No. 14-826(L) No. 14-832(CON) In the United States Court of Appeals for the Second Circuit ____________________________ CHEVRON CORPORATION, Plaintiff-Appellee, V. HUGO GERARDO CAMACHO NARANJO, JAVIER PIAGUAJE PAYAGUAJE, STEVEN DONZIGER, THE LAW OFFICES OF STEVEN R. DONZIGER, DONZIGER & ASSOCIATES, PLLC, Defendants-Appellants, (caption continues on inside cover) ____________________________ On Appeal from the United States District Court for the Southern District of New York (The Honorable Lewis A. Kaplan) _________________________________________________________ CORRECTED BRIEF FOR DEFENDANTS-APPELLANTS STEVEN DONZIGER, THE LAW OFFICES OF STEVEN DONZIGER, AND DONZIGER & ASSOCIATES PLLC _________________________________________________________ JUSTIN MARCEAU DEEPAK GUPTA JOHN CAMPBELL GREGORY A. BECK University of Denver JONATHAN E. TAYLOR Sturm College of Law Gupta Beck PLLC 2255 E. Evans Ave. 1735 20th Street, NW Denver, CO 80208 Washington, DC 20009 (303) 871-6000 (202) 888-1741 Counsel for Defendants-Appellants Steven Donziger, The Law Offices of Steven Donziger, and Donziger & Associates PLLC July 16, 2014 STRATUS CONSULTING, INC., DOUGLAS BELTMAN, ANN MAEST, Defendants-Counter-Claimants, PABLO FAJARDO MENDOZA, LUIS YANZA, FRENTE DE DEFENSA DE LA AMAZONIA, AKA AMAZON DEFENSE FRONT, SELVA VIVA SELVIVA CIA, LTDA, MARIA AGUINDA SALAZAR, CARLOS GREFA HUATATOCA, CATALINA ANTONIA AGUINDA SALAZAR, LIDIA ALEXANDRA AGUIN AGUINDA, PATRICIO ALBERTO CHIMBO YUMBO, CLIDE RAMIRO AGUINDA AGUINDA, LUIS ARMANDO CHIMBO YUMBO, BEATRIZ MERCEDES GREFA TANGUILA, LUCIO ENRIQUE GREFA TANGUILA, PATRICIO WILSON AGUINDA AGUINDA, CELIA IRENE VIVEROS CUSANGUA, FRANCISCO MATIAS ALVARADO YUMBO, FRANCISCO ALVARADO YUMBO, OLGA GLORIA GREFA CERDA, LORENZO JOSE ALVARADO YUMBO, NARCISA AIDA TANGUILA NARVAEZ, BERTHA ANTONIA YUMBO TANGUILA, GLORIA LUCRECIA TANGUI GREFA, FRANCISO VICTOR TRANGUIL GREFA, ROSA TERESA CHIMBO TANGUILA, JOSE GABRIEL REVELO LLORE, MARIA CLELIA REASCOS REVELO, MARIA MAGDALENA RODRI BARCENES, JOSE MIGUEL IPIALES CHICAIZA, HELEODORO PATARON GUARACA, LUISA DELIA TANGUILA NARVAEZ, LOURDES BEATRIZ CHIMBO TANGUIL, MARIA HORTENCIA VIVER CUSANGUA, SEGUNDO ANGEL AMANTA MILAN, OCTAVIO ISMAEL CORDOVA HUANCA, ELIA ROBERTO PIYAHUA PAYAHUAJE, DANIEL CARLOS LUSITAND YAIGUAJE, BENANCIO FREDY CHIMBO GREFA, GUILLERMO VICENTE PAYAGUA LUSITANTE, DELFIN LEONIDAS PAYAGU PAYAGUAJE, ALFREDO DONALDO PAYAGUA PAYAGUAJE, MIGUEL MARIO PAYAGUAJE PAYAGUAJE, TEODORO GONZALO PIAGUAJ PAYAGUAJE, FERMIN PIAGUAJE PAYAGUAJE, REINALDO LUSITANDE YAIGUAJE, LUIS AGUSTIN PAYAGUA PIAGUAJE, EMILIO MARTIN LUSITAND YAIGUAJE, SIMON LUSITANDE YAIGUAJE, ARMANDO WILFRIDO PIAGUA PAYAGUAJE, ANGEL JUSTINO PIAGUAG LUCITANT, KEMPERI BAIHUA HUANI, AHUA BAIHUA CAIGA, PENTIBO BAIHUA MIIPO, DABOTA TEGA HUANI, AHUAME HUANI BAIHUA, APARA QUEMPERI YATE, BAI BAIHUA MIIPO, BEBANCA TEGA HUANI, COMITA HUANI YATE, COPE TEGA HUANI, EHUENGUINTO TEGA, GAWARE TEGA HUANI, MARTIN BAIHUA MIIPO, MENCAY BAIHUA TEGA, MENEMO HUANI BAIHUA, MIIPO YATEHUE KEMPERI, MINIHUA HUANI YATE, NAMA BAIHUA HUANI, NAMO HUANI YATE, OMARI APICA HUANI, OMENE BAIHUA HUANI, YEHUA TEGA HUANI, WAGUI COBA HUANI, WEICA APICA HUANI, TEPAA QUIMONTARI WAIWA, NENQUIMO VENANCIO NIHUA, COMPA GUIQUITA, CONTA NENQUIMO QUIMONTARI, DANIEL EHUENGEI, NANTOQUI NENQUIMO, OKATA QUIPA NIHUA, CAI BAIHUA QUEMPERI, OMAYIHUE BAIHUA, TAPARE AHUA YETE, TEWEYENE LUCIANA NAM TEGA, ABAMO OMENE, ONENCA ENOMENGA, PEGO ENOMENGA, WANE IMA, WINA ENOMENGA, CAHUIYA OMACA, MIMA YETI, Defendants, ANDREW WOODS, LAURA J. GARR, H5, Respondents TABLE OF CONTENTS TABLE OF AUTHORITIES ................................................................................v INTRODUCTION............................................................................................... 1 JURISDICTIONAL STATEMENT .................................................................... 3 STATEMENT OF THE ISSUES ......................................................................... 4 STATEMENT ...................................................................................................... 5 I. For two decades, Ecuadorian rainforest communities seek—and ultimately win—a judgment holding Chevron responsible for dumping billions of gallons of toxic waste into the Amazon.................... 5 A. Chevron pollutes the Ecuadorian Amazon (1970s & 1980s)......................................................................................... 5 B. Ecuadorians bring an environmental case against Chevron in New York, and Chevron convinces the court to dismiss the case by promising to satisfy any Ecuadorian judgment against it (1993-2002) ................................................. 