Republic of Ecuador, et al. v. Gregory Douglas
Filing
51
Judge Douglas P. Woodlock: MEMORANDUM AND ORDER entered granting 33 Motion for a protective order; granting in part and denying in part 15 Motion for Protective Order (Woodlock, Douglas)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
In re Application of:
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THE REPUBLIC OF ECUADOR and
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DR. DIEGO GARCÍA CARRIÓN, the )
Attorney General of the
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Republic of Ecuador,
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Applicants,
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)
For the Issuance of a
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Subpoena Under 28 U.S.C
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§ 1782(a) for the Taking of
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a Deposition of and the
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Production of Documents by
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DR. GREGORY S. DOUGLAS for
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Use in a Foreign Proceeding, )
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Respondent,
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and
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CHEVRON CORPORATION,
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Intervenor.
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CIVIL ACTION NO.
11-mc-91287-DPW
MEMORANDUM AND ORDER
December 18, 2015
The Republic of Ecuador and its civil attorney general, Dr.
Diego García Carrión (collectively, the “Republic”) submitted an
application under 28 U.S.C. § 1782(a) for an order allowing them
to serve a subpoena on Dr. Gregory S. Douglas.
They seek to
require Dr. Douglas to produce documents for use in Chevron
Corporation and Texaco Petroleum Corporation v. The Republic of
Ecuador, PCA Case No. 2009-23, a foreign Bilateral Investment
1
Treaty arbitration.
Dr. Douglas and Chevron Corporation, as
intervenor, have moved for a protective order, which the
Republic opposed, modifying the scope of the Republic’s
requested discovery.
For the reasons stated below, I will grant
the Republic’s motion for a substitute subpoena and grant the
motion of Dr. Douglas and Chevron for a protective order but
only to the extent of providing protection from production to
draft reports and specified attorney-client communications.
I.
BACKGROUND
In 1993, indigenous Ecuadorians brought an environmental
suit in the Southern District of New York against Texaco Inc.,
and its subsidiary Texaco Petroleum Corporation, for polluting
the Oriente region of the Amazon rain forest while operating oil
wells there from 1964-1992.
The plaintiffs contended that
operations resulted in the illness and death of numerous people.
The case was dismissed in the district court on forum non
conveniens grounds, Aguinda v. Texaco, Inc., 945 F. Supp. 625,
627 (S.D.N.Y. 1996).
The Second Circuit vacated and remanded to
consider dismissal upon the condition that Texaco consent to
Ecuadorian jurisdiction, Jota v. Texaco, Inc., 157 F.3d 153, 155
(2d Cir. 1998).
On remand, the case was again dismissed by the
district court, Aguinda v. Texaco, Inc., 142 F. Supp. 2d 534,
536 (S.D.N.Y. 2001), on the conditions identified by the Second
2
Circuit, which thereafter affirmed.
Aguinda v. Texaco, Inc.,
303 F.3d 470, 473 (2d Cir. 2002).
In 2003, some of the Ecuadorian plaintiffs re-filed their
suit in Ecuador’s Lago Agrio Court against Chevron.
Republic of
Ecuador v. Chevron Corp., 638 F.3d 384, 390 n.5 (2d Cir. 2011).
As the Third Circuit put it, “[i]t is an understatement to
characterize the Lago Agrio litigation as contentious, as both
sides of the litigation vigorously have opposed nearly every
move by the other, and have accused the other side of criminal
or fraudulent conduct in the course of the litigation.”
Chevron Corp., 633 F.3d 153, 157 (3d Cir. 2011).
In re
On February
14, 2011, the Lago Agrio court entered judgment for the
Ecuadorian plaintiffs in the amount of $18 billion.
In 2009, while the Lago Agrio litigation was still pending,
Chevron commenced arbitration under the United Nations
Commission on International Trade Law (UNCITRAL).
Chevron Corp.
And Texaco Petroleum Corp. v. The Republic of Ecuador, PCA Case
No. 2009-23.
Chevron alleged that the Lago Agrio litigation was
unfair and denied it due process as required under the U.S.Ecuador Bilateral Investment Treaty.
