In February, an Ecuadorean court order ed Chevron Corp. to pay Ecuadorean plaintiffs some $8.6 billion in compensation relating to alleged environmental damage in the Amazon rain forest. Undoubtedly, the final chapter of the battle between Chevron and its opponents has yet to be written—both sides have stated their plans to appeal the judgment. And, Chevron is also seeking to prevent any enforcement of the Ecuadorian judgment (as discussed in a separate note herein), as it simultaneously prosecutes an international arbitration challenging the legitimacy of the Ecuadorian court action.

Whatever its ultimate outcome, the Chevron case has already spawned a significant body of case law in the United States, not only in the areas of arbitration law and judgment enforcement, but also in the specialized field of collection of evidence in the United States for use in foreign proceedings.  

The Facts

Within just the last year alone, Chevron and related individuals have filed between 20 and 30 applications to obtain evidence in the United States for use in the main Ecuadorean action and related civil and criminal proceedings abroad. Those applications were filed pursuant to a federal statute, 28 U.S.C. § 1782 (“Section 1782”), which allows for issuance of orders to persons found within a particular federal district to provide evidence for use before a foreign tribunal.

A common theme running through many of the Section 1782 decisions issued in connection with the Chevron matters is the question whether and when a legal privilege will justify non-production of evidence by the witness in the United States. Section 1782, by its terms, states that a “person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.” Yet, such language leaves open the question whether the available privileges are only those recognized in the United States or include privileges available under foreign law. And, if foreign privileges are recognized, there is the further question just how a United States court is to determine their scope and applicability in any given situation.

The Decisions

U.S. Privileges

  • In one of the more publicized court rulings, the Second Circuit Court of Appeals affirmed an order directing the maker of the film “Crude,” a documentary regarding the Ecuadorian proceedings, to produce outtakes of the film. Chevron had claimed the outtakes would demonstrate the plaintiffs’ abuse of the Ecuadorian legal system. The Appeals Court upheld the order directing production of the outtakes over the objection of the filmmaker and the plaintiffs that the material was protected by the privilege extended to journalists under United States law.1
  • In somewhat similar cases, district courts in New York and Pennsylvania have also ordered document production and testimony by lawyers associated with the Ecuadorean plaintiffs, despite claims of attorney-client and work product protection under U.S. law.2  

Foreign Privileges

  • Chevron’s applications have also included requests for orders directing parties in the United States to produce evidence claimed to be privileged under foreign law. For example, Chevron sought evidence in the U.S. relating to communications between persons or entities associated with the Ecuadorian plaintiffs and an alleged independent expert witness appointed by the Ecuadorian court. Chevron asserted that the evidence sought would reveal the expert’s lack of true independence.
  • In contesting the applications, the plaintiffs and third party witnesses argued, among other things, that the requested evidence was protected under either the attorney client privilege or the work product doctrine— under either or both United States and Ecuadorian law. For various reasons, these claims of privilege were generally overruled.
  • Most of the U.S. courts addressing the issue of foreign privilege, while acknowledging that a witness in the United States may not be compelled to produce evidence in violation of a privilege recognized under foreign law, have ruled that in order to invoke the foreign privilege successfully, the witness must prove that the foreign court would refuse to consider the evidence because of the violation of a privilege.3
  • A somewhat different approach was taken by a federal court in Colorado, which appears to have ruled that questions of privilege are to be determined by reference to United States law alone, although foreign courts are free to refuse to accept evidence if it is deemed to have been obtained in violation of a privilege that they recognize.4
  • Such an approach has the benefit of relieving United States courts of the obligation to delve into foreign countries’ privilege laws, but risks forcing witnesses to provide evidence in violation of a foreign privilege, which might arguably be in contravention of the express terms of Section 1782.

Burdens Of Proof

  • On the question of who bears the burden to prove inadmissibility in the foreign court, a federal court in Massachusetts, addressing one of Chevron’s applications, has opined that because the target of a Section 1782 request may have limited resources, the burden of proving admissibility or inadmissibility abroad should be shared by both the target and the parties to the foreign action themselves.5 This approach is at odds with the approaches taken by a number of other federal courts.  

Conclusion

No doubt, the law regarding the assertion of foreign privileges in the context of Section 1782 proceedings will continue to evolve. And, the Chevron case may continue to provide a forum for that evolution in the years to come.