UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

In re Application of RODRIGO PEREZ P ALLARES and RICHARD REIS VEIGA for an Order to Conduct Discovery for Use in Foreign Proceedings

In re Application of CHEVRON CORPORATION for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in Foreign Proceedings

M-19-111

MEMORANDUM OF LAW BY THE LAGO AGRIO PLAINTIFFS IN OPPOSITION TO APPLICATION FOR AN ORDER PURSUANT TO 28 U.S.C. § 1782 TO CONDUCT

DISCOVERY FOR USE IN FOREIGN PROCEEDINGS

EMERY CELLI BRINCKERHOFF & ABADY LLP 75 Rockefeller Plaza, 20th Floor

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

TABLE OF CONTENTS

PRELIMINARY STATEMENT ...................................................................................................... 1

FACTUAL BACKGROUND ........................................................................................................... 2

Chevron's Destruction of the Amazonian Rainforest ................................................................... 2

Plaintiffs File in the Southern District, but Chevron Successfully Moves to Transfer the Litigation to Ecuador, Because "the Evidence is in Ecuador" .............................................. 4

The Trial in Ecuador Reveals Overwhelming Evidence of Chevron's Liability and Plaintiffs' Damages ....................................................................................................................................... 6

Chevron Files a Private Arbitration to Avoid Its Chosen Forum of Ecuador .............................. 6

Chevron's Flimsy Basis for this Section 1782 Application .......................................................... 8

ARGUMENT .................................................................................................................................... 10

CHEVRON'S SECTION 1782 APPLICATION SHOULD BE DENIED .................................. 10

I. Legal Framework .............................................................................................................. 10

II. The Discretionary Factors Weigh Heavily Against Chevron ........................................... 12

A. The Proposed Discovery is Highly Intrusive and Burdensome ................................ 12

B. The nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance ........................................................ 15

C. The Section 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States ......................................................................................................................... 17

III. The Application is Prohibited Under Section 1782 Because it Violates the Journalist's Privilege ......................................................................................................... 19

IV. With Respect to the BIT, Chevron's Application Also Fails Because the BIT is Not a "Foreign or International Tribunal" ............................................................. 19

V. The PerezlVeiga Section 1782 Application Also Fails ..................................................... 22

CONCLUSION ................................................................................................................................. 23

TABLE OF AUTHORITIES

Cases:

Aguinda v. Texaco, Inc., 142 F.""Supp. 2d 534 (S.D.N.Y. 2001), affd,

Aguinda v. Texaco, 303 F.3d 470 (2d Cir. 2002) ................................................................................................ 4, 5, 6

Aguinda v. Texaco, Inc., 945 F. Supp. 625 (S.D.N.Y. 1996), vacated by Jota v. Texaco, Inc., 157 F.3d 153 (2d Cir. 1998) ........................................................................................................ 5

Aventis Pharma v. Wyeth, 2009 WL 3754191 (S.D.N.Y. Nov. 9, 2009) ................................................................ 16, 18, 19

Comision Ejecutiva, Hidroelectrica Del Rio Lempa v. Nejapa Power Co., LLC, No. 08-135-GMS, 2008 WL 4809035 (D. Del. Oct. 14, 2008), appeal dismissed as moot, No. 08-3518 (3d Cir. Aug. 3, 2009) ......................................................................................... 21

El Paso Corp., v. La Comision Ejecutiva, Hidroelectrica Del Rio Lampa, No. 08-20771,2009 WL 2407189 (5th Cir. Aug. 6, 2009) ..................................................... 21

Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) ......................................................................................... 11, 18, 19,20,21

In La Comision Ejecutiva, Hidroelectrica Del Rio Lempa v. El Paso Cop., 617 F.Supp.2d 481 (S.D.Tex. 2008) ........................................................................................ 21

In re Apotex, Inc., 2009 WL 618243 (S.D.N.Y. March 9, 2009) ............................................................... 12, 13, 14

In Re Application of 000 Promnefstroy, 2009 WL 333560 ................................................................................................................ 17, 18

In Re Arbitration in London, No. 09 C 3092, 2009 WL 1664936 (N.D.Ill. Jun. 15, 2009) ................................................... 21

In re DaimlerChrysler AG Securities Litigation, 216-F.R.D. 395 (E.D. Mich. 2003) .......................................................................................... 13

In Re Microsoft Corp., 428 F.Supp.2d 188 (S.D.N.Y. 2006) ................................................................ 11,13,14,15,17

11

In re Opera-dora DB Mexico, S .A. DE C. V., No. 6:09 CV 383 ORL-22GJK, 2009 WL 2423138 (M.D.Fla. Aug. 4,2009) ........................ 21

In Re Oxus Gold P LC, No. MISC 06-82-GEB, 2007 U.S. Dist. LEXIS 24061 (D.N.J. Apr. 2,2007) ................... 20-21

Nat'l Broadcasting Cio., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2d Cir. 1999) .......................................................................................... 19-20, 21

OJSC Ukrnafata v. Carpatsky Petroleum Corp., No. 3:09-MC265(JBA), 2009 WL 2877156 (D. Conn. Aug. 27, 2009) .................................. 20

Patterson v. Burge, 2005 WL 43240 (N.D. Ill. Jan. 06, 2005) ................................................................................ 14

Porzig v. Dresdner, Kleinwort, Benson, North America LLC, 497 F.3d 133, 138 (2d Cir. 2007) ............................................................................................. 23

Pravin Banker Assocs., Ltd. v. Banco Popular Del Peru, 109 F.3d 850, 854 (2d Cir.1997) ............................................................................................... 15

Republic of Kazakhstan v. Beidermann, 168 F.3d 880 (5th Cir. 1999) .............................................................................................. 20,21

Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79 (2d Cir. 2004) ............................................................................................ 11, 15, 16

Statutes:

28 V.S.C.A. § 1782(a) ........................................................................................................... passim

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Plaintiffs} in a related civil action against Chevron Corporation venued in Lago

Agrio, Ecuador (the "Lago Agrio litigation"), submit this memorandum of law in opposition to

Chevron's application under 28 U.S.C.A. § 1782(a).2

PRELIMINARY STATEMENT

After seventeen years of litigation, including nine years fighting jurisdiction in the

Southern District, and an over seven-year litigation in Chevron's chosen forum of Ecuador

involving 200,000 pages of evidence, 63,000 chemical sampling results, testimony from dozens

of witnesses, and dozens of judicial field inspections, Chevron now runs to this Court years after

the evidentiary phase ended in Ecuador, to impugn the proceedings in the Lago Agrio litigation.

