Will What Happened in Ecuador Stay in Ecuador?

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Richmond Journal of Global Law & Business

Volume 13 | Issue 3 Article 4

2014 Will What Happened in Ecuador Stay in Ecuador? How the Existing International Due Process Analysis May Be Ineffective in Keeping Fraudulent Foreign Judgments Out of U.S. Courts Christopher Lento Louisiana State University

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Recommended Citation Christopher Lento, Will What Happened in Ecuador Stay in Ecuador? How the Existing International Due Process Analysis May Be Ineffective in Keeping Fraudulent Foreign Judgments Out of U.S. Courts, 13 Rich. J. Global L. & Bus. 493 (2014). Available at: http://scholarship.richmond.edu/global/vol13/iss3/4

This Article is brought to you for free and open access by UR Scholarship Repository. It has been accepted for inclusion in Richmond Journal of Global Law & Business by an authorized administrator of UR Scholarship Repository. For more information, please contact [email protected]. 35295-rgl_13-3 Sheet No. 32 Side A 09/09/2014 14:33:00 Chevron/Ec- , 1:11-cv-00691 LAK-JCF, 493 Chevron v. Donziger http://www.nysd.uscourts.gov/cases/show.php?db By: Christopher Lento** OUT OF U.S. COURTS* available at available Recent evidence in the decades-old litigation suggests that the $18 billion judgment uador rendered against Chevron by an Ecuadorian court may have been a product of conspiracy and fraud most on unprecedented an al- scale. However, these overshadow allegations fundamental problems in which the U.S. method courts by determine whether judgments ren- WILL WHAT HAPPENED IN ECUADOR STAY IN KEEPING FRAUDULENT FOREIGN JUDGMENTS M K ECUADOR? HOW THE EXISTING INTERNATIONAL C Y DUE PROCESS ANALYSIS MAY BE INEFFECTIVE IN Energy Law and Resources. In 2011, Mr. Lento represented LSU in the inaugural the by scholarship a awarded also was and Court, Moot Sustainability and Energy Rocky Mineral Law Foundation and Foundation.Scholarship Rudd Joe the by scholarship a awarded was served Lento Mr. 1 of 3 students and Law Energy of Journal Law’s LSU of creation the for Member Committee a as in the nation to be Resources, which was launched in 2012. He was a Senior Graduate Editor of the Journal of Civil Law Studies, and also edited a chapter on Oil and Gas Contracts for the revision of a seven-volume treatise entitled Energy Transactions and Busi- ness Planning, published by LexisNexis/Matthew Bender in 2012. =special&id=379. ** Christopher Lento graduated in 2012 from the Paul M. at Hebert Louisiana School of State Law University, with both a JD and a Graduate Diploma in Com- parative Law. He is admitted to practice law in the State of Texas, and currently works for a Louisiana-based oil services company. At LSU Law, Mr. Lento served as the Editor of the Louisiana Mineral Law Institute Newsletter, which summa- Oil to distribution for Law Gas and Oil Louisiana to relating cases important rizes and Gas Attorneys throughout Louisiana and Texas. He was also the founder and President of the LSU Energy and Mineral Law Society, and the creator of the En- ergy and Mineral Law Writing Competition, a joint collaboration of the Law Mineral Institute, the LSU Energy and Mineral Law Society, and the LSU Journal of case to enforce Ecuador’s judgment subpoena in the United States. See against Chevron would not be subject to *Corrupt and Racketeering the in ruling 2014 March his in Kaplan, Lewis Judge Influenced Organizations case brought by Chevron against the plaintiff’s attorney to Ecuador” in Stays Ecuador in Happens “What phrase the used Donziger, Steven refer to Donziger’s supposed assumption that evidence of potential fraud in the ABSTRACT: \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 1 9-SEP-14 8:51 126, (S.D.N.Y. 2014) (S.D.N.Y. 126, 35295-rgl_13-3 Sheet No. 32 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 32 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 32 Side B 09/09/2014 14:33:00 M K C Y [Vol. 13:3 gen- case concerns claims that Chevron/Ecuador The Under the current jurisprudential regime, courts Paradoxically, the existing international due pro- affords due process in judicial proceedings. If so, erally evidence regarding the political system of where the country the judgment troublesome is originated. the fact that because U.S. courts Perhaps are not even analysis this proceedings, particular examine to required more has the potential to increase fraudulent practices by foreign litigants in “fair judicial systems,” who that anticipate unscrupulous tactics will not affect enforceability of their judgments in the U.S. and if the U.S. court determines that the judicial system in the country of origin is fundamentally fair, the judgment will be upheld by U.S. courts. However, this analysis raises a potentially troublesome issue because under the guise of judicial efficiency, courts are only free on the to foreign focus court system as a whole gard and the disre- particular proceedings under which the ment judg- was rendered. In essence, this means that courts may completely ignore claims by defendants that did not they receive due process in foreign proceedings. Fur- ther, courts are afforded unbridled discretion to validate foreign judgments without considering credible extrinsic dered in foreign jurisdictions may be enforced against de- against enforced be may jurisdictions foreign in dered fendants in the United States. that are faced with the question what follow States United the in enforceable is judgment of whether a foreign is termed the “international due on judgment value a render must court the analysis, this process analysis.” In the overall judicial process of the country handing down the original decree, and decide whether the country lution in the region, an Ecuadorian Court ordered Chev- ron to pay $18 billion plaintiffs dollars sought in to damages. collect When Chevron the challenged the ruling the by the Ecuadorian Court, judgment in the eventually U.S., uncovering evidence that suggested the judgment was a product of a widespread pattern of fraud and conspiracy, including admissions of bribery by one of the presiding Ecuadorian judges. cess analysis suggests that a U.S. court determining Texaco, which Chevron acquired in 2001, Lago polluted the Agrio oilfield region dumping billions of gallons of contaminants of in the area. Ecuador by After a court appointed expert improperly reported widespread pol- RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS 494 \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 2 9-SEP-14 8:51 35295-rgl_13-3 Sheet No. 32 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 32 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 33 Side A 09/09/2014 14:33:00 R R R R R R R R 495 availa- ONEY increases OREIGN M F ...... 498 OREIGN ROCESS case has revived a F P UE OREIGN NALYSIS D F ...... 515 A UDICIARY IN J ENDERED IN R ROCESS P Chevron/Ecuador Litigation UE NTERNATIONAL ECOGNITION OF I D OLE OF THE R UDGMENT Under the International Due Process R J ...... 495 The litigation, now over 20 years old, brings a host a brings old, years 20 over now litigation, The ...... 503 1 ...... 506 ...... 533 ...... 496 ...... 500 RADITIONAL NTERNATIONAL INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS Chevron/Ecuador I T ATIONS NDERPINNINGS OF NALYSIS ECOGNITION OF FFAIRS PPLICATION OF THE HE HE HE UDGMENTS NTRODUCTION A recent ruling in the the Executive and Legislative Branches. whether to enforce the judgment should examine Ecua- dor’s court system as a whole, rather than looking into the particular proceedings judgment was under rendered. This article examines the back- which the ground and original application of the international due process analysis, and suggests that rather than promoting judicial efficiency, the existing analysis the actually burden on U.S. courts determining the validity of a foreign judgment, and also may lead sions to judicial foreign incur- affairs, a territory normally reserved for Analysis A Chevron/Ecuador N A J Chevron v. Donziger, 1:11-cv-00691 LAK-JCF, 126, (S.D.N.Y. 2014) http://www.nysd.uscourts.gov/cases/show.php?db=special&id=379. I. I V. U II. R M K IV. T VI. A III. T See VII. T VIII. C Y tions relates to how the United States will enforce judgments rendered judgments enforce will States United the how to relates tions in foreign courts. Surprisingly, the scheme by which the enforceability of these judgments is determined by U.S. courts is sadly lacking. Be- cause of the unclear nature of the legal standards used to examine the validity of judgments rendered abroad, judges no- our contravene potentially that proceedings in rendered judgments may validate foreign tions of fairness and judicial impartiality, but more importantly, may contentious debate by a number of widely disparate groups, from companies oil and environmentalists, to foreign affairs experts and judi- commentators. cial of legal, ethical and political questions into increasingly the global spotlight, society, but perhaps in one of an the most important ques- 1 I. INTRODUCTION 2014] \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 3 9-SEP-14 8:51 TABLE OF CONTENTS ble at 35295-rgl_13-3 Sheet No. 33 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 33 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 33 Side B 09/09/2014 14:33:00 M K C Y [Vol. 13:3 Generally, 4 Chevron/Ec- http://blogs.wsj.com/ available at Similarly, U.S. courts have 2 ., (August 16, 2013) However, the Supreme Court has noted that . J 5 T S Oklahoma Ban on Sharia Law Unconstitutional, US Judge ALL Full Faith and Credit: The Lawyer’s Clause of the Constitution . 1 (1945). W , EV art. IV, § 1. art. IV, § 1. . . LOG B . L. R Taken together, the Full Faith and Credit Clause, and its co- Both federal and state courts have recently wrestled with the ONST ONST AW 3 case provides an illustration of some of the difficult issues that L , OLUM RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS C Jacob Gershman, U.S. C Robert Jackson, U.S. C there is a difference between the credit owed to a state’s legislative ments rendered domestically normally pose little, if any, problems be- understood widely are Constitution the by guaranteed rights the cause to require uniform practices that, when followed by the conscientious plaintiff, lead to the recognition of judgments by all other the Full Faith and Credit states Clause, found at Article IV §1 via of the Consti- tution. increasingly had to contend with issues raised ments rendered in foreign courts, particularly in civil matters. Specifi- by recognizing judg- cally, in the absence of an existing international legal regime, such as the International Criminal Court or an applicable treaty, what is the extent to which the U.S. judiciary’s deference to nations the obviates courts due of process other in proceedings rendered abroad? Judg- uador 2 3 4 45 5 496 violate constitutional requirements and guarantees. The \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 4 9-SEP-14 8:51 of every other state.” rollary, the Due Process Clause, suggest that when legal controversy the have an parties opportunity for to a full a and fair hearing by a court of competent jurisdiction, the re-litigation of issues already decided is not only wasteful of judicial resources, but would also impose an unfair burden on the victor in the earlier proceeding. Article IV §1 of the Constitution addresses the duties that the various states have to honor the “public acts, records, and judicial proceedings II. RECOGNITION OF JUDGMENTS NATIONS RENDERED IN FOREIGN question of the extent to which U.S. courts should tional consider law interna- when applying domestic law. arise when the validity of a foreign judgment is suspect. Although has it recently come to light that the multi-billion dollar judgment rendered against Chevron was most likely a product of a widespread pat- litigants, whether to as remains question the bribery, and fraud of tern who may have been denied any semblance of a fair and impartial trial in a foreign court, should be through which we denied examine a foreign judgment relief is often colored by simply our because the relationship with lens the country where it was rendered. Rules law/2013/08/16/oklahoma-ban-on-sharia-law-unconstitutional-us-judge-rules/. 35295-rgl_13-3 Sheet No. 33 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 33 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 34 Side A 09/09/2014 14:33:00 10 497 7 In its traditional formulation, the doctrine precludes 8 the court sitting in the state where the judgment is INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS Therefore, once a judgment is rendered, under the doctrine of International recognition of judgments between countries is ob- is countries between judgments of recognition International While application of the doctrine is not required by statute, it 6 9 Id. M K Franchise Tax Bd. v. Hyatt, 538 U.S. 488, 494 (2003). 28 U.S.C. § 1738 (2006). Underhill v. Hernandez, 168 U.S. 250, 254 (1897). Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 408 (1964). C Y is a principle generally recognized and adhered to when examining by the decisions federal of the courts agencies of foreign sovereigns. for judgments rendered in domestic courts, a subsequent court’s determination of whether a litigant has already had the opportunity for a full and fair hearing is a fairly straightforward matter. Generally, comprehensive a and shared legal analysis scheme is for assures the most part that uniform, notwithstanding the that proceedings fairness may occur in states thousands of minimal inquiry miles into the apart. adequacy of the Therefore, judicial process upon of the state be to sought is judgment where state the originated, judgment a where enforced is constitutionally bound to give the same effect to judgments as those proceedings would have in the state of their origin. sought to be enforced can no longer review whether the original court observed procedural due process requirements, as this kind of review is precluded by the mandatory recognition of the Presumably, original any judgment. procedural defects in the suit would viewed have and resolved by been the court in re- the original proceedings, and litigation of these issues would be barred in a subsequent trial. Further, It is important to note that the underlying aim of the Act of State Doc- trine is not based in comity, the principle that one nation will extend valid- the of recognition the through nations other to courtesies certain 6 7 8 9 10 2014] are which judgments, to owed credit the and law, common or measures generally entitled to greater respect than the laws or statutes of other states. res judicata, \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 5 9-SEP-14 8:51 that provided by international treaty) means that each nation is free to free is nation each that means treaty) international by provided that to or law, own its to according judgments foreign enforce and recognize refuse to consider recognition United States, the closest approximation of an international version of and enforcement altogether. In the Full Faith the and Credit Clause is the Act of State dictates Doctrine, that which the propriety of the decisions of other countries relating to their internal affairs will not United be States. questioned in the courts of the viously much more problematic. The absence of recognized analogue any of the internationally Full Faith and Credit Clause (other than courts of this country from inquiring into the that a recognized validity foreign sovereign power commits within of its own ter- public acts ritory. 35295-rgl_13-3 Sheet No. 34 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 34 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 34 Side B 09/09/2014 14:33:00 M K C Y Rather [Vol. 13:3 11 That is, the 12 , a 1964 case that , even though recognition though even , 13 Sabbatino Sabbatino However, although the recognition of case brings these issues screaming into 14 , rather than federal law, with the consequence that Under the holding of holding the Under Chevron/Ecuador 15 state The The Act of State doctrine gives rise to an additional complica- 376 U.S. at 423. RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Hilton v. Guyot, 159 U.S. 113, 164 (1895). See Id. Nicor Int’l Corp. v. El Paso Corp., 318 F. Supp. 2d 1160 (S.D. Fla. 2004). 376 U.S. at 939. the aim of the Act of State Doctrine is to powers preserve between the the separation Judicial of and Executive branches. established that the policy of federal courts would be to honor the Act of State Doctrine, the Court was “not without determination other that federal precedent law governs; for there a are enclaves of federal judge-made law which bind the States”. . .[t]he rules of international law should not be left to divergent and perhaps parochial state inter- pretations.” each state is free to make its own decision regarding recognition of a foreign country’s judgments. ity between the United States and Ecuador, as well questions as raise about serious the extent to which the Judicial decisions Branch that can touch render upon political relationships before it encroaches the spotlight, demanding particular attention to potential domestic en- domestic potential to attention particular demanding spotlight, the forcement of judgments rendered in the courts of other countries. As the case continues to wind its way through the appeals process, it has the potential to either reinforce or redefine the existing limits of com- 11 12 13 14 15 (and their underlying principles) would seemingly restrict state court judges and also curtail the discretion of federal judges, when the foreign relations of the United States could be impaired by the application of state judgment recognition law. III. THE INTERNATIONAL DUE PROCESS ANALYSIS of foreign judgments in this country is generally governed by state law, state by governed generally is country this in judgments foreign of Doctrines Question Political and State of Act Powers, of Separation the 498 ity and effect of their executive, legislative, and judicial acts. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 6 9-SEP-14 8:51 tion, which is the fact that conflict of laws is generally regarded as a matter of purpose of the doctrine is not to protect other nations’ sovereignty from sovereignty nations’ other protect to not is doctrine the of purpose interference by the United States, but rather to prevent the Executive Branch’s prerogative of dictating foreign affairs from being frustrated by a decision issued by the Judicial Branch. judgments generally has state-specific applicability, the complication primarily arises when the controversy at hand may implicate foreign relations. As the Supreme Court noted in 35295-rgl_13-3 Sheet No. 34 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 34 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 35 Side A 09/09/2014 14:33:00 21 499 It has Under 20 19 In this analysis, 17 affords due process in judicial Under the current jurispruden- 16 generally 1159, 1164 (2007). Political Judging: When Due Process Goes International, . 18 EV L. R INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS ARY at 481. at 1207. at 1206–07. In addition, courts are afforded unbridled discretion with re- This analysis raises a potentially troublesome issue because . & M Montre Carodine, M W Aguinda v. Texaco, Inc., 142 F. Supp. 534, 545 (S.D.N.Y. 2001), aff’d, 303 F.3d Soc’y of Lloyds v. Ashenden, 233 F.3d 473, (7th Cir. 2000). See id. See See id. See id. M K C Y held by U.S. courts. proceedings. If so, and the court determines that the court system in the country of origin is fundamentally fair, the judgment will be up- holdings that will bind subsequent courts considering similar issues. been contended that because the international due rests solely with the judiciary, and may be subject to process the personal bias analysis and determinations of the judge, it violates the Separation of Powers Doctrine because it in effect allows courts to “set” foreign policy in 470 (2d Cir. 2002). even if the particular proceedings were void of the due process require- process due the of void were proceedings particular the if even ments that would be guaranteed under the Constitution in domestic proceedings. However, judges are free to refuse to enforce judgments from countries that may be considered “unfriendly” to U.S. exceed that interests protections defendants the afforded countries these if even constitutional due process requirements. spect to the extrinsic evidence they will consider concerning the fairness of the judicial system of the judgment’s country of origin. this analysis, an anomaly may occur judgments wherein from courts foreign nations might that enforce generally provide due process, 16 17 18 19 48 20 21 2014] on the powers of the other branches. