Caso Chevron

Chevron Says Ecuadorian Atty Can't Quash Subpoenas

Law 360 24/10/2019

Chevron has urged a New York federal court to deny an Ecuadorian lawyer’s bid to quash subpoenas seeking information on whether attorney Steven Donziger is profiting from a $9.5 billion judgment issued against the company in Ecuador.

The energy giant said Friday that Patricio Salazar’s claims did not hold up. The attorney, who is not a party to the litigation, argued on Oct. 2 he could not be subpoenaed in the U.S. because he is based in Ecuador and that much of the requested documents would be covered by attorney-client privilege. 

Chevron claimed Salazar — who represents El Frente de Defensa de la Amazonia, the beneficiary of the Ecuadorian judgment, which U.S. District Judge Lewis  A. Kaplan later deemed fraudulent — is closely connected to Donziger and was “integral” to his scheme to “violate this court’s [Racketeer Influenced and Corrupt Organizations Act] injunction by profiting from funds raised through the selling of shares of the Ecuadorian judgment.”

Salazar, also referred to as Salazar Cordova, was served with subpoenas when he traveled to New York to appear at Donziger’s disbarment proceedings. Chevron said since Donziger failed to participate in post-judgment discovery, it must rely on evidence from third parties like Salazar.

In his Oct. 2 motion to quash, Salazar said Rule 45 of the Federal Rules of Civil Procedure does not allow for subpoenas to be served on parties who reside more than 100 miles from where they would be deposed. As a resident of Quito, Ecuador, he's well outside this radius, he argued.

Chevron said the subpoenas are valid and enforceable under Rule 69 of the Federal Rules of Civil Procedure, which allows parties to seek discovery that may assist with the enforcement of a judgment. And under New York law, a deposition of nonresidents can take place in the location where they were served. Salazar was served in New York City, and Chevron said he can testify there and it would be willing to pay for his flight from Ecuador.

According to Chevron, the 100-mile rule does not apply when documents can be sent by mail or emailed, which Salazar can do. And if the subpoenas do in fact violate this rule, they should be modified, not quashed, the company said.

Additionally, Chevron says Salazar cannot assert all of the requested documents are protected by attorney-client privilege. Salazar must provide a privilege log in order to determine for any documents that he claims are covered by attorney-client privilege, and his failure to do so means he has waived any privileges he may have been entitled to, Chevron argued.

Rick Friedman, an attorney who is representing Donziger in separate proceedings, told Law360 on Monday the Salazar subpoenas are part of Chevron's intimidation of those connected to Donziger and the Ecuadorian judgment, and a distraction from the actual issue, which is that the company “totally trashed the environment in Ecuador and has been ordered to pay to clean it up.”

The dispute is rooted in a court case in Ecuador in which Chevron was accused of polluting rivers and streams in the Amazon near an oil field in northern Ecuador, causing massive ecological damage to the region and harm to residents. A court in Ecuador ordered Chevron to pay $19 billion in 2011, though the amount was later cut to $9.5 billion.

Judge Kaplan ruled in 2014 the Ecuadorian judgment was fraudulently ghostwritten by Donziger and other members of his legal team, who had bribed a judge to sign off on it. The decision was affirmed by the Second Circuit in 2016, and the U.S. Supreme Court subsequently declined to take up the case.

A Permanent Court of Arbitration tribunal then reached a similar conclusion in August 2018, holding that Ecuador had committed a denial of justice by issuing the corrupt award in 2011 to indigenous people who alleged Chevron was responsible for decades-old environmental damage caused by predecessor Texaco Inc.

Donziger and Chevron have continued to spar as Chevron has raised allegations that Donziger hasn't complied with the terms of the 2014 RICO decision and pressed for payment of a related $800,000 monetary judgment.

In June, Judge Kaplan ordered Donziger to surrender his passport, saying "additional coercive remedies" were necessary because the attorney had not purged himself of a pair of contempt orders from May. In those contempt orders, Donziger was instructed by Judge Kaplan to sign over his claim to the Ecuador judgment and to repay the $666,000 he either pocketed, gave to his wife or used to pay personal expenses such as his mortgage and American Express bill.

Representatives for Salazar declined to comment. Representatives for Chevron did not immediately respond to requests for comment.

Chevron is represented by Randy M. Mastro, Andrea E. Neuman and William E. Thomson of Gibson Dunn & Crutcher LLP and Herbert J. Stern and Joel M. Silverstein of Stern Kilcullen & Rufolo LLC.

Donziger is representing himself.

Patricio Salazar Cordova is represented by James D. Bailey of Bailey Duquette PC.

The civil case is Chevron v. Donziger, case number 1:11-cv-00691, in the U.S. District Court for the Southern District of New York.

Fuente Original