Rather than go to Ecuador to lodge its flimsy complaints against the Court's expert and Mr.

Donziger's lobbying efforts, Chevron attempts to engineer a blatant end-run around the

jurisdiction of the Ecuadorian court. The effort should be rejected.

Chevron has no basis for the extraordinary request to compel production of 600

hours of raw footage by a prominent New York filmmaker. As set forth in the Filmmakers'

brief, the request violates the journalist's privilege and is therefore absolutely precluded by

1 Plaintiffs include: Daniel Carlos Lusitande Yaiguaje, Venancio Freddy Chimbo Grefa, Miguel Mario Payaguaje Payaguaje, Teodoro Gonzalo Piaguaje Payaguaje, Sim6n Lusitande Yaiguaje, Armando Wilmer Piaguaje Payaguaje, Javier Piaguaje Payaguaje, Fermin Piaguaje, Luis Agustin Payaguaje Piaguaje, Emilio Martin Lusitande Yaiguaje, Reinaldo Lusitande Yaiguaje, Maria Victoria Aguinda Salazar, Carlos Grega Huatatoca, Catalina Antonia Aguinda Salazar, Lidia Alexandra Aguinda Aguinda, Clide Ramiro Aguinda Aguinda, Luis Armando Chimbo Yumbo, Beatriz Mercedes Grefa Tanguila, Lucio Enrique Grefa Tanguila, Patricio Wilson Aguinda Aguinda, Patricio Alberto Chimbo Yumbo, Segundo Angel Amanta Milan, Francisco Matias Alvarado Yumbo, Olga Gloria Grefa Cerda, Narcisa Tanguila Narvaez, Bertha Yumbo Tanguila, Lucrecia Tanguila Grefa, Francisco Victor Tanguila Grefa, Rosa Teresa Chimbo Tanguila, Maria Clelia Reascos Revelo, Heleodoro Pataron Guaraca, Maria Viveros Cusangua, Lorenzo Jose Alvarado Yumbo, Francisco Alvarado Yumbo, Jose Gabriel Revelo Llore, Luisa Delia Tanguila Narvaez, Jose Miguel Ipiales Chicaiza, Hugo Gerardo Camacho Naranjo, Maria Magdalena Rodriguez, Elias Piyahuaje Payahuaje, Lourdes Beatriz Chimbo Tanguila, Octavio C6rdova Huanca, Celia Irene Vivero Cusangua, Guillermo Payaguaje Lucitande, Alfredo Payaguaje, and Delfiin Payaguaje (collectively, the "Lago Agrio Plaintiffs"). 2 Petitioners Rodrigo Perez Pallares and Richard Reis Veiga served plaintiffs their papers just one day before plaintiffs' opposition was due, but the application is (1) largely duplicative of Chevron's papers, and (2) more importantly, mooted by Mr. Berlinger's sworn statement that his outtakes reveal nothing concerning the criminal cases. See § V, infra.

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Section 1782. In any event, it imposes a huge burden on the Filmmakers, undermines the

policies of comity and cooperation underlying Section 1782, and is an untimely and unseemly

attempt to attack the Ecuadorian forum that Chevron chose seven years ago.

If Chevron has complaints about the Ecuadorian Court's expert team, Chevron

should lodge those complaints in Ecuador. But the true purpose of this application is not to "aid"

the Court. It is to attack and embarrass the Court, pursue a press strategy with selected outtakes

as misleading as this petition, and silence filmmakers such as Joe Berlinger whose work

(however evenhanded) has helped expose Chevron's shocking and unconscionable misconduct.

The Court should reject Chevron's fishing expedition and deny the application.

FACTUAL BACKGROUND3

Chevron's Destruction of the Amazonian Rainforest

From 1964 to 1992, Chevron owned an interest in an approximately 1,500 square-

mile concession in Ecuador that contained numerous oil fields and more than 350 well sites. Ex.

5113.4 Beginning in 1964 and continuing at least until June 30, 1990 - when it ceased being

operator of the concession area - Chevron engineered and presided over what some experts

believe is the worst oil-related environmental disaster in the world. It deliberately dumped many

billions of gallons of waste byproduct from oil drilling directly into the rivers and streams of the

rainforest covering an area roughly the size of Rhode Island. It gouged more than 900 unlined

waste pits out of the jungle floor - pits which to this day leach toxic waste into soils and

groundwater. It burned hundreds of millions of cubic feet of gas and waste oil into the

3 For a timely summary of the history of the case, see "A Most Inconvenient Forum," Stephen Kass, New York Law Journal, April 23, 2010 (attached as Ex. 16). 4 See Plaintiffs' Complaint to Stay Arbitration dated January 14,2010 (attached as Ex. 5). For a fuller description of Chevron's conduct in the Amazon, see id ~~ 1-3, 13-18. Unless otherwise noted, all exhibits are attached to the Declaration of II ann Maazel dated April 23, 2010.

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atmosphere, poisoning the air and creating "black rain" which inundated the area during tropical

thunderstorms. Chevron deliberately dumped into Ecuador's Amazon rainforest many more

times the amount of oil spilled by the Exxon Valdez. In the impacted area of Ecuador today, due

to the legacy created by Chevron, the natural environment of the Amazon rainforest on which

thousands of people depend for their daily sustenance is for the most part poisoned. ld.

