United States District Court, D. Colorado
[Copyrighted Material Omitted]
For Chevron Corporation, Petitioner: Robert Charles Blume, Gibson Dunn & Crutcher, LLP-Denver, Denver, CO.
For Andres Snaider, Respondent: Jacqueline C. Melmed, Paul Howard Schwartz, Shoemaker Ghiselli & Schwartz, LLC, Boulder, CO.
Kathleen M. Tafoya, United States Magistrate Judge.
This matter is before the court on Respondent Andres Snaider's (" Snaider" ) " Motion to Modify Ex Parte Order and Partially Quash Subpoena under 28 U.S.C. § 1782, or in the Alternative, for a Protective Order under Fed.R.Civ.P. 26(c)." [Doc. No. 21, filed Aug. 29, 2014.] Petitioner Chevron Corporation's (" Chevron" ) Response was filed on September 19, 2014 [Doc. No. 24] (" Resp." ) and Snaider's Reply was filed on October 10, 2014 [Doc. No. 28] (" Reply). On October 27, 2014 the court heard oral argument on the motions.
On November 13, 2014, Snaider filed a " Notice of Supplemental Authority" [Doc. No. 30], attaching a " Judgment" dated November 10, 2014, by the Honourable Justice Adroam Jack from the Supreme Court of Gibraltar in Case Nos. 2012-C-232, 2012-C-112, 2014-C-113, and 2014-C-111 (" Gibralter Order" ) [Doc. No. 30-1]. Chevron filed its " Response to Notice of Supplemental Authority" [Doc. No. 31] on November 18, 2014. The matter is ripe for review and ruling.
PROCEDURAL BACKGROUND IN THIS CASE
As part of what has become a multi-national dispute between Petitioner Chevron and a group of indigenous Ecuadorians concerning alleged environmental damage, Chevron seeks discovery documents from Andres Snaider, a Colorado resident. This case was initiated upon the filing of Chevron's ex parte " Petition and Application for an Order under 28 U.S.C. § 1782 Permitting Chevron Corporation to Issue Subpoenas for the Taking of Depositions and the Production of Documents from Andres Snaider" [Doc. No. 1], filed May 14, 2014 and Memorandum in Support [Doc. No. 2] (" Petition" or " Pet." ). In its Petition,
Chevron sought authorization to subpoena discovery from Snaider in aid of its case before the Supreme Court of Gibraltar against James Russell DeLeon (" DeLeon" ) and an investment company he controls, Torvia Limited (the " Gibraltar Action" ), as well as in aid of its defense against enforcement proceedings brought against Chevron in multiple foreign jurisdictions, including Argentina and Brazil, seeking to collect on an Ecuadorian judgment originally rendered in favor of the original plaintiffs, the indigenous Ecuadorians, or on the appellate order therefrom (the " Enforcement Actions" ). District Judge R. Brooke Jackson entered a summary order granting the Petition on May 20, 2014. [Doc. No. 11.]
Snaider now seeks to modify or partially quash the subpoena issued by Chevron, and/or obtain a protective order under Fed.R.Civ.P. 26(c). The final version of the Subpoena is attached as Exhibit A to Chevron's Response. [Doc. No. 24-1.]
A. Ecuadorian and New York RICO cases
The complex background of this dispute began with a lawsuit filed in Ecuador against Chevron (the " Lago Agrio Action" ) by 47 named plaintiffs (the " Lago Agrio Plaintiffs" or " LAPs" ), through their attorney Steven Donziger, a New York lawyer, on behalf of a " class" of thousands of Ecuadorian indigenous peoples. Plaintiffs in that suit claimed that Chevron was responsible for extensive environmental damage caused by the oil activities of Texaco, Inc., undertaken more than twenty years prior and long before Chevron acquired Texaco's stock. The LAPs ultimately obtained a multi-billion dollar judgment (the " Ecuadorian Judgment" ) against Chevron in the Lago Agrio Action and have now begun seeking to enforce it around the world through the Enforcement Actions, with more such actions in the offing.