Specifically, Chevron
alleged that the Lago Agrio court was corrupt, was not
independent or impartial, acted in collusion with the
plaintiffs, and unjustifiably denied Chevron’s defense that
Ecuador had released Chevron from liability, all in violation of
3
Chevron’s due process rights.
Chevron sought to obtain a
judgment from the Arbitration panel that would preclude
international enforcement of what became the $18 billion award
by the Lago Agrio court.
See In re Chevron Corp., 633 F.3d at
158-59 (giving factual history of this dispute in addressing an
application by Chevron for a subpoena to conduct discovery using
28 U.S.C. § 1782(a) for the Arbitration).
Unlike the Lago Agrio litigation, the Republic of Ecuador,
not the Ecuadorian plaintiffs, is opposing party to Arbitration
with Chevron.
As preparation for the Arbitration, Chevron
brought “an extraordinary series of at least 25 requests to
obtain discovery from at least 30 different parties” under 28
U.S.C. § 1782(a) in district courts throughout the United
States.
Id. at 159.
In response, the Republic has filed at least nine
applications for discovery pursuant to the same statutory
authority.
This is one of those applications.
Here, to defend
against Chevron’s claims in the Arbitration, the Republic seeks
discovery from Dr. Gregory S. Douglas, a resident of Rockland,
Massachusetts with twenty-five years of experience in
environmental labs analyzing crude oil samples from water,
waste, and biota.
Dr. Douglas submitted a number of expert
reports on Chevron’s behalf rebutting both court-appointed
experts and experts for the Ecuadorian plaintiffs in the Lago
4
Agrio litigation.
He also submitted an expert report in support
of Chevron’s merits brief to the Arbital Tribunal.
The Republic
seeks broad discovery of the bases of Dr. Douglas’s reports and
expert opinions.
Chevron moved for a protective order, arguing that the
Republic’s application was unduly burdensome, overbroad, and
beyond the scope of Federal Rule of Civil Procedure 26.
The
Republic opposed Chevron’s motion, claiming that it was an
attempt to “close the shades on this case denying to the
Republic . . . the sunlight [Chevron] has enjoyed.”
At a hearing held on January 3, 2012, I provided guidance
on how the Republic of Ecuador was to limit its subpoena to
appropriate bounds.
Subsequently, the parties made substantial
progress in resolving their discovery disputes.
On May 9, 2012,
the Republic filed a motion to substitute its subpoena.
The
proposed subpoena was much narrower, requesting fewer categories
of document and better shaping the bounds of those categories.
Protected categories of documents, such as draft reports or
attorney-client communications, are no longer sought.
The
proposed substitute subpoena addresses the concerns this Court
raised in the hearing.
Although the parties are now closer to
agreement on the proper scope of remaining discovery, a number
of disputes endure.
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II. DISCUSSION
A.
Statutory Requirements
The threshold issue is a narrow one:
whether compelled
discovery process is appropriate in this jurisdiction for use in
a foreign proceeding.
Under section 1782, “[t]he district court
of the district in which a person resides or is found may order
him to give his testimony or statement or to produce a document
or other thing for use in a proceeding in a foreign or
international tribunal . . . . upon the application of any
interested person.”
28 U.S.C. § 1782(a).
The statute
establishes requirements before a district court may grant an
application under section 1782.
First, the person from whom
discovery is sought must be found in the district.
Second, the
proceeding for which his discovery is being sought must be “a
foreign or international tribunal.”
Finally, the party applying
for the discovery must be an “interested person.”
Here, the Republic’s application meets all of the statutory
requirements.
Dr. Douglas, according to an expert report he
filed for Chevron in the Lago Agrio litigation, works in
Rockland, Massachusetts.
Thus, he can be “found” in the
District of Massachusetts.
Second, neither party disputes that the Arbitration is a
“foreign or international tribunal.”
See Chevron Corp. v.
Shefftz, 754 F. Supp. 2d 254, 260 (D. Mass. 2010) (noting that
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“international arbitral bodies operating under UNCITRAL rules
constitute ‘foreign tribunals’ for purposes of § 1782.”).
Moreover, the third track of the Arbitration, which the tribunal
plans to hold in order to quantify any liability and in which
the Republic seeks to use these materials, is “within reasonable
contemplation.”