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 7 9-SEP-14 8:51 under the guise of judicial efficiency, courts are free to focus the foreign court only system as a whole and disregard procedural issues in on In rendered. was judgment the which under proceedings particular the essence, this means that courts may completely ignore claims by defendants that they did not receive due process in foreign proceedings. interna- the of examination in-depth an in Carodine, Montre Professor tional due process analysis, has noted that rather than examining individual proceedings, courts are free to rely on “political evidence and countries.” foreign the of perceptions personal own judges’ the tial regime, courts that are faced with the question of whether a foreign judgment is enforceable termed in the the “international United due process” States analysis. rather follow than re-examining foreign what proceedings in which is the judgment overall the on judgment value a render may court U.S. a obtained, was judicial system of the country handing down the original decree, and decide whether the country 35295-rgl_13-3 Sheet No. 35 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 35 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 35 Side B 09/09/2014 14:33:00 M K C Y Chevron [Vol. 13:3 available at and Similar to the so- Dole 23 afforded due process , March 28, 2012, generally ONITOR M CIENCE Egypt’s Liberals Walk Out, Leaving Islamists to S HRISTIAN C , With the advent of the internet and communications 22 Kristen Chick, With all due respect to the memory of the late Reagan-era However, perhaps the most troublesome aspect of the interna- RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Former Speaker of the U.S. House Tip O’Neill (b. December 12, 1912, d. Janu- See generally ary 5, 1994) coined the popular phrase “All Politics is Local,” which stands for the principle that politicians must appeal to the concerns of their local constituents in order to garner success. According to this theory, local issues and mundane concerns drive political success, rather than broad theoretical or global issues or concerns which may only have intangible effects on voters. technology that allows instantaneous dissemination political of developments information, in nearly every evaluated on a global scale in real-time country as they occur. As business and are scrutinized and commerce becomes increasingly globalized, developments in countries the world over have both a concrete and abstract effect on the day-today activities of the citizens of the United States. Speaker of the House Tip O’ global concern. Neill, “politics” has rapidly become a rights might have made a significant difference in the outcome of the case. IV. THE TRADITIONAL ROLE FOREIGN OF AFFAIRS THE JUDICIARY IN 22 23 http://www.csmonitor.com/World/Middle-East/2012/0328/Egypt-s-liberals-walk- out-leaving-Islamists-to-write-a-constitution. cases discussed below provide examples in which choosing to file in a “fundamentally fair” country that only 500 \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 8 9-SEP-14 8:51 called “butterfly effect,” where a small change in one system has dras- polit- date, later a at system unrelated seemingly a in consequences tic ical developments in nearly every country are instantly noted, tive as it may seem, the existing international may afford due unscrupulous process plaintiffs who analysis choose their forums carefully increased opportunities to tamper with individual then proceedings, have potentially and fraudulent judgments enforced in the U.S. though Al- this outcome seems implausible, both the tional due process analysis arises because U.S. courts are not required to examine particular proceedings, which means this analysis has the potential to increase fraudulent practices by foreign litigants in “fair judicial systems,” who anticipate that unscrupulous tactics will not affect the enforceability of their judgments American attorneys representing in plaintiffs in foreign courts the that gen- U.S. For example, erally afford fair proceedings have an incentive to exploit this weakness through fraud or bribery, particularly if they believe individual proceedings that will receive minimal scrutiny. As their counterintui- Write a Constitution 35295-rgl_13-3 Sheet No. 35 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 35 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 36 Side A 09/09/2014 14:33:00 , 501 Mar- Mitchell vs. While the “political” 24 http://www.usatoday.com/money/indus As in any self-policing system, not- 26 The Court built on this in 27 Although the opinion seemed to suggest Gas Could Hit $8 on Iran Showdown, Experts Say Experts Showdown, Iran on $8 Hit Could Gas 28 available at However, it is often the Court itself that sets 25 case, in which Chief Justice John Marshall described note 20, at 1196. Tim Mullaney, Tim INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS supra March 22, 2012, , , noting that a federal court has a special obligation to “satisfy As noted above, the primary restraint on judicial incursions ODAY Oetjen v. Cent. Leather Co., 246 U.S. 297, 302 (1918) (“[T]he conduct of . . . See generally See See Carodine, Marbury v. Madison, 5 U.S. 137, 164 (1803). Mitchell v. Maurer, 293 U. S. 237, 244 (1934). M K C Y the extent that they may evaluate and render a value judgment on the on judgment value a render and evaluate may they that extent the legal systems of foreign nations. Doctrine, Powers of Separation the is branches other of sphere the into which is further encapsulated in the judicially created Political Ques- tion Doctrine. The doctrine was first suggested in the landmark power is, at least in theory, the exclusive domain of the Executive and Legislative branches. withstanding the appeals system, the judiciary is almost unrestricted in its ability to step outside the bounds of its own self-imposed restric- tions in the name of judicial interpretation. As corporations continue certain virtually is it scale, global a on business conduct and expand to that the judiciary will be called upon more and more to determine the validity of judgments rendered in foreign courts. In this cumstance, specific cir- under the existing courts are able to determine foreign international policy, rather than interpret it, to due process analysis, branches of the federal how of determinations government make to resources and staff the have Branches), (the Legislative and Executive global events will shape U.S. foreign policy, the Judiciary should theo- retically be insulated from the requirement of making or formulating these foreign policy determinations based on constitutional and legal norms. Under the Separation of Powers doctrine, the foreign affairs bury v. Madison the limits on the extent to which it may consider questions of foreign affairs, and it does so through purely jurisprudential checks such the as Political Question Doctrine. Maurer constitution- the interpreting in say final the has always court the that 24 USA T 25 26 27 28 2014] transmitted instantaneously via mass communication channels, and the resultant potential global ramifications are calculated, outcomes and effects are anticipated, and measures are put foster in or minimize the impact place of these changes. to either \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 9 9-SEP-14 8:51 foreign relations . . . is committed by the Constitution to the Executive and Legis- lative [branches] . . . ”). a distinct type of Executive action, the political action, wherein an offi- an wherein action, political the action, Executive of type distinct a cial may exercise discretion. itself not only of its own jurisdiction, but also that of the lower courts in a cause under review.” tries/energy/story/2012-03-21/gas-prices-iran-strait-of-hormuz/53704546/1. 35295-rgl_13-3 Sheet No. 36 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 36 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 36 Side B 09/09/2014 14:33:00 M K C Y Baker In for- [Vol. 13:3 33 Court indi- These factors These 30 Baker Clearly however, 32 Considerations such as a “textually 29 United States v. Curtiss-Wright Exp. Corp., 299 U.S. 304 (1936). However, realizing the potential to completely sideline the sideline completely to potential the realizing However, 31 . at 217. , where Justice Brennan outlined the factors to be used by the 369 U.S. at 211. RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Baker v. Carr, 369 U.S. 186, 217 (1962). See id. See generally See See id the Court itself through application of the Political Question Doctrine, which analysis should also be applicable to the international due process analysis. eign affairs, the Executive is often in the best position to determine the determine to position best the in often is Executive the affairs, eign state of relations between the United States and other depending nations, on and the political and economic those changes nations, foreign relations that may necessitate occur adjustment on a within mo- ment’s notice notwithstanding any expertise the both country’s lacks often therefore, Judiciary, The stability. nomic given political or eco- and legitimate authority to determine foreign policy, as recognized by would all seemingly come into play in the foreign affairs arena, which is unquestionably the branches. province of the Executive and Legislative political department,” “a lack of judicially discoverable and managea- ble standards for resolving it,” and “the impossibility of a court’s un- dertaking independent resolution respect due coordinate branches of without government” are several of the fac- expressing lack determination. question political the into play that tors of the demonstrable constitutional commitment of the issue to a coordinate eign relations lies beyond judicial cognizance.” cated that invocation of the Political Question Doctrine was at the discretion of the Court. Although all questions involving foreign are affairs potentially political questions, the Court stated that it would be a mistake to “suppose that every case or controversy which touches for- v. Carr 29 30 31 32 33 502 ally conferred powers of the branches, it might refuse to do so in certain situations where the questions were simply not within the courts’ expertise. Marshall suggested that these questions, although falling squarely within the Court’s power to adjudicate, mined by the Executive were branch, which is uniquely better positioned to make deter- policy decisions. This notion was later refined and expanded in \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 10 9-SEP-14 8:51 there are situations dealing with foreign relations where the question falls into an area “textually . . . commit[ed] . . . to a coordinate political department,” where the court’s involvement lack of the might respect due demonstrate coordinate branches of “a government.” judiciary in questions regarding foreign affairs, the court in determining whether a question is more appropriate for resolution by the political branches. 35295-rgl_13-3 Sheet No. 36 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 36 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 37 Side A 09/09/2014 14:33:00 , 37 503 How- 34 Many statutes relating to 35 The Doctrine of Comity in Private International Law International Private in Comity of Doctrine The , which involved a French liquidator’s attempt 327 (1979). INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS AW at 163–64. at 330. Hilton v. Guyot ance of jurisprudence likely the to secure an impartial administra- defendant, and country own its of citizens the between justice of tion and under those of other countries, and there is nothing to show ei- a system of [W]e are satisfied that, where there court [foreign] a before abroad has trial fair and full a for been nity opportu- regu- upon trial the conducting jurisdiction, competent of lar proceedings, after due citation or voluntary appear- However, courts have arrived at, and seemingly wholeheart- . L Hilton v. Guyot, 159 U.S. 113 (1895). In its landmark decision, the Supreme Court ruled in favor of John Kuhn Bleimaier, Kuhn John ATH 36 See See id. See See id. M K C Y the enforcement of foreign judgments require that the judgments of a particular jurisdiction will be recognized and enforced only by to a the extent country that the originating country concept This country. enforcing the by rendered judgments the enforce would recognize and was perhaps most clearly outlined by the Supreme Court in the 1895 case of to collect on a judgment obtained in France against an American citi- zen. noted, is neither a matter of absolute obligation “recogni- the is but other, the on will good and courtesy mere of matter on one hand, nor a tion which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due international regard duty both and to convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.” ever, the basic hope underlying comity is that other jurisdictions will reciprocate the courtesy shown to them. the defendant-debtor, and refused to recognize the French judgment, court the Comity, comity. of doctrine the of discussion a with beginning 34 24 C 35 36 37 The court went on to review the other countries, and then announced its rule regarding the conclusive- treatment of foreign judgments in ness of foreign judgments: ity and effect of their executive, legislative, and judicial acts. 2014] V. UNDERPINNINGS OF RECOGNITION JUDGMENTS OF FOREIGN MONEY edly embraced, the current iteration of the international due process analysis through a series of notable cases. As unrecogniz- it almost be would it that stands, extent the to time over evolved the has analysis able to its original proponents. The analysis has its roots in the principle of comity, which is the principle that one jurisdiction valid- the of recognition the will through nations other to courtesies extend certain \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 11 9-SEP-14 8:51 35295-rgl_13-3 Sheet No. 37 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 37 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 37 Side B 09/09/2014 14:33:00 M K 41 C Y was [Vol. 13:3 , 13, Febru- Hilton AWYER L 38 ERSEY J Under both the Restate- EW 42 N . , An Overview of Enforcement of For- 72 (1964). Hilton . L. note 20, at 1166. OMP supra , J. C , as well as section 481 of the Third Restatement of M Among western nations, France was one of the A 39 French Courts Recognize Foreign Money Judgments: One Courts will typically enforce a judgment that the , 13 43 comity-based analysis for the recognition and enforce- , 565 A.2d 1044, 1049 (N.H. 1989) (referencing the common law Political Judging Hilton v. Guyot at 202–03. at 227. 40 Hilton’s ther prejudice in the court, under or which in it was the sitting, system judgment, or or any of other special reason fraud why the laws comity of in procuring the this nation should not allow it full effect, the the merits case should not, in of an action brought in this country upon the judgment, be tried afresh, as on a new trial or an appeal, upon the mere assertion of the party that the judgment was erroneous in law or in fact. RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS See id. See id. Kurt H. Nadelmann, Carodine, See In re Breau Steven M. Richman & Justin B. Richman, decided. Foreign Relations Law, adopted in 1987). creditor seeks to have recognized, unless the judgment debtor estab- lishes the applicability of one of the statutory grounds for non-recognition. These grounds are comprised of both mandatory grounds, which absolutely prohibit judicial recognition, and discretionary grounds, principles of 39 40 41 42 43 States that have not adopted the Uniform Act usually rely on common law principles, and the Restatement of statement), Foreign which is Relations also based Law on (Re- ment and the Uniform Act, if a party obtains a judgment outside the United States but wishes to collect on party it must have the in judgment “recognized” in the order for the United judgment States, that to be enforceable. 38 lack of reciprocity, because France judgments. American did not at that time recognize 504 Though the French judgment appeared to meet these the requirements, Court nevertheless refused to recognize the judgment based on a \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 12 9-SEP-14 8:51 ment of foreign judgments survives today, albeit in tered a form. drastically al- The National Conference of State Commissioners Laws on drafted the Uniform Uniform Foreign Money-Judgments Recogni- tion Act in 1962, and the American Bar Association same year, approved and it a majority the of states have adopted the Uniform Act. Down and More to Go last major countries that refused to recognize and enforce foreign judg- foreign enforce and recognize to refused that countries major last ments in the absence of a complete reexamination of the merits, and only began doing so approximately 70 years after ary 2010. eign Orders and Judgments in American Courts 35295-rgl_13-3 Sheet No. 37 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 37 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 38 Side A 09/09/2014 14:33:00 48 505 non-recogni- Court’s require- However, grounds 44 Hilton The final discretionary 45 As it evolved, however, the ex- 47 be recognized. The will judgment and make it judicially enforceable, or to Remarkably, based on the plain wording of the Act, 46 INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS at §§ 4(a)–(b). Perhaps most troubling, however, are the “mandatory grounds” “mandatory the are however, troubling, most Perhaps fraudulent of a judgment have become the test by which to determine 2005 Uniform Foreign Money-Judgments Recognition Act, § 4(c). See id. See id. 2005 Uniform Foreign-Country Money Judgments Recognition Act § 4(b). See id. M K C Y tion ground in the 2005 iteration of the Act specific include proceedings are situations not compatible when with the the requirements of due process of law. dures compatible with the requirements of due process of law.” ments of the opportunity for a full and fair trial before a foreign court cita- the proceedings, regular upon conducted jurisdiction competent of tion or voluntary appearance of the defendant, an impartial system of jurisprudence treating all parties alike, and the lack fraud of in prejudice the or court or the system of longer the primary aspects laws considered by the under court in recognizing which for- it sits are likely appear which considerations, those than Rather no judgments. eign to accurately measure the fairness and validity of a foreign judgment, the international due process analysis has been determination reduced by the to court as to a whether the judgment single was rendered “under a system which fails to provide impartial tribunals or proce- ceedings devoid of due process. gesting Likewise, in spite that of evidence the enforce to not or whether on discretion has judge the compromised, sug- the integrity judgment, rather than the duty to of dismiss the suit for enforcement. the rendering court for non-recognition which have has given rise to not is judgment foreign a that suggest grounds These today. use courts the been analysis which the conclusive if the judgment was rendered under a system which not does provide impartial tribunals or procedures compatible with the requirements of due process of law, the foreign court did not have personal jurisdiction over the defendant, or the foreign court did not have jurisdiction over the subject matter. that the Act considers “discretionary” include situations such as when the judgment was obtained by about fraud the or integrity of there the is rendering court. substantial doubt recognize a judgment in spite of evidence that it was rendered in pro- Under this loose standard, a foreign judgment need only be rendered under a system that generally provides impartial tribunals and proce- 44 45 46 47 48 2014] which allow the judge some amount of leeway. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 13 9-SEP-14 8:51 whether a judgment ception has become the rule: the “mandatory grounds” for this suggests that the judge has the discretion to tially recognize a poten- 35295-rgl_13-3 Sheet No. 38 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 38 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 38 Side B 09/09/2014 14:33:00 M K C Y [Vol. 13:3 Under this analysis, the 51 54 Society of Lloyd’s v. Ashenden, If the overall judicial system of the na- 49 court emphasized that the entire “system” Instead, Judge Posner held that foreign judg- 50 Ashenden . The Also troubling is the suggestion that the analysis should 52 53 at 477. . at 481 The international due process analysis has been most clearly RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Soc’y of Lloyd’s v. Turner, 303 F.3d 325, 330 (5th Cir. 2002). Soc’y of Lloyds v. Ashenden 233 F.3d 473, 480–81 (7th Cir. 2000). See id. See id See id. See id. tional concept of due process” is distinct from the notion of due process that has emerged from American case law. pro- due debtor judgment individual an denied court foreign a that fact cess is inconsequential if the court feels that judicial the system, and country it has may, in a the fair name of comity, enforce the ment judg- against the judgment debtor. On the other hand, had the judgment creditor obtained the judgment in a country that the court feels has an unjust judicial systems, the court will completely disregard the judgment. ments from the United Kingdom and other “civilized” countries need only comply with a much looser standard, noting that the “interna- foreign judgments rendered in proceedings that would clearly violate due process protections if they took place in a U.S. court. VI. APPLICATION OF THE ANALYSIS INTERNATIONAL DUE PROCESS defined by Judge Posner in the case tion rendering the judgment is considered “fair,” then fairness in individual an case is not examined, allowing for potential recognition of 49 50 51 52 53 54 when he noted that foreign judgments from the United Kingdom need not comport with American notions of due process to be enforceable in the United States. 