To minimize production costs, Chevron built an oil extraction system that was

designed to pollute. First, it discharged billions of gallons of "production water" (the

contaminated waste water that is mixed with crude oil as it comes out of the ground) into streams

and rivers - four million gallons per day at the height of the operation. At Chevron's oil

production facilities, the "formation water" was separated from the crude and discharged onto

the ground and into the surface waters on a continuous basis, 24 hours per day, seven days per

week, over a period of decades. ld. ~ 14.

Second, Chevron built some 916 open-air toxic waste pits in and around its well

sites. Chevron cut these pits directly into the floor of the jungle, and they had no lining to

prevent their contents from migrating into the soil and groundwater. To the contrary, Chevron

designed the waste pits to flow into neighboring streams and rivers. An example of this is found

in Crude (Mastro Decl. Ex F, at 36:40). Chevron filled the waste pits with "drilling muds" and

waste crude oil and then used them for permanent storage in violation of established industry

standards. "Drilling muds" are a combination of lubricants and heavy metals, which are

combined with the waste oil and formation waters that are the end by-products of the well

perforation and maintenance process. Chevron built many of its pits with piping systems used to

drain these oil bypro ducts into nearby streams and rivers. Chevron would also set the pits on

fire. In addition, the Company regularly dumped the oil sludge from the waste pits along dirt

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roads in the region. fd. ~ 16.

Chevron's operation was grossly substandard by any measure: it violated, inter

alia, then-current U.S. industry standards, Ecuadorian environmental law, the Company's

contract with Ecuador's government - which prohibited Chevron from using production methods

that contaminated the environment - and international law. Even Chevron's own internal audits

of its environmental impacts, conducted in the early 1990s by independent outside consultants

and placed in evidence in the Lago Agrio trial, found extensive contamination at Chevron's oil

production facilities. Consistent with its willful neglect of Ecuador's Amazon and the people

who lived there, Chevron also engaged in deliberate malfeasance: a 1972 memo from R.C.

Shields, then head of Latin American production for Chevron, issued a blunt directive to

Chevron's acting manager in Ecuador to destroy previous reports of oil spills and to forego

documenting future spills in writing unless they were already known to the press or regulatory

authorities. Id. ~ 17; Ex. 14.

PlaintijJs File in the Southern District, but Chevron Successfully Moves to Transfer the Litigation to Ecuador, Because "the Evidence is in Ecuador"

In 1993, the Amazon communities filed a federal class-action lawsuit against

Chevron in the Southern District of New York, the site of Chevron's global headquarters.

Plaintiffs "sought money damages under theories of negligence, public and private nuisance,

strict liability, medical monitoring, trespass, civil conspiracy, and violations of the Alien Tort

Claims Act," as well as "extensive equitable relief to redress contamination of the water supplies

and environment." Aguinda v. Texaco, Inc., 303 F.3d 470,473 (2d Cir. 2002).

From the lawsuit's inception, and for nine years, Chevron did everything it could

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to transfer the case away from the Southern District to the courts of Ecuador. 5 Chevron's motion

on/orum non conveniens and international comity grounds rested on two principal grounds: first,

that the Ecuadorian courts provided an adequate, fair, and neutral forum; second, that the

evidence and the witnesses were in Ecuador.

F or nine years, Chevron touted the Ecuadorian judicial system, submitting

numerous affidavits from experts and its own counsel, and repeating these assertions in extensive

briefing. See, e.g., Affidavit of Dr. Alejandro Ponce Martinez dated February 9, 2000 ~ 2 ("the

courts in Ecuador provide a totally adequate forum"), ~~ 5, 6, 7 ("I believe that Ecuador's courts

would resolve the claims that the plaintiffs ... have attempted to assert in the United States.")

(attached as Ex. 1); Affidavit of Dr. Rodrigo Perez Pallares (Texaco's attorney) dated December

1, 1995 ~ 7 ("the Ecuadorian courts provide an adequate forum for claims such as those asserted

by the plaintiffs") (attached as Ex. 2); Affidavit of Dr. Enrique Ponce y Carbo dated December 7,

1995 (attached as Ex. 3); Affidavit of Dr. Vicente Bermeo Lanas dated December 11, 1995

(attached as Ex. 4); Texaco Inc.'s Memorandum of Law in Support of Its Renewed Motions to

Dismiss Based on Forum Non Conveniens and International Comity, dated January 11, 1999, at

18 ("Ecuador's judicial system provides a fair and adequate alternative forum"), id. at 19-21

(attached as Ex. 6); Texaco Inc.'s Reply Memorandum of Law in Support of Its Renewed

Motions to Dismiss Based on Forum Non Conveniens and International Comity dated January

25, 1999, at 3 (attached as Ex. 7); Brief for ChevronTexaco, Inc., U.S. Court of Appeals for the

Second Circuit date December 20,2001, at 34 ("Ecuadorian legal norms are similar to those in

many European nations."), 46-57 (attached as Ex. 8).

Chevron also argued repeatedly that the case did not belong in the Southern

5 See Aguinda v. Texaco, Inc., 945 F. Supp. 625 (S.D.N.Y. 1996), vacated by Jota v. Texaco, Inc., 157 F.3d 153 (2d Cir. 1998); Aguinda v. Texaco, Inc., 142 F. Supp. 2d 534 (S.D.N.Y. 2001), aff'd Aguinda v. Texaco, 303 F.3d 470, 476 (2d Cir. 2002).

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District, because the evidence and the witnesses were in Ecuador. See, e.g., Ex. 6, at 32-36; Ex.

8, at 63-65. As ChevronTexaco put it succinctly: "The evidence is in Ecuador," ChevronTexaco

Press Release dated August 19, 2002 (attached as Ex. 9)-a position with which the Second

Circuit ultimately agreed, Aguinda v. Texaco, 303 F.3d 470,476 (2d Cir. 2002).

