LEWIS A. KAPLAN, District Judge.
Defendants now move to delay the October 15, 2013 trial (which was scheduled more than ten months ago) and, in addition, stay all other proceedings in this case pending the disposition by the Second Circuit of their petition for a writ of mandamus.
The motion to delay the trial is without merit, represents a radical change in defendants' nominal position (though it is entirely consistent with a years-old strategy of delay wherever possible), and comes far too late.
The motion to delay the trial on the theory that it should await disposition of the mandamus petition, taken at face value, is entirely unpersuasive. The petition, even if granted, would not be case dispositive. It seeks to vacate a few interlocutory orders that relate principally to whether the defendants' affirmative defense of collateral estoppel rests in part on the Ecuadorian judgment against Chevron (the "Judgment") and, if so, whether defendants should have been permitted to withdraw it in this action without prejudice to asserting that Judgment elsewhere. A ruling vacating those orders would not significantly affect the scope or duration of the trial or of the preparation for it. In any event, as the collateral estoppel defense, if pressed, would be resolved either
Defendants' actions since the petition for mandamus was filed on March 5, 2013 effectively admit as much. They subsequently asserted their desire to proceed to trial on October 15 and initiated and participated in extensive discovery and motion practice — some within the last few weeks — without ever suggesting that a delay of the trial pending the outcome of the petition was necessary or appropriate.
Nor is there any merit to the suggestion that the trial should be delayed because defendants need more time to prepare. They repeatedly have been granted most of the extensions they have sought despite only the most tenuous reasons for them. Indeed, they recently moved for — and on September 4 substantially received — a thirty day extension of all outstanding deadlines, an extension they said was necessary to permit them to try the case on October 15. Interestingly, they did not wait for a ruling on that motion before following it up with the motion now before the Court.
The request to stay all proceedings other than the trial itself would lack merit even if the trial were delayed temporarily. There is much that should and can be done before this case is finally adjudicated and, in a few particulars, before trial commences. There is no reason why those tasks should not proceed in any event. To stay all proceedings — not just delay the start of the trial — pending the outcome of the mandamus petition would add needlessly to any delay that would be caused if the trial alone were deferred
Finally, this motion seeks to delay or avoid a trial of the fundamental dispute between the parties — whether the Judgment was procured by fraud. The reason for it is evident from defendants' memorandum. Defendants now admit fear that "any rulings adverse to Defendants" would "prejudice[]" them in proceedings to enforce the Judgment elsewhere.
Defendants have brought Judgment enforcement proceedings in Argentina, Brazil and Canada, as they have been free to do since the Naranjo decision in January 2012.
This case now is ready for its long scheduled trial. The outcome of the mandamus petition either will not affect the trial at all or merely will eliminate the collateral estoppel defense that defendants wish to withdraw. The possibility of an adverse result on Chevron's affirmative fraud claims that defendants fear might
A discussion of the relevant procedural history is useful to understand this motion and the context in which it is made.
The parties had nineteen months in which to conduct discovery in this case.
Defendants filed the mandamus petition in the Court of Appeals on March 5, 2013. They sought no stay of this action from this Court or the Court of Appeals. The proceedings in the District Court continued in this case as scheduled. As even the most cursory review of the docket sheet reveals, they have been extensive.
On May 3, 2013, former counsel for the Donziger Defendants and some of the counsel for the LAP Representatives sought leave to withdraw as counsel on the ground of nonpayment of fees.
Immediately after those motions to withdraw were granted, Messrs. Gomez and Donziger began requesting that the special masters delay depositions and discovery
Three days later, Mr. Donziger reversed course. He contended that his request for a two week stay of depositions (made just three days before) had been insufficient and asked that the Court stay all proceedings for at least three months.