506 dures compatible with due process commensurate process due provide to need not does system the cantly, of law, as noted above. with Signifi- constitutionally guaranteed rights, but rather, the foreign proce- due-process. of approximation vague some reflect to have simply dures proceed- foreign the which in system the that required not have Courts ings took place comply with constitutional benchmarks of due-process, but rather, require only that the system generally affords proceedings that are fundamentally fair. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 14 9-SEP-14 8:51 cess, rather than mirror the fundamental rights that would be constitutionally guaranteed in domestic courts. only require that the foreign procedures be “compatible” with due pro- must be unfair to preclude recognition, and expressed doubt as to the viability of the “retail approach” which focuses on the particular proceedings. 35295-rgl_13-3 Sheet No. 38 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 38 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 39 Side A 09/09/2014 14:33:00 58 507 Lloyd’s 56 available at http://www , 421 (1976). USTOMS and other related C L.J. available at L ’ , NT COM . I . S ’ EX Ashenden T EVENUE AND LOYD 11 L Lloyd’s generally raises capital HM R 57 , cases were just such a situation. at http://www.lloyds.com/The-Market/Operating- Lloyd’s ” which is the general term for the risk-relation- cases concern Lloyd’s of London, established ap- available The Proposed Recognition-of-Judgments Convention Between Lloyd’s INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS However, despite numerous revisions and attempted com- syndicates, 55 .” Names may be either individuals, partnerships of individu- The The anomalies that arose under cases are ironic, because in 1977, the United States and the Hay & Walker, Lloyd’s Act of 1871, Introduction to Lloyd’s: Background “What Lloyd’s Insures”, About Lloyd’s, M K Names C Y Name by entering into an agency relationship with a Lloyd’s employee, Lloyd’s a with relationship agency an into entering by Name known as “Member’s Agents.” Further, to become a Name, investors must demonstrate a particular level of financial worth, and then must issued credit of letter a of form the in amount investment their deposit one in money this invests then Agent Members The Lloyd’s. of favor in or more “ process rights, but the through soliciting investments, but in order to invest in Lloyd’s underwriting activities, an individual or corporation must first become a promises, the final adoption of this document never occurred, despite history. legal shared a and process judicial the of similarities many the It is almost unthinkable that a country that spawned so many of our legal traditions would give rise to questions regarding the recognition of judgments in which U.S. citizens were deprived of fundamental due the United States and the United Kingdom, als or corporate investors, all of which come together under the aegis of aegis the under together come which of all investors, corporate or als Lloyd’s to pool and spread risk. at-Lloyds/Regulation/Acts-and-Byelaws/~/media/Files/The%20Market/Operating %20at%20Lloyds/Regulation/Acts%20and%20byelaws/Acts/Mar07LloydsAct1871 .pdf. United Kingdom did attempt to establish a bilateral treaty to govern the recognition of judgments, and the proposal received approval. preliminary 55 56 57 http://www.hmrc.gov.uk/manuals/llmanual/LLM1010.htm. 58 Syndicates typically write business and insure risks for only one year, at the end of which the syndicate ceases to exist as an ongoing trading entity. However, after the year lapses, there is a lag time of two more years allowed for claims to come in and be settled, and at the end of 2014] Lloyd’s \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 15 9-SEP-14 8:51 ship between the entities that are performing risk. that insure who investors the of group the and insured, be actions to sought which are proximately 325 years ago and later incorporated in 1871. Lloyd’s not an is insurance company as we would recognize one it in the United States, but rather, is actually a marketplace itself, corporate body under the Act 1871 of the British Parliament. established as a has historically been made up of individual financial backers, under- writers, and members, “ which have been traditionally known as .lloyds.com/lloyds/about-us. 35295-rgl_13-3 Sheet No. 39 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 39 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 39 Side B 09/09/2014 14:33:00 M K for C Y [Vol. 13:3 http://www 60 available at (last visited May 7, 2014), http: COM . S , is Latin for “of the utmost good ’ ” that allowed a syndicate to close Names are liable without limit LOYD L Historically, this potential inability of a 59 Uberrimae fidei (last visited April 14, 2012), .UK Reinsurance to Close GOV Syndicate Accounts: Accounting Rules until 2004: Three-Year Ac- HMRC. Lloyd’s motto, , RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS See How is Risk Placed at Lloyd’s, LLM2020, their shares in the pledges his syndicates entire personal wealth to in back up his share which in the syndicate’s they insurance invest. policies. Each Name order to counter this, and generate interest by investors, Lloyd’s insti- tuted the practice of having reserves calculated to cover any outstand- ing claims that might come in against the syndicates, which allowed Lloyd’s to maintain the schedule profits of (or losses) closing at the accounts end of and the third declaring year. At actuaries the calculate and set time aside estimated reserves of to cover the closing costs of both claims that have been notified but not yet paid, and potential claims which may have been incurred but not reported, and the costs of the reserves are then deducted from the syndicate’s profits, and the syndicate is allowed to close at the end of the third year. syndicate to close its accounts in a timely fashion and then distribute In syndicates. in investing of appeal the reduced drastically had profits individual investors alleged fraud by Lloyd’s on a massive scale, which scale, massive a on Lloyd’s by fraud alleged investors individual led to multiple lawsuits and tested the outer limits of both comity and international judgment recognition. Over time, it was discovered that Lloyd’s three-year business model was completely ineffective in dealing with risks that could be categorized as “long tail” risks, where the or years, for known become not may occurrence an to related liabilities perhaps even decades later. These types of risks often led to an insur- ing syndicate’s reserves being vastly inadequate to cover later claims, which also led to resistance to doing business with perspective Lloyd’s of from the the insured. To Lloyd’s maintain on the appeal both of the investing Name scheme called “ in and insured sides, Lloyd’s developed a faith,” which is ironic in the eyes of many after a series of states and 59 60 508 the third year, each syndicate closes its accounts, and the Names receive their share of the profits, or pay their their share liability of comes to the an end. losses, Most importantly, and until all claims are received and paid, a syndicate cannot close its accounts and distribute profits, and pending that closure, \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 16 9-SEP-14 8:51 .hmrc.gov.uk/manuals/llmanual/LLM2020.htm. claims that had been made within the three year time limit. However, it would then package the entire portfolio of policies from that closed syndicate with a set amount claims against these policies, and pass them on to new syndicates that of reserves to cover potential future counting in any event after three years and declare a result based only on the //www.lloyds.com/lloyds/about-us/what-we-do/placing-risk. 35295-rgl_13-3 Sheet No. 39 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 39 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 40 Side A 09/09/2014 14:33:00 61 60 EL- , 509 T HE T (June 27, 1993), NDEPENDENT I HE T , The system was a perfect breeding ground 62 Choice Of Law And Forum Clauses and the Recognition Two Men Who Lost a Billion: Names in the Lloyd’s Syn- , Lloyds Names Face Bankruptcy as Court Battle Ends, Battle Court as Bankruptcy Face Names Lloyds , http://www.independent.co.uk/news/business/profile-two-men-who- 63 INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS . 1259, 1262 (2000). In the 1980s, when Lloyd’s governing committee learned of the EV , June 4, 2009, http://www.telegraph.co.uk/finance/newsbysector/banksand Richard Thomson, Courtland H. Peterson, Dunkley Jamie See M K . L. R A C Y EGRAPH ance to be purchased, and maximize present profits. Further, many of to led were they that claim period time this during solicited Names the believe that the very existence of Reinsurance to Close ended their liability at the end of the three year syndicate period, and that they were completely unaware reinsurance. of the potential liability from inadequate for fraud, because profits taken as a syndicate closed were directly reduced by the reserves calculated, which in turn influenced the amount of reinsurance purchased. This encouraged mating reserves, which would then require a intentionally lower amount of reinsur- underesti- finance/insurance/5446813/Lloyds-Names-face-bankruptcy-as-court-battle-ends .html. available at 62 63 61 limit if the reinsurance amount able were investors was early that sense the in scheme, “Ponzi” a to similar inadequate, the structure was to take profits while passing risks That is, as along the portfolios were transferred forward year after year, the to subsequent investors. investors in the most recent syndicate became personally liable for all of the latent liabilities of its predecessor syndicates, reserves (in and the form of unless reinsurance) passed the on were adequate to pay potential future claims, the result of using this system was to create a “time bomb” of liability. 2014] were still active. These active syndicates, now saddled with potential future claims from “inherited” policies, used the calculated reserves to buy reinsurance policies to cover any losses that might arise from any future claims, which effectively shifted the risk from the syndicates to the reinsurer. However, Lloyd’s quickly discovered several problems with this structure. First, calculating the amount of sary to cover hypothetical reserves future claims is a difficult and often inaccu- neces- rate process, and so the amount future of liability reinsurance was purchased often to grossly cover inadequate fested. once the Second, claims because mani- the Names were personally liable without \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 17 9-SEP-14 8:51 potential future liability posed by the hazards of asbestos and other lost-a-billion-names-in-the-lloyds-syndicates-run-by-anthony-gooda-and-derek- walker-are-facing-ruin-richard-thomson-relates-a-tale-of-two-incompetents-14942 24.html. dicates Run by Anthony Gooda and Derek Walker are Facing Ruin. Richard Thom- Richard Ruin. Facing are Walker Derek and Gooda Anthony by Run dicates son Relates a Tale of Two Incompetents of Foreign Country Judgments Revisited Through the Lloyd’s of London Cases L 35295-rgl_13-3 Sheet No. 40 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 40 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 40 Side B 09/09/2014 14:33:00 M K C Y The 68 [Vol. 13:3 Lloyd’s began re- 67 More importantly, they were not 65 66 A report was generated that recommended that 64 ]. The Lloyd’s Act authorized the Council to appoint 69 Ashenden at 2. . In the early 1980s, Lloyd’s sought to take measures to protect RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Soc’y of Lloyd’s v. Ashenden, 233 F.3d 473, 478 (7th Cir. 2000). Soc’y of Lloyd’s v. Ashenden, 98 C 5335, 1999 WL 284775 1, 4 (N.D. Ill. Apr. 23, See id. See id See id Ashenden v. Lloyd’s of London, 96 C 852, 1996 WL 717464 1,1 (1996). surance scheme. Names were not informed of changes until much later when losses in the the billions of dollars became extent and crit- be to proved implications clauses choice-of-forum and choice-of-law The known. of these ical in the litigation in American courts during the rein- the from losses massive the for liable individually became 1990s, Names when the 1999) aff’d sub nom. Soc’y of Lloyd’s v. Ashenden, [hereinafter 233 F.3d 473 (7th Cir. 2000) quiring all Names to sign contracts in choice-of- and choice-of-forum included which and which Act, Lloyd’s the with they agreed to comply law clauses under which they agreed that all legal disputes would be brought in English courts and decided under English law. 64 65 66 67 68 69 510 pollutants, they realized that many of the most profitable syndicates, which many members of the governing committee had personally in- as Lloyd’s destroy literally would that scale a on losses faced in, vested a functioning entity. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 18 9-SEP-14 8:51 the British Parliament, entitled the Lloyd’s Act vided of Lloyd’s with immunity from legal liability, and further, 1982, stripped which pro- the ability of the Names to regulate themselves by establishing a governing committee known as the Council of Lloyd’s. to be Names, and continued to do so during the late 1970s and 1980s, but although the governing committee knew of the pending from disaster long-tail asbestos claims, the new Names were not informed the of probable liability they faced. itself from litigation, and succeeded in obtaining a new ‘private act’ of new Names be actively recruited so that facilitated be recruitment that and losses, additional impending meet to available assets would be by reducing the assets which each Name had to prove in order to establish membership. This would serve to bring in Names, which would thousands dilute impending losses by actively passing of costs new on to the new Names. In 1972 Lloyd’s had begun soliciting Americans told that their liability was both several expanding the numbers of Names functioned to provide more and assets to unlimited. In essence, absorb the impending losses, while allowing insiders to avoid liability future by surreptitiously leaving the at-risk syndicates. In fact, during this period, some of the safety Names of were their investment, repeatedly and were assured actually urged of to the increase their investment in the syndicates. 35295-rgl_13-3 Sheet No. 40 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 40 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 41 Side A 09/09/2014 14:33:00 511 Non-settling Names sought 73 Additionally, the British courts were a husband and wife who re- 74 75 Ashenden Further, there were provisions in the settlement plan that plan settlement the in provisions were there Further, INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS When Lloyd’s experienced over $12 billion in losses during 72 The majority of the Names accepted the settlement plan in at 2–3. at 3. 70 When Lloyd’s sought to enforce provisions in the contracts 71 Ashenden, 98 C 5335 at 2. See id. See id. See id. See id. See id. M K C Y also upheld what was termed a “conclusive evidence” clause of the re- the determined Lloyd’s whatever that stated which contract, insurance between evidence conclusive automatically was be to amount premium the Names and the reinsurer, and the Names would simply be liable for whatever amount Lloyd’s set. 70 71 72 73 74 75 who rejected the settlement, were offered the opportunity to purchase reinsurance. Significantly, even those Names that did not participate the but reinsurance, the by covered were agreements settlement the in Names who refused to settle were not included in the “mutual waiver claims.” of 2014] “substitute agents,” who would have the power members “to for act the on proper behalf of regulation Lloyd’s.” of the business of insurance the at 1980s and early l990s, and the Names were unable to meet their contribution requirements, Lloyd’s entered into a series of settlement agreements with the Names, under which Lloyd’s and the Names who agreed to settle exchanged mutual releases of liability and waivers of claims. refused to do so. In substantial number of the Names 1996, although a accordance with the settlement plan, all of the Names, including those \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 19 9-SEP-14 8:51 Lloyd’s had used in order to losses. The generate defendants in capital in order to dilute its against American Names by billing them for mounting losses, the subsequent cases highlighted the fraudulent misrepresentations that shielded Lloyd’s from being tangled in extended litigation. Specifically, litigation. extended in tangled being from Lloyd’s shielded dispute not could and Lloyd’s against offset any claim not could Names the amount of their reinsurance premiums in any lawsuits brought by Lloyd’s to collect the reinsurance premiums. To ensure that these provisions were enforceable against the non-settling Names, the Council appointed a “substitute agent” to their behalf pursuant sign to the Lloyd’s Act. the reinsurance contract on specific provisions of the reinsurance contract in court in the United Kingdom. However, the British courts affirmed Lloyd’s power to enact the settlement plan, and upheld the validity of the clause which pre- pre- reinsurance the from set-offs any claiming from Names the vented mium, including damages for fraud. to challenge Lloyd’s ability to enact the settlement plan, as well as 35295-rgl_13-3 Sheet No. 41 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 41 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 41 Side B 09/09/2014 14:33:00 M K C Y The 80 Subse- [Vol. 13:3 79 Lloyd’s re- 78 The British court denied 81 Lloyd’s made demand upon 77 The Managing Agent continued Agent Managing The 76 at 4. Lloyd’s then sought to have the judgments recognized in the Ashenden, 98 C 5335 at 4. RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS See id. See id. Ashenden v. Lloyd’s of London, 934 F. Supp. 992, 994 (N.D. Ill. 1996). See id. See See id. United States. Writing for the Seventh Circuit, Judge Posner began Ashendens refused the settlement offer, agent not to sign the and reinsurance agreements for them. they But as noted, instructed their Lloyd’s had made the reinsurance payments for all of the Names, including payment on Ashendens, behalf who had of also refused the to Lloyd’s sign then non-settling the reinsurance sued Names, contract. those the of because judgments default get to able was and Kingdom, United like Names, including the the waiver Ashendens, and “conclusive in evidence” clauses. the the Names leave to appeal, and so valid, and enforceable. the British judgment was final, manded $179,430 from James Ashenden Jane Ashenden, and but stated $222,668 that from their individual Mary liabilities reduced to would $100,000 each be if they executed the mutual releases. quently, Lloyd’s sent the Ashendens which included “finality copies statements” that set forth demands from each of the settlement plan, of them for the balance that they owed from their underwriting liabilities, and from their shares of the reinsurance premium. Lloyd’s de- the Ashenden’s letters of credit to cover the losses, and the Ashendens, the and losses, the cover to credit of letters Ashenden’s the in addition to over forty other Illinois Names, ultimately sued Lloyd’s and several of its agents in state court, arguing that Lloyd’s had violated Illinois securities and consumer protection moved laws. the case of choice the to subject were Names the that ruling case, the dismissed to federal district law and court, forum clauses and as outlined in the the settlement district plan. court 76 77 78 79 80 81 512 sided in Illinois, James and were Mary separately recruited to Jane become Names in 1977 Ashenden. and in 1984 by The a Ashendens Managing Agent, and they initially invested $70,000 after sured that being Lloyd’s was an esteemed and time-honored as- institution that risks.” “conservative in invested only \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 20 9-SEP-14 8:51 that had been successively reinsured without adequate reserves, some- reserves, adequate without reinsured successively been had that times dating as far back as the 1930s. to reassure the Ashendens regarding the security of their investment in Lloyd’s, and they invested even more in Lloyd’s, never having been informed that they faced tremendous impending losses because of asbestos claims. In 1991, Lloyd’s called on the Ashendens to help cover increasing losses sustained by the syndicates, who insured policies 35295-rgl_13-3 Sheet No. 41 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 41 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 42 Side A 09/09/2014 14:33:00 513 Accord- 88 and asserted 85 The Seventh Circuit 87 However, Judge Posner Judge However, He further asserted that 91 86 Judge Posner noted that the 83 The court found the word “sys- 82 Posner unequivocally declared that 84 However, because of the Illinois Act’s focus on the 90 note 20, at 1183. , 223 F. 3d at 476. n 89 INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS supra . The Court rejected the Ashenden’s argument that it should ex- Ashende See id. See id. See id. See id. See id. See id. See id. Carodine, See See id M K C Y British courts “are highly regarded for impartiality, professionalism, and scrupulous regard for procedural rights.” Kingdom’s judicial system comports with the international concept of due process. ing to Judge Posner, there was no “serious question” that the United tem” fatal to the Ashendens’ position. “[t]he courts of England are fair and neutral forums,” “system”, Posner concluded that the Act did not call for proach”, “a retail ap- which he stated streamlined, expeditious method for collecting would judgments rendered by be inconsistent courts in with other jurisdictions, and which would, in effect providing give the judg- a merits. the on appeal further a creditor ment concluded that the Illinois Judgment Recognition Act only the system under which a foreign judgment was provided entered be “com- that patible with” American notions of due process, not identical. 