Ceglia v. Zuckerberg et al

Filing 577

MEMORANDUM in Opposition re 553 MOTION for Discovery CORRECTED/AMENDED filed by Paul D. Ceglia. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit, # 5 Exhibit, # 6 Exhibit, # 7 Exhibit, # 8 Exhibit, # 9 Exhibit, # 10 Exhibit, # 11 Exhibit, # 12 Exhibit, # 13 Exhibit, # 14 Exhibit)(Boland, Dean)

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IN THE MATTER OF

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__________________________________________

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CHEVRON

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-against-

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DONZIGER

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__________________________________________

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The following transcript of

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proceedings, or any portion thereof, in

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the above-entitled matter, taken on any

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date, is being delivered unedited and

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uncertified by the official court

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reporter.

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The purchaser agrees not to

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disclose this UNCERTIFIED and UNEDITED

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transcript in any form (written or

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electronic) to anyone who has no

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connection to this case.

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unofficial transcript, which should NOT be

This is an

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relied upon for purposes of verbatim

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citation of testimony.

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This transcript has not been

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checked, proofread, or corrected.

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draft transcript, NOT a certified

It is a

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transcript.

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computer-generated mistranslations of

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stenotype code or electronic transmission

As such, it may contain

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errors, resulting in inaccurate or

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nonsensical word combinations, or

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untranslated stenotype symbols which

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cannot be deciphered by non-stenotypists.

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Corrections will be made in the

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preparation of the certified transcript,

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resulting in difference in content, page,

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and line numbers, punctuation, and

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formatting.

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This uncertified and unedited

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transcript contains no appearance page,

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certificate page, index, or certification.

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HON. POOLER: I understand all

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parties are here so due to the length

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of the challenge, I won't call it.

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We'll start with the first case

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on our calendar which is Chevron

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Corporation versus Camacho and others.

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The panel has determined that

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the first five minutes will be on the

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mandamus motion, the movants and the

EXHIBIT J

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opponents, and then we will turn to

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the other issues on appeal.

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So five minutes on the clock on
the mandamus motion.

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MR. TYRELL: May it please the

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court, my name is James Tyrell from

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the firm of Patton Boggs and I

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represent individual Ecuadorian

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citizens, Mr. Camacho and Mr.

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Payaguaje.

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was going to start the other way, but

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I'm happy to start on the mandamus

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petition.

The court surprise me.

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HON. POOLER: Thank you.

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MR. TYRELL: I start with the
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standard.

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application of mandamus is an

The standard for

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objective analysis.

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USC 455A is based upon what the man in

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the street perceives the

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reasonableness of judicial conduct.

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Any doubt is to be resolved in favor

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of recusal.

Recusal under 28

We maintain that the

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standard here is one of deep

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antagonism, that deep antagonism has

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been demonstrated by the district

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court to the judicial system of

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Ecuador, to my individual clients, and

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to my individual clients' lead

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counsel, Mr. Donziger.

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We ask that, in addition to

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mandamus, that the court consider as

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an alternative but also available,

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reassignment.

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The conduct of the district

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court can be put into several broad

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categories, each of which we believe

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mandates recusal or reassignment.

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Number one, prejudice and
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visceral snap judgment.

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had this case at the time of the

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Berlinger 1782 and in that case with

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no reason to do it, it discredited the

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Ecuadorian court system saying that it

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would be happy to wait for a judgment

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if it was the high court of London but

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not a court in Ecuador.

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This court

That was in

April of 2010.
In September of 2010 in the
Donziger Section 1782 -HON. LYNCH: I'm sorry, I don't

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understand, isn't the very issue in

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this case whether the Ecuadorian

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system of justice is to be credited?

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Isn't that the whole point?

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understand that you take the position

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that it should be and that the judge

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was wrong in his view that there are

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deep problems with the Ecuadorian

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judicial system, but are you just

I

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saying that he came to a conclusion

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that is erroneous about that issue?

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MR. TYRELL: It's the timing,
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your Honor, in the Berlinger 1782, the

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issue was the discovery of the

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outtakes.

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Ecuadorian court system was not before

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the court.

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disparage the Ecuadorian court system

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at that time.

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which I'm about to get to, there was

The legitimacy of the

He went out of his way to

In the Donziger 1782,

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no issue yet because there was no

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filing for declaratory judgment.

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again went out of his way to disparage

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the Ecuadorian court system.

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short, it demonstrates a prejudgment,

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a snap visceral reaction which is

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precisely the kind of thing that this

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court in a recent case in 2010 said

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has to be looked at for purposes of

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recusal.

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He

In

In the Donziger 1782, what does

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the court say?

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own words.

And it's the court's

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become the next big thing in fixing

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the balance of payments deficit.

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I got it from the beginning.

