Chevron Corporation v. Donziger et al

Filing 1119

MEMORANDUM AND ORDER denying 1065 Motion to Quash; denying 1067 Motion to Quash; denying 1069 Motion to Quash. For the reasons discussed above, Chevron's motions to quash the depositions of Mr. Watson (Docket no. 1067), Mr. Scott (Docket no. 1065), and Kroll (Docket no. 1069) are each denied. (Signed by Magistrate Judge James C. Francis on 5/7/2013) Copies Mailed By Chambers. (lmb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

(ECF)

11 Civ. 0691 (LAK)

CHEVRON CORPORATION,

(JCF)

Plaintiff,
MEMORANDUM
AND ORDER

- against -

USDSSDNY
DOCIJMENT
ELECTRONICALLY FILED

STEVEN DONZIGER, et al.,
Defendants.

DOC
DATE FILED:r

JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
This

case

arises

out

of

a

multi billion

dollar

I

,

I

judgment

obtained in Ecuador against Chevron Corporation ("Chevron U

)

based

on claims of environmental destruction caused by the activities of
Texaco,

Inc. prior to its merger into Chevron.l

In this action,

Chevron contends that the plaintiffs in the Ecuadorian litigation,
along with their attorneys and consultants, procured the judgment
through fraud, including the fabrication of evidence. 2

During the

course of discovery, the defendants have noticed the depositions of
1 A fuller picture of the factual and legal background of this
controversy may be gleaned from the numerous opinions issued in
this litigation and related cases.
See"
e.g., Chevron Corp. v.
667 F. 3d 232 (2d Cir.), cert. denied, 133 S. Ct. 423
(2012) i Chevron Corp. v. Donziger, 871 F. Supp. 2d 229 (S.D.N.Y.
2012) i In re Chevron Corp., 709 F. Supp. 2d 283 (S.D.N.Y. 2010),
aff'd sub nom. Chevron Corp. v. Berlinger, 629 F.3d 297 (2d Cir.
2011) i In re Chevron Corp., 736 F. Supp. 2d 773 (S.D.N.Y. 2010).

2
The defendants asserted counterclaims, and a report and
recommendation recommending that the counterclaims be dismissed is
currently pending before the Court.

1

John S. Watson

l

Chevron/s Chairman and Chief Executive Officer;

Edward B. Scott III Vice President and General Counsel of Chevron/s
Global Upstream and Gas Group; and Kroll

Inc'

l

l

an investigative

and risk management company that Chevron retained in connection
with the various related litigations.

Chevron has now moved to

I will address each proposed deponent in

quash the depositions.
turn.

Because of the possibility of business disruption and the
potential for harassment

courts give special scrutiny to requests

l

to depose high-ranking corporate and governmental

ficials

are

See Alliance

sometimes

Industries
4323071

1

referred

to

as

Inc. v. Longyear Holding, Inc'

I

at *4

(W.D.N.Y. March 10

Nov. 11, 2000 Kaprun, Austria
*10

(S.D.N.Y.

depositions
knowledge

"apex witnesses. II

of

May

16,

senior
relevant

l

("Courts

executives
or

No. 08CV490S

1

disfavor

unless

some

2006 WL 1328259

1

they

unique

1

have

knowledge

at *1-2 (S.D.N.Y. Feb. 28, 2006).

senior executives are not exempt from deposition
principles relating to

1

requiring

relevant to the action. II) ; Treppel v. Biovail Corp., No.
3002 1 2006 WL 468314

2010 WL

2010); In re Ski Train Fire of

1

No. MDL 1428

2006)

facts

l

who

l

l

and,

at
the

personal
that

is

03 Civ.
However,
because

witnesses are in tension with the broad

lability of discoverYI

, In re Deposition Subpoenas of
2

David Garlock, 463 F. Supp. 2d 478, 481 (S.D.N.Y. 2006)

("We begin

with the proposition that plaintiffs have no burden to show that
the deponents have any relevant knowledge.");
172 F.R.D.

Naftchi v. New York

130,

132

(S.D.N.Y.

1997)

("[I]t is exceedingly difficult to demonstrate an appropriate basis
for an order barring the taking of a deposition.

Nor,

ordinary

circumstances, does it matter that the proposed witness is a busy
person or professes lack of knowledge of the matters at issue, as
the party seeking discovery is entitled to test the asserted lack
of knowledge."
excuse

a

(internal citations omitted)),

witness

from

giving

testimony

it is important to

only

in

compelling

circumstances.
On balance,

the relevant considerations here do not

precluding the deposition of Mr. Watson.

favor

To be sure, the rancorous

history of this litigation lends credibility to Chevron's concern
that the deposition has been noticed for purposes of harassment.
On the

other hand,

relevant knowledge.

there

is

little

As Chief Execut

doubt

that Mr.