82 83 84 85 86 87 88 89 90 91 that “[a]ny suggestion that this system of courts does not provide impartial tribunals or procedures compatible with the requirements due process of of law’ borders on the risible.” 2014] his analysis by outlining Illinois’s Country Money-Judgments Recognition version Act, which of allows that the a for- Uniform eign Foreign judgment is unenforceable if United States and rendered the judgment was “rendered under a system by which a court the with compatible procedures or tribunals outside impartial provide not does the requirements of due process of law.” \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 21 9-SEP-14 8:51 amine the particular proceedings in which Lloyd’s obtained the judgments against them, rather than looking only at the British system generally. judicial went on to state that had the judgment at issue “been rendered by eral Courts of Appeals; and the Appellate Committee of the House of Lords, which corresponds to the U.S. Supreme Court, denied the defendants’ petition for review.” judgments against the defendants were obtained High in Court, Great “which Britain’s corresponds to our were affirmed by federal the Court district of Appeal, courts; which corresponds to they the Fed- 35295-rgl_13-3 Sheet No. 42 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 42 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 42 Side B 09/09/2014 14:33:00 M K C Y 92 [Vol. 13:3 The Ashendens were left with 94 case is significant for its clear application of the note 20, at 1184. Ashenden supra The This statement highlights the major flaw in the international However, the U.S. court ignored the fact that the British Court 93 RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS See id. Mathews v. Eldridge, 424 U.S. 319, 333 (1976). Carodine, and specifically against their wishes, and moreover, were left with no defenses other any nor fraud of claims raise to opportunity meaningful against Lloyd’s. cretion, with no other proof of their validity other than “conclusive the under and assessment, the of the amount the chose Lloyd’s fact that evidence” provision, the Court unquestioningly accepted that amount as of the the debt owed. By focusing solely by entered judgment on a enforced Circuit Seventh the Lloyd’s, with tract the Ashenden’s con- British court without affording the Ashendens any meaningful opportunity to be heard or challenge the claims brought essence, against the them. In Court’s decision meant that the the standardized Ashendens signed contracts when they became Names granted Lloyd’s the power to appoint substitute agents, chosen for the sole purpose of uni- laterally waiving the Names’ rights to challenge the very fraud led them that to become Names initially. behalf, their on entered agreement settlement a challenge to ability no entered a judgment against the Ashendens for the reinsurance premiums even though the Ashendens never had contest these figures. any The figures were calculated solely at Lloyd’s dis- real opportunity to 92 93 94 514 Cuba, North Korea, Iran, Iraq, Congo, or some other nation whose ad- herence to the rule of law and commitment to the norm of due process are open to serious question,” the Court may have considered the type of evidence needed to show a denial of international due process. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 22 9-SEP-14 8:51 massive scale, but more disturbing had situation this if that, rights of is deprived were Ashendens the fraud, the fact that because of occurred in this the United States, would have been guaranteed under the Constitution, and the actions of Lloyd’s criminal prosecution. would However, have under this subjected analysis, it Lloyd’s not to only perpetrated fraud, but was then allowed to sue, as judgment creditors, the very people they had defrauded. In the United States, one of most the fundamental requirements of procedural due process is “the opportunity to be heard ‘at a meaningful time and in a meaningful man- ner.” due process analysis, that whether an individual’s claim that due process rights were violated are measured against applicable sets of standards that are wholly at the their discretion personal of perception of the the presiding country that judge, the judgment and dered was in. ren- It is generally believed that Lloyd’s engaged in fraud on a international due process analysis, which, as it stands, seems to be 35295-rgl_13-3 Sheet No. 42 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 42 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 43 Side A 09/09/2014 14:33:00 515 available http://www.law.com/ available at LITIGATION litigation are based on Judge Kaplan’s ruling , Nov. 8, 2010, case, but in this case, rather than misrepre- AWYER case was decided in 2000, but the international L Judge Kaplan Lays Into Plaintiffs in Ecuador Suit Against , No. 11 Civ. (S.D.N.Y.Mar. 0691, 4, 17–20, 2014), Lloyd’s note 20, at 1188. The case involves political corruption, fabricated evi- Chevron/Ecuador MERICAN 98 Ashenden INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS A CHEVRON/ECUADOR supra It is still unknown whether the recent ruling in the federal the in ruling recent the whether unknown still is It HE 99 T The , 97 However, he also suggested that courts might label other coun- Some authors have suggested that this scheme not only encour- 95 96 Michael Goldhaber, Ashenden, 233 F.3d at 476–78. See id. Carodine, References to fraud, bribery, racketeering and other wrongdoing by plaintiffs’ M K Chevron v. Donziger http://www.nysd.uscourts.gov/cases/show.php?db=special&id=379. It is impor- C Y plaintiffs involve widespread fraud and bribery on an almost unprecedented level. due process analysis has been also been playing out to some extent in litigation that dates back into the 1990s. It involves a situation that is reminiscent of the sentation and failure to disclose by the plaintiff, the behaviors of the ages, but indeed requires, courts to look the other way when presented when way other the look to courts requires, indeed but ages, with questionable and possibly fraudulent countries, and judgments this favored from status need favored not reflect the opinion of Executive branch the in any fashion, but rather, the opinion of the court itself. tries as fundamentally “uncivilized,” and following this holding, might similarly pass judgment on those countries without meaningful analysis. attorneys in the tant to note that this ruling is subject to appeal and plaintiffs’ attorneys may be cleared of any wrongdoing. However, this would not change the fundamental pre- mise of this paper regarding the shortcomings of the process existing analysis. international due dence, manipulation and threats against and other conduct so egregious that the the U.S. judge hearing the case to Ecuadorian judiciary, enforce a judgment handed down by the Ecuadorian court found plaintiff’s the attorney, Steven Donziger, liable for coercion, bribery other violations of the Racketeering Influenced and Corrupt Organiza- and Act. tions in 99 95 96 97 98 VII. THE 2014] fundamentally flawed. It allows for a potential deprivation of due pro- judicial entire the whether to only look will challenged, when that cess pass may courts and fair, fundamentally view, court’s the in is, system judgment on other judicial systems with little or no evidentiary bases for their assessments. Judge Posner himself presumed the fairness of the British system without any significant, in-depth procedural analysis. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 23 9-SEP-14 8:51 jsp/law/article.jsp?id=1202474516910&Judge_Kaplan_Lays_Into_Plaintiffs_in_Ec uador_Suit_Against_Chevron. Chevron at 35295-rgl_13-3 Sheet No. 43 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 43 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 43 Side B 09/09/2014 14:33:00 M K C- C Y E Chev- [Vol. 13:3 OLITICAL AND : P : suggests that the , CNN, Dec. 12, 2013, CUADOR Although this ruling is re- 100 lawsuit concerns accusations by accusations concerns lawsuit ., RS21687, E RS21687, ., (2008). Chevron/Ecuador ERV S ELATIONS ESEARCH However, under any theory of natural law or Ecuador, where the judgment was rendered in . R . Chevron/Ecuador U.S. R 102 101 ONG Report: Political Instability on the Rise , C , litigation is significant because it raises questions about EELKE http://edition.cnn.com/2013/12/11/business/maplecroft-political-risk/. S ITUATION AND The original The Chevron, No. 11 Civ. 0691 at 20. S LARE RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS See Sophie Brown, C ONOMIC ron/Ecuador social justice, the fact that the government of a country might be corrupt should not serve to against U.S. deprive companies who its have intentionally citizens and validly of them. wronged Likewise, the remedies fact that a in country has a court beneficent government should not diminish the need to protect the due process rights of U.S. citizens or companies who may world be moves innocent towards of a wrongdoing. more As transnational global the litigation economy, such the as resulting rise in in 2001, dumped billions of gallons of contaminated water in and approximately 30,000 plaintiffs that Texaco, which Chevron acquired cent as of March 2014, even in the face of early evidence that the origi- the that evidence early of face the in even 2014, March of as cent nal suit and fabricated evidence the and fraud, the resulting suit to judgment enforce laboriously the wound its judgment ways were has through U.S. courts for potentially years. The based on international due process analysis’ focus on judging the entire judicial system of a country may require closer examination. 100 101 available at 102 516 district court could result in proceedings seeking the plaintiff’s attorney’s disbarment, but the District Court, in examining statements by a is Donziger that note to relevant is “it stated, attorney, plaintiff’s the member of the New York Bar. States His or conduct, in whether Ecuador, was in subject the in United every rules respect governing the conduct to of lawyers.” the New York \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 24 9-SEP-14 8:51 dent Hugo Chavez. the admissibility of expert testimony and evidence that is rendered or in awards damage support to used when particularly abroad, gathered countries that are subject to frequent regime change, and political or countries These governments. unstable to leading instability, economic are typically governed by regimes that are semi-dictatorial, and often subject to allegations ranging from bureaucratic ineptitude spread to corruption. wide- this case, is currently governed by a regime politically that and economically is unstable. The considered country is both marked by hav- twelve years; 40% of its population ing had eight presidents in the last living in poverty and another 13% live in extreme poverty; and its current President is a socialist with strong ties to Venezuela’s late presi- 35295-rgl_13-3 Sheet No. 43 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 43 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 44 Side A 09/09/2014 14:33:00 , 517 The 109 107 http://www.theguar Chevron produced Attorneys initiated , July 13, 2009. 108 110 During the period that period the During The case, perhaps the ORBES 103 104 F available at , Chevron continuously main- http://science.time.com/2012/01/09/ 105 http://legalnewsline.com/issues/class- Chevron Fined over $8 Billion over Amazon available at , Mar. 26, 2014, available at available Pressure Placed on Chevron to Settle Ecuador Lawsuit . , http://www.texaco.com/sitelets/ecuador/en/history/. UARDIAN G , Jan. 2012, HE T Chevron’s $27 Billion Problem An Oily Case: Chevron’s Never-Ending, Record-Breaking Law- IME CUADOR note 104 , T , May 25, 2011, 25, May , E , INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS Significantly, Donziger was successful in eliciting substan- eliciting in successful was Donziger Significantly, supra 106 The plaintiffs’ claims stem from Texaco’s participation in an ex- an in participation Texaco’s from stem claims plaintiffs’ The EWSLINE N HEVRON IN Id. Dominic Rushe and Rory Carroll, Jessica M. Karmasek, Daniel Fisher, C Id. Walsh, Bryan Walsh, M K EGAL C Y tained the lawsuit was a scheme by Donziger, to the whip up plaintiff’s a attorney, frenzy of Steven support among the media and environmental groups so that Chevron would eventually settle just to end case. the the original litigation in August 1993 in Texas state court. The case approximately 1.7 billion barrels of crude oil, and it alleged that Government of Ecuador received 95% the of the financial proceeds. 104 105 106 L 107 108 109 110 103 tial financial support, and eventually it was discovered that the plaintiff’s case had been underwritten by a number of investors including a the in involved not was that Philadelphia in based firm plaintiff’s large suit, but which sought to collect a portion of the judgment. 2014] Agrio. Lago of region Ecuadorian the around \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 25 9-SEP-14 8:51 dian.com/business/2011/feb/14/chevron-contaminate-ecuador. took place primarily on government lands and was conducted in compliance with Ecuadorian laws and regulations.” resulting oil production and exports were so profitable that Ecuador’s per-capita GDP doubled within a single decade, revenues. public of bulk the provide still exports and even today, oil suit in Ecuador ploration and production venture with Petroecuador, Ecuador’s state- owned oil company, in the 1970s. Texaco was a minority partner, and representatives from Chevron claimed that “the production operation on fabricated evidence and testimony. largest environmental lawsuit in history, aside from the 2010 Deepwa- 2010 the from aside history, in lawsuit environmental largest ter Horizon spill, has once again brought the question of the recogni- Ecuadorian an After foreground. the to judgments international of tion judge rendered an $18 billion damage award against Chevron reduced (later to $9.5 billion), the company vowed to continue fighting lawsuit, claiming that the the plaintiffs’ case had no merit and was based the lawsuit has been in the judges have court been involved in system, the case, and six “one federal judge separate in New Ecuadorian York died before he could make a ruling.” an-oily-case-chevrons-never-ending-record-breaking-lawsuit-in-ecuador/. action/232868-pressure-placed-on-chevron-to-settle-ecuador-lawsuit. “Contaminations” 35295-rgl_13-3 Sheet No. 44 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 44 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 44 Side B 09/09/2014 14:33:00 M K L. C Y L ’ NT forum I [Vol. 13:3 MORY E , Jan. 9, 2012, , 25 ORKER Y note 104. EW N Texaco claimed that after , The plaintiffs alleged that, supra 115 111 . 117 In addition to monetary relief, the relief, monetary to addition In The attorneys for the plaintiffs 113 112 note 111; Walsh, note 111. Reversal of Fortune Attorneys for Texaco denied these charges, court subsequently dismissed the suit fewer 114 supra supra Sequihua v. Texaco The Enforcement Loophole: Judgment-Recognition Defenses However, in November of 1993, the plaintiff’s filed 118 note 104. . Sequihua http://www.newyorker.com/reporting/2012/01/09/120109fa_fact_keefe supra The plaintiffs also attempted to tie birth defects and cancer to cancer and defects birth tie to attempted also plaintiffs The The 116 RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS 731, 732 (2011) (internal citations omitted). Christina Weston, Sequihua v. Texaco, Inc., 847 F. Supp. 61, 62 (S.D. Tex. 1994). Chevron in Ecuador, Chevron in Ecuador, Walsh, Sequihua 847 F. Supp. 61, 62. Sequihua v. Texaco, Inc., 847 F. Supp. 61 (S.D. Tex. 1994). Patrick Radden Keefe, EV non conveniens its former condition” and the imposition of a “trust fund” to be admin- istered by the Court. plaintiffs sought an injunction requiring Texaco to “return the land to and offered evidence that Texaco’s operations were law, as in well producing evidence that line Texaco had completed a $40 with mil- the lion remediation and public works program supervised, inspected and approved by the Government of Ecuador. rather than safely disposing of the byproducts of oil pits, open large into byproducts the dumped exploration simply Texaco production, and and left hundreds of these pools behind when the company’s contract ended and it left the country. it ceased operations, the Government of Ecuador had granted Texaco a Texaco granted had Ecuador of Government the operations, ceased it full and complete release of all further claims, liabilities and tions. obliga- available at 113 as a Loophole to Corporate Accountability For Conduct Abroad 114 115 116 117 118 111 112 518 was subsequently removed to the U.S. District Court for the Southern District of Texas in brought claims based on property damage, personal injuries, and “increased risk of disease due to negligent or otherwise improper oil pip- practices.” disposal waste and ing \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 26 9-SEP-14 8:51 ?currentPage=all. a concurrent suit in Southern District of New York (the trict judicial dis- encompassing Texaco’s corporate headquarters), judge allowed in the which plaintiffs the the opportunity, otherwise, through to discovery attempt and to ascertain the in belonged litigation the that prove to and pollution, the in volvement scope of Texaco’s alleged in- the waste, while Texaco claimed that there had been no proven health effects from the pollution, and that in any event, they had remediated their share of any pollution and were shielded releases from Government from of Ecuador. liability by the than five months later on grounds of international comity and R 35295-rgl_13-3 Sheet No. 44 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 44 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 45 Side A 09/09/2014 14:33:00 519 . The forum Jota against the vacated sub nom. forum non con- . (which consoli- Accordingly, the 122 of jurisdiction in the in jurisdiction of 123 , was also subsequently The Second Circuit, possibly 121 Jota v. Texaco, Inc in a federal court of N.Y. Remarkably, the court noted that al- only the adjudication the only 124 Aguinda v. Texaco and comity was erroneous in the absence of any condi- This suit, 119 INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS However, on appeal in At this point it may be appropriate to discuss a discrepancy , as well as the failure to join indispensible parties - namely, Aguinda, 945 F. Supp. at 627. 