The Court granted Mr. Gomez's request for an extension of the deadline for the pretrial submissions until July 30, 2013 — an extension of about five weeks — and indicated that it might "make further adjustment[s]" to that schedule
On July 12, 2013, the LAP Representatives requested by letter that "due to the extraordinary size of discovery and pleadings in this case, not to mention defendants' [alleged] lack of personnel and resources
A week later, at a scheduling conference, Mr. Donziger and Mr. Gomez contended that they would be unable to meet the July 30, 2013 deadline for submission of motions for summary judgment, the joint pretrial order, and the proposed verdict forms.
On August 16, 2013 — the day motions for summary judgment were due — defendants moved by order to show cause for "adjournment of all dates in this action for thirty days," including those set in an order by Magistrate Judge Francis, in which he granted in part and denied in part Chevron's motion to compel production of certain documents from defendants.
Chevron later that day moved for partial summary judgment on certain of its claims and certain of defendants' affirmative defenses.
On August 23, 2013, the Court scheduled a conference for September 3 in order to take up defendants' motion for a 30 day extension.
On August 27, 2013 — while defendants' motion for a 30 day adjournment of pretrial deadlines was pending — defendants made this motion for a continuance of the trial and a stay of all other proceedings, in each case pending the Second Circuit's disposition of the mandamus petition.
On September 4, 2013, the Court granted substantially all of the relief defendants sought, in some instances more than they sought, with respect to the dates on which various pretrial submissions were required.
Defendants contend that a delay of the trial and a stay of other proceedings now are necessary because "the outcome [of the petition] holds the potential to alter substantially the nature of the looming pre-trial submissions, not to mention trial itself" and because any effort and resources they expend preparing for trial therefore may be wasted.
"The decision to grant or deny a continuance [i.e., a postponement or stay of a trial] is within the discretion of the trial judge."
That discretion is very broad. "The person seeking a stay `bears the burden of establishing its need.' [citation omitted] `[A]bsent a showing of undue prejudice upon defendant or interference with his constitutional rights, there is no reason why plaintiff should be delayed in its efforts to diligently proceed to sustain its claim.'"
Defendants have not sustained that burden. Their requests will be denied.
Defendants seek a writ of mandamus "ordering the district court to (1) vacate its July 31, 2012, November 27, 2012, and February 20, 2013 Orders, ... (2) vacate its January 7, 2013, Order," ... and (3) refrain, in any context, from considering whether the Judgment is entitled to recognition."
For the reasons set forth in the orders and opinions that the mandamus petition seeks to have vacated, as well as in Chevron's opposition to the petition before the Second Circuit, these contentions lack merit, and defendants are unlikely to prevail in the Court of Appeals. Even if they were to prevail, however, the relief they seek would not be dispositive of this case or significantly alter the scope or duration of the trial. In order to understand why that is so, it is useful to appreciate the very limited part the case that could be affected by the outcome of the mandamus petition.
Chevron's complaint alleges fraud and RICO claims. The RICO and, to some extent, the fraud claims rest on allegations that Steven Donziger, a New York lawyer, and others based in the United States, here conceived, substantially executed, largely funded, and significantly directed a scheme to extort
The complaint seeks damages and equitable relief. It does not seek a declaration that the Judgment is not entitled to recognition or enforcement in New York or anywhere else.
To be sure, the question of the recognizability and enforceability of the Ecuadorian judgment has arisen in this case. But that is so only because defendants injected it by asserting their res judicata-collateral estoppel affirmative defense. For reasons explained elsewhere, this Court held that (1) defendants intended that defense to include a claim of preclusion based, at least in part, on the Judgment and (2) their answer sufficiently did so.
In these circumstances, the scope and duration of the forthcoming trial would not be affected substantially even if the orders of which defendants claim were vacated entirely. The effect of such an outcome would be that the collateral estoppel defense would be out of the case.
The fact that Chevron's claims might result in a determination of fraud in the procurement of the Judgment does not alter this conclusion. Such a finding would not be equivalent to a determination that the Judgment is not recognizable or enforceable.