The Trial in Ecuador Reveals Overwhelming Evidence of Chevron's Liability and Plaintiffs' Damages

After final dismissal of the Aguinda action in 2002, plaintiffs refiled the case in

Lago Agrio, Ecuador. Trial began in 2003. It has been highly contested and vigorously

defended by Chevron. The record contains more than 200, 000 pages of evidence, roughly

63,000 chemical sampling results produced by laboratories contracted by both parties and the

court expert, testimony from dozens of witnesses, and tens of judicial field inspections of former

Chevron well and production sites conducted over a five-year period under the auspices of the

court. Declaration of Juan Pablo Saenz dated April 23, 2010 ~ 3. Soil samples from the

production wells and separation stations inspected reveal extensive contamination in violation of

Ecuadorian law. Ex. 5 ~ 28.

The Lago Agrio litigation has continued for over seven years. The evidentiary

phase of the trial is now over. After Chevron files a few additional expert reports, and the parties

submit written "final arguments," the court will be in a position to rule. Saenz Decl. ~ 6.

Chevron Files a Private Arbitration to Avoid Its Chosen Forum of Ecuador

Realizing that plaintiffs might actually get into a position to prevail in Ecuador,

Chevron has taken a new tack: to defeat Ecuadorian jurisdiction and attack the Lago Agrio

Court. In a 2007 press release, Chevron promised the plaintiffs in the Lago Agrio action a

"lifetime" of appellate and collateral litigation if they persisted in pursuing their claims. See

6

Press Release, Chevron, Chevron Calls for Dismissal of Ecuador Lawsuit, Oct. 8, 2007,

(attached as Ex. 10).6 Chevron is making good on its threat. Unhappy with its chosen forum of

Ecuador, Chevron has pursued a two-prong strategy to undermine the Ecuadorian proceedings:

First, on September 23, 2009, Chevron filed a "notice of arbitration" under the UNCITRAL rules

pursuant to the U.S.-Ecuador BIT. Exs. 5, 12. Chevron has asked this private arbitration panel

to tell the government of Ecuador to tell the judge to dismiss the Lago Agrio litigation. Ex. 12 ~

76(3). In short, Chevron is seeking an order through the arbitral panel requiring that the

Republic's President violate Ecuador's own Constitution, interfere in the country's independent

judiciary, and quash a trial brought by his own citizens against Chevron in the very court in

which Chevron sought to have the claims heard. Plaintiffs recently moved to stay the arbitration

(but, contrary to Chevron's representation, sought no relief whatsoever vis-a-vis any 1782

action) before Judge Sand. Ex. 5. Judge Sand dismissed the complaint and the matter is

currently on appeal.

Second, Chevron has filed a series of ex parte Section 1 782 petitions, seeking vast

amounts of discovery throughout the United States (so far, in Georgia, Texas, Colorado, and

New York). In an about face from their previous litigation position of nine years, Chevron now

argues that it needs discovery in the United States, not Ecuador. Apparently now, the evidence

and the witnesses are in the United States. Notwithstanding that the evidentiary phase of the trial

ended in Ecuador, notwithstanding that it failed to seek any of the discovery sought in any of the

Section 1782 actions from Ecuador, and notwithstanding an over 200,000 page trial record in

Ecuador, Chevron seeks at this late date essentially to begin a new round of American discovery

in an end-run around a seven-year litigation in a foreign nation.

6 A Chevron spokesperson recently said the Company would "fight" the Aguinda case "until hell freezes over" and then "fight it out on the ice." See John Otis, Chevron vs. Ecuadorean activists, The Global Post, May 3, 2009, attached as Ex. 11.

7

Largely because of the ex parte nature of the proceedings and other issues not

relevant here, neither the Court in Georgia or Colorado issued a Section 1782 ruling in a

contested proceeding.7 In Texas, the Court yesterday (April 22) set a briefing schedule for

plaintiffs' motion to quash. This Court (or the Texas court) will therefore be the first to opine on

a contested 1782 application in the Lago Agrio case.8

Chevron's Flimsy Basis for this Section 1782 Application

Chevron's discovery application (made long after discovery ended in Ecuador) is

based on a couple of scenes in the movie Crude, concerning allegedly improper conduct by the

Court's expert and plaintiffs' attorneys, and Chevron's unsupported speculation that the

Filmmakers' outtakes will reveal evidence of substantial relevance to the Lago Agrio Court or

the BIT. Chevron points primarily to a scene where Dr. Beristain, who was later part of the team

of Court expert Richard Cabrera, appears in a meeting of indigenous people affected by

Chevron's actions in the Amazon. Chevron Br. 8-11. This innocuous meeting, which is of no

relevance to anything, and which (to plaintiffs' knowledge) Chevron has not even presented to

the Ecuadorian Court, has become the linchpin for this extraordinary application to invade 600

hours of outtakes of a prominent New York filmmaker.

Chevron's next complaint is that plaintiffs' attorney, Steven Donziger, made an ex

parte application to ajudge in Ecuador. Chevron Br. 11. This is quite ironic, since Chevron

7 In Georgia, Chevron provided no formal notice to plaintiffs and the application was ex parte. Mastro Ex. Q at 1. In Colorado, Judge Kane provisionally granted Chevron the right to serve the subpoenas, but stated that "It is not necessary at this time to rule on the merits of any potential opposition," pending a future motion to quash. Mastro Ex. P at 8:1-2. 8 Chevron has burdened the Court with a series of exhibits that have no relevance to this application, but exist only to try to taint the plaintiffs, including the entire ex parte deposition of an apparently disgruntled, unpaid, former minor expert for plaintiffs in Ecuador (Charles Calmbacher, see Mastro Decl. Ex. R), whose memory of events is, to put it charitably, questionable, and two orders from a different proceeding in California involving separate plaintiffs (Mastro Decl. Exs. BB & CC). Submissions of these exhibits is little more than an attempt to distract the Court from the weakness of Chevron's underlying application.

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made this Section 1782 application ex parte to Judge Koe1tl. Missing, of course, from Chevron's

presentation, is (1) that Chevron made an improper, ex parte application to that court, which

required plaintiffs to make the responsive application shown in Crude; and (2) as demonstrated

in Crude itself, Chevron's attorney ultimately participated in the proceeding shown in Crude,

and (unlike, for example, Chevron's Section 1782 application and deposition in Georgia), it was

not ex parte at all. Saenz Decl. ,-r 4.