Intel Corp. v. Advanced Micro Devices, Inc.,
542 U.S. 241, 259 (2004).
Finally, the Republic is an “interested person” because it
is the respondent in the Arbitration.
See, e.g., Intel Corp.
542 U.S. at 256 (2004) (“No doubt litigants are included among,
and may be the most common example of, the ‘interested
person[s]’ who may invoke § 1782.").
B.
Intel Discretionary Factors
Once these statutory requirements are met, as they are
here, a court may, but is not required to, grant the
application.
Id. at 264.
The Supreme Court has provided four
concerns for district courts to consider in determining whether
to grant an application that meets the statutory requirements of
§ 1782.
First, there is less of a need for § 1782(a) aid where
“the person from whom discovery is sought is a participant in
the foreign proceedings.”
Id.
Second, a district court should
consider the nature and character of the foreign proceedings,
and the receptivity of the foreign body involved to U.S.
judicial assistance.
Id.
Third, a district court should deny a
7
section 1782 application if it “conceals an attempt to
circumvent foreign proof-gathering restrictions or other
policies of a foreign country or the United States.”
265.
Id. at
Finally, a district court can reject or modify “unduly
intrusive or burdensome requests.”
Id.
The first Intel factor weighs in favor of granting the
Republic’s application.
Arbitration.
Dr. Douglas is not a party to the
UNCITRAL Rules make no provision for requiring
production of documents from non-parties, as opposed to parties.
UNCITRAL Arbitration Rules Art. 24.3 (1976) (“At any time during
the arbitral proceedings the arbitral tribunal may require the
parties to produce documents, exhibits or other evidence . . .
.”), International Bar Association Rules on the Taking of
Evidence in International Arbitration, Art. 3.9 (“If a Party
wishes to obtain the production of Documents from a person or
organisation [sic] who is not a Party to the arbitration and
from whom the Party cannot obtain the Documents on its own, the
Party may, within the time ordered by the Arbitral Tribunal, ask
it to take whatever steps are legally available to obtain the
requested Documents, or seek leave from the Arbitral Tribunal to
take such steps itself.”); see also In re Application of
Republic of Ecuador, 2011 WL 4434816, at *3 (N.D. Cal. Sept. 23,
2011).
Because the foreign tribunal cannot order the discovery
sought by the Republic, the first factor weighs in favor of
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granting the Republic’s application.
See Shefftz, 754 F. Supp.
2d at 261.
The second factor is neutral, because neither party
provides convincing evidence regarding whether the Arbitral
Tribunal would be receptive to this Court’s assistance.
There
are, however, no allegations that the application is being used
to circumvent the Arbitration’s evidence-gathering restrictions,
so the third factor weighs in the Republic’s favor.
Instead, Dr. Douglas and Chevron argue that the Republic’s
request for discovery is overbroad, and compliance with it would
be unnecessarily costly and unduly burdensome.
Thus, they
request a protective order from this court modifying the terms
of the proposed subpoena and oppose the motion to substitute the
subpoena.
Under Rule 26(c), a protective order may issue upon a
showing of good cause “to protect a party or person from
annoyance, embarrassment, oppression, or undue burden or
expense.”
C.
Fed. R. Civ. P. 26(c)(1).
Objections to Further Discovery
At this point, the discoverability of only two specific
sets of materials remains contested.
48 p. 3].
[Doc No. 47 p. 5; Doc. No.
First, the Republic seeks to discover the data and
supporting documentation underlying five reports from the Lago
Agrio litigation.
Chevron and Dr. Douglas argue that those data
should be protected.
Second, the Republic of Ecuador seeks to
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discover certain communications by Dr. Douglas: those with other
expert witnesses, those with non-attorney Chevron employees, and
those in which Chevron’s counsel are merely copied on the e-mail
but do not otherwise participate in the discussion.
Supporting
documents and notes are also sought in connection with those
communications.
Additionally, Chevron argues that additional
discovery should either be limited entirely or partially because
it is unnecessary at this point; it asserts that the Republic
failed to pursue discovery adequately in recent years and that
this discovery would be unreasonably cumulative.
1.
The Lago Agrio Reports
I turn first to the documents and data related to and
forming the basis for five expert reports prepared by Dr.