On February 1, 2011, just before the Ecuadorian court issued its original judgment, Chevron brought suit against Donziger and others in the Southern District of New York, alleging that any judgment rendered in the Lago Agrio Action against Chevron was obtained as part of a RICO conspiracy that included fraudulent and criminal conduct by the LAPs and their attorneys (the " N.Y. RICO Action" ). On March 4, 2014, United States District Judge Lewis A. Kaplan in the Southern District of New York found, in a 320-page opinion, that Donziger and others had " corrupted the Lago Agrio case" by submitting " fraudulent evidence" and engaged in other wrongdoing including:
They coerced one judge, first to use a court-appointed, supposedly impartial, " global expert" to make an overall damages assessment and, then, to appoint to that important role a man whom Donziger hand-picked and paid to " totally play ball" with the LAPs. They then paid a Colorado consulting firm secretly to write all or most of the global expert's report, falsely presented the report as the work of the court-appointed and supposedly impartial expert, and told half-truths or worse to U.S. courts in attempts to prevent exposure of that and other wrongdoing. Ultimately, the LAP team wrote the Lago Agrio court's Judgment themselves and promised $500,000 to the Ecuadorian judge to rule
in their favor and sign their judgment. If ever there were a case warranting equitable relief with respect to a judgment procured by fraud, this is it.
Chevron Corp. v. Donziger, 974 F.Supp.2d 362, 384 (S.D.N.Y. 2014).
B. The Gibraltar Action
In December 2012, Chevron filed the Gibraltar Action alleging that Russell DeLeon and his company, Torvia Limited, major funders of the Lago Agrio Action, knew or were recklessly indifferent to the commission of the fraud in both Ecuador and the United States that corrupted the Lago Agrio Action. ( See Petition at 17-18.) Chevron alleges that DeLeon and Torvia Limited provided millions of dollars to support the Lago Agrio Action and participated in the underlying conspiracy that Judge Kaplan found to be corrupt and in violation of the federal RICO statute. Prior to the filing of the Petition in this case, the Gibraltar court denied DeLeon and Torvia's motion to dismiss the Gibraltar Action. ( See id.) On November 10, 2014, while ruling on the instant motion was under advisement, the Gibraltar court entered the Gibraltar Order which, in part, precluded Chevron from obtaining discovery from a company Chevron claimed was a fiduciary holding stock shares of Gibraltar defendant Torvia and non-defendant Amazonia. The court held, " [a]ll of the documentation sought against the [fiduciary] can be the subject of a witness summons under CPR Rule 34.2(1)(b). . . . Accordingly, on this ground I consider that I have no jurisdiction to make the order sought." (Gibraltar Order P 31.) However, in the same Order, the Gibraltar court granted non-party discovery subpoenas against T.C. Payment Services on the grounds that the company likely had information relevant to the funding of the alleged conspiracy at issue in the case. ( Id. PP 48--65.) Implicit in the Gibraltar Order is that T.C. Payment Services would not be subject to a witness summons and therefore seeking non-party subpoenaed information and documents was appropriate.
C. The Enforcement Actions
The Enforcement Actions have been filed by law firm now representing the LAPs, Patton Boggs. Chevron claims these actions are part of a " multi-jurisdictional strategy" to enforce the over $9 billion Ecuadorian Judgment notwithstanding the result of the N.Y. RICO Action and the findings by Judge Kaplan that the judgment was illegally obtained and is therefore unenforceable. (Petition at 19.) More specifically, the LAPs filed actions in both the Supreme Court of Justice in Brasilia,
Brazil, and Argentina's National Civil Trial Court 61 against Chevron for recognition of the Ecuadorian Judgment in spite of the findings in the N.Y. RICO Action, both of which are currently ongoing. ( Id.) There is evidently also an enforcement proceeding ongoing in Canada. (Mot. at 11-12, Ex. B-1 P 52.)
In addition, Chevron claims the LAPs " maintain a list of approximately 30 potential countries that recognize foreign judgments and where Chevron has assets" and have allegedly vowed to file enforcement actions in these countries " as necessary to ensure that the full amount of the [Ecuadorian Judgment] can be satisfied." ( Id. at 19.) Chevron alleges that obtaining the fraudulent judgment and filing it in various foreign venues is all part and parcel of a conspiracy to defraud Chevron out of billions of dollars.
