In this case, although the LAPs oppose the application of the
crime-fraud exception in part by attempting to rebut allegations
that they themselves were “engaged in a fraudulent effort” (Def.
Kohn Opp. Memo. at 20-21), Chevron alleges wrongdoing by the LAPs
as well as by their attorneys (Pl. Garr/Woods Memo. at 11-12; Pl.
Kohn Memo. at 18-20). Wrongdoing by either group is sufficient for
the exception to apply.
2.
Choice of Law
Case law on the crime-fraud exception does not make perfectly
clear what wrongdoing must be alleged, and with what specificity,
in order for the privilege to apply.
37
“[T]he actual burden to be
imposed on a movant seeking to defeat a privilege in this way is
still an open question.”
In re Omnicom Group, 233 F.R.D. at 406.
“There is no question that the crime-fraud exception embraces
common-law fraud . . . [and] there is a large body of caselaw that
recognizes its applicability even to non-fraud intentional torts.”
Specialty Minerals, Inc. v. Pleuss-Stauffer AG, No. 98 Civ. 7775,
2004 WL 42280, at *9 (S.D.N.Y. Jan. 7, 2004) (internal citations
omitted).
Indeed, some courts have interpreted the exception so
broadly as to encompass “‘misconduct fundamentally inconsistent
with the basic premises of the adversary system,’”
Madanes v.
Madanes, 199 F.R.D. 135, 148-49 (S.D.N.Y. 2001) (quoting Coleman v.
American Broadcasting Cos., 106 F.R.D. 201, 208 (D.D.C. 1985)), and
I have previously held that “[a]t a minimum, [] the attorney-client
privilege does not protect communications in furtherance of an
intentional tort that undermines the adversary system itself,” id.
at 149.
The issue is particularly thorny in this case, however,
because much of the alleged wrongdoing took place in Ecuador and
was directed toward an Ecuadorian court.
In determining whether
probable cause of a crime or fraud has been established, Chevron
contends that New York law applies.
points
to
concerned
evidence
that
that their
the
conduct
(Tr. at 70).
defendants
with
38
in
respect
Nonetheless, it
this
to
the
action
were
Lago
Agrio
litigation violated Ecuadorian criminal law and contends that there
is sufficient evidence of criminal or fraudulent activity under
either country’s law to merit application of the exception.
at 62-63, 71-72).
(Tr.
In contrast, the Respondents contend that,
although U.S. law applies with respect to the application of the
privilege and the crime-fraud exception, the underlying wrongdoing
must be a crime or fraud under Ecuadorian law for the exception to
apply.
(Tr. at 111-13).
The relevant factors in this case indicate that New York law
should determine whether probable cause has been established to
believe a crime or fraud was committed or intended.
“Whether
foreign law should play a role in defining the contours of the
attorney-client privilege in any given case is a determination
within the sound discretion of the court.”
Madanes, 199 F.R.D. at
145 (“[I]t would be anomalous for the plaintiff and [her attorney]
to engage in conduct that may violate American professional ethics,
even if not Argentine ethical norms, and then seek to shield their
communications on the basis of a privilege asserted in an American
court.”).
And, because “what constitutes a crime will vary from
one jurisdiction to the next,” the crime-fraud exception “is forumspecific.”
Id. at 148.
In making their arguments with respect to the crime-fraud
exception,
all
parties
have
cited
39
to
U.S.
law.
(E.g.,
Pl.
Garr/Woods Memo. at 11-12; Pl. Kohn Memo. at 17-22; Def. Garr/Woods
Opp.
Memo.
at
12-15;
Def.
Kohn
Opp.
Memo.
at
19-22;
Resp.
