A federal appeals court in Washington today heard a sliver of a long-running, international legal dispute in which Chevron Corp. is trying to vacate a multi-billion dollar judgment in Ecuador over the alleged dumping of millions of gallons of toxic waste in a rainforest there.
An attorney for Chevron, Theodore Boutrous Jr., argued today in the U.S. Court of Appeals for the D.C. Circuit that a trial judge in Washington got it right in ordering a consulting firm to turn over internal documents about its role in the overarching environmental dispute.
Boutrous, a partner at Gibson, Dunn & Crutcher, told the three-judge appellate panel that the consulting firm Weinberg Group participated in a fraud scheme rooted in the attempt to “cleanse” a bogus expert report about damage from the dumping of waste in Ecuador. Chevron sought documents from the Weinberg Group in support of a suit in Manhattan federal district court.
Chevron's suit against the Weinberg Group in Washington tests the scope of the so-called “crime fraud” exception in discovery. Traditional protections against the disclosure of information—including the attorney-client and work-product privileges—can be voided if a judge determines information was prepared in furtherance of a crime or fraud.
Boutrous said in court papers that the consulting firm and the Ecuadorian plaintiffs’ lawyers “have engaged in intimidation of judges, bribery, fabrication of evidence, and the secret and unlawful ghostwriting of judicial documents in pursuing a corrupt” judgment against Chevron.
A court in Ecuador last year issued an $18.2 billion judgment against the oil giant.
But Boutrous’ argument today hit snags, as the appellate panel questioned whether Magistrate Judge John Facciola's review of the documents was sufficient to conclude the consulting firm has no legal ground to block disclosure of the information.
Represented by Patton Boggs partner James Tyrrell Jr., the Weinberg Group contends the work-product privilege protects the documents from disclosure.
Tyrrell urged the appeals court to force Chevron to return the 1,400 documents to the consulting firm. He asked the appeals court not simply to send the case back to the trial court but, instead, to issue an order dismissing Chevron’s discovery pursuit.
Judge David Tatel, who heard the case with Chief Judge David Sentelle and Judge Brett Kavanaugh, suggested through questioning that Facciola failed to assess whether the Weinberg Group documents were prepared in furtherance of an alleged fraudulent scheme.
Tatel said it’s not enough to show that certain documents are “related” to an alleged fraud. Rather, the judge seemed to suggest, Facciola needed to determine that the Weinberg Group intended to create or use documents to further a fraud on the court.
In ordering the Weignberg Group to disclose information to Chevron, Facciola, Tyrrell argued today, relied on an opinion in U.S. District Court for the Southern District of New York that an appeal court later overturned.
“Is this something we should uphold?” Sentelle asked Boutrous.
Kavanaugh suggested the “prudent” course could be to send the discovery dispute back to the trial court for further proceedings.