D. Andres Snaider
1. Obtaining Funding and Participation in the Lago Agrio Action
According to the Declaration of Andres Snaider attached to the Motion as Exhibit C [Doc. No. 21-6], Snaider is an Ecuadorian national residing in Colorado and a founder and manager of Nextant, LLC, (" Nextant" ) a business consulting firm. ( Id. PP 3, 7.) Snaider, Donziger, and DeLeon were all classmates at Harvard Law School in the late 1980s. ( Id. P 5.) Snaider and Donziger initially approached DeLeon, a wealthy investor with an interest in film, about investing in a documentary detailing the environmental damage at issue in the Lago Agrio Action. ( Id. PP 10-12.) Chevron alleges that subsequent to this initial contact, DeLeon eventually invested $3.25 million in the Lago Agrio Action. Chevron alleges that Snaider was involved in structuring certain DeLeon investments in the Lago Agrio Action and that Snaider reviewed " final discussion drafts of the [Torvia] funding agreement" in May 2011. (Pet. at 16.) Altogether, Chevron asserts that Snaider was " instrumental" in procuring significant funding for the Lago Agrio Action, including the behavior which was held to be fraudulent and in violation of the RICO statute in the New York court. ( Id. at 14.)
2. N.Y. RICO Action Discovery Rulings Re: Snaider
In the N.Y. RICO action, Chevron moved to compel documents about non-party Snaider's involvement in the Lago Agrio Action, which Chevron claimed were in the control of the defendants, including Donziger and the LAPs, but in the possession of their Ecuadorian co-counsel in the Lago Agrio Action. ( Id. at 16.) The LAPs responded by bringing an action in Ecuador attempting to obtain a ruling that Ecuadorian law prevented the RICO Action defendants (specifically Donziger and the LAPs) from providing documents for discovery purposes in the RICO Action. ( Id. (citing Ex. 124 at 84-87 & Ex. 125.) Donziger was, at that time, both the LAPs' United States counsel and also a defendant in the N.Y. RICO case. To combat Chevron's attempt to gain discovery regarding Snaider, Donziger " temporarily" vacated his position as the LAPs' United States representative and appointed Snaider to assume that role on his behalf. ( Id. at 16-17 (citing Ex. 126.)
Chevron also attempted to obtain discovery about Snaider's activities with a subpoena directed at the law firm of Patton Boggs, which had joined as plaintiffs' counsel in the Lago Agrio Action in 2010. That subpoena sought " [a]ll documents related to Andres Snaider" and " [a]ll documents related to Nextant." (Mot at 7, citing Ex. F at 64-71.) Patton Boggs objected on several grounds, including that the requests impermissibly sought information regarding the LAPs' post-judgment enforcement
strategy. ( Id. at 7-8.) Judge Kaplan sustained Patton Boggs' objections with little discussion. ( Id. at 8, citing Ex. G P 1 and Ex. H at 34-36.)
Several months later, Chevron served the same requests upon Donziger. ( Id. (citing Ex. I at 49-50).) Judge Kaplan found that the discovery requests were " broad as all outdoors" ( id.,q uoting Ex. A at 17:15) and also ruled that any post-judgment documents, while likely relevant, would relate to enforcement of the Ecuadorian Judgment and therefore would likely be protected from production by the work product doctrine. ( Id., citing Ex. A at 18:1-5.)
Finally, Chevron subpoenaed Snaider directly to produce documents as a non-party and to sit for a deposition, claiming Snaider had " assume[d] the role of coordinating the legal strategy of the [Lago Agrio Action] in the United States" and claiming Snaider had played an " important role in Defendants' scheme." ( Id. at 8, citing Ex. K at 2.) Judge Kaplan denied this last effort as untimely.
As noted infra, Judge Kaplan ultimately found that the N.Y. RICO defendants had engaged in fraud and extortion in the Lago Agrio Action and that the judgment obtained in that action was unenforceable. Chevron, 974 F.Supp.2d 362. Judge Kaplan, however, does not discuss the roles, if any, played by Snaider and/or Nextant in the RICO scheme. (Mot. at 11 (citing Chevron, 974 F.Supp.2d 362).) Given that Chevron was blocked in its discovery efforts with respect to Snaider and Nextant in that case, however, the court does not find that this absence suggests Snaider and Nextant were not involved in fraudulent conduct and/or in the conspiracy currently alleged in the Gibraltar Action.