Garr/Woods Opp. Memo. at 11-14; Resp. Kohn Opp. Memo. at 8-9); see
In re Fresh Del Monte Pineapple, 2007 WL 64189, at *13 n.14
(“Implied acceptance of a forum’s law is sufficient to establish
the law for application to substantive legal claims.”); see also
Kingsway Financial Services, Inc. v. Pricewaterhouse-Coopers LLP,
No. 03 Civ. 5560, 2007 WL 1837133, at *2 (S.D.N.Y. June 27, 2007)
(“[T]he law is clear in this Circuit that federal privilege law
should be applied to evidence relevant to both federal and state
law claims.”); cf. Astra Aktiebolag v. Andrx Pharmaceuticals, Inc.,
208 F.R.D. 92, 98 (S.D.N.Y. 2002) (“Where . . . alleged privileged
communications took place in a foreign country or involved foreign
attorneys or proceedings, this court defers to the law of the
country
that
has
the
‘predominant’
or
‘the
most
direct
and
compelling interest’ in whether those communications should remain
confidential, unless that foreign law is contrary to the public
policy of this forum.”).
Further, although the wrongdoing alleged was largely directed
toward the court in Ecuador, the allegation in this portion of
Chevron’s bifurcated case against the defendants is that the
judgment of the Ecuadorian court in the Lago Agrio litigation is
unenforceable “on, among others, grounds of fraud, failure to
40
afford procedures compatible with due process, lack of impartial
tribunals, and contravention of public policy.”
Complaint at 144-45 & ¶ 394).
(11 Civ. 691,
Analysis of such a claim requires
“consideration of the fairness of a foreign adjudicating system,”
as well as a “case-specific inquiry” to identify fraud in procuring
the judgment.
2001).
Diorinou v. Mezitis, 237 F.3d 133, 143 (2d Cir.
This analysis depends on U.S. law and public policy
principles, since “comity prevails if [the] foreign judgment ‘does
not prejudice the rights of United States citizens or violate
domestic public policy.’” Id. (quoting Victrix Steamship Co., S.A.
v. Salen Dry Cargo A.B., 825 F.2d 709, 713 (2d Cir. 1987)).
Additionally,
Judge
Kaplan
has
already
determined
that
Chevron’s claim that the judgment of the Ecuadorian court in the
Lago Agrio litigation is unenforceable will be determined using New
York law.
See Chevron Corp., 768 F. Supp. 2d at 632-33.
Under New
York law, a foreign judgment will not be recognized if, among other
reasons, “the judgment was rendered under a system which does not
provide impartial tribunals or procedures compatible with the
requirements of due process of law,” “the judgment was obtained by
fraud,” or “the cause of action on which the judgment is based is
repugnant to the public policy of this state.”
§ 5304.
N.Y. C.P.L.R.
In turn, a claim of fraud is established by showing “‘a
misrepresentation or a material omission of fact which was false
41
and known to be false by defendant,’” “‘made for the purpose of
inducing
the
other
party
to
rely
upon
it,’”
and
causing
“‘justifiable reliance of the other party on the misrepresentation
or material omission, and [] injury.’”
Premium Mortgage Corp. v.
Equifax, Inc., 583 F.3d 103, 108 (2d Cir. 2009) (quoting Lama
Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 421, 646 N.Y.S.2d
76, 80 (1996)).
Therefore, the crime-fraud exception to the privilege may
apply here provided that there is a reasonable basis to suspect
that the LAPs or their attorneys procured a judgment in Ecuador
through fraud as defined by New York law, and that the documents
they are seeking to protect were in furtherance of that fraud.
To
the extent that Ecuadorian law is relevant, it is relevant only to
establish the parties’ expectations with respect to the conduct of
the Lago Agrio litigation -- in other words, whether or not the
LAPs
or
their
attorneys
made
misrepresentations
that
were
justifiably relied upon by Chevron.12
12
Both Chevron and the LAPs have incorporated by reference the
arguments made in the Section 1782 proceeding with respect to the
crime-fraud exception, which delve more deeply into Ecuadorian law.
(Pl. Garr/Woods Memo. at 12 n.8; Def. Garr/Woods Opp. Memo. at 12
n.12). Chevron has also offered to make available expert reports
it solicited in conjunction with other related actions discussing
whether the wrongdoing alleged here was in violation of Ecuadorian
law. (Tr. at 71). However, given the limited role that Ecuadorian
law plays in this determination, particularly in light of Judge
Kaplan’s holding -- discussed below -- that a portion of the
42
3.