Douglas in the Lago Agrio litigation.
When presented with the
same issue, other courts have ordered materials underlying Lago
Agrio expert reports to be disclosed in connection with the
Treaty Arbitration.
See, e.g., In re Application of Republic of
Ecuador, 280 F.R.D. 506, 513 (N.D. Cal. 2012) aff'd sub nom.
Republic of Ecuador v. Mackay, 742 F.3d 860 (9th Cir. 2014).
I
reach the same result.
Here, the parties dispute the precise status of these five
reports in the Treaty Arbitration and therefore whether the
underlying facts and data supporting the reports must now be
produced.
The Republic states that these reports were relied
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upon in Dr. Douglas’s Treaty Arbitration reports, discussed in
his testimony, and provided directly to the tribunal.
Chevron
asserts that these reports were merely cited by, but not
incorporated into, Dr. Douglas’s arbitration report.
In other
cases, the distinctions between a document cited by a testifying
expert, one he relied upon, and one he fully incorporated into
his report might be meaningful in determining what underlying
facts must be produced in discovery.
But this particular
arbitration requires, in many ways, a reevaluation of the Lago
Agrio case on the merits, in order to determine what would have
happened in the absence of the alleged corruption.
In that
sense, the Lago Agrio litigation is a “case within the case.”
In re Republic of Ecuador, No. C-10-80225 MISC CRB, 2010 WL
4973492, at *8 (N.D. Cal. Dec. 1, 2010).
In such a context,
where the same expert testifies in both proceedings on the same
subject, I conclude it is immaterial how Dr. Douglas presented
his five Lago Agrio reports to the tribunal.
However Dr. Douglas packaged his research, it is clear that
he generated a body of knowledge for the two cases, taken
together, which formed the basis for his expert report in the
arbitration.
Cf. In re Application of Republic of Ecuador, No.
4:11MC73-RH/WCS, 2012 WL 5519611, at *2 (N.D. Fla. Nov. 2, 2012)
aff'd sub nom. Republic of Ecuador v. Hinchee, 741 F.3d 1185
(11th Cir. 2013) (“Dr. Hinchee was such an expert in the
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underlying litigation. But Dr. Hinchee will not testify in the
arbitration proceeding.
For work-product purposes, Dr. Hinchee
should be treated as a testifying expert. He was hired to
testify in the underlying—closely related—litigation, and he did
testify.”).
Treating these five Lago Agrio reports separately
would, on the basis of an artificial distinction, impede the
Republic of Ecuador’s ability appropriately to address Dr.
Douglas’s testimony before the tribunal.
I follow the other
courts that have addressed discovery in this matter and find
that facts and data considered in producing reports for the Lago
Agrio litigation must be disclosed in the Treaty Arbitration.
2.
Work-Product Protections and the Interpretation of
Fed. R. Civ. P. 26
In attempting to protect Dr. Douglas’s materials from
discovery, Chevron presents an interpretation of Rule 26 that
has been consistently rejected in parallel litigation across the
country.1
Republic of Ecuador v. Hinchee, 741 F.3d 1185 (11th
Cir. 2013); Republic of Ecuador v. Mackay, 742 F.3d 860 (9th
Cir. 2014); Republic of Ecuador v. For Issuance of a Subpoena
Under 28 U.S.C. Sec. 1782(a) [hereinafter “Bjorkman”], 735 F.3d
1179 (10th Cir. 2013).
In this respect, Chevron makes two
1
The parties previously disputed whether the pre-December 2010
version of Rule 26 or the current version should apply. [Doc.
No. 19]. All parties now agree that the current version
governs.
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contentions.
First, it argues that Rule 26(b)(3) provides a
blanket protection for the materials of expert witnesses,
because they are “prepared in anticipation of litigation or for
trial by or for another party or its representative.”
Civ. P. 26(b)(3)(A).
Fed. R.
Second, Chevron argues that Rule
26(a)(2)(B) limits what must be produced to a narrow range of
“facts or data considered by the witness” and excludes much of
the discovery sought by the Republic of Ecuador here.
Both of
these contentions misread Rule 26 and its 2010 revisions.