Chevron's final complaint is that Mr. Donziger tried to "curry favor" with the

President of Ecuador, Chevron Br. 11-13, by essentially, lobbying. This complaint is particularly

interesting, since Chevron, by its own admission, has for years done everything in its power to

curry favor with the Ecuadorian government, including the President. See Jones Day Letter to

Counsel dated August 11, 2005 ("As new administrations have come to power in Ecuador from

time to time, Texaco and Chevron representatives have always made efforts to meet with

government officials, including the President if possible, to introduce themselves and the

company and to discuss the state of affairs between the company and the Republic .... [1]t is

clear under Ecuadorian law, just as it is under the laws of the United States, that individuals and

corporate representatives have the right to meet with representatives of governments-even if the

parties are engaged in litigation on one issue or another.") (attached as Ex. 15). Chevron has also

lobbied extensively in the United States concerning this case, going so far as to pressure

Congress to impose trade sanctions on the Republic of Ecuador if the Ecuadorian government

did not intervene to stop the Lago Agrio litigation. See, e.g., Press Release, Congresswoman

Linda Sanchez, Chevron's Lobbying Efforts Look Like Extortion (Nov. 17,2009), available at

http://www.voteforlinda.com/index.php?section=news&article=477 ("Chevron has engaged in a

lobbying effort that looks like little more than extortion. Apparently, if it can't get the outcome

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it wants from the Ecuadorian court system, Chevron will use the U.S. government to deny trade

benefits until Ecuador cries uncle. "); Kenneth Vogel, Chevron's Lobbying Campaign Backfires,

POLITICO, Nov. 16, 2009, available at http://www.politico.com/news/stories/1109/29560.html.

As a Chevron spokesman put it, "If we were able to call a timeout and make the lawsuit

disappear, then this entire issue disappears." Id.

Chevron's real concern, then, is not with the idea of "currying favor," but with the

idea that anyone other than Chevron may try to curry favor with the government-hardly a basis

for a Section 1782 application.

In short, Chevron's claims of malfeasance are remarkably weak (and if anything,

are vastly outweighed by Chevron's own malfeasance). To plaintiffs' knowledge, Chevron has

not made these flimsy allegations or presented this extraordinarily weak evidence of wrongdoing

to the Ecuadorian Court. Instead, in an abuse of Section 1782, Chevron runs back to the United

States to attack the Ecuadorian proceeding.

ARGUMENT

CHEVRON'S SECTION 1782 APPLICATION SHOULD BE DENIED

I. Legal Framework

Section 1782 provides in relevant part:

The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a ... request made, by a foreign or international tribunal or upon the application of any interested person ..... A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.

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28 U.S.C.A. § 1782(a). A Section 1782 application may not be granted unless "(1) ... the person

from whom discovery is sought reside[ s] (or [is] found) in the district of the district court to

which the application is made, (2) ... the discovery [is] for use in a proceeding before a foreign

tribunal, and (3) ... the application [is] made by a foreign or international tribunal or 'any

interested person. '" Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 83-84 (2d Cir.

2004). If the petitioner meets these gateway requirements, petitioner must then convince the

court to exercise its discretion to grant the discovery. Id. That discretion is first informed by

"the twin aims of the statute: providing efficient means of assistance to participants in

international litigation in our federal courts and encouraging foreign countries by example to

provide similar means of assistance to our courts .... " Id. at 84 (internal quotation marks

omitted).

The Supreme Court has identified four factors to assist district courts in

determining whether to grant Section 1782 applications:

(1) Whether the documents or testimony sought are within the foreign tribunal's jurisdictional reach, and thus accessible absent § 1782 aid;

(2) The nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to u.S. federal-court judicial assistance;

(3) Whether the § 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States; and

( 4) Whether the subpoena contains unduly intrusive or burdensome requests.

In re Microsoft Corp., 428 F.Supp.2d 188, 192-93 (S.D.N.Y. 2006) (quoting Intel Corp. v.

Advanced Micro Devices, Inc., 542 U.S. 241,264-65 (2004)).

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In addition, irrespective of the discretionary factors, "[a] person may not be

compelled to give his testimony or statement or to produce a document or other thing in violation

of any legally applicable privilege." 28 U.S.C.A. § 1782 (emphasis added). The legislative

history of the statute is equally plain: "[NJo person shall be required under the provisions of [§

1782] to produce any evidence in violation of an applicable privilege." S.Rep. No. 1580, at 9,

u.s. Code Congo & Admin.News 1964, pp. 3782, 3789-90 (emphasis added). The United States

Supreme Court has also emphasized the importance of not abusing Section 1782 to discover

privileged information. "We ... count it significant, that § 1782(a) expressly shields privileged

material." Intel, 542 U.S. at 260.

Chevron's application should be rejected for three independent reasons: (1) the

discretionary Intel factors weigh heavily against the application; (2) as set forth at length in the

Filmmakers' Brief, the application violates the journalist's privilege, and therefore fails under

Section 1782; and (3) to the extent Chevron's application concerns the BIT, it fails as a matter of

law, because under Second Circuit case law, the BIT is not a "foreign or international tribunal"

within Section 1782.

II. The Discretionary Factors Weigh Heavily Against Chevron

Although it is unlikely that respondents are within Ecuador's jurisdictional reach,

this factor is substantially outweighed by the remaining three Intel factors.

A. The Proposed Discovery is Highly Intrusive and Burdensome

A court may deny a Section 1782 application based solely on the burden imposed

by the proposed subpoena. See, e.g., In re Apotex, Inc., 2009 WL 618243, at *3-4 (S.D.N.Y.

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March 9, 2009) (denying Section 1782 application based solely on intrusiveness and burden).

This is such a case.

Even if the Section 1782 application did not violate the journalist's privilege (and

it does, see infra, at § III), the forced production of 600 hours of raw footage by this well-known

documentary filmmaker is highly "intrusive and burdensome" - from the perspective of both the

journalist and those (such as plaintiffs) who communicate with him. 28 U.S.C. § 1782. This

factor weighs heavily against Chevron; indeed, it is all but dispositive.