Mr. Donziger is trying to

Key,

In other

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words, he knew from the prior

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proceedings before involving Berlinger

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what that case was about.

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fraud, a sham by American class action

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lawyers to, as he said it, hit Chevron

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big, and the statements are in our

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brief; I won't go through them.

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particular comments disparaging Mr.

It was a

Those

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Donziger before this case is ever

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filed dealing with declaratory

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judgment or civil RICO evidenced a

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predisposition and unwillingness to

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have an open mind with respect to

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issues now before the court in this

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case.

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HON. LYNCH: Had Judge Kaplan

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seen the film by the time he made

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those comments about Mr. Donziger?

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MR. TYRELL: He had seen five

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minutes of outtakes of six hundred

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hours of film.

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forward in our brief, Chevron is a

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master and their counsel are a master

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of taking two words here, a snippet

And as we have put

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there, gluing them together.

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set forth in our brief the entire

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context.

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We have

The bottom line is Judge Kaplan

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is not changing his mind; he will

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never change his mind.

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Mr. Donziger is some sort of PR guy,

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as he said, not a lawyer, not entitled

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He believes

to an attorney-client privilege.

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With Mr. Donziger, as this court

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well knows, he made Mr. -- my clients,

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my Ecuadorian plaintiffs forfeit

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eighteen years of privileged documents

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because Mr. Donziger, who he has no

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respect for, supposedly missed a

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deadline to get a privilege log in at

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the same time that he moved to strike

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the entire subpoena or limit its

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scope.

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court, and I argued it last December,

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the court said there's only one reason

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why that would be appropriate and that

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is the criminal proceedings, their

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imminence pending in Ecuador.

When we were before this

It had

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instructed the district court that if

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that imminence went away, he should

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sua sponte go back and look at that

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privilege waiver.

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court never did it.

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now that privilege waiver has been

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extended by the district court in ways

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we've never seen before to potentially

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include the documents of thirty other

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law firms and consultants, including

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my law firm Patton Boggs, who is

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somehow deemed to have waived the

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privilege derivative of Mr. Donziger's

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waiver of the privilege.

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the kinds of things that are judge,

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who has an open mind and is willing to

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demonstrate the appearance of

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impartiality, does.

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Of course, the
In fact, right

These aren't

Your Honor, I'm out of time, but

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there's more to say.

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you wish.

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I'll do whatever

HON. POOLER: We'll hear from

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Chevron on the recusal motion.

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MR. TYRELL: And so I can
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clarify, will I come back to speak to

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the merits argument and will I have

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nine minutes at that time?

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HON. POOLER: Yes.
MR. TYRELL: Thank you very much,
your Honor.
MR. MASTRO: Thank you, your
Honors.
Actually, the standard on

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mandamus, it's one of the highest

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standards that can possibly be --

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HON. POOLER: Could you do

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something with the microphones?

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MR. MASTRO: Your Honor, the

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standard on mandamus, as this court

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well knows, are that it is an

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extraordinary measure and only granted

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in the most extreme circumstances.

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One, it has to be a circumstance of

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mandamus where an appeal would not

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suffice; two, it has to be such a

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clear and undisputable abuse of

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discretion, because we're talking

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about abuse of discretion here; and
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three, it has to involve significant

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issues.

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HON. POOLER: The defendants

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argue that they have lost every single

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time they've come before this judge.

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MR. MASTRO: Actually, they've

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lost every single time they've been

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before this court, your Honor.

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the very thing that Mr. Tyrell

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complains about --

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And

HON. POOLER: Not exactly.
MR. MASTRO: Mr. Tyrell complains

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about the privilege waiver and the

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ramifications of that and Judge

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Kaplan's as to Mr. Donziger and

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ramifications of that.

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affirmed, affirmed with an opinion

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that made crystal clear that Judge

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Kaplan had handled the cases -- he'd

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had multiple cases at that point --

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in, quote, an exemplary manner and

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that all concerned, not least this

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court, are well served by his

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stewardship.

This court

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Now, your Honor, Liteky is the

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standard and Liteky tells us, the

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Supreme Court has told us flat out the

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judicial rulings alone almost never

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are a cause for mandamus, that it's

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not reviewable, a decision for bias or

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prejudice whether it's based on his

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knowledge or opinion based on what's

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properly happened in the case.

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this case, Judge Kaplan's

And in

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observations, Judge Kaplan's rulings,

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they were, your Honor, when Donziger

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ruled -- when he ruled on Donziger's

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waiver, he had seen the crude outtakes

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because this court confirmed the crude

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outtakes being released.

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showed Mr. Donziger saying that

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Ecuador, the judges in Ecuador are

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corrupt, it's their birthright, saying

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that they don't decide by the law,

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they decide by who they fear, saying

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that maybe the judge won't be killed

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but if he thinks he will, that's good

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enough.