Specific Frauds
Chevron alleges three categories of wrongdoing with respect to
the Lago Agrio litigation, which they contend merit the piercing of
the attorney-client privilege: (1) using intimidation and illicit
pressure to affect the Ecuadorian judges, (2) “hijacking” and
“ghostwriting”
ostensibly
neutral
attempting
foment
criminal
to
attorneys in Ecuador.
the
expert
reports,
prosecution
of
and
(3)
Chevron’s
(Tr. at 65-66, 72-73).
As Chevron notes, Judge Kaplan has already “effectively found”
a reasonable basis to suspect that the judgment in the Lago Agrio
litigation was procured by fraud.
(Tr. at 61-62); Chevron Corp.,
768 F. Supp. 2d at 636-37 (“There is ample evidence of fraud in the
Ecuadorian proceedings.”).13
Especially given that the crime-fraud
exception requires only a showing of probable cause that a crime or
fraud was intended, this determination is sufficient for the crimefraud exception to apply.
However, in so holding, Judge Kaplan identified three specific
wrongdoing alleged amounted to fraud under U.S. law, I need not
consider those arguments or reports.
13
The LAPs argue that I should “[a]bstain” from deciding
whether the Ecuadorian judgment was procured by fraud, since doing
so would “‘tilt the playing field of this lawsuit at a relatively
early stage in the litigation.’”
(Def. Kohn Opp. Memo. at 25
(quoting In re Omnicom Group, 233 F.R.D. at 405-06); Def.
Garr/Woods Opp. Memo. at 15 (same)).
Because Judge Kaplan has
already made a determination on this issue, such caution is
unnecessary.
43
examples of fraud: (1) forging a report submitted under the name of
Dr. Calmbacher; (2) ghost-writing much or all of the expert report
submitted by Mr. Cabrera; and (3) “undert[aking] a scheme to
‘cleanse’ the Cabrera report.”
Id. at 636.
The remainder of
Chevron’s allegations of wrongdoing are discussed only in the
context of Judge Kaplan’s determination that “Ecuador [d]oes [n]ot
[p]rovide [i]mpartial [t]ribunals and [d]ue [p]rocess.”
633-36.14
Id. at
In making this determination, Judge Kaplan carefully
considered the voluminous evidence propounded by Chevron and by the
defendants.
Id. at 597-620, 625-26, 657-60.
Because Judge Kaplan
went no further in determining whether Chevron has established a
reasonable basis to suspect that any broader crime or fraud has
been committed, I likewise decline to go further, particularly
because the instant motion arises in the context of Chevron’s more
limited claim for declaratory relief from the Ecuadorian court’s
judgment.15
See id. at 638-39.
14
It is of note that this finding postdated the judgment in
the Lago Agrio litigation, in which the Ecuadorian court considered
allegations of fraud and determined that it would not rely on the
Cabrera report in light of them. Chevron Corp., 768 F. Supp. 2d at
636-37.
Judge Kaplan considered this but determined that “it
likely is impossible to separate the tainted Cabrera process from
the final judgment.” Id.
15
Although Judge Kaplan alludes to the possibility that
Chevron could establish that the defendants’ tactics in Ecuador
amounted to “duress on the court,” a separate ground for denying
recognition of a foreign judgment, this allusion only relates to
the likelihood that the expert reports tainted the final judgment.
44
4.
Document Production and In Camera Review
Chevron has thus carried its burden of demonstrating that the
crime-fraud exception applies to the creation of the Calmbacher
report, the Cabrera report, and the cleansing memos.
Mr. Woods is
therefore directed to produce all of the documents identified on
his privilege log that relate to these reports.
Any of Mr. Woods’
documents not produced directly to Chevron pursuant to this order
shall be produced to me for in camera review to determine whether
they in fact fall under the crime-fraud exception as detailed here.