Watson has

Officer, he has, of course,

monitored litigation that creates potential liability for Chevron
in the tens of billions of dollars.
dated

April

corporate

24,

2013,

biography,

Mr.

~

6).

(Declaration
Furthermore,

Watson previously

John S. Watson

according
"led

the

to

his

company's

integration effort following the Chevron-Texaco merger," experience
3

likely to have given him personal knowledge of the environmental
issues underlying the Ecuador litigation.
John S.

Watson,

Camacho Naranj 0

attached as Exh.
and

Javier

(Corporate Biography of

A to Defendants'

Piaguaj e

Payaguaj e' s

Hugo Gerardo
Opposition

to

Chevron's Motions for Protective Orders and to Quash Defendants'
Notices of Depositions of John Watson and Edward Scott, Dkts. 1065,
1067) .

The extent to which Mr.

Watson's knowledge of relevant

matters is unique is not clear, and the defendants have yet to take
the deposition of Chevron pursuant to Rule 30(b) (6) of the Federal
Under other circumstance, it might be

Rules of Civil Procedure.
prudent

to

defer

Mr.

Watson's

deposition

until

it

could

be

determined whether his testimony would likely be redundant to that
other witnesses.
however,

we

do

~~~='

not

2006 WL 468314,

that

as

have

luxury,

completed by the end of this month.
case.
apex witness

ly,

at *2.

discovery

is

Here,
to

be

this is far from a

Enough is at stake to justify the deposition of an
like

Mr.

Watson.

Chevron's motion to quash his

deposition is therefore denied.

Chevron seeks to preclude the deposition of Mr. Scott on the
basis

that he,

like Mr.

Watson,

an

wi tness

information that is both relevant and unique.
that

a

deposition

of

Mr.

Scott

would

who

lacks

Chevron also argues

necessarily

invade

4

D,;Ii/I"I_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _"

the

attorney-client privilege and the protection afforded attorney work
product.

I

need not decide whether Mr.

Scott's position in

Chevron's hierarchy qualifies him as an apex witness; even if it
does, the defendants would be entitled to take his deposition for
the reasons discussed with respect to Mr. Waters.
Of course, the defendants may not pursue information that is
privileged or is subject to work product protection.
assumed,

however,

that

possesses is privileged.

the only relevant

It cannot be

information Mr.

Scott

The defendants have the right to develop

the record by seeking Mr. Scott's knowledge and, where an objection
is lodged, asking the questions that will help determine whether
the privilege
Railroad

See New York v.

is properly asserted.

Passenger

Corp.,

04-CV-962,

2007

WL

National

4377721,

at

*3

(N.D.N.Y. Dec. 12, 2007); New York v. Oneida Indian Nation of New
No.

95-CV-554,

2001 WL 1708804,

at

*5

(N.D.N.Y.

Nov.

9,

2001); Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., No.
95 Civ.

8833,

1998 WL 2829,

at *5

(S.D.N.Y.

Jan.

6,

1998)

("[A

party] may not preclude entire areas from deposition questioning on
the basis of generalized assertions of privilege.").

Chevron's

motion to preclude Mr. Scott's deposition is also denied.

Finally,

Chevron argues

that

the

deposition of

Kroll,

investigati ve agency working wi th counsel, should be quashed.
5

an
"But

there

no

1S

Department

private-investigator's
of

Education

privilege,"

National

v.

United

Collegiate

States

Athletic

Association, 481 F.3d 936, 938 (7th Cir. 2007), and a determination
of the applicability of the attorney-client privilege and the work
product doctrine requires analysis of specific disputed materials
and communications.

Indeed, Chevron itself acknowledges that not

all of Kroll's work may be exempt from disclosure.

(Plaintiff

Chevron Corporation's Motion for a Protective Order to Strike the
Notice of Deposition Pursuant to Fed. R. Civ. P. 30(b) (6) to Kroll,
Inc. at 1
that

("[AlII but a few of the communications and materials

Kroll

counsel)

created,

in

used,

and exchanged with Chevron

connection with

its

work

on

Chevron's

(and its

behalf

are

subject to attorney client and work-product protections." (emphasis
added) ) .
Under some circumstances, communications to or from a lawyer's
agent may be privileged just as if they were communications with
the lawyer.
1961) .

==~~~~~~~~~~,

This