The question is not merely how long it would take to produce documents and

information, cf Chevron Br. 18-19, but the character of what is being demanded. See, e.g., In re

Microsoft, 428 F.Supp.2d at 196 (Section 1782 application was unduly intrusive and

burdensome; Court opined that the confidentiality of information sought was crucial to

Commission's ability to carry out its investigative function, because disclosure would discourage

third parties from cooperating with the Commission and would potentially injure the

Respondents and their clients).

The forced revelation of even a single church confession, for example, might last

only ten minutes of a deposition, but be extremely intrusive, and place a great burden on the

confessor, the priest, and the entire institution of confession. The forced revelation of an off-the­

record conversation with a journalist, even if it did not violate the journalist's privilege in a given

case, would place a great burden on the journalist, other journalists, people who have

confidential conversations with journalists - such as whistleblowers, government employees, and

in this case, the plaintiffs, among others - and the values served by protecting journalistic

sources. See In re DaimlerChrysler AG Securities Litigation, 216 F.R.D. 395,406 (E.D. Mich.

2003) ("Given the important role that news gathering plays in a free society, courts must be

13

vigilant against attempts by civil litigants to turn non-party journalists or newspapers into their

private discovery agents."); Patterson v. Burge, 2005 WL 43240, at *3 (N.D. Ill. Jan. 06, 2005)

(where the press' "'work product' becomes fair game for civil litigants in their relentless quest to

'discover' everything, the news organizations become the indentured servant of the litigants, and

their ability to do their important work will be severely impaired.").

Here, as set forth at great length in the Filmmakers' brief, the application

threatens to place a great burden on the Filmmakers, and their ability to get access to and

document the sorts of events that make for important documentaries. If a documentary

filmmaker such as Mr. Berlinger and his would-be interviewees have no confidence that

Berlinger's outtakes will be protected, he would not get the access necessary to make Crude, and

a great tragedy such as Chevron's destruction of the Amazon would not and could not receive the

attention it deserves. See Patterson, 2005 WL 43240, at *3 (reasoning that the "subject matter

of the civil suit raises issues of immense public importance" in granting motion to quash

subpoenas served on news outlets as unduly burdensome). Chevron's application thus has the

(no doubt intended) effect of silencing critics of Chevron, and more broadly, any documentary

filmmaking of corporate or other wrongdoing. No doubt Chevron will next seek the outtakes of

Mr. Donziger's interview with 60 Minutes, and his other interviews with news organizations in

the United States, to pursue this fishing expedition of anything and everything allegedly wrong

with the Lago Agrio litigation. As interpreted by Chevron, the four discretionary factors would

authorize such discovery as well.

The startlingly intrusive nature of this weak application compels denial of the

petition. In re Apotex, Inc., 2009 WL 618243, at *3-4; In re Microsoft, 428 F.Supp.2d at 196.

Given the substantial burden on the Filmmakers, Chevron's complete failure to seek relief from

14

the Ecuadorian Court, the untimely nature of the application, Chevron's own choice of the

Ecuadorian forum, and the flimsy nature of Chevron's highly speculative and essentially

irrelevant allegations, the question in this case is not close: the application should be denied.

B. The nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance

On April 9, 2010, plaintiffs filed an application with the Lago Agrio court in

Ecuador, requesting a ruling from the Court concerning its receptivity to evidence gathered in

Chevron's various Section 1782 applications around the country. See Ex. 13 (attached).

Plaintiffs also requested that the Lago Agrio Court enjoin Chevron from pursuing Section 1782

actions throughout the United States. fd. The Ecuadorian's Court's ruling, which has not been

issued, will be the best evidence concerning the Court's "receptivity" to the Section 1782

discovery sought here. Schmitz, 376 F.3d at 84 (leaning heavily on statements of Gennan

government in dismissing Section 1782 petition); fn re Microsoft, 428 F .Supp.2d 188, 194

(S.D.N.Y. 2006) (leaning heavily on opposition to discovery request by the EU Commission).

The opposition of a foreign court to 1782 discovery would be highly significant.

fd. ("Indeed, Microsoft has not cited, and this Court has not found, a single case where a court

has granted § 1782 discovery in the face of express objection by the foreign court where the

underlying proceeding is pending."); id. at 195-96 ("[A] decision by this Court which would

either preempt or contradict a decision by the Commission-would render the Commission's

proceedings meaningless and undermine the Commissions rules on confidentiality ....

Moreover, a decision by this Court upholding Microsoft's discovery request would contravene

the purpose of § 1782 by pitting this Court against the Commission, rather than fostering

cooperation between them, and would violate established principles of comity, under which

15

'United States courts ordinarily refuse to review acts offoreign governments and defer to

proceedings taking place in foreign countries.' Pravin Banker Assocs., Ltd. v. Banco Popular

Del Peru, 109 F.3d 850, 854 (2d Cir.1997)").

As the Second Circuit has held, granting a Section 1782 application over the

opposition of a foreign court "would in fact encourage foreign countries to potentially disregard

the sovereignty concerns of the United States and generally discourage future assistance to our

courts." Schmitz, 376 F.3d at 84-85 (citation omitted). "Granting discovery in the face of

opposition from the foreign tribunal would undermine the spirit and purpose of the statute by

discouraging that and other foreign tribunals from heeding similar sovereignty concerns posited

by our governmental authorities to foreign courts." Id. (quotation marks omitted).

Chevron's rushed Section 1782 application, and refusal to agree to even a short

extension of the briefing schedule, is no doubt largely motivated by a desire to avoid the

consequences of the Lago Agrio Court's pending ruling. As set forth infra and in the

Filmmakers' brief, the Court should deny the Section 1782 application, inter alia, because it

seeks privileged information, is unduly intrusive and burdensome, and is an end run around the

jurisdiction of the Ecuadorian Court. However, if this Court were at all inclined to consider this

premature and precipitous application, at a minimum the Court should defer ruling until the

Ecuadorian Court rules on plaintiffs' April 9, 2010 application.