As any stay must be "tailor[ed] ... so as not to prejudice the non-moving litigant unduly,"
First, while defendants have fully completed their discovery, a number of matters remain with respect to Chevron's efforts to obtain discovery from defendants and their allies.
Second, a number of routine pretrial matters remain to be concluded.
The foregoing illustrate
No stay of anything is warranted here. Even if a delay of the trial were warranted, however, a stay of proceedings other than the trial would serve only to delay for no good reason.
Defendants have had ample time in which to prepare for trial.
First, depositions were completed two months ago. Document production was completed months before some of defendants' lawyers withdrew, subject to resolution of a few issues relating to Chevron's efforts to obtain discovery that it claims should have been provided long ago, but that it apparently is prepared to abandon if the trial goes forward. Defendants now have served their lists of trial witnesses and trial exhibits.
Second, the Court repeatedly has granted defendants' requests for adjournments of deadlines
Third, notwithstanding their attempts to portray themselves as Davids, each alone facing Goliath, the reality is quite different.
The Court already has addressed the unsubstantiated and dubious claim that the defendants are constrained by limited resources in a previous opinion to which the readers attention is invited.
From the outset, the LAP Representatives have been assisted substantially by Patton Boggs, a firm of hundreds of lawyers with professional standing comparable to that of Chevron's counsel and a huge contingent fee that hinges on the collection of the Judgment.
Nor is Mr. Donziger the only lawyer involved in his defense. He benefits from the efforts of Mr. Gomez and Patton Boggs, as the interests of Mr. Donziger and the LAPs are closely aligned. In addition to what has been said already, he openly has received additional assistance in the person of at least two more lawyers — Aaron Marr Page, whom Mr. Donziger described in June as having "deep factual knowledge of the case,"
As noted, the mandamus petition was filed on March 5, 2013. To whatever extent that petition held the potential substantially to affect the scope of this case, that was as true on March 5 as it is today.
Despite this inescapable fact, during the nearly six months between March 5 and the late August filing of this motion, the parties began and completed depositions, including depositions in New York, California, Texas, and Peru; litigated extensive discovery and other motions; and otherwise contested this case most vigorously. Indeed, as seen, the defendants repeatedly sought extensions of time, interim stays of discovery, and the like. Yet defendants
If there were any real substance to that assertion, defendants would have made the argument long ago. Having proceeded as they have for so many months, and thus imposed such substantial burdens and costs on their adversary and the Court in the efforts of both to proceed in good faith on the long-standing schedule, defendants have no equitable claim to a last minute delay based on that newly articulated theory, a theory which — if accurate — would have counseled delaying far more than the start of the trial.
It bears mention also that any delay in the start of the trial would threaten severe disruption of this Court's trial calendar that could have been avoided had this belated argument, assuming it had any merit to begin with, been made promptly after the filing of the petition. Defendants, who are well aware of the difficulties a delay at this late date could cause, should not be permitted to benefit, intentionally or otherwise, from this circumstance.
For the foregoing reasons, defendants' motion to for a continuance of the trial and a stay of all other proceedings pending the disposition by the Second Circuit of their petition for a writ of mandamus [DI 1369] is denied.
SO ORDERED.
LEWIS A. KAPLAN, District Judge.
An Ecuadorian court in Lago Agrio, Ecuador, in 2011 entered an $18.2 billion judgment (the "Judgment") against Chevron Corporation ("Chevron") in an action brought by 47 individuals referred to as the Lago Agrio Plaintiffs (the "LAPs"), and others. Chevron brought this action on February 1, 2011 against the LAPs, their lead U.S. attorney, Steven Donziger and his law offices (the "Donziger Defendants"
The matter now is before the Court on the Donziger Defendant's motion for a three month stay of proceedings or for alternative relief. Mr. Donziger — who, since the withdrawal on May 17 of his former counsel of record, the Keker firm, is representing himself and his personal law firms, allegedly alone — contends that he needs such relief in order to find new counsel or to prepare to try the case himself.