And they

These are the kinds of things
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that he admitted and on those crude

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outtakes, they showed the plaintiff's

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leading -- the court's global damages

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expert, supposedly an independent --

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HON. POOLER: Counsel, what
you're describing is evidence.

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MR. MASTRO: And that's what
Judge Kaplan --

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HON. POOLER: But has he made

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findings based on that evidence up

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until his last decision?

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I think that's what counsel is saying

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is that before he made a decision, he

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seemed to have prejudged the issue.

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He had not.

MR. MASTRO: Absolutely not, your

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Honor.

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context, we had to show that we were

In the Donziger waiver

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entitled to have a subpoena issued and

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he reviewed the evidence to date,

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including the crude outtakes which

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showed Mr. Donziger's blatant

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misconduct, in fact his criminal

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conduct.

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ruling that this court affirmed based

So your Honors, he made a

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on the evidence before him which

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included the crude outtakes.

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Honor, he made rulings in our case

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based on an overwhelming record.

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thirty years of practice and as a

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former prosecutor, I've never seen a

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record so shocking of illegal and

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improper conduct; a fraud on the court

And your

In

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in Ecuador blackmailing the judge to

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get them to appoint a court-appointed

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officer and then ghostwriting his

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report word for word and submitting

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other false expert reports and now the

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evidence -- with complicity of counsel

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of trying to cleanse that fraud by

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offering new experts who did no work

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themselves, relied simply on the old

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fraudulent Cabrera report.

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Honor, the latest efforts even that

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these plaintiffs and their agents --

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I'm referring to the LAPs, not Chevron

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as the plaintiff -- they even

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ghostwrote the judgment that issued

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out of Ecuador.

And your

We see whole sections

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of internal memos of theirs that were

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never submitted to the court that

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showed up word for word in the

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Ecuadorian judgment as well as their

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own internal database, never turned

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over to the court called Selva Viva

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which turned out to be a hotel room.

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That shows up word for word in the

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judgment.
HON. POOLER: Counsel, the issue
as to the validity of the Ecuadorian

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judgment is, in fact, to be tried by

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Judge Kaplan.

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MR. MASTRO: Correct, your Honor.

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HON. POOLER: And what these

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defendants, plaintiffs in other

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contexts, are saying is that he

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appears to have prejudged the issue of

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the validity of the Ecuadorian

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judgment.

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yet.

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That has not been decided

MR. MASTRO: But your Honor, what

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he has done is issue -- and we're now

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getting into the second part of the
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argument -- he issues a status quo

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preliminary judgment based on what was

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undisputed evidence before him of

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fraud in the procurement of the

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judgment and lack of impartiality

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in --

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HON. WESLEY: Well, that's not
true because the timelines were pretty

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tight; weren't they?

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have much time to respond.

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showed up with a thousand pages,

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didn't you, of exhibits and Donziger

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got how many days to respond?

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You had

MR. MASTRO: Actually, your
Honor --

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Donziger didn't

HON. WESLEY: It's a just
question.

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I need you to respond.

MR. MASTRO: He, from the time he

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had notice of the complaint and the

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TRO which was issued on notice, it was

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not issued at the outset, he had eight

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days to come into the court on the TRO

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and then until the eleventh, that's

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eleven days, to submit additional
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papers.

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did.

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sixty-plus page brief at the TRO

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hearing and hundreds of pages of their

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own of exhibits.

Mr. Donziger chose

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not to do that.

The LAPs put in more

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papers by the eleventh.

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chose not to do that even while he had

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a prominent criminal defense attorney

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in the New York City, Jay Lefkowitz,

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speak on his behalf the very first day

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the complaint was filed.

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He chose not to.

The LAPs

The LAPs, in fact, put in a

Mr. Donziger

HON. POOLER: How can you say the

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evidence then was uncontroverted?

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They did attempt to controvert it;

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didn't they?

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MR. MASTRO: But your Honor, they

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didn't put in any evidence, no sworn

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statement from anyone, not Mr.

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Donziger, no one in Ecuador, nowhere

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disputing our evidence from the crude

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outtakes and from their own internal

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documents, including their own

EXHIBIT J

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Ecuadorian lawyers who wrote, when the
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fraud was going to be revealed, that

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this is a disaster for our case, it

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will destroy it.

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lawyers, may all go to jail.

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words, not mine.

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single sworn statement from anybody,

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not Donziger, not an Ecuadorian

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lawyer, not a plaintiff, no one,

We, your Ecuadorian
Their

They didn't put in a

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disputing the fraud in the submission

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of falsified expert reports, you had

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ghostwriting in the Cabrera report --

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HON. POOLER: We're a little off
the topic.

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This is on recusal.