is

commonly the

296 F.2d 918, 921 22 (2d Cir.

case where

"translator," analyzing and interpret

the

agent

acts

as

a

technical information in

order to facilitate the attorney's provision of legal advice.
at 921; accord Federal Trade Commission v. TRW, Inc., 628 F.2d 207,
212

(D.C.

Cir. 1980); AVX Corp. v.

Horry Land Co., No.

3299, 2010 WL 4884903, at *8 (D.S.C. Nov. 24, 2010).
6

4;07-cv­

Some courts

have construed Kovel broadly, applying it to factual investigations
conducted by an attorney's agent.
Guess?,

Inc.,

271 F.R.D.

58,

See, e.g. Gucci America, Inc. v.

71

(S.D.N.Y.

2010).

Others have

limited its application to circumstances where communications with
the

agent

were

communications

necessary

to

improve

between attorney and

the

comprehension of
uni ted states

client.

Ackert, 169 F.3d 136, 139 (2d Cir. 1999)

the
v.

(" [T]he privilege protects

communications between a client and an attorney, not communications
that prove important to an attorney's legal advice to a client.")

i

E.I. du Pont de Nemours & Co. v. MacDermid, Inc., Civ. A. No. 06­
3383, 2009 WL 3048421, at *3 (D.N.J. Sept. 17, 2009)

i

United States

v. ChevronTexaco Corp., 241 F. Supp. 2d 1065, 1071-72 (N.D. Cal.
2002)

Indeed,

Kovel itself, the court stated that

[n]othing in the policy of the privilege suggests that
attorneys, simply by placing accountants, scientists or
investigators on their payrolls and maintaining them in
their
offices,
should
be
able
to
invest
1
communications by clients to such persons with a
privilege the law has not seen fit to extend when the
latter are operating under their own steam.
296 F.2d at 921.

The precise contours of the privilege as it

applies to Kroll need not now be decided.

Indeed,

it cannot be

until the record is developed to illuminate the role that Kroll
played for Chevron and the communications and materials that may be
at issue.
Of

course,

even

if

Kroll's
7

work

is

not

covered

by

the

attorney-client privilege, it may be protected by the work product
doctrine.

Evergreen Trading, LLC ex reI. Nussdorf v. United

States, 80 Fed. CI. 122, 142 (Ct. CI. 2007);
Refining Co.,

279

F.R.D.

290,

306

(W.D.

Pa.

2011).

But

that

doctrine provides only qualified protection, and may be overcome by
Chevron Corp. v. Donziger, No.

a showing of substantial need.
11 Civ.

691,

2013 WL 1087236, at *3

(S.D.N. Y. March IS,

2013);

United States v. Ghavami, 882 F. Supp. 2d 532, 540 (S.D.N.Y. 2012).
Furthermore, work product immunity can be forfeited by disclosure
that materially increases the opportunity that the adversary will
obtain the information.

See Egiazaryan v. Zalmayyev,

F.R.D.

, 2013 WL 945462, at *13 (S.D.N.Y. 2013); Ghavami, 882 F. Supp.
2d at 540; NXIVM Corp. v. O'Hara,
2007)

241 F.R.D.

109,

142

(N.D.N.Y.

(finding waiver of work product based on disclosure to public

relations firm).
finding

The current record provides an insuffic

that

the

work

product

doctrine

applies

basis
to

all

information that might be elicited in Kroll's deposition, that the
protection has not been forfeited, and that the defendants do not
have a substantial need for information that would otherwise be
protected.

The motion to relieve Kroll

from being deposed

therefore denied.

For the reasons discussed above,
8

Chevron's motions to quash

the depositions of Mr. Watson (Docket no. 1067), Mr. Scott (Docket
no. 1065), and Kroll (Docket no. 1069) are each denied.
SO ORDERED.

C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE

Dated:

New York, New York
May 7, 2013

Copies mailed this date:

Randy M. Mastro, Esq.

Kristen L. Hendricks, Esq.

Anne Champion, Esq.

Gibson, Dunn & Crutcher, LLP

200 Park Avenue, 47th Floor

New York, New York 10166

Andrea E. Neuman, Esq.

Gibson, Dunn & Crutcher LLP

3161 Michelson Drive

Irvine, CA 92612

William E. Thomson, Esq.

Gibson, Dunn & Crutcher LLP

333 South Grand Avenue

Los Angeles, CA 90071

Carlos A. Zelaya,
F. Gerald Maples,
F. Gerald Maples,
365 Canal Street,
New Orleans, LA

II, Esq.

Esq.
PA
Suite 2650
70130

Julio Gomez, Esq.
Gomez LLC Attorney At Law
40 Wall Street, 28th Floor
New York, New York 10005
9

Larry R. Veselka, Esq.

Tyler G. Doyle, Esq.

Smyser Kaplan & Veselka, L.L.P.

Bank of America Building

700 Louisiana, Suite 2300

Houston, TX 77002

10