In considering the "character of the proceedings underway abroad," Intel, 542

U.S. at 264-65, the Court must also take notice of the very late nature of this application: many

years after the evidentiary phase of the Lago Agrio litigation has ended, after the judicial

inspection phase, over two years after the Cabrera report, and well over a year after Crude was

released. Saenz Decl. ,-r 3; Aventis Pharma v. Wyeth, 2009 WL 3754191, at *1 (S.D.N.Y. Nov. 9,

16

2009). Chevron's application "is untimely given the current procedural posture of the case

before the [Ecuadorian] Courts." ld. Granting the application would therefore "frustrate, rather

than promote, the twin aims of § 1782: 'providing efficient means of assistance to participants in

international litigation in our federal courts and encouraging foreign countries by example to

provide similar means of assistance to our courts.'" ld. (quoting Schmitz, 376 F.3d at 84).

Federal courts in this country routinely reject discovery requests after the close of

discovery. One can only imagine how a federal court would respond if a litigant sought fact

discovery in a foreign jurisdiction years after the discovery deadline and soon before pretrial

briefs were due. Yet that is precisely what Chevron seeks here. This request undermines the

comity concerns at the heart of Section and 1782 and should be rejected. Aventis, 2009 WL

3754191, at *1.

C. The Section 1782 request conceals an attempt to circumvent foreign proof­gathering restrictions or other policies of a foreign country or the United States

This Section 1782 application is a plain attempt to circumvent foreign proof-

gathering restrictions in Ecuador. The heart of Chevron's claim here is that there was

impropriety involving a Court expert, Richard Cabrera, and a member of his team, Carlos

Beristain. Chevron Br. at 2-3. The Ecuadorian Court is more than capable of investigating its

own experts, who are, after all, in Ecuador. Rather than make a request to the Court actually

hearing the case, though, Chevron runs to New York to seek 600 hours of outtakes from a

filmmaker.

"Under th[is] discretionary factor, district courts may consider how the applicant

fared or is faring in the foreign jurisdiction in its attempts to procure the same information it now

seeks under § 1782." In Re Application of 000 Promnefstroy, 2009 WL 3335608, at *8

17

(S.D.N.Y. Oct. 15,2009); Microsoft, 428 F.Supp.2d at 195 (same). Where a party has tried but

failed to procure the discovery in a foreign jurisdiction, this factor weighs heavily against the

1782 petition. Id.; In Re Application of 000 Promnefstroy, 2009 WL 3335608, at * 1 0 ("Put

simply, this Court would not provide 'efficient means of assistance' to litigants by giving parties

an incentive, after losing in their original requests for information in the foreign tribunal, to rush

to the United States in hopes of obtaining a second bite at the apple .... [O]rdering the discovery

would not encourage foreign countries by example, unless that example is to aid litigants in

circumventing the judicial systems of foreign countries.").

Here, Chevron is in an even worse position, because it did not even try to get

discovery concerning the Court expert from the foreign jurisdiction. See, e.g., Aventis Pharma v.

Wyeth, 2009 WL 3754191, at *1 (S.D.N.Y. Nov. 9,2009) ("There are myriad reasons for

denying A ventis' Application. First, despite the fact that it appears that the French Court has the

jurisdictional reach over these documents, in five years, Aventis has never sought the subject §

1782 documents in the French Tribunal."). Chevron knows how to make an application in the

Court it chose, but has instead pursued an American end-run around the entire Ecuadorian legal

system. Even more galling, Chevron seeks to impugn an Ecuadorian court expert without

approaching the Ecuadorian court itself. The Lagio Agrio Court plainly has jurisdictional reach

over its own experts-if Chevron wants to impugn or question them, Chevron should direct that

inquiry to the Lago Agrio Court. Id.

Another policy is at stake here: it is unseemly for Chevron to delay the case in the

United States for nine years withforum non conveniens motions, all while touting the wonders of

the Ecuadorian judicial system, and then, post-hoc, attempt to use the American judicial system

to undermine the Ecuadorian Court. Chevron chose the forum of Ecuador. Chevron is a

18

"sophisticated part[y]" that "freely chose the [Ecuadorian] forum with all its requisite procedural

rules." Aventis, 2009 WL 3754191, at *1. Chevron must now live by those procedural rules and

approach the Ecuadorian court with complaints about its own court experts.

III. The Application is Prohibited Under Section 1782 Because it Violates the Journalist's Privilege

The application should be denied for a second, independent reason. Where a

Section 1782 application violates a privilege, there is no discretion: it must be rejected. 28

U.S.C. § 1782; Intel, 542 U.S. at 260 ("§ 1782(a) expressly shields privileged material."). Here,

for the reasons set forth in the Filmmakers' brief, the Section 1782 application plainly violates

the journalist's privilege and must be denied.

IV. Chevron's Application Also Fails Because the Arbitral Tribunal at Issue is Not a "Foreign or International Tribunal"

To the extent Chevron's application concerns a private arbitration that is a

transparent collateral attack on the Lago Agrio litigation (the BIT), it fails again as a matter of

law. Under Second Circuit case law, international commercial arbitration bodies such as the BIT

are not "foreign or international tribunal[s]," as required under Section 1782. This portion of

Chevron's application simply fails under the statute.

Section 1782 provides, in pertinent part, "[t]he district court ... may order ...

[discovery] for use in a proceeding in a foreign or international tribunal." 28 U.S.C. § 1782(a).

Only two U.S. Circuit Courts of Appeal have considered the issue of whether an international

arbitral tribunal constitutes a "foreign or international tribunal" for purposes of discovery under

Section 1782(a) - and both courts held they are not. Nat 'I Broadcasting Co., Inc. v. Bear Stearns

& Co., Inc., 165 F.3d 184 (2d Cir. 1999); Republic o/Kazakhstan v. Beidermann, 168 F.3d 880

19

(5th Cir. 1999). In National Broadcasting Co., the Second Circuit held that a commercial

arbitration in Mexico, conducted under the auspices of the International Chamber of Commerce,

was not within the scope of Section 1782, as "Congress did not intend for that statute to apply to

an arbitral body established by private parties." Nat 'I Broadcasting Co., 165 F.3d at 19l.