In ordinary circumstances, some delay to permit a litigant whose counsel suddenly had withdrawn to secure new counsel usually would be granted. But the withdrawal of the Keker firm was not sudden, and there is n nothing ordinary about these circumstances. Several points need to be considered in that regard.
First, the Keker firm and counsel for their co-defendants, Smyser, Kaplan & Veselka ("SKV"), obtained leave to withdraw on express representations that their withdrawal would not materially affect the schedule in this case.
Following the withdrawal of the Keker firm, Mr. Donziger adhered for several days to the position the Keker firm had taken. Indeed, this request for a threemonth stay is a radical shift in position by Mr. Donziger.
On May 17, 2013, immediately following the Keker firm's withdrawal, Mr. Gomez — on behalf of the Donziger Defendants and the LAP Representatives — "propose[d] that Chevron agree to a modification and a reasonable extension of the deposition schedule into the month of June in order to permit the [remaining depositions] to be
There is no evidence of any change of circumstances since Mr. Donziger made clear, after the withdrawal of the Keker firm, that what he wanted was merely a two — week hiatus in the deposition schedule — which in substantial measure he received.
The Keker firm was permitted to withdraw because, it said, it was no longer being paid. And the Court was persuaded that the non-payment was a deliberate breach of the clients' obligation to pay. Nor was there anything sudden about the non-payment. Keker's bills had not been paid currently at least since September 2012.
Given those discussions and statements, as well as the arrearages that had been mounting for eight months before the Keker firm actually moved to withdraw, Mr. Donziger knew that the Keker firm's withdrawal was possible and, no doubt, increasingly likely. He had ample time in which to find substitute counsel before the Keker firm sought to withdraw and has had six weeks in which to do so since it filed the motion.
To whatever extent Mr. Donziger is understood as suggesting a lack of resources with which to re-retain the Keker firm
As an initial matter, Mr. Donziger — despite repeated invitations to do so
Under the terms of their agreement, the LAPs are obliged to pay for Mr. Donziger's defense in this action.
To be sure, Mr. Donziger and the LAP Representatives have claimed that the LAPs are out of money. But they have provided no sworn statements, at least from anyone with personal knowledge, let alone other evidence, to support that assertion. To the contrary, the record establishes that have they raised millions of dollars in exchange for shares of any recovery on the Judgment and supplemented that cash by obtaining legal services through contingent fee arrangements with lawyers. They have stated publicly that they have decided to spend their resources elsewhere because they regard this case as a "sideshow."
Mr. Donziger has offered no reason to be any more optimistic now about his ability to engage substitute counsel if they were given a three month stay than he was when he discussed the motion to withdraw with Mr. Keker.
Finally, it bears mention that Mr. Donziger has a contingent fee agreement with the LAPs which entitles him to 31.5 percent of the total contingency fee recovered on the Judgment, which is 20 percent of any total collections.
In the last analysis, Mr. Donziger did not obtain substitute counsel in the months during which he knew that the Keker firm was increasingly likely to withdraw if it were not paid. He has not done so in the weeks since Keker moved to withdraw. And there is reason to believe that there would not be much likelihood that he would succeed in doing so even if he were given the three month stay he asks. Moreover, it would be an utter abuse if Mr. Donziger's alleged plight in fact is a contrived refusal by those controlling the LAPs' funds (who appear to include Mr. Donziger) to decline to spend those funds for the defense of this action in order to obtain a tactical advantage, a subject to which the Court will turn below after dealing with the claim that Mr. Donziger needs three more months — in addition to the three that already lie before him before trial begins — to prepare.
There is not sufficient reason to stay the matter for three months to afford Donziger more time to prepare for trial.
Second, and quite a apart from the fact that counsel and the litigants should be held to their representations to the Court, the Donziger Defendants have not persuaded the Court that the three-month stay they seek is necessary or appropriate.
As an initial matter. Mr. Donziger has at least two quite considerable advantages that are not enjoyed by his adversary notwithstanding Chevron's superior resources.