120 Aguinda v. Texaco, Inc., 945 F. Supp. 625 (S.D.N.Y. 1996) See Jota v. Texaco, Inc., 157 F.3d 153 (2d Cir. 1998). Calavo Growers of California v. Generali Belgium, 632 F.2d 963, 968 (2d Cir. Id. Jota, 157 F.3d at 155. M K C Y Court of Appeals remanded the case to the Southern District of New York for proceedings in line with its decision. non conveniens ing just treatment and a solution to the serious situation that they are Texaco Company, [would] bring to those affected the possibility of find- of possibility the affected those to bring [would] Company, Texaco claim filed by Ecuadorians . . . dated the Ecuadorian case with a case filed by Peruvian plaintiffs who lived downstream from the affected area), the Second Circuit Court of Appeals held that the district court’s dismissal on grounds of veniens dismissed on the grounds of international comity and the Republic of Ecuador, and Petroecuador, the state-run oil company which conducted all 1992. operations since Texaco left the country in tion requiring the oil company to submit to and that the jurisdiction district court’s reasoning in regarding the plaintiffs’ Ecuador, failure to join the Republic of Ecuador as applicable to the part of an the complaint that “sought to enjoin activities indispensable party was only currently under Republic’s control.” 119 Jota v. Texaco, Inc., 157 F.3d 153 (2d Cir. 1998). 120 121 122 123 124 though the Republic of Ecuador had originally considered the suit an affront to their sovereignty, after the regime change the “ that urged had Ecuadorian government 2014] U.S. courts. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 27 9-SEP-14 8:51 initially noted by the Second Circuit Court of Appeals in seeking to relieve district courts of complex examinations of jurisdictional issues when transferring to foreign courts, had noted in earlier cases that a conditional dismissal obviated the need for an extensive inquiry into foreign jurisdictional law, reasoning that court if refused to the take foreign jurisdiction, the plaintiff tected would by the conditional “still nature of the [be] dismissal.” pro- 1980). court noted that the litigation had taken a curious turn at this point: the litigation was proceeding under the unusual context of a country, the Republic foreign of Ecuador, initially expressing vigorous opposi- tion to the maintenance of this litigation in a United States court and then, after a change in the government, just as vigorously urging that the litigation proceed here. 35295-rgl_13-3 Sheet No. 45 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 45 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 45 Side B 09/09/2014 14:33:00 M K 132 Se- C Y The Aguinda [Vol. 13:3 Chevron/ forum non 129 1444 (2011). . . Jota v. Texaco, v. Jota . EV The Forum Non Con- 130 . L. R OL sub nom sub , C As noted above, on ap- court, found the obsta- grounds, seeking to have 131 100 grounds. The plaintiffs, and eventu- vacated 126 Sequihua grounds. The practical effect of a 127 dismissal is a clear victory for a defen- 128 forum non conveniens forum non conveniens jurisdiction in Ecuador to be reversible error. This point underscores the fact that the note 114, at 741. 125 forum non conveniens dismissal is significant – in the overwhelming majority of supra forum non conveniens litigation may stand for one of the great “ironies” in the field court undertook a detailed analysis to determine whether Ec- Texaco was well within reason to assume that, once it estab- in personam (emphasis added). RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Id. Id. Sequihua, 847 F. Supp. at 62. Weston, Christopher A. Whytock & Cassandra Burke Robertson, Sequihua, 847 F. Supp. at 65. 1996) (S.D.N.Y. 628 at Supp. F. 945 Aguinda, Jota v. Texaco, Inc., 157 F.3d 153, 159 (2d Cir. 1998). conveniens quihua peal, the Second District Court of Appeals finding that the failure reversed of the District Court to and require Texaco to sub- remanded, mit to miscalculations in the history of corporate law, repeatedly brought mo- brought repeatedly law, corporate of history the in miscalculations tions to dismiss under ally the Republic of mone- huge a for Ecuador, potential the of because possibly quite States, United fought to keep the the avoid to wanting Texaco, jury. U.S. sympathetic a from award tary litigation in the suit all together, in what may have possibly been one of the largest uador was an adequate alternative motion forum, to dismiss eventually on granting the the case transferred to Ecuador. cases, a Ecuador Inc., 157 F.3d 153 (2d Cir. 1998). cles to maintaining U.S. jurisdiction even more persuasive, and dismissed on also of law to date. The attorneys for the Ecuadorian plaintiffs brought suit brought plaintiffs Ecuadorian the for attorneys The date. to law of in the U.S. because of expanded remedies such as punitive damages, expanded procedural opportunities such as broad discovery tools, and the right to a jury trial on issues of fact. 125 126 127 128 129 130 131 132 Court following the reasoning of the During all of the initial U.S. proceedings, the plaintiffs continuously 520 going through.” \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 28 9-SEP-14 8:51 would be able to take advantage of a better bargaining settle the case quickly, or position have the case dismissed entirely. and lished that Ecuador provided a more appropriate forum, the suit would suit the forum, appropriate more a provided Ecuador that lished fall by the wayside. Because Ecuador was traditionally pro-defendant, large companies such as Texaco would naturally anticipate that they dant because it forces amounts or plaintiffs abandon their to efforts, either country particularly to if settle which the the for courts suit in insignificant award huge would tort the judgments. be transferred do not historically veniens and the Enforcement of Foreign Judgments, 35295-rgl_13-3 Sheet No. 45 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 45 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 46 Side A 09/09/2014 14:33:00 134 521 forum forum non con- In perhaps the 136 Chevron/Ecuador 133 grounds even if the The requirement that the 139 In those circumstances, the Sec- the circumstances, those In 138 forum non conveniens The Second Circuit Court of Appeals has Further, in making the determination, the 137 140 grounds, and closely review all submissions that submissions all review closely and grounds, argument, the District Court stated that the events Sequihua, 847 F. Supp. at 61; Aguinda, 945 F. Supp. at 625; note 116, at 733. INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS supra at 247. Noting that the plaintiffs themselves initially raised issues of It is interesting to note that the reason the “fairness” of the It was only on remand to the Southern District of New York, analysis also requires judges to assess the appropriateness of Bank of Credit & Commerce Int’l Ltd. v. State Bank of Pak., 273 F.3d 241, Calavo Growers of California, 632 F.2d at 968. at 743. . at 248. 135 ee See generally, Weston, Aguinda v. Texaco, Inc., 142 F. Supp 2d 534, 543-44 (S.D.N.Y. 2001). Id. See See id. Id S M K C Y veniens court’s justifiable belief in the adequacy of the alternative forum has been held to be a sufficient basis for granting a conditional dismissal most prescient arguments of the entire litigation, the plaintiffs, who would eventually triumph in Ecuador, introduced evidence that “the Ecuadorian courts were showing subject to corrupting influences and outside pressures, especially from the military, that rendered them inadequate to dispense independent, impartial justice in these cases.” dismissal be conditional serves to protect the non-moving party, and allows a court to dismiss on court is unable to make a definitive determination as to the adequacy of the foreign forum. clarified the type of finding that district courts are required to make in make to required are courts district that finding of type the clarified order to determine the adequacy of alternative foreign forums foreign when law or practice is an issue, and, as in the 246 (2d Cir. 2001). are related to the adequacy of the forum. non conveniens ques- lingering revived had Ecuador in change regime the surrounding tions about the ability of the Ecuadorian (and Peruvian) courts to “dispense independent, impartial justice in these cases.” the alternative forum. ond Circuit stated that a district court must undertake a full analysis of the foreign laws or practices relevant to its decision to dismiss on lingering corruption in the Ecuadorian court system in their 133 134 135 136 137 138 139 140 litigation, when dismissal is conditional on the alternate forum gain- defendant. the over jurisdiction ing conveniens non forum 2014] protested the transfer of the litigation to Ecuador. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 29 9-SEP-14 8:51 Ecuadorian court system was at issue during these proceedings is because, like the international due process analysis, the that anyone in the judiciary began expressing ability of misgivings the Ecuadorian Court system to render a fair decision in this about the case. Jota, 157 F.3d at 53. 35295-rgl_13-3 Sheet No. 46 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 46 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 46 Side B 09/09/2014 14:33:00 M K C Y T OF ’ EP [Vol. 13:3 This ful- U.S. D 146 , Acknowledging the 144 , 273 F.3d at 248. jurisdiction. The district court However, the Second Circuit held that 143 141 in personam jurisdiction in Ecuador, waiving statute of in personam 145 Country Reports on Human Rights Practices: Ecuador at 968 n.6. In essence, the movant must prove that the forum is ade- 539. The district court, applying the analysis outlined by the Second the by outlined analysis the applying court, district The At this point, with the plaintiffs essentially stipulating in dis- Aguinda, 142 F. Supp. 2d at 538 (S.D.N.Y. 2001). (2001), http://www.state.gov/j/drl/rls/hrrpt/2000 /wha/766.html). 142 RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS See id. See Bank of Credit & Commerce Int’l Ltd. See id. Aguinda, 142 F.Supp 2d at 544 (citing Bureau of Democracy, Human Rights, See Id. at TATE and claims here presented, that modicum of independence and impar- limitations and accepting service of process in filled Ecuador. the Second Circuit’s requirement that dismissal be conditional on Texaco’s submission to then outlined its “justifiable belief” in the adequacy of Ecuador as an alternative forum. While noting that “no one claims judiciary is wholly the immune to corruption, inefficiency, or outside pres- Ecuadorian sure,” the district court ultimately decided that Texaco had carried its burden in proving that Ecuador was an that adequate “the forum, courts of theorizing Ecuador can exercise, with respect to the parties caution and deference that a U.S. court must exercise in approaching the question of the independence and impartiality of a submissions additional receive foreign to record the reopened court, court district the adjudicating for Ecuador of system court the of adequacy the regarding the dispute. even if the court asserts a justifiable belief in the adequacy of the alter- the of adequacy the in belief justifiable a asserts court the if even native forum, it is required to cite to the movant’s the times evidence all at is it that mind in in bearing belief, this supports the record that burden to persuade the court of the adequacy rums. of any alternative fo- quate to such an extent that it gives rise to a justifiable belief on the part of the court, and in cases when the court has concerns regarding the accuracy of its justifiable belief, the conditional dismissal serves to protect the non-moving party. 141 142 143 144 S 145 146 522 in favor of a foreign forum. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 30 9-SEP-14 8:51 aco’s involvement in the pollution, Texaco, with almost self-destructive almost with Texaco, pollution, the in involvement aco’s determination, continued to press for transfer of the case to Ecuador, consenting to Circuit, consulted the U.S. Department of State, Ecuador Country Re- port on Human Rights Practices for 2000, noting that a primary con- clusion of the report was that “[t]he most fundamental human rights abuse in Ecuador stems from shortcomings cient, in and its corrupt politicized, legal ineffi- and judicial system.” trict court that they were unable to produce material evidence of Tex- and Labor, 35295-rgl_13-3 Sheet No. 46 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 46 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 47 Side A 09/09/2014 14:33:00 523 availa- On Septem- on, the oper- 152 In what was, in (July 1, 2009), http:// 2009), 1, (July 147 (Jan. 9, 2012), 2012), 9, (Jan. OST P ORKER Y EW MAZON N A , , http://www.texaco.com/sitelets/ecua The $40 million remediation pro- EXACO T 151 , 149 . , ruling that the lower court’s decision was decision court’s lower the that ruling , notwithstanding notwithstanding repeated arguments by the This 1998 agreement finalized the govern- 153 Reversal of Fortune of Reversal The Ecuadorian plaintiffs appealed this decision, this appealed plaintiffs Ecuadorian The 148 INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS Despite continuing attempts by the plaintiffs to try the suit 546. 150 In 2003, the Ecuadorian plaintiffs re-filed their suit in Ecuador in suit their re-filed plaintiffs Ecuadorian the 2003, In forum non conveniens non forum at 544–46. http://www.newyorker.com/reporting/2012/01/09/120109fa_fact_keefe?cur Id. Id. at Aguinda., 303 F.3d at 478. Keefe, Radden Patrick Id. Remediation?, Texaco’s On Signed-Off Who Texaco in Ecuador: Remediation M K C Y gram began in 1995 and was completed in late summer 1998, and dur- and 1998, summer late in completed was and 1995 in began gram ing the process, all remediation activities were inspected and certified by the Ecuadorian government on a site-by-site basis. but in 2002 the Second Circuit affirmed the District Court’s dismissal under not an abuse of discretion, ber 30, 1998, Ecuador’s Minister of Energy and Mines, the President of President the Mines, and Energy of Minister Ecuador’s 1998, 30, ber Petroecuador and the General Manager of Petroproducci´ and Claims of Release “Final the signed Petroecuador, of division ating Delivery of Equipment.” 147 148 149 150 151 152 153 2014] forum.” alternative adequate an to necessary tiality \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 31 9-SEP-14 8:51 against Chevron Corporation, which was at that point the successor of Texaco. plaintiff’s attorneys that Ecuadorian courts were subject to corruption and incapable of impartiality rentPage=all. remediation program as it had been asserting all along, in which producing wells and pits formerly utilized and replanted, were lands cleared modified, were systems water duced by Texaco were closed, pro- contaminated soil remediated. in the media and in the court of public opinion by suggesting that the suit was about a greedy U.S. corporation taking advantage of the pow- erless citizens of a smaller country, the polluting more and rampant running fact in facts not was Texaco above, noted began to emerge. As land at will; it was simply the minority partner in the oil consortium run by Petroecuador, which was the actual operator. In fact, Texaco’s in agreement, concession a by governed was project the in involvement which all activities were conducted with the oversight and approval of the Government of Ecuador. Evidence was produced showing that at the end of the concession agreement, Texaco had conducted the hindsight, an ill-fated proclamation, “even the the district possibility court that stated brought corruption to that bear or if this litigation undue were pursued influence in Ecuador remote.” ceedingly seems might ex- be dor/en/remediation/ (last visited May 16, 2014). ble at www.theamazonpost.com/news/who-signed-off-on-texaco’s-remediation. 35295-rgl_13-3 Sheet No. 47 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 47 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 47 Side B 09/09/2014 14:33:00 , M K U- C Y F 156 [Vol. 13:3 NERGY FOR THE At the end of the E 154 https://web.archive.org/web/ EVELOPING D Based on the political climate (Dec. 13, 2008), http://news.bbc.co.uk/ OW 158 N Voters in Ecuador Approve Constitution available at BBC , NERGY E 47 (2008), EPORT ELIVERING R ., D ORP NNUAL C , (Sept. 29, 2008), http://www.washingtonpost.com/wp-dyn/content/ Based on these audits and the remediation efforts, the gov- OST Under almost any situation, an agreement between a govern- Further, when Ecuador defaulted on its payment of global debt 155 . . . P HEVRON : 2008 A 157 RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Id Id C Joshua Partlow & Stephan Kuffner, Ecuador Defaults on Foreign Debt ASH TURE consulting firms conducted the audits and cluded that Texaco acted each responsibly and that there was independently no lasting or con- significant environmental impact from the former consortium operations. concession agreement, two independent audits were also conducted to address the impact of the consortium operations on the soil, water and air, and assess compliance with environmental laws, regulations and recognized internationally Two practices. operating accepted generally it owed to the World Bank and other international banks, he declared that simply Ecuador’s national debt was “immoral and illegitimate,” based on the argument that it had been contracted by prior regimes, and pledged to fight creditors in international courts, in order to nego- tiate a reduction in the debt amount. 20130407190605/http://www.chevron.com/documents/pdf/annualreport/Chevron 2008AnnualReport_full.pdf. 154 155 156 157 W 158 524 ment of Ecuador’s approval and certification of Texaco’s environmental remediation work and stated that Texaco had fully complied with all obligations established in the 1995. In remediation addition, the municipalities in the agreement area of the drilling signed opera- in tions signed a negotiated settlement with company from Texaco any future claims that and obligations. released the \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 32 9-SEP-14 8:51 article/2008/09/28/AR2008092802644.html. consolidate power, and shortly after he took office, proposed a series of changes to Ecuador’s constitution in order to extend fice. his term in of- in Ecuador when the suit was brought, it was seemingly no surprise that the regime allowed the suit against Chevron to proceed, despite both the release and the fact that Texaco was a minority consortium ment-run company and a corporation would be valid. However, Ecua- turmoil, economic and political to subject been has above, noted as dor, and although the country had traditionally been current pro-defendant, President the of Ecuador has seemingly spect demonstrated for the country’s legal obligations, whether to little private companies re- or other nations. Elected in 2006, he began a series of machinations to ernment of Ecuador subsequently granted Texaco a full release from any and all environmental liability arising from its operations. 2/hi/7780984.stm. 35295-rgl_13-3 Sheet No. 47 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 47 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 48 Side A 09/09/2014 14:33:00 525 Af- N.Y. , http:/ , 162 EXACO T , forum non con- , BBC (Feb. 15, 2011, which has continu- , Companies Look to Boost Production at Mature at Production Boost to Look Companies . (Feb. 1, 2012), http://online.wsj.com/article/BT- . J T The resulting legislation, Ecuador’s Environ- Ecuador’s legislation, resulting The S 161 ALL W , Mercedes Alvaro, Alvaro, Mercedes INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS Report Says Chevron Owes Billions for Ecuadorean Pollution Ultimately, on February 15, 2011, after years of litigation in litigation of years after 2011, 15, February on Ultimately, 164 In the midst of the litigation, Chevron attorneys began discov- Further, it later came to light that while the suit was proceeding through the U.S. courts, the plaintiff’s at- However, the suit proceeded against Texaco alone, with the 163 160 (Apr. 3, 2008), http://www.nytimes.com/2008/04/03/business/worldbusiness/ 159 See generally See Chevron Corp. v. Donziger, 1:11-cv-00691-LAK-JCF at 15. Id. Reuters, Chevron Fined for Amazon Pollution by Ecuador Court History of Texaco and Chevron in Ecuador: Chevron in Ecuador in Chevron Ecuador: in Chevron and Texaco of History M K IMES C Y veniens CO-20120201-713643.html. state-run Petroecuador notably absent from the proceedings, and with the President of Ecuador consistently calling for Chevron to be subject the enjoys still regime current the that fact the despite punishment, to profits from the operations of from Petroecuador ously drilled in the disputed area even after claims of arose. vast pollution 03chevron.html?fta=y&_r=0. torneys had been the from case the of transfer possible “working any for preparation in legislation with” Ecuadorian Ecuador. legislators to courts U.S to draft 160 161 162 163 164 159 2014] produc- from profits the of 95% receiving government the with partner, tion. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 33 9-SEP-14 8:51 tural destruction as well, and recommended billion. damages of up to $16 Ecuador, the court in Ecuador fined Chevron $9.5 billion over the alleged pollution, which included a 10 percent legally mandated repara- tions fee. ering proof of discrepancies and misrepresentations by the plaintiff’s attorneys and the court appointed “independent expert” eventually that lead would Chevron to file fraud, extortion and racketeering ter suit was filed in Ecuador, the Ecuadorian court received even- and opinions, expert pollution, of extent the damage of estimates reports, tually appointed an “independent global expert,” who provided a massive report that purportedly damages. assessed The report, called the the Cabrera Report, existence accused Texaco em- and ployees extent of not of only widespread pollution, but deforestation and cul- mental Management Act of 1999, created a private right of action for the cost of remediation for general Ecuador. in Chevron against action eventual environmental the for groundwork harm, laying the T /www.texaco.com/sitelets/ecuador/en/history/ (last visited May 16, 2014). Oil Fields in Ecuador 12:58 AM), http://www.bbc.co.uk/news/world-latin-america-12460333. 35295-rgl_13-3 Sheet No. 48 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 48 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 48 Side B 09/09/2014 14:33:00 . M K . J . 165 C Y T He S 169 ALL [Vol. 13:3 W , (Jan. 9, 2012), In one of the 166 ORKER Y EW N , the spelling of Calmbacher’s Chevron Claims Trial Showed Proof of During Calmbacher’s subsequent Chevron Suit Data Questioned Data Suit Chevron 168 (Nov. 26, 2013, 3:35PM), http://www.bloomberg Reversal of Fortune However, Chevron attorneys noticed a typo- His deposition testimony included the state- 167 170 LOOMBERG B , . Chevron attorneys also noticed misspellings of Despite amounting to possible fraud by Donziger, Donziger Patrick Radden Keefe, 171 . RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Chris Dolmetsch & Christie Smythe, Gonzalez, Angel & Casselman Ben Id. Id. Id Id. See ment “I did not reach these conclusions, and I did port.” not write this re- own name deposition, he stated that he had flown back to the U.S. early due illness, to and had therefore sent pre-signed pages back to Ecuador with the understanding his findings would be printed over However, his he stated signature. that the reports that were actually filed with the Ecuadorian court did not reflect his actual conclusions, that maintaining he had not seen the final version of the submitted they reports were until produced during a deposition by Chevron attorneys. noted while he did find some evidence determine of that additional remediation was necessary, and did not cal- contamination, he did not culate clean-up costs, concluding that he did not see significant tamination con- that posed immediate threat humans or to wildlife. the environment or to graphical error in some of these reports: 167 168 169 170 171 165 166 526 charges against the plaintiff’s American attorney, Steven Donziger. Discovery also led to allegations of manipulating the Ecuadorian judiciary and misrepresentations of the testimony of expert witnesses who testified as to the extent of environmental damages. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 34 9-SEP-14 8:51 Calmbacher’s name in letters to the Ecuadorian court asking extension for in an filing his reports. made no denial that falsified reports were submitted and offered no mated the contamination would cost more than $40 million to clean up clean to million $40 than more cost would contamination the mated at these sites alone. earliest discoveries, a typographical error led to the Donziger’s realization that team fabricated early Donziger hired Charles Calmbacher, a Georgia-based biologist and en- expert witness reports. In vironmental scientist, to help oversee soil and water tests 2004, in Ecuador. Reports signed by Calmbacher, which were submitted to an Ecuado- rian court in 2005, showed high levels of toxins at two sites and esti- (Apr. 5, 2010), http://online.wsj.com/article/SB100014240527023039121045751642 10793874400.html. http://www.newyorker.com/reporting/2012/01/09/ 120109fa_fact_keefe?currentPage=all. .com/news/2013-11-26/chevron-claims-trial-showed-proof-of-fraud-in-ecuador .html. Fraud in Ecuador 35295-rgl_13-3 Sheet No. 48 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 48 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 49 Side A 09/09/2014 14:33:00 176 177 527 CNN A fo- , 172 175 , (July 13, 2009), http:// ORBES F , In eleven civil actions across 173 Although Cabrera, the purported author of author purported the Cabrera, Although 174 Ecuador Plaintiffs Suffer Setback in Chevron Case Chevron’s $27 Billion Problem Evidence of Fraud Mounts in Ecuadorian Suit against Chevron, INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS , (Sept. 13, 2010), http://money.cnn.com/2010/09/13/news/internation Shortly after these falsified reports were discovered, Chevron ONEY , (Oct. 31, 2013), http://features.blogs.fortune.cnn.com/2013/10/31/ecuador- Roger Parloff, See id. See id. Daniel Fisher, Id. Roger Parloff, M K ONEY C Y of the Cabrera report was originally Spanish. into translated written later only and speak, not does in Cabrera that English, a language rensic linguist retained by Chevron filed a report concluding that most that concluding report a filed Chevron by retained linguist rensic www.forbes.com/part_forbes/2009/0713/texaco-ecuador-pollution-chevrons-27-bil lion-problem.html. que ruled that the evidence presented appeared to demonstrate fraud by Donziger, who denied wrongdoing, saying that Ecuador.” in permissible his “actions were the United States, Chevron presented this evidence to federal district judges; judges sitting in Newark, San Diego, Asheville, and Albuquer- the report, assured the Ecuadorian court that he was independent and independent was he that court Ecuadorian the assured report, the environmental the with do to nothing had attorneys plaintiff’s the that assessment or damage recommendations, Chevron had seemingly uncovered evidence to the contrary. consul- litigation plaintiffs’ Ecuadorian the which These in cities in filed were eleven federal civil actions tants were based, and materials subpoenaed by Chevron from litigation these consultants suggest that much Cabrera Report was generated by these litigation consultants. of the material from the al/chevron_ecuador_litigation.fortune/. 174 CNN M 175 176 177 Cabrera, a mining engineer, allegedly recommended damages for “can- for damages recommended allegedly engineer, mining a Cabrera, cer deaths,” and “unjust enrichment,” which Chevron claimed would be unlikely areas of expertise to be evaluated by a mining engineer. provided indeed they that acknowledged lawyers plaintiff’s Eventually fact of findings “proposed including Cabrera, to information significant and economic valuations for the environmental caused and by other Texaco’s damages practices and pollution,” and that Cabrera, evi- 172 173 2014] explanation for the Calmbacher’s reports were only a falsified small part of the reports, overall case, that and other tests have shown other contamination at dozens of sites. than to state that \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 35 9-SEP-14 8:51 attorneys uncovered evidence suggesting that portions of the Cabrera Report, which was most by likely provided actually been have may Chevron, against judgment court’s the justification for the Ecuadorian the plaintiffs’ attorneys themselves. plaintiffs-suffer-setback-in-chevron-case/ (referring to the ghostwritten responses to its own comments). M 35295-rgl_13-3 Sheet No. 49 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 49 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 49 Side B 09/09/2014 14:33:00 M K It C Y 179 [Vol. 13:3 182 In transcripts of the 180 In film footage, Donziger footage, film In 178 181 garnered enormous support for the Crude . note 174. supra note 174 , Crude Outtakes Reveal Lies in Trial Lawyers Suit Against Chev- , supra Parloff, Possibly most damaging to the plaintiffs’ case are outtakes Subsequently, Chevron attorneys unearthed a second set of , released in 2009, detailed the legal struggle of the plaintiffs, RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS See id. Carter Wood Parloff See id. See id. , (Aug. 13, 2010), http://www.pointoflaw.com/archives/2010/08/crude-outtakes .php (referring to the documentary-style film). plaintiffs’ cause, but when Chevron again once material edited of hours 600 over the movie, the from takes attorneys subpoenaed the out- fraud. massive a in engaged was Donziger that evidence provided became clear that the entire movie was orchestrated by Donziger, who was featured prominently in the film as fighting to Ecuadorian protect innocent victims against the greed mega-corporation. and However, in the corruption outtakes, Donziger was of caught on a corruption, weakness, “utter the for disgust massive expressing repeatedly tape and lack of integrity” of the Ecuadorian courts. 178 179 180 181 182 at one point barges into a judge’s chambers and intimidates him into reversing a ruling the judge had made in Chevron’s favor. The associated outtake shows Donziger later claiming happen in that any judicial system this that had integrity.” “would never 528 dently persuaded by these submissions, had “adopted the analyses, proposals, and conclusions of the Plaintiffs.” Crude \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 36 9-SEP-14 8:51 was even officially appointed as court. “global expert” by Attorney the Ecuadorian Fajardo is shown in the footage presenting a ple around the courthouse, you’re going to get what you want. Sorry, but it’s true.” Later he adds, “Because, at the end of the day, this is all for the court, just a bunch of smoke and mirrors and bullshit. It really is. We have enough, to get money, to win.” from the movie showing Donziger and Pablo Fajardo, an Ecuadorian attorney also representing the plaintiffs, and three litigation Cabrera before weeks two consul- 2007, of May in Cabrera with meeting tants, outtakes, Donziger, speaking with his American litigation consultants, litigation American his with speaking Donziger, outtakes, pollu- widespread of evidence little was there that suggested they after tion, states “[h]old on a second. . . [T]his is Ecuador. . . . You can whatever say you want and at the end of the day, there’s a thousand peo- revelations, possibly even Donziger, more attempting to generate public sympathy damning in the U.S., had for a documentary filmed that would allegedly garner support for the plain- the plaintiff’s case. tiffs and put pressure on Chevron to settle the case. The documentary, and showed interviews from Ecuadorian “experts” and the victims of Texaco’s alleged pollution. ron 35295-rgl_13-3 Sheet No. 49 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 49 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 50 Side A 09/09/2014 14:33:00 529 , (Oct. 30, 2007, 12:01 AM), . J. T 184 Those documents led Chev- S 186 ALL 183 W , . note 181 , supra , (Oct, 21, 2010), http://www.forbes.com/sites/danielfisher/ Amazonian Swindle Kaplan Orders Deposition of Attorney Donziger in Chevron Ec- ORBES . Fisher F INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS In the face of so much potential evidence of fraud, Manhat- fraud, of evidence potential much so of face the In , 185 While this court is unfamiliar with the practices of the Ecuadorian judicial system, the court must believe that the concept of fraud is universal, and that what has bla- considered be fact in would matter this in occurred tantly to amount not does conduct such If . . court. any by fraud fraud in a particular larger country, problems than an oil then spill.” that country has In the face of clear and widespread fraud by Donziger, includ- see also, See id. Chevron Corp. v. Camp, No. 1:10MC27, 2010 WL 3418394, at *6 (W.D.N.C. Bret Stephens, Daniel Fisher, M K C Y tan District Court Judge Lewis Kaplan granted Chevron’s motion to depose Donziger in October 2010, and also compelled Donziger to produce attorney-client communications. ron to file a civil suit under the Racketeering Influenced and Corrupt Organizations Act (RICO) in February 2011, accusing the Ecuadorian 2010/10/21/kaplan-orders-deposition-of-attorney-donziger-in-chevron-ecuador- case/; 183 184 185 186 case: the attorney who had initially filed on behalf of the plaintiffs in New York, Cristobal Bonifaz, after leaving his role in the original litigation, filed a claim for a separate set of plaintiffs against Chevron in federal court in San Francisco. The U.S. District Judge subsequently ordered Bonifaz to pay $45,000 in costs and fees when it was discovered that his plaintiffs did claimed. not actually have cancer like the suit Other courts subsequently sanctioned attorneys associated with the 2014] PowerPoint presentation entitled “Plan for the Global Expert Assess- ment,” and according to transcripts filed in court, states “[a]nd here is where we do want the support of our entire technical team, of experts, scientists, attorneys, political scientists, so that all will contribute to that report, in other words, you see . . . the work isn’t going to be the expert’s. All of us bear the burden.” \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 37 9-SEP-14 8:51 would seem that attempts to enforce the Ecuadorian judgment in the rul- initial an in Indeed, immediately. dismissed been have would U.S. ing in one of the civil actions noted above, the U.S. Magistrate Judge in Asheville, North Carolina, stated ing possible fabrication of evidence, and suggestions of the Ecuadorian judiciary bowing to pressure entirely generated by a campaign by the plaintiff’s attorneys to manipulate the Ecuadorian court system, it Aug. 30, 2010) http://online.wsj.com/news/articles/SB119370013621475588. uador Case 35295-rgl_13-3 Sheet No. 50 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 50 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 50 Side B 09/09/2014 14:33:00 M K C Y , 133 S. vacated [Vol. 13:3 cert. denied However, this in- 190 However, the Court of Ap- , at ¶ 7-10 (Jan. 2012). 191 AWYER . Chevron Corp. v. Naranjo, 667 F.3d 232 . L Chevron Appeals $18 Billion Ruling in Ec- Furthermore, the Court noted that M A 192 , 187 193 In March 2011, in response to the evidence , (Jan. 20, 2012,), http://www.reuters.com/article/2012/01/ 189 EUTERS R The Complete Game , Despite the evidence of widespread fraud in Ecuador, 188 at 241. rev’d and remanded sub nom . More recently, these questions regarding the enforcement of However, the suit against Chevron in Ecuador continued to . Chevron Corp. v. Naranjo, 11-1150-CV L, 2011 WL4375022 (2d Cir. Sept. Cir. (2d WL4375022 2011 L, 11-1150-CV Naranjo, v. Corp. Chevron . RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS N.Y. C.P.L.R. § 5302 (Consol. 2014). Chevron Corp. v. Donziger, 768 F. Supp.2d 581, 660 (S.D.N.Y. 2011) Chevron Corp. v. Naranjo, 667 F.3d 232, 246 (2d Cir. 2012) See id See id. Amy Kolz, Braden Reddall & Eduardo Garcia, 20/us-chevron-idUSTRE80J1ZJ20120120. 19, 2011) judgment that the sought Ecuadorian protection under the judgment New York Civil Practice was Law and Rules imposed judgments money of recognition the governs which 53, Article unenforceable, and in foreign countries. Chevron found it difficult to get resolution in U.S. courts regarding the regarding courts U.S. in resolution get to difficult it found Chevron disposition of the Ecuadorian judgment. However, once the judgment was affirmed in Ecuador, Chevron immediately sought a declaratory 189 190 191 192 193 187 188 530 plaintiffs and their lawyers of a conspiracy to extort a multibillion-dollar settlement from Chevron. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 38 9-SEP-14 8:51 Chevron would “unquestionably provoke extensive friction between legal systems” by encouraging challenges in New York to the legitimacy of courts in foreign countries. Ecuador’s judgment in the United States and the effect on interna- peals stated that granting the type of “speculative” relief sought by progress through the appeals process there, and the Ecuadorian Court of Appeals eventually public a “make to failed had Chevron because part in Chevron, against affirmed the multi-billion apology.” dollar judgment (2d Cir. 2012). Ct. 423, 184 L. Ed.2d 288 (U.S. 2012). Article 53 and the common-law principles that judg- foreign of enforcement it the for provide to interest an encapsulated by motivated were “turn would favor Chevron’s in rule to and them, prevent to not ments, that framework on its head.” junction was voided by the Second Circuit Court of Appeals in January in Appeals of Court Circuit Second the by voided was junction of 2012, in a unanimous decision by the three-judge panel, who noted that Chevron could only challenge the judgment’s validity defensively, in response to attempted enforcement, and that the Ecuadorian plaintiffs had not yet undertaken enforcement anywhere, and might never undertake in enforcement in New York. uador Lawsuit presented by Chevron, Judge Kaplan issued an injunction to block enforcement of the judgment on a worldwide basis. sub nom sub 35295-rgl_13-3 Sheet No. 50 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 50 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 51 Side A 09/09/2014 14:33:00 531 However, it was soon 194 In a 485-page opinion, Judge opinion, 485-page a In 200 (Apr. 11, 2013) http://www.forbes.com/sites/ 2013) 11, (Apr. These revelations soon paled in the face of face the in paled soon revelations These ORBES F ’ 197 , Cabrera Report had been written and provided and written been had Report Cabrera (Oct. 24, 2013), http://www.businessweek.com/news/2013- 2013), 24, (Oct. The former judge, Alberto Guerra, testified that he Ecuador Judge Testifies That He Was Bribed to Rule Against entire 198 Plaintiffs’ Expert Disavows Evidence in Chevron Ecuador Case, (March 15, 2014), http://features.blogs.fortune.cnn.com/2014/03 Judge: $9.5 Billion Ecuadorean Judgment against Chevron was note 196. INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS supra USINESSWEEK Over the years, Donziger had represented to both Ecuadorian both to represented had Donziger years, the Over In the face of the evidence advanced in the RICO trial against trial RICO the in advanced evidence the of face the In B Stratus, a co-defendant in the RICO suit, settled the lawsuit 195 199 196 See id. Daniel Fisher, Christie Smythe, See id. Parloff, Chevron Corp. v. Donziger, 886 F. Supp. 2d 235, 258 (S.D.N.Y. 2012). Roger Parloff, M K C Y Kaplan did not rule on whether pollution occurred in the disputed area disputed the in occurred pollution whether on rule not did Kaplan as a result of Texaco’s operations, but did find that the plaintiff’s legal and conspiracy, bribery, widespread in engaged Donziger, by led team, and U.S. courts, the media, and the public that Cabrera, the Ecuado- rian court-appointed global expert, had port. been the author of the re- by the Stratus Company, a Boulder, Colorado consulting firm Donziger firm consulting Colorado Boulder, a Company, Stratus the by hired. 10-23/ecuador-judge-testifies-he-was-bribed-to-rule-in-chevron-case. with Chevron and disavowed its work in the Chevron suit, stating that stating suit, Chevron the in work its disavowed and Chevron with its work had been “fatally tainted” by Donziger, and that the Cabrera reliable.” “not was Report revealed that the that revealed Donziger, Judge Kaplan recently issued a ruling that can only be considered a major setback for the plaintiff’s case, holding that the monetary judgment against Chevron was a product of racketeering perpetrated by Donziger. bribery, fraud and 196 197 198 199 200 194 195 2014] tional comity have taken a back RICO suit filed against Donziger seat in the same Manhattan court. Origi- to rulings in Chevron’s nally, the RICO suit 2011 focused on allegations that Donziger and the consultants retained by the plaintiffs authored portions Report, of the the report Cabrera that was provided to the Ecuadorian Court sessing in the existence and as- extent of pollution in the disputed area and on which the judgment against was based. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 39 9-SEP-14 8:51 Product of Bribery testimony by one of the presiding Ecuadorian judges that he had been bribed in order to rule against Cabrera Report. Chevron based on the ghostwritten was paid thousands of dollars by attorneys for against the plaintiffs Chevron, to and rule that two were of each promised $500,000 the from the proceeds presiding of the Chevron Ecuadorian judg- judges ment. Says Process ‘Fatally Tainted ‘Fatally Process Says danielfisher/2013/04/11/plaintiffs-expert-disavows-evidence-in-chevron-ecuador- case-says-process-fatally-tainted/. /05/judge-9-5-billion-ecuadorian-verdict-against-chevron-was-product-of-bribery/. Chevron, 35295-rgl_13-3 Sheet No. 51 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 51 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 51 Side B 09/09/2014 14:33:00 , M K 205 203 C Y IMES [Vol. 13:3 N.Y. T , Aside from Further, on Once viewed 204 207 202 http://www.ameri- 201 available at , and invested millions in the Chevron alleges that DeLeon 206 Crude (Mar. 20, 2014), http://www.businessweek.com/ (Mar. 24, 2014), The Global Lawyer: The Noose Tightens on Chevron Lit- Chevron on Tightens Noose The Lawyer: Global The AWYER . L In Pollution Case, Chevron Seeks $32 Million from Plaintiffs’ Chevron Seeks $32 Million in Legal Fees in Ecuador Case Big Victory for Chevron Over Claims in Ecuador USINESSWEEK M B A , , https://www.documentcloud.org/documents/1088097-2014-03-14-gi (Mar. 19, 2014), http://www.reuters.com/article/2014/03/19/us-chevron- After a twenty-year legal battle and possibly hundreds of mil- Chevron v. Donziger, 1:11-cv-00691 LAK-JCF 126, at 478. RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Nate Raymond, See id. Chevron v. DeLeon, Supreme Court of Gibraltar, 2012-C-232 1-2, 4 (2014), Goldhaber, D. Michael See Paul M. Barrett, Clifford Krauss, EUTERS March 31, 2014, Chevron brought fraud charges against Patton Boggs, Patton against charges fraud brought Chevron 2014, 31, March seeking legal fees from Donziger, Chevron well. as litigation Ecuador the facilitating in is involved others against seeking to bring suits ruling, calling the court proceedings it “deeply flawed,” and claiming to claiming and flawed,” “deeply it proceedings court the calling ruling, be the victim of a “well-funded corporate retaliation campaign.” as a tenacious maverick who was something akin to a hero for going up going for hero a to akin something was who maverick tenacious a as against a gigantic multinational corporation, Donziger is now on the defensive, challenging the legitimacy of the most recent district court braltar-judgment.html. Court found at least a prima facie case that DeLeon and his funding vehicle were “fully involved in the conspiracy, well continuing after to fund they it were aware of fraudulent activities.” litigation in Ecuador, which Chevron claim eventually became a racke- a became eventually claim Chevron which Ecuador, in litigation teering conspiracy. According to evidence, Deleon was entitled to collect $600 million if Chevron paid the judgment, and the Gibraltar 204 R 205 206 available at 207 201 202 articles/2014-03-20/in-pollution-case-chevron-seeks-32-million-from-plaintiffs-law yer-donziger. 203 (Mar. 4, 2014), http://www.nytimes.com/2014/03/05/business/federal-judge-rules- for-chevron-in-ecuadorean-pollution-case.html. However, Chevron claims it is trying to hold Donziger accountable for bringing a fraudulent lawsuit against the company. can Chevron that held Gibraltar in sitting Judge a 2014, 14, March On proceed in a tort suit against Russ DeLeon, Harvard Law classmate of Donziger, and online-poker tycoon. 532 obstruction of justice, and barring Donziger and his associated profiting from from the “egregious fraud that occurred. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 40 9-SEP-14 8:51 lions of dollars in legal fees, the ruling by Judge has seemingly galva- nized Chevron, which is pursuing Donziger and his associates with all of its legal might, and is now suing him for $32 resulting million from the in successful legal RICO case fees against him. ecuador-idUSBREA2I1PS20140319. igation Backers helped pay for the documentary Lawyer Donziger canlawyer.com/id=1202648169924/The-Global-Lawyer:-The-Noose-Tightens-on- Chevron-Litigation-Backers?slreturn=20140323141053. 35295-rgl_13-3 Sheet No. 51 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 51 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 52 Side A 09/09/2014 14:33:00 211 212 533 (Mar. 31, 2014), ORBES F , Chevron claims that attorneys 208 210 , May 7, 2014, http://www.washingtonpost UNDER THE INTERNATIONAL OST . P ASH W , On May 7, 2014 Patton Boggs agreed to pay Chev- pay to agreed Boggs Patton 2014 7, May On N.Y. Judge Lets Chevron Bring Fraud Claims against Patton 209 note 20, at 1206. Chevron, Patton Boggs Settle their Epic Legal Battle over Jun- Chevron’s Next Target: Patton Boggs (Mar. 31, 2014), http://www.reuters.com/article/2014/03/31/chev supra INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS EUTERS The high-profile nature of the case, and the subsequent Ecua- CHEVRON/ECUADOR R , Daniel Fisher, Steven Mufson, Carodine, Soc’y of Lloyds v. Ashenden, 233 F.3d at 481 (7th Cir. 2000). Casey Sullivan, M K C Y Boggs at Patton Boggs had knowledge that the Cabrera Report was written by Donziger’s consultants at Stratus, and misled both the public about the report’s court origin; in essence claiming that Patton Boggs and not only had knowledge of, but furthered the racketeering conspiracy Chevron. against .com/business/economy/chevron-and-patton-boggs-settle-their-epic-legal-battle- over-jungle-oil-pits-in-ecuador/2014/05/07/8fa73ad4-d5ef-11e3-aae8-c2d44bd79778 _story.html. in the foreign judgment stated earlier, recognition the international and due process enforcement analysis, these cases, may violate separation context. of as powers principles because it re- applied As in quires courts to pass judgments courts on to actively engage other in international countries, politics, and their and holdings so must then allows be followed by lower courts considering similar claims. DUE PROCESS ANALYSIS dorian judgment seemingly squarely implicates application the international due process analysis. Because the March 2014 ruling did not consider the actual question of the existence of, or Chevron’s responsi- bility for, pollution in the Lago Agrio oilfield region, the litigation will most likely continue to wind its way the the overshadow bribery and fraud of allegations the Ecuadorian Although systems. and U.S. court entire litigation, the case it has the potential tional due process doctrine to and judges’ roles in affecting foreign policy clarify the interna- ron-lawsuit-idUSL1N0MS14420140331. 209 http://www.forbes.com/sites/danielfisher/2014/03/31/chevrons-next-target-washing ton-law-firm-patton-boggs/. 210 211 212 As noted, Judge Posner held that the court may divide countries into two categories, “civilized countries” Where and countries “uncivilized were countries.” courts, meaning effectively that they did considered not provide for “uncivilized” impartial tribunals or by the 208 VIII. 2014] a Washington D.C. law firm, that the plaintiffs hired in an attempt to collect the judgment from Chevron. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 41 9-SEP-14 8:51 ron $15 million to settle the fraud allegations, and agreed to cooperate with Chevron in discovery related to the case, while expressing regret over its involvement in the matter. gle Oil Pits in Ecuador 35295-rgl_13-3 Sheet No. 52 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 52 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 52 Side B 09/09/2014 14:33:00 M K C Y Dole aff’d. sub [Vol. 13:3 One of the primary analysis, noting that 217 found that “[t]he most The plaintiffs in the 213 The Country Report for Ecuador, ., the court refused to recognize and litigation could ultimately assist in fur- , 635 F.3d 1277, 1279 (11th Cir. 2011). . forum non conveniens 665 F.Supp.2d 1307, 1351 (S.D. Fla. 2009), ., Significantly, Judge Rakoff consulted an annual re- 216 Chevron/Ecuador Osorio v. Dole Food Co The court was careful to note that its decision was based on based was decision its that note to careful was court The at 2. 214 However, as noted above, the Second Circuit had held that it The at 1351. 215 218 RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS . Osorio v. Dow Chem. Co Osorio v. Dole Food Co Id. See id. Jan. (S.D.N.Y. 1 122143 WL 2000 (TSR), 7527 CIV. 93 Inc., Texaco, v. Aguinda See id. See id. U.S. Department of State, Ecuador Country Report on Human Rights Practices for 1998, dated February 26, 1999, of New York, Judge Rakoff examined the appropriateness of Ecuado- rian court system in the ther developing the parameters of the international due process analy- process due international the of parameters the developing ther sis. In the 2000 remand to the District Court of the Southern District tem.” conclusions of the report, entitled fundamental human rights abuse [in Ecuador] stems from shortcomings in [its] politicized, inefficient, and corrupt legal and judicial sys- 213 214 215 216 217 218 port produced by the U.S. State Department that undertakes to assess to undertakes that Department State U.S. the by produced port “whether the judicial institutions of various nations provide at least a modicum of fundamental fairness to litigants.” case were represented by Los Angeles-based guez. Examining attorney the Nicaraguan court system that Juan handled the origi- Domin- the recognize to refused Court California the plaintiffs, the by suits nal direct that evidence persuasive the of view “[i]n judgment, Nicaraguan political interference and judicial corruption spread.” in Nicaragua is wide- the overall Nicaraguan judicial system, “not case.” the particulars of this 534 procedures compatible with due process of law, the courts are comfort- able passing judgment on those countries and finding that the ments at issue judg- were unenforceable. In the “uncivilized country” cases, the courts essentially ignored the individual proceedings that resulted the regarding “evidence” to looked instead and judgment foreign the in quality of the foreign judicial system and the U.S. judges’, sometimes personal, perceptions of those countries. Notably, one of these “uncivilized country” cases was recently decided by the Southern District of Florida. In \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 42 9-SEP-14 8:51 31, 2000). the events in Ecuador had “revived lingering questions about the ability of the Ecuadorian courts to dispense independent, impartial justice in these cases.” which was that the Nicaraguan judicial system did not comport with the concept of international due process. enforce a $97 million Nicaraguan judgment for several reasons, one of nom 35295-rgl_13-3 Sheet No. 52 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 52 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 53 Side A 09/09/2014 14:33:00 535 Alvarez, ac- 223 An important 220 Based on the report the on Based 225 In his ruling, Judge analysis, and so Judge 221 The District Court considered evi- 222 Judge Kaplan found that President 219 In an overview of the Ecuadoran politi- 226 litigation, which was between 2003 when 224 forum non conveniens Chevron INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS at 633. at 3. at 584. at 633–34. During subsequent proceedings to determine the enforceability at 616 n.163. at 635, n.305. at 616. See id. Chevron Corp. v. Donziger, 768 F.Supp.2d at 595. See id. See id. See id. Id. Id. Id. M K C Y Kaplan noted, “there is abundant evidence before the Court that Ecua- that Court the before evidence abundant is “there noted, Kaplan dor has not provided impartial with due process tribunals of law, at least or in the time period procedures relevant here and compatible especially in cases such as this.” Rakoff invited the Chevron litigants themselves to submit the fairness of the Ecuadorian courts in briefs order to assess whether a fair on trial might be obtained there. point at issue in the Chevron was likely to have been successful 2011 on the merits with respect district court proceedings to its claim that the Ecuadorian judicial system does was not comport with whether the international concept of due process. cal and judicial systems, Alvarez focused in particular on the relevant time period for the the lawsuit in Ecuador began and 2011 when the monetary judgment court. provincial Ecuadorian the by entered was Correa had heavily influenced the judicial system that he in “interfered in this matters that case, were pending before and the judiciary 219 220 221 222 223 224 225 226 dence of Ecuador’s deficiencies of judicial process as “Alvarez reported Report” prepared by Vladimiro in Alvarez Grau. the 2014] the of adequacy the demonstrate to movants the of burden the remains proposed forum in a \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 43 9-SEP-14 8:51 and had held various prominent posts there, including as an official elected and legal academic. the Court noted that “troubled” the when socialist judicial President Rafael system Correa, who publicly in supported Ecuador the Ecuadorian plaintiffs’ was claims, rose to already power. The judiciary had been in a “state of severe institutional crisis” for a long time and had recently “deteriorated.” plicating “considerations of international comity.” cording to the Court, was a highly credentialed and experienced attorney from Ecuador who had practiced law in Ecuador for over 40 years of the Ecuadorian judgment, Judge Kaplan noted that “extraordinary,” the not only case because was of the staggering amount of money about arguments serious raised had Chevron because also but stake at “the fairness and integrity of the judicial system of Ecuador,” thus im- 35295-rgl_13-3 Sheet No. 53 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 53 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 53 Side B 09/09/2014 14:33:00 , M K C Y Ac- 227 [Vol. 13:3 Taken in 231 Also relevant to Judge 228 http://www.nytimes.com/gwire/2011/03/ In 2009, the World Bank gave Ec- 230 However, Judge Kaplan also looked to available at In response to Judge Kaplan’s assertion that 229 232 Ecuador’s U.S. Ambassador Speaks out on Chevron Case (Mar. 10, 2011), However, Judge Kaplan seems to have given some weight to Immediately after Judge Kaplan’s 2011 decision, the Ecuado- at 618. at 619. at 620. IMES 233 RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Id. Id. Id. Id. Id. Lawrence Hurley, Id. uador a low ranking for respect for the rule of law; and the U.S. State Department recognized that there were times when the judges in Ec- uador decided cases on the basis when dealing with of matters of interest to the outside government. influences, particularly 10/10greenwire-ecuadors-us-ambassador-speaks-out-on-chevron-c-86771.html. cording to Judge Kaplan, in “a number of been threatened recent with violence, removed, and/or cases, prosecuted when they judges have ruled against the government’s interests.” sources such as World Bank and U.S. State Department documents, which supported these findings. the aggregate, the judicial system in Ecuador seemed than scarcely a more political tool used to accomplish the goals without regard of to an the evenhanded or just government application of the law, when the judge rendered the Chevron judgment. rian ambassador to Washington launched a defense of judicial system, taking his issue with Judge country’s Kaplan’s conclusions and expressed “consternation that a U.S. court has elected to pass judgment on Ecuador’s courts.” Kaplan’s determination was the fact that a commentators lamented the state of affairs in Ecuador, and concluded number of independent that there was no respect for the rule of law, independent and that there was judiciary. no 227 228 229 230 231 232 N.Y. T 233 536 and that were of particular interest Ecuadorian government.” \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 44 9-SEP-14 8:51 “here is abundant evidence before the court that Ecuador has not proof process due with compatible procedures or tribunals impartial vided law,” the Ambassador claimed that the Judge’s opinion “does not accu- judici- Ecuadorian the of independence the credit or upon reflect rately ary.” external guidance such as the Country Report from evaluation his for justification the strong a have may so and State, U.S of ment Depart- of the foreign court system. A systematic approach in evaluating the court system of another country, which is based on guidance from the Executive Branch, seems more likely to withstand scrutiny approach than an that is based judge’s on perceptions. While the the Second determination Circuit Court based reaching far the of because of decision Kaplan’s Judge overturned mately Appeals solely ulti- on the 35295-rgl_13-3 Sheet No. 53 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 53 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 54 Side A 09/09/2014 14:33:00 537 cert. denied forum non conveniens Noting that “Courts essentially Unlike the 236 234 238 INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS Judge Kaplan applied the international due process analysis in analysis process due international the applied Kaplan Judge Bridgeway Corp. v. Citibank, 201 F.3d 134, 142 (2d Cir. 2000). For a second time in a ruling, Judge Kaplan examined the writ- the examined Kaplan Judge ruling, a in time second a For at 418 & n.1585. at 419. Chevron v. Donziger, 1:11-cv-00691 LAK-JCF 126, at 417. 235 237 Chevron Corp. v. Naranjo, 667 F.3d 232, 242–43 (2d Cir. 2012), See See Id. Id. M K C Y 234 133 S. Ct. 423, 184 L. Ed. 2d 288 (2012). 235 236 237 238 tem. Limiting the branches analysis may serve to as the most external appropriate method determinations, guidance and to allow make judges these from to avoid the the implication that determination might their be other colored by personal perceptions. This method has allowed courts to past. sidestep concerns regarding comity in the 2014] nature of his global injunction on the enforcement of the the Ecuadorian of purpose the of affirmation Circuit’s Second the judgment, court’s and restraint the of reminder clear a as serve to seems Act Recognition delicacy that comity principles would warrant in transnational politically cases such charged as this. analysis, in which the judge may rely on arguments from the litigants themselves to determine the adequacy of seem a that foreign judges forum, performing it the would international due should seek external process guidance from other branches, and rely analysis solely on that guidance when determining the adequacy of a foreign court sys- \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 45 9-SEP-14 8:51 requirements of due process. The Ecuadorian decisions therefore are not entitled to recognition here.” system that does not provide impartial tribunals or procedures compatible with due process of law.’” “fun- are procedures foreign the whether question: one with tasked are damentally fair” and “do not Kaplan remarked on the delicate nature of this determination, stating offend against basic fairness,” that “the Judge Court is far from eager to pass judgment as to the fairness of the judicial system of another country, but it of course is obliged to do so.” ings of Grau regarding the state of the Ecuadorian courts, and based his opinion partly on that evidence, as well as Donziger’s statements that the Ecuadorian judiciary lacked integrity, and the U.S. State De- partments Human Rights Reports, Judge Kaplan held that “the judicial system was not fair or impartial and did not comport with the his March 2014 opinion in the RICO case against Donziger. Basing his Basing Donziger. against case RICO the in opinion 2014 March his For- the of (Third) Restatement the of language the on part in analysis eign Relations Law of the United “United States, States Judge courts Kaplan may not noted give that comity to ment of or a foreign state if recognize ‘the judgment was the rendered under a judicial judg- 35295-rgl_13-3 Sheet No. 54 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 54 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 54 Side B 09/09/2014 14:33:00 M K C Y Hilton [Vol. 13:3 (Apr. 6, 2011), As evidenced As 240 IMES Court established Chevron/Ecuador L.A. T , , in which the Supreme Hilton The 242 . litigation, the question that re- As noted above, it is quite possible quite is it above, noted As 239 Hilton v. Guyot Ecuador Expels U.S. Ambassador Chevron/Ecuador note 20, at 1205. 241 159 U.S. at 113. , supra A ruling based on particular proceedings, rather than a ruling After the Paul Richter, RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Carodine, Id. See See Hilton that the analysis requires action that is unsuitable for judges, who are responsible for settling disputes between individual parties, but for formulating international policies or not engaging in a type of decision engage. should Branch Executive the which in making the test, and it is only a vagary of time and judicial fiat that completely that fiat judicial and time of vagary a only is it and test, the altered the considerations to the extent that the mandatory exception would become the benchmark. Examining the elements of the Court specifically contemplated a due process analysis that would in- deter- to proceedings foreign the of assessment individualized an volve mine if they were fundamentally fair by the fact that the Ambassador for a foreign sovereign was compelled to defend his country’s judiciary based on the ruling of a this analysis U.S. may give rise judge, to foreign affairs complications outside the purview of the judiciary. The international due process analysis in a published opinion in a high-profile case such as http://articles.latimes.com/2011/apr/06/world/la-fg-ecuador-ambassador-20110406. 