The
three Courts of Appeals to consider Chevron’s arguments each
provided thorough, and substantially identical, readings of the
Rules.
I adopt those interpretations, which I briefly restate
here.
The work product protection codified in Rule 26(b)(3) does
not extend to testifying experts.
This is clear from the text
of the Rule, which lists a series of persons and entities, such
as insurers or agents, who might be a party’s representative for
work-product purposes; the list conspicuously does not include
“experts.”
Hinchee, 741 F.3d at 1190.
“This silence speaks
volumes,” given that the Rule’s drafters then dealt with experts
in the following subsection. Id.
Moreover, certain expert
witness materials — draft reports and attorney-expert
communications — are specifically identified as exempt from
discovery.
Fed. R. Civ. P. 26(b)(4)(B)-(C).
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Those provisions
would be rendered superfluous by the creation of a blanket work
product protection for testifying witnesses. Hinchee, 741 F.3d
at 1191.
The history of the Rule also makes clear that expert
witnesses are not categorically protected by the work product
doctrine – and indeed clarifies that the specific materials
sought by Ecuador are discoverable.
The 1970 revised rules, the
first formally to incorporate the work product doctrine,
included a comment expressly rejecting “decisions which have
sought to bring expert information within the work-product
doctrine.”
Fed. R. Civ. P. 26, advisory committee notes (1970)
cited by Bjorkman, 735 F.3d at 1185.
Likewise, the 2010
Advisory Committee notes, for amendments which added specific
protections for certain expert materials, make clear that “the
expert’s testing of material involved in litigation, and notes
of any such testing would not be exempted from discovery by this
rule” and that “inquiry about communications the expert had with
anyone other than the party’s counsel about the opinions
expressed is unaffected by the rule.”
Fed. R. Civ. P. 26,
advisory committee notes (2010), cited by Hinchee, 741 F.3d at
1191.
The drafters’ intent, which in this case is reliably
captured by the explanatory notes, Mackay, 742 F.3d at 865, was
unambiguously to exclude expert witnesses from the blanket
protections of Rule 26(b)(3).
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Finally, the purpose of the Rule bolsters these textual and
historical arguments.
The work-product doctrine is meant to
protect the work of lawyers.
510-11 (1947).
Hickman v. Taylor, 329 U.S. 495,
The rationale for protecting attorneys does not
extend to testifying expert witnesses, who play a fundamentally
different role in litigation.
Expert witnesses do not craft
legal strategy; they provide testimony.
“Cloaking all
materials prepared by or for a testifying expert under the workproduct doctrine inhibits the thorough and sharp cross
examination that is vital to our adversary system.” Hinchee, 741
F.3d at 1192.
For each of these reasons, expert witnesses are
not covered by the work-product doctrine and Rule 26(b)(3).
Rather, it is essential that the materials of expert witnesses
be discoverable by opposing parties.
Chevron also argues that the 2010 revisions to Rule
26(a)(2) limit what expert materials must be disclosed.
Prior
to 2010, expert reports were required to disclose “data or other
information” considered by the expert in forming his opinions;
in 2010, that phrase was revised to require disclosure of only
“the facts or data” considered.
Mackay, 742 F.3d at 868-69.
This change was meant to protect two specific kinds of material
from disclosure: draft expert reports and communications between
experts and counsel.
Id. citing Fed. R. Civ. P. 26, advisory
committee notes (2010).
Only those two types of discovery were
15
to be affected. Bjorkman, 735 F.3d at 1186.
For all other
materials, the Rule drafters intended that “’facts or data’ be
interpreted broadly to require disclosure of any material
considered by the expert, from whatever source, that contains
factual ingredients.” Id. citing Fed. R. Civ. P. 26, advisory
committee notes (2010).
Thus, the Eleventh Circuit held that a testifying expert’s
notes and his communications with other non-attorneys must be
produced in discovery. Hinchee, 741 F.3d at 1186.
The Ninth
Circuit likewise noted that communications between the expert
and anyone other than the party’s counsel were discoverable.
Mackay, 742 F.3d at 863-64.
The Tenth Circuit affirmed a
district court order allowing Chevron to withhold only draft
reports, attorney-client communications, and documents
specifically covered by Rules 26(b)(4)(B) and (C).
