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December 14, 2010

Intel “Discretionary Factors” Considered ln Chevron’s Section 1782 Cases

The efforts of Chevron Corporation to obtain evidence under 28 U.S.C. § 1782 for use in litigation in Ecuador’s courts  and in a BIT arbitration against the Government of Ecuador has given U.S. District courts in a number of jurisdictions the opportunity to consider the discretionary factors affecting the availability of section 1782 discovery. Such discretionary factors were identified by the U.S. Supreme Court in the Intel case. (Intel Corp. v. Advanced Microdevices, Inc., 542 U.S. 241 (2004)).

 

Chevron is the defendant in private environmental litigation in Ecuador, and contends that the Government of Ecuador has improperly colluded with the Plaintiffs in that case. That collusion underlies Chevron’s BIT arbitration claims against Ecuador.

 

Federal district judges in Boston and Baltimore have granted Chevron permission in recent weeks to conduct depositions of damages experts who submitted reports for the Ecuador civil plaintiffs. (Chevron Corp. v. Sheffitz, 2010 U.S. Dist. LEXIS 129540 (D. Mass. Dec. 7, 2010); In re Chevron Corp., 2010 U.S. Dist. LEXIS 124897 (D. Md. Nov. 24 , 2010)).

 

Each court paused to consider whether the foreign court was receptive to the proposed discovery — and on which side the “receptivity” discretionary factor should impose a burden of persuasion. The Maryland judge was inclined to the view that the Respondent-witness bears the burden to demonstrate that the foreign tribunal is not receptive to the proposed evidence-gathering.  The Massachusetts judge took a more moderate view on this issue, finding that the burden is not clearly imposed on one party or the other. But each judge concluded that even though there was no clear indication that the Ecuador court wished to consider the proposed evidence, the fact that the Ecuador court stated that it was ethically-bound the make the evidence part of the official court file was sufficient to make the “receptivity” factor tip slightly in Chevron’s favor.

 

The two courts were more nearly consistent in the treatment of the third Intel discretionary factor: whether the proposed discovery would circumvent the procedures of the foreign tribunal. For the Maryland judge, it was sufficient to re-state the settled principle that the proposed evidence need not be discoverable in the foreign proceeding. The Massachusetts judge went a step further, to point out that the issue is properly viewed as one if bad faith, i.e. whether the evidence is sought in defiance of a preference of the foreign tribunal that the evidence not be obtained. 

 

In both cases, Chevron’s petitions were granted.