See In re Omnicom, 233 F.R.D. at 405 (“‘[T]he decision whether to
engage
in
an
in
camera
review
of
the
evidence
lies
in
the
discretion of the district court.’” (quoting Jacobs, 117 F.3d at
87)); see also United States v. Zolin, 491 U.S. 554, 572 (1989)
(“[A] lesser evidentiary showing is needed to trigger in camera
review than is required ultimately to overcome the privilege.”).
In conducting that in camera review, I will also consider Chevron’s
outstanding objections to Mr. Woods’ privilege log.
(See Pl.
Garr/Woods Memo. at 8-10, 12-13; Chevron Corporation’s Motion to
See Chevron Corp., 768 F. Supp. 2d at 637. All of the remaining
language in his discussion indicates that his holding is limited to
the issue of fraud, and his discussion is entirely focused on the
submission of fraudulent expert reports. See id. at 636-37 (“In
all the circumstances, Chevron has raised substantial questions
that present a fair ground for litigation as to whether the
Ecuadorian judgment is a result of fraud practiced on the
Ecuadorian tribunal . . . .”).
45
Compel Andrew Woods and Laura Garr to Produce Individual Documents
Listed on Their Privilege Logs at 2-4).
Conclusion
For the reasons discussed above, Ms. Garr’s objections to
Chevron’s subpoena based on the attorney-client privilege and the
work product doctrine are overruled, and she shall produce each of
the
documents
on
her
privilege
log
forthwith.
Mr.
Woods’
objections are overruled except to the extent that they relate to
documents which were created after October 20, 2010 but which are
not encompassed by the crime-fraud exception as described above.
Mr. Woods shall produce all documents for which his objections have
been overruled and shall submit for in camera review by August 8,
2011 all other documents identified in his privilege log. The Kohn
Respondents’ objections are overruled, and they shall produce the
requested documents except for those inadvertently identified in
their
privilege
logs
Chevron’s subpoena.
that
were
not,
in
fact,
responsive
to
Except for the obligation to submit documents
to me for in camera review, this order is stayed until 5 p.m. on
August 8, 2011 to permit any party to file objections with Judge
Kaplan.
This Memorandum and Order resolves the motions identified
as Docket Nos. 25, 35, and 100.
46
SO ORDERED.
J
~ ~~(MA~'
JAMES C. FRANCIS IV
;>
UNITED STATES MAGISTRATE JUDGE
Dated: New York, New York
August 3, 2011
Copies mailed this date:
Randy M. Mastro, Esq.
Kristen L. Hendricks, Esq.
Anne Champion, Esq.
Gibson, Dunn & Crutcher, LLP
200 Park Avenue, 47th Floor
New York, New York 10166
Andrea E. Neuman, Esq.
Gibson, Dunn & Crutcher LLP
3161 Michelson Drive
Irvine, CA 92612
William E. Thomson, Esq.
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, CA 90071
Carlos A. Zelaya,
F. Gerald Maples,
F. Gerald Maples,
365 Canal Street,
New Orleans, LA
Ie
II, Esq.
Esq.
PA
Suite 2650
70130
Julio C. Gomez, Esq.
Julio C. Gomez Attorney at Law LLC
111 Quimby Street, Suite 8
Westfield, New Jersey 07090
Elliott R. Peters, Esq.
John W. Keker, Esq.
Christopher J. Young, Esq.
Jan N. Little, Esq.
Matthew M. Werdegar, Esq.
47
Nikki H. Va, Esq.
Paula L. Blizzard, Esq.
William S. Hicks, Esq.
Keker & Van Nest LLP
710 Sansome Street
San Francisco, CA 94111
Seth D. Ard, Esq.
Susman Godfrey LLP
654 Madison Avenue
New York, New York 10065
James J. Rohn, Esq.
Patricia Hamill, Esq.
Joshua J. Voss, Esq.
Conrad, O'Brien Gellman & Rohn, PC
1515 Market Street
Philadelphia, PA 19102
48
]]>
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