735 F.3d at 1181-82.
Bjorkman,
These holdings required the production of
precisely the same categories of document at issue in this
proceeding.
Chevron’s efforts to distinguish the decisions of the
Courts of Appeals is unpersuasive.
It argues that those courts
failed to examine the role of an expert “in the context of legal
strategy.”
Chevron argues that its experts here should be
understood to be working in furtherance of an overall litigation
strategy and therefore protected by Rule 26.
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Chevron presents
no case law in support of this proposition nor any argument that
Dr. Douglas was more involved in legal strategy than the experts
considered by the many other courts addressing the matter.
Its
argument would allow parties to avoid discovery by simply
labeling their experts legal strategists, undermining the
structure of the Rules.
That argument must be rejected.
As previous courts have held, the work-product doctrine
only allows Dr. Douglas to withhold from discovery the “core
opinion work-product of Chevron attorneys.” Hinchee, 741 F.3d at
1196.
But, the exceptions provided in the Rule remain
operative.
Communications between Dr. Douglas and attorneys
relating to his compensation or identifying facts, data or
assumptions for Dr. Douglas to use in forming his opinion are
not protected and must be produced.
26(b)(4)(C).
Fed. R. Civ. P.
In addition, Dr. Douglas’s communications with
non-attorneys – including communications in which attorneys are
merely copied, but in which no attorney work product exists and notes must be provided.
3.
Improper Delay and Cumulative Discovery
In addition to seeking the protection of the two specific
categories of material described above, Chevron also seeks the
more general protections of Rule 26(b)(2)(C), which imposes
certain limits on unreasonable discovery.
17
First, Chevron argues that the Republic of Ecuador is not
entitled to discovery here because it has failed to press its
claims adequately over the last three years.
Rule 26(b)(2)(C)
(ii) of the Federal Rules of Civil Procedure requires courts to
limit discovery where the party seeking discovery has had ample
opportunity to obtain the information by discovery in the
action.
This provision does not bar the Republic from
conducting the discovery it seeks.
The Republic was not
obligated, as Chevron suggests, to contact the Court every time
it might have found this discovery useful.
The Republic has, on
more than one occasion, informed this Court of recent decisions
in parallel litigation.
Those filings have renewed its request
for action by this Court.
To the extent that those filings were
not enough to secure an immediate decision, it is not the fault
of the Republic of Ecuador.
Second, Chevron argues that discovery should be limited
under Rule 26(b)(2)(C)(i), which requires a court to limit
discovery that is “unreasonably cumulative or duplicative.”
Chevron asserts that the Track 3 issues for which Dr. Douglas’s
expertise might be relevant – how much contamination remains on
site and how toxic that oil is – have already and more
thoroughly been addressed by two other experts, Dr. John Connor
and Dr. Thomas McHugh.
It may be that the testimony of Drs.
Connor and McHugh proves more relevant to the third track of the
18
arbitration; it may even be likely.
However, that does not make
the information sought by the Republic of Ecuador unreasonably
cumulative.
Dr. Douglas is Chevron’s expert.
The Republic
seeks to understand and potentially contest the basis for his
opinions.
To do that, the Republic needs the information that
Dr. Douglas, specifically, used in forming his opinions.
Data
on the same subject from a different expert is not an adequate
substitute.
What is more, Drs. Connor and McHugh each rely upon
Douglas’s findings at various points in their own reports.
These relationships show that Douglas’s reports are not
duplicative of the Connor and McHugh reports but independent and
distinct.
The Republic’s discovery requests are not
unreasonably cumulative.
III. CONCLUSION
For the reasons above, I GRANT the Republic’s motion for a
substitute subpoena (Dkt. No. 33).
I GRANT in part and DENY in
part Dr. Douglas’ and Chevron’s motion for a protective order
(Dkt. No. 16) which is applicable to the substitute subpoena.
Accordingly, it is hereby ORDERED that all documents sought
in the Republic’s substitute subpoena shall be produced, with
19
the exception of draft reports and protected communications
between Dr. Douglas and counsel.
/s/ Douglas P. Woodlock_
DOUGLAS P. WOODLOCK
UNITED STATES DISTRICT JUDGE
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