8 C. Disregarding its promises to this Court, Chevron repeatedly tries to thwart the Ecuadorian case (2003- 2010) .........................................................................................11 D. Hundreds of site inspections and expert reports— including those from Chevron’s own experts—confirm Chevron violated the law (2006-10)...........................................20 E. Chevron shifts its strategy to collateral attacks outside Ecuador and adopts the “demonize Donziger” playbook (2007-2011) ...............................................................................21 F. Chevron obtains unprecedented discovery in U.S. courts .........24 G. Chevron uses the vast “universe” of documents it obtained in discovery to carry out its “demonize Donziger” strategy ....................................................................29 H. The Ecuadorian court enters a preliminary judgment against Chevron (February 2011) ..............................................33 i I. The Ecuadorian court clarifies its judgment (March 2011) ........36 J. Chevron declines to challenge the preliminary judgment under Ecuador’s Collusion Prosecution Act ..............................36 K. An Ecuadorian three-judge court reviews the case de novo and enters a substitute judgment against Chevron (2012) ........................................................................................38 L. The Ecuadorian Supreme Court grants “cassation” review, affirms liability, and reduces damages (2013) ................39 II. Chevron brings this action as yet another collateral, preemptive attack on enforcement of the Ecuadorian judgment ..............................40 A. Chevron files this action ............................................................40 B. The district court grants a temporary restraining order ............42 C. The district court issues a worldwide injunction ........................44 D. This Court, in Chevron v. Naranjo, promptly reverses the injunction and orders dismissal of the severed ninth claim ........46 E. Chevron immediately attempts to evade Naranjo .......................47 F. The district court refuses to allow the defendants to drop their collateral-estoppel defenses ...............................................48 G. The court allows Chevron to drop its “sham litigation” claim .........................................................................................48 H. Chevron forces Donziger to proceed pro se and drops its damages claim on the eve of trial to avoid a jury .......................50 III. After a seven-week bench trial, the district court again issues a decision preemptively nullifying the Ecuadorian judgment ...................51 A. The court holds a seven-week bench trial ..................................51 1. Chevron’s allegations of impropriety regarding the judgment .........................................................................52 ii 2. Chevron’s allegations of fraud regarding the Cabrera Report...............................................................61 3. Chevron’s allegation that the Ecuadorian judiciary is corrupt. ........................................................................64 B. The court issues its decision ......................................................65 STANDARD OF REVIEW ................................................................................ 67 SUMMARY OF ARGUMENT .......................................................................... 68 ARGUMENT ..................................................................................................... 69 I. Because Chevron lacks standing, the district court lacked jurisdiction to issue its opinion and judgment. .......................................69 A. Chevron cannot show that the alleged trial-level misconduct caused the substitute judgment of the three- judge appellate court. ................................................................72 1. The appellate court’s substitute judgment—the product of a de novo review of the record—breaks any causal link between alleged trial-level improprieties and Chevron’s injuries...............................73 2. The district court’s conclusion about the standard of review contradicts Ecuador’s highest court on a question of Ecuadorian appellate procedure. ..................75 B. Chevron failed to demonstrate any concrete injuries that could be redressed by the relief sought. .....................................79 C. Because the district court lacked jurisdiction to hear this case, its findings—particularly findings related to professional misconduct—should be vacated. ...........................82 II. Chevron’s collateral attack on the Ecuadorian judgment violates bedrock international-comity principles and is authorized by neither state nor federal law. .................................................................84