According to the Second Circuit, Section 1782's reference to a "foreign or international tribunal"

contemplates a "state-sponsored" proceeding; thus, private arbitration falls outside Section

1782' s coverage. Id. at 188. The Fifth Circuit reached a similar holding. See Beidermann, 168

F .3d at 881-83 (extensive discovery through the federal courts pursuant to Section 1782 would

complicate and undermine private international arbitration, which is intended as a "speedy,

economical, and effective means of dispute resolution").

Since the Supreme Court's decision in Intel, district courts have split on the issue

of whether international commercial arbitrations can be considered "foreign or international

tribunal[s]" under Section 1782. Intel itself dealt with a Section 1782 application in aid of an

antitrust proceeding before the Commission of European Communities, not an international

arbitral panel. Intel, 542 U.S. at 246. Although Intel did not address private international

arbitration tribunals, the Court's opinion quoted a law review article which suggests that arbitral

panels may qualify as "foreign tribunals." Intel, 542 U.S. at 258 (quoting Han Smit,

International Litigation Under the United States Code, 65 Colum. L. Rev. 1015, 1026-27 & nn.

71, 73 (1965)). A few district courts have seized on this language (dicta, at best) to conclude

that the Supreme Court was adopting the law review article's defInition of "tribunal" in toto. See

OJSC Ukrnafata v. Carpatsky Petroleum Corp., No. 3:09-MC-265(JBA), 2009 WL 2877156 (D.

Conn. Aug. 27,2009); In re Oxus Gold PLC, No. MISC 06-82-GEB, 2007 U.S. Dist. LEXIS

24061, at *11-14 (D.N.J. Apr. 2, 2007); Comision Ejecutiva, Hidroelectrica Del Rio Lempa v.

20

Nejapa Power Co., LLC, No. 08-135-GMS, 2008 WL 4809035, at *1 (D. Del. Oct. 14, 2008),

appeal dismissed as moot, No. 08-3518 (3d Cir. Aug. 3, 2009).

Other district courts, however, have either explicitly or implicitly recognized that

Intel was of no consequence to the issue of whether an international arbitral panel is a "foreign

tribunal" under Section 1782. See, e.g., In re Opera-dora DB Mexico, S .A. DE C. v., No. 6:09

CV 383 ORL-22GJK, 2009 WL 2423138, at *12 (M.D.Fla. AugA, 2009) (International Chamber

of Commerce International Court of Arbitration is not a foreign or international tribunal under §

1782); In re Arbitration in London, No. 09 C 3092,2009 WL 1664936, at *4 (N.D.IlI. Jun.l5,

2009) (discussing Intel and holding: "I generally agree with the conclusion of the Second and

Fifth Circuits that the legislative history of § 1782 does not support the inclusion of private

arbitral tribunals within the scope of § 1782(a)."); In La Comision Ejecutiva, Hidroelectrica Del

Rio Lempa v. EI Paso Corp., 617 F.Supp.2d 481,487 (S.D.Tex.2008) (finding that private

arbitral tribunal was not "foreign or international tribunal" under § 1782).

Post-Intel, the Second Circuit has not revisited its stance on arbitral panels vis-a­

vis Section 1782, and thus, National Broadcasting Co. remains good law. In addition, the Fifth

Circuit - which revisited its Beiedermann decision last year in the face of Intel - declined to

broaden its interpretation of "foreign tribunal" to include international arbitration panels, finding

Intel irrelevant to that issue. EI Paso Corp. v. La Comision Ejecutiva, Hidroelectrica Del Rio

Lempa, No. 08-20771,2009 WL 2407189, at *3 (5th Cir. Aug.6, 2009).

The same public policy considerations that girded the Second Circuit's holding in

National Broadcasting Co. - that litigants choose arbitration because it involves limited

discovery, making arbitration more efficient and less costly than traditional litigation - remain

valid today. Nat 'I Broadcasting Co., 165 F.3d at 190-91; see also Porzig v. Dresdner,

21

Kleinwort, Benson, North America LLC,497 F.3d 133, 138 (2d Cir. 2007) ("The value of

arbitration lies in its efficiency and cost-effectiveness as a process for resolving disputes outside

the courts, and its tendency to foster a less acrimonious process."). Allowing additional

discovery in aid of an international arbitration through separate judicial discovery proceedings

undermines the policy goals animating the parties' selection of arbitration as the mechanism for

dispute resolution. Nat'l Broadcasting Co., 165 F.3d at 190-91 (allowing U.S. courts to compel

discovery in aid of an international arbitration would undermine the efficiency and cost­

effectiveness advantages of arbitration "and thus [would] arguably conflict with the strong

federal policy favoring arbitration"). Thus, allowing broad discovery here in "aid" of the BIT

arbitral proceedings is inconsistent with both the decisional law of the Second Circuit and the

policies undergirding arbitration as a dispute resolution mechanism.

v. The PerezN eiga Section 1782 Application Also Fails

The PerezlVeiga Section 1782 application fails. First, in light of Mr. Berlinger's

sworn statement that the outtakes contain no material at all concerning these petitioners' criminal

prosecutions, Berlinger Decl. ~ 35, the application is moot. Even if it were not mooted, the

application fails for all the reasons set forth supra.

22

CONCLUSION

F or these reasons, the petition should be denied in its entirety, and the Court

should grant all other relief as is just and proper.

Dated: April 23, 2010 New York, New York

23

EMERY CELLI BRINCKERHOFF & ABADYLLP

75 Rockefeller Plaza, 20th Floor New York, New York 10019 (212) 763-5000

By: lsI Ilann M. Maazel Ilann M. Maazel Jonathan S. Abady o. Andrew F. Wilson

Attorneys/or Lago Agrio Plaintiffs