3. Enforcement Efforts
Chervon asserts that Snaider and Nextant escalated their involvement in the conspiracy to defraud Chevron when the LAPs began their efforts to enforce the Ecuadorian Judgment, in spite of Judge Kaplan's findings and opinion in the N.Y. RICO Action. More specifically, Chevron alleges that in 2011, Snaider and Nextant manager, Juan Pablo Navas, were involved in the creation of Amazonia, an entity created as a vehicle to manage the proceeds to be received from collection efforts to enforce the Ecuadorian Judgment. ( Id. at 15.) Based on documents produced during the N.Y. RICO case, Chevron asserts that Snaider and Nextant were paid approximately $1.3 million dollars for their efforts in obtaining funding to successfully pursue and obtain the Ecuadorian Judgment and for their post judgment activities associated with collection of proceeds, if any, from execution in foreign jurisdictions. ( Id.)
A. Use in a Foreign Proceeding
A petitioner seeking discovery for proceedings in a foreign jurisdiction must meet the following four requirements for an application under Section 1782 to be granted:
(1) the request must be made " by a foreign or international tribunal," or by " any interested person" ; (2) the request must seek evidence, whether it be the " testimony or statement" of a person or the production of " a document or other thing" ; (3) the evidence must be " for use in a proceeding in a foreign or international tribunal" ; and (4) the person from whom discovery is sought must reside or be found in the district of the district court ruling on the application for assistance.
In re Application of Michael Wilson & Partners, Ltd., Case No. 06-cv-02575-MSK-PAC, 2007 WL 22221438, at *2 (D. Colo. July 27, 2007) (quoting In re Clerici, 481 F.3d 1324, 1331--32 (11th Cir.
2007)). The parties' sole dispute is whether the third factor is satisfied--specifically, and as discussed below, Snaider disputes that the subpoena seeks documents " for use" in a foreign proceeding, claiming that the documents sought are not relevant to either the Gibraltar Action or the Enforcement Actions.
B. Intel Factors
Even if the court finds the Michael Wilson & Partners factors are fully satisfied, the court must then consider whether certain discretionary facts weigh in favor of granting the application and the requested discovery. These factors include: (1) whether the party from whom discovery is sought is a participant in a foreign proceeding, or already subject to the jurisdiction of the foreign tribunal; (2) the nature and character of the foreign proceedings; (3) the receptivity of the foreign tribunal to such judicial assistance; (4) whether the request is an attempt to circumvent foreign discovery restrictions; and (5) whether the requests are unduly intrusive or burdensome. See Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 264-265, 124 S.Ct. 2466, 159 L.Ed.2d 355 (2004).
C. Federal Rules of Civil Procedure
Assuming a finding that the discovery is for use in a foreign litigation and a favorable determination considering the Intel factors, any discovery nonetheless remains subject to the Federal Rules of Civil Procedure. See Texas Keystone, Inc. v. Prime Natural Res., Inc., 694 F.3d 548, 554 (5th Cir. 2012) (" [Section] 1782 does not establish a standard for discovery. Instead it provides for a threshold determination of whether to allow foreign litigants to enjoy discovery in U.S. courts in accordance with the federal rules." ) (quotation omitted). A motion to quash, therefore, also is governed by Rule 45(d)(3), which directs a court to quash a subpoena that " subjects a person to undue burden." Fed.R.Civ.P. 45(d)(3)(A)(iii) & (iv); see, e.g., General Steel Domestic Sales, LLC v. Chumley, No. 13-cv-769-MSK-KMT, 2014 WL 3057496, at *1 (D. Colo. July 7, 2014) (motion to quash non-party discovery granted when information sought was " overbroad, irrelevant, unnecessary, and was a fishing expedition designed to gain information . . . not for purposes of [the] litigation" ). Federal Rule of Civil Procedure 26(b)(2)(C) provides that a court " must limit the frequency or extent of discovery otherwise allowed....if it determines that" :
(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;
(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or
(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties? resources, the importance of the issues at stake in the action, ...