Thus, he knows or readily can find out exactly what happened at every stage of this long saga. His adversary, on the other hand, must attempt to piece much of the story together through discovery and investigation. Moreover, it must do so without access to key Ecuadorian witnesses and documents, as the defendants have not complied with a Court order compelling production of responsive documents from the defendants' Ecuadorian lawyers and allies. Nor have they made available for deposition many of the key Ecuadorian witnesses, some of whom are defendants in this action.
Given the intense litigation of this action, the Count Nine Action,
Nor is there so much left to do other than prepare for the October 15 trial. The depositions have been completed. Document production was completed months ago subject to the resolution of a small number of disputes relating to the completeness of production by the defendants and the LAPs' counsel, Patton Boggs, LLP ("PB"). While there may be some additional motion practice, that would only be normal in the context of any substantial case.
In addition, Mr. Donziger is not David facing Goliath alone, notwithstanding his attempt so to portray himself. His codefendants, the LAP Representatives, are said to be liable here only or primarily on a vicarious liability theory based on alleged misconduct by Mr. Donziger and the Ecuadorian counsel and allies whom Mr. Donziger has supervised and, at least in part, paid. It is very much in their interests to defend Mr. Donziger. The LAP Representatives' defense is being substantially assisted by PB, a firm of hundreds of lawyers with professional standing comparable
Thus, Mr. Donziger has approximately three months in which to prepare for trial. This Court sees no reason why — with his extensive personal knowledge of the facts and the evidence, his clear understanding o The nature of Chevron's case against him and the theories upon which it rests, and the assistance a available to him from his LAP clients and their counsel — he can not be as ready to try this case on October 15 as he would be a month or three months later.
The Court denies the motion for a three month stay purely on the basis of what has been said already. But it is relevant to note also that Chevron contends that the withdrawal of the Keker and SKV firms and the Donziger Defendants' claims of lack of resources, need for more time, and the like have been carefully orchestrated, that they rest on at least some factual premises that are untrue, and that all are designed to gain public relations and tactical advantages in the battle relating to the Judgment, which includes far more than this lawsuit. In view of the grounds upon which this application is decided, the Court need not address the substance of that contention.
The Donziger Defendants' motion sought various forms of alternative relief in the event the three month stay were denied. The Court previously denied that alternative relief to the extent that it was sought pending the decision on this motion.
For the foregoing reasons, the Donziger Defendants' motion for a stay of proceedings in this case or, alternatively, other relief [DI 1211] is denied in all respects.
SO ORDERED.
Although defendants had not so requested, the Court stayed the deadline set by the magistrate's order in order to permit it to consider that deadline in the context of the trial schedule. DI 1350.
Another concerns Chevron's challenges to claims by defendants of attorney-client privilege and work product with respect to production of documents in the possession of Patton Boggs that fall within the crime-fraud exception to the privilege and to work product protection. See Chevron Corp. v. Donziger, No. 11 Civ. 0691(LAK), 2013 WL 1087236 (S.D.N.Y. Mar. 15, 2013) (holding there is probable cause to believe that crimes or frauds were committed in respect of certain enumerated subjects, that any privilege or work product otherwise protecting Patton Boggs documents relating to those subjects that were in furtherance of those alleged crimes or frauds has been vitiated, and deferring pending further proceedings the determination whether particular documents were in furtherance); DI 1312 (pending Chevron motion to expand subjects as to which probable cause exists).
SKV represented that (1) the LAP Representatives "will continue to be represented in the case by Mr. Julio Gomez, who was their attorney before they hired SKV and who has continued to represent them during SKV's and Mr. Smyser's tenure as attorney-in-charge," (2) "[t]he case is set on the trial docket ... more than five months after the date of this motion" and is not "on the verge of being tried," and (3) "[t]he withdrawal ... will not prejudice any of the parties ... nor will it adversely affect the scheduling order." DI 1102, at 7.