239 240 241 242 Ecuadorian Ambassador had been forced to defend his country’s judicial system in the media, that our own ambassadors would have been remaining ambassadors been still there had Ecuador the from expelled in the country. forces the judiciary to make judgments that condemnation may of be a construed country’s as entire a government. Further, the decision might court’s certainly generate “consternation” to the extent that it complicated foreign relations. It is not hard to imagine that after the 538 mains is whether the international due process analysis gives rise to more problems than it solves. Going forward, it seems counterproduc- tive to insist that the judiciary be required to examine the entire judi- properly more perhaps should it when country, foreign a of system cial may It process. due violate proceedings individual that claims examine be argued that the international due process analysis Judge required Kaplan that reach beyond his constitutionally delineated engage role in and a foreign affairs-based analysis that is beyond judges. federal and state of tence the compe- \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 46 9-SEP-14 8:51 based on the fairness of a foreign court system as a whole might better might whole a as system court foreign a of fairness the on based shield U.S. Courts from entanglement with foreign sence, the balancing test that should be used to determine the validity concerns. In es- of foreign judgments is one that is not unfamiliar to jurisprudence, as it is the one originally found in 35295-rgl_13-3 Sheet No. 54 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 54 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 55 Side A 09/09/2014 14:33:00 243 539 Hilton periodi- It seems or 245 generally to the individual pro- only appropriate evidence by which to de- Court’s requirement of “conducting the most Hilton INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS This mandates an evaluation of the general court proce- 244 Secondly, the at 202. seems illogical, as it would be so ambiguous as to allow almost Id. Id. Id. M K C Y termine the fairness of the foreign system. If not, what is the evidence that should be used, and are the individual members of the anal- judiciary The judgments? value these making be to parties appropriate the ysis, as it stands, does not seem to operate under guidelines that are clear enough to actually aid judges in making these determinations. trial upon regular proceedings” can speak due process requirements of the individual proceedings. The plain that this requirement mandates examining the fulfillment of the ceedings. court clearly spoke to the system as a whole when it looks to “a system “a to looks it when whole a as system the to spoke clearly court of jurisprudence likely to secure an impartial administration of justice between the citizens of its own country and those of other countries,” show to nothing is “there whether examines sentence following the but 243 244 245 dures balanced against the particulars of the specific trial at issue, and issue, at trial specific the of particulars the against balanced dures further requires an examination of whether the trial took place “after due citation or voluntary appearance of the defendant.” references only opportunities for impartial trials cally 2014] decision may clarify this assertion. The court noted that “[W]e are satisfied that[:]. . .[firstly,] where there has been and opportunity for fair a trial full abroad before a tion. . .” speaks [foreign] directly to the requirement of a “full court and fair trial.” of competent jurisdic- A plain reading of this sentence would seem to indicate that the state- system court general the and proceedings specific the both covers ment seem would trial” fair and “full sentence The jurisdiction. foreign the of to speak to the individual proceedings, and “before a foreign court of competent jurisdiction” would speak to the general validity of the foreign court system. To argue that “opportunity for a full and fair trial” \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 47 9-SEP-14 8:51 court would be some of the any judgment to stand. Under this line of that historically gave the reasoning opportunity for a fair a trial that had recently foreign state been taken over by a dictatorship might qualify as having opportunity given for a the full and fair trial. It would appear that U.S. courts must look at whether individual a foreign proceedings court to generally affords stands, some presiding due U.S. process extent judges rights. have As to to it research system of the countries measure on current a case-by-case political basis before it could be ered consid- in evaluating judgments. If judges are free to determine the fairness of an entire foreign court system based on judicial discretion, it would seem that the particular proceedings in the original judgment 35295-rgl_13-3 Sheet No. 55 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 55 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 55 Side B 09/09/2014 14:33:00 M K 246 C Y This 247 [Vol. 13:3 However, if the 248 Had Judge Kaplan is- case was remarkable be- 249 Chevron court next provided the balance, when it noted that Hilton Judge Kaplan noted that the The at 617. at 203. RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Id. Id. Chevron Corp. v. Donziger, 768 F.Supp.2d at 595. Id. than pointing out the flaws in another country’s entire judicial system. judicial entire country’s another in flaws the out pointing than If the injunction had been based on the individual proceedings, Ecua- dor would have been hard pressed to seriously implicate concerns comity, of because, as the Magistrate Judge “the court must believe that the concept of fraud is universal, and that in North Carolina noted, the judiciary. sued the injunction based on evidence of pervasive fraud by the plaintiff’s attorney, proceedings after and without reference to the a fairness of the efficiently more comity promoted have would certainly it system, court Ecuadorian careful examination of the individual proceedings to ensure only that they meet the minimum standards of fairness and due process, but in no way should advocate turning a this blind eye to be the fairness of construed the individual proceed- to ings, or focusing only on the foreign proceed- individual the court in fraud of possibility the examining system of expense as a whole at the that analyses not are proceedings individual the of Examinations ings. are outside the bounds of the court’s courts are competence. called on to On balance the actions a of governmental or daily private basis, interests against individual rights that might be abridged by these ac- pro- of burdens the against interests asserted the balance to and tions, viding adequate due process. However, analyzing entire judicial and political systems in lieu of examining claims of of fraud realm the outside be should proceedings particular or during violations due process seems to caution the court to limit the examination of the individual cause of the extent to which it implicated comity. 246 247 248 249 540 either prejudice in the court, or in the system of laws under which it was sitting, or fraud in procuring the judgment, or any other special reason why the comity of this nation should not allow it full effect.” This directly asks the court to consider reasons why these particular proceedings should not be enforced, as long as the court system itself offers the opportunity for the fair administration of justice. \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 48 9-SEP-14 8:51 international due process analysis can be said to have its foundation in foundation its have to said be can analysis process due international Com- also. front that on failing be may it comity, of aims the furthering ity does not seem to be served when the lack of integrity of the Judici- process judicial the in President country’s the of interference the or ary are brought to light in a judicial proceeding. the merits should not be tried anew, as on a new simply because the debtor asserts some trial mistake of law or fact. or on appeal, 35295-rgl_13-3 Sheet No. 55 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 55 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 56 Side A 09/09/2014 14:33:00 253 541 These determinations , which has tied up the 252 251 http://www.abajournal.com/mobile/ case, there is no reason to implicate available at Dole Chevron/Ecuador , or If comity is the concern, examining individual 250 note 20, at 1224. Dole Gets Legal Fees as Calif. Judge Details Attorneys’ Fraud on were eventually discovered to have engaged in such Ashenden supra INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS Dole Claims that the international due process analysis furthers the furthers analysis process due international the that Claims A finding that an entire country’s judicial system is fundamen- at 1225. , A.B.A. J. (June 17, 2009), Chevron Corp. v. Camp, 2010 WL 3418394, at *6 (W.D. N.C. Aug. 30, 2010) Martha Neil, Carodine, Id. M K C Y Court another country’s entire judicial system if the interests of comity un- derlie foreign relations, because in like fashion, the neys plaintiff’s attor- in massive fraud that they were recommended for criminal charges by a state Supreme Court Judge in California. at cases like 250 251 article/dole_gets_legal_fees_as_calif._judge_details_massive_attorney_fraud_on_ cour/. 252 253 This would promote judicial efficiency by mechanism, serving precluding judgments as from a countries gatekeeping with questionable court systems from being enforced through U.S. courts altogether, and shielding U.S. courts from political controversy. goal of “judicial efficiency” may be subject to question when one looks 2014] what has blatantly occurred in this matter would in fact be considered fraud by any court.” \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 49 9-SEP-14 8:51 U.S. State Department Country would Reports. control enforcement of judgments rather rendered than determinations in by that the country, judiciary. renders However, a if judgment that a was country not on the sought list, to and be was enforced subsequently in the United then States, consider then whether courts the court would in only the afforded foreign the proceedings litigants at due process issue in those particular proceedings. tally unfair is far broader than a judgment regarding a particular act of the government, or indeed, particular acts of the litigants. In some respects, the refusal to enforce the judgments of another country, be- system court country’s entire the that determination judicial a of cause is subject to political influence or bias, unlaw- acted official foreign specific a is that case particular a in decision far more troubling than a appropriately more be to seem would opinion far-reaching a Such fully. made by the Executive Branch. To avoid implicating the judiciary in foreign affairs, Professor Carodine suggests changing the existing due process analysis to shift the determination judgments that are a not foreign worthy country’s of enforcement which to could the possibly Executive outline its Branch, decisions in a format similar to the (ordering that discovery be allowed). proceedings would allow Ecuador to save face by categorizing cases as an isolated abuse of discretion, and preserve the reputation of its judiciary as a whole. As in the 35295-rgl_13-3 Sheet No. 56 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 56 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 56 Side B 09/09/2014 14:33:00 . M K C Y [Vol. 13:3 Chevron/Ecuador opinion, as well as mul- as well as opinion, Ashenden plaintiffs would most likely not have not likely most would plaintiffs Chevron opinions demonstrates that courts are unlikely to ignore Rather than promoting judicial efficiency, the international As it stands, the proposal that the international due process Chevron RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS due process analysis seems to impose an even greater burden on judicial resources. A quick review of the wasted time seeking enforcement in the U.S., parties. the by wrangling legal of decades two over avoided and have would the court system Alternately, if Ecuador was of the category of countries ments whose were judg- recognized, the overwhelming evidence of fraud in these individual proceedings may have led to the complaint being dismissed much more quickly. U.S. courts completely. If litigants in countries with court systems that systems court with countries in litigants If completely. courts U.S. were not at all implicated by the Executive Branch complained of due process violations, courts would only placed had U.S. the if example, For provided. was process due whether then be obliged to determine Ecuador in the list of countries whose judgments were not recognized the States, United the in The argument that forcing courts would to result in shifting the risks review and costs from the entity individual that chose proceedings also is courts U.S. the to entities foreign with transactions into enter to subject to challenge. If the Executive Branch state were that to certain unequivocally countries were of a category that were unenforceable, then there would be no their risk or costs to the courts, judgments as judgments rendered by those countries would be precluded from tiple violations. These reviews would be confined to examining only the due process violations complained of, and nothing more. analysis prevents parties from re-litigating in the U.S. court system is questionable at best, when examined in the light of 542 courts for decades. Proponents of the analysis hard would most pressed likely to be point to quicker instances resolution of where cases, the or analysis avoided transnational litigation becomes more protracted frequent as we resulted move to a global litigation, in and as society, it may be wiser to change the analysis. Judgments from countries with courts that do not provide due determined by the Executive Branch, would process not be entitled to recogni- in proceedings, as tion by U.S. courts. Judgments from countries that generally provide due process, as determined by the Executive Branch, could be made, subject to review, upon allegations of specific instances of due process \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 50 9-SEP-14 8:51 the individual proceedings and rule only on the judgment court court system alone. In of order the to understand the framework for judgment rendered in the the foreign court, both the general court system of the country where the judgment was rendered and proceedings the are particular examined, in almost excruciating detail. To that the retail suggest approach is not viable seems to have missed the mark, as judges are seemingly compelled to examine both the retail and 35295-rgl_13-3 Sheet No. 56 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 56 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 57 Side A 09/09/2014 14:33:00 543 UMAN H If – as Judge However, this 255 260 Focusing on the in- the entire case could 259 256 http://www.businessweek.com/ This has proven to be true 257 available at http://hrp.law.harvard.edu/events/the-future-of-corpo , The international due process comprised the Attorney Deemed a “Racketeer” Takes His Case to Harvard EBSITE (Mar. 26, 2014), 254 W INTERNATIONAL INTERNATIONAL DUE PROCESS ANALYSIS ROGRAM Despite Judge Kaplan’s careful review of caselaw and the Further, utilizing the international due process analysis in a Chevron v. Donziger, 1:11-cv-00691 LAK-JCF 1, at 485. Chevron v. Donziger, 1:11-cv-00691 LAK-JCF 1, at 418. USINESSWEEK at 417–19. at 419. P 258 . B See Id. Id. Id Paul M. Barrett, The Future of Corporate Impact Litigation After the Chevron Case, See M K IGHTS C Y facts in a nearly 500-page opinion, in ance at Harvard, the Human Rights Program at Harvard claimed that promoting Donziger’s appear- Chevron secured “a controversial ruling from a U.S. federal judge in a non-jury trial that Ecuador’s entire judicial system is unworthy of respect, and that the case was marred by fraud.” Kaplan pointed out, based on the wording of the Restatement (Third) – Restatement the of wording the on based out, pointed Kaplan of decisions the impartial,” or fair not was system “judicial the because Ecuador are “not entitled to recognition here,” articles/2014-03-26/attorney-deemed-a-racketeer-takes-his-case-to-harvard-law. rate-impact-litigation-after-the-chevron-case/. 254 255 256 257 258 259 R 260 ternational due process analysis contained on 3 out of the entire 485 pages of Judge Kaplan’s opinion, the promoters of Donziger’s speech may have been attempting to suggest that the ruling was made without consideration of Donziger’s fraud Kaplan himself as noted that he was the “obligated” to pass judgment of primary the factor. Judge “fairness of the judicial system of another country.” 2014] wholesale nature of the proceedings before them, which does not lead to judicial efficiency. For example, after Kaplan reviewing rendered the his March facts, 2014 Judge ruling in 1,842 a 485-page opinion citations. with \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 51 9-SEP-14 8:51 even after Judge Kaplan’s ruling. In a recent article, in an attempt to continue to garner support from the public, Donziger speak was at his alma-mater, Harvard Law booked School, where it has been sug- to gested that he was “tak[ing] his case to the Ivy League peal” Court of Ap- Law, overburdened court system by avoiding a retrial of the initial claims litigated in the foreign court. high-profile case may lead to increased attempts to 2014 try March his in example, For a opinion. public of court the case in or media in the ruling, Judge Kaplan noted that Donziger was a “master of public and media relations” and that “an extensive public campaign has been part of his strategy.” relations and media equivalent of three pages out of the entire opinion. have been resolved in a few sentences. However, the analysis does not seem to be effective at lightening the workload of the already 35295-rgl_13-3 Sheet No. 57 Side A 09/09/2014 14:33:00 09/09/2014 A Side No. 57 Sheet 35295-rgl_13-3 35295-rgl_13-3 Sheet No. 57 Side B 09/09/2014 14:33:00 M K or C Y 263 [Vol. 13:3 (Mar. 4, 2014), 2 COM . ONZIGER note 314. D TEVEN supra S , , However, omitting the international EBSITE 262 W ROGRAM It is unlikely that omitting the requirement of litigation is remarkable for a number of reasons, P (Mar. 4, 2014), http://www.huffingtonpost.com/2014/03/04/ In Ecuador Pollution Case, New York Judge Rules for Chev- for Rules Judge York New Case, Pollution Ecuador In Why Judge Kaplan’s Decision is Unlikely to Survive Appeal 261 OST IGHTS P R Chevron 264 UMAN The H UFFINGTON H RICHMOND RICHMOND JOURNAL OF GLOBAL LAW & BUSINESS Larry Neumeister, Larry Steven Donziger, Id. See , judiciary’s role in foreign affairs, how comity may when best enforcing foreign judgments, be and the furthered appropriateness of the ju- Hope- courts. sovereign’s foreign a of reputation the evaluating diciary fully, the boundaries of the international due process analysis will be clarified, as well as the role of U.S. judges in navigating the controversial international political issues that are implicated in foreign judgment recognition cases will be more fully defined. as Judge Kaplan noted, not the least problems with of existing which international due is process that analysis in it its highlights current form. In the face of overwhelming evidence of fraud on the part of the plaintiffs, it is possible that Judge Kaplan could have disposed of the case without implicating the Ecuadorian court system at the litigation all. continues As to wind its way through the appeals process, the sheer drama of the case overshadows questions regarding the U.S. performing the international due process analysis in the March 2014 ruling would have prevented from Donziger’s resulting claims of bias on the part of Judge Kaplan. that he found respect.” “Ecuador’s entire judicial system is unworthy of due process analysis and focusing only on the particular allegations of fraud by Donziger may have shielded Judge Kaplan from claims that he “made disparaging remarks about Ecuador’s judicial system,” ecuador-pollution-case-new-york_n_4896293.html. 261 ron 262 263 264 544 obligation may subject an otherwise thorough and thoughtful opinion to suggestions that it was rendered by a spect judge with for profound an disre- entire country’s judicial vowed to system. appeal In Judge fact, Kaplan’s Donziger decision, calling has ling”, and claiming that Judge Kaplan has let his “implacable hostility the ruling “appal- his infect country their and clients Ecuadorian [Donziger’s] . . towards. view of the case.” \\jciprod01\productn\R\RGL\13-3\RGL303.txt unknown Seq: 52 9-SEP-14 8:51 http://stevendonziger.com/wp-content/uploads/2014/03/Background-On-Kaplan- Ruling-in-RICO-Case.pdf. and Will Backfire in Enforcement Courts 35295-rgl_13-3 Sheet No. 57 Side B 09/09/2014 14:33:00 09/09/2014 B Side No. 57 Sheet 35295-rgl_13-3