MR. MASTRO: But your Honor, I

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was just coming to Judge Kaplan who's

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not prejudged, he has done what a

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judge should do which is to decide a

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preliminary injunction, decide whether

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there is a likelihood or success or

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serious questions going to the merits,

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evaluated all of the evidence before

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him, and that evidence, your Honors,

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showed undisputed, because they put

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nothing in to dispute this core
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evidence, that they had ghostwritten

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expert reports, that they --

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HON. POOLER: We'll hear from
them on the merits.

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MR. MASTRO:

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I understand.

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just want to make the point -HON. POOLER: So you're opposing
recusal of Judge Kaplan?

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MR. MASTRO: Oh, without

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question, your Honor.

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had recusal motions time and time

This court has

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again.

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tried with Judge Rakoff when he was

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overseeing the Aguinda case and it had

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failed then, the judge vilified him --

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This is the same tactic they

HON. LYNCH: Mr. Mastro, you may

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take notice of the fact that the

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presiding judge has told you to sit

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down.

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MR. MASTRO: I'm sorry, your

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Honor.

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point.

I just wanted to make that

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Thank you very much.

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HON. POOLER: Before I turn to
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the merits argument, we gave

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permission to Chevron to have a

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reporter here.

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the transcript should be sent to the

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clerk's office as well.

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Of course, a copy of

You're aware of that, counsel?

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MR. MASTRO: Of course, your
Honor.

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MR. TYRELL: May it please the

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court, eighteen years of litigation do

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not easily lead to a recitation of the

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facts, so I'll skip them.

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like to frame, particularly in light

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of Judge Wesley's questions, some

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headlines which are both important to

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the merits and to what we've just

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discussed.

But I would

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After nine years of litigation

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in New York, this court dismissed on

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forum non conveniens, as you're aware,

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the action brought here.

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based on promises exclusively made by

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Chevron that representations that the

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court in Ecuador was fair and

It did so

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impartial, that they would submit to

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jurisdiction in Ecuador, and that they

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would pay a judgment if it was

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entered, subject to reserving their

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rights under the New York recognition

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Act.

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The first thing they did when

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they went to Ecuador was to contest

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jurisdiction.

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of litigation in Ecuador, the

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Ecuadorian court finally rendered a

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judgment which is not final, which is

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on appeal de novo, but in that one

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hundred eighty-seven-page opinion, it

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found Chevron liable for contaminating

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a Rhode Island-sized piece of the

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Ecuadorian rainforest and awarded

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damages of approximately $18 billion.

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After nine more years

Before the Ecuadorian judgment

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was entered, Chevron, who has eschewed

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any activity in the Southern District

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of New York, rushes back to the

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Southern District of New York of

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course, I suggest, after sampling
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sixteen other federal courts to find a

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judge that looked most favorable to

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them.

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case doctrine, managed to usher the

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case to the very judge that they

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wanted who we've already argued showed

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predisposition in their favor.

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judge then enters a temporary

They then, using the related

That

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restraining order, a full scope

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antiforeign suit injunction, before

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anything is there to enjoin in

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Ecuador.

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HON. WESLEY: Mr. Tyrell, can you

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tell me the status of the Ecuadorian

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judgment now?

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MR. TYRELL: It is on de novo

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appeal, which is intermediate appeal

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in Ecuador.

Both sides have

EXHIBIT J

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cross-appealed.

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stipulated that the judgment is not

Both sides have

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final until that cross-appeal is

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resolved.

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right to seek a further appeal to a

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higher court in Ecuador.

And even then Chevron has a

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HON. WESLEY: Does the final
appeal require posting of the bobbed?

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MR. TYRELL: It is disputed.

We

think it should.

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HON. WESLEY: Is it disputed as

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to the period of time it will take the

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Ecuadorian intermediate court to

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resolve the matter?

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MR. TYRELL: It isn't disputed,
but no one knows.

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HON. POOLER: At what stage could

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collection of the judgment be

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initiated?

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MR. TYRELL: The judgment cannot

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be enforced until the final

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disposition of the Ecuadorian

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intermediate court and a decision by

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Chevron not to appeal further or, if a

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bond is required, not to post the

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bond.

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required and they then appeal.

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until -- I forget what the name of the

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court is but it's equivalent to their

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Supreme Court -- until their Supreme

If it posts a bond, it's
Not

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Court decides it so it should be.

3

HON. WESLEY: After they say that

4

the intermediate court issues a

5

decision, what is the maximum amount

6

of period of time that Chevron, by

7

considering or seeking additional

8

appeals, prior to an actual appeal

9

beginning in the highest court, what

10

is the maximum period of time they

11

could accomplish?

12

MR. TYRELL: I'm not sure but I

13

believe it's a minimum of thirty days.

14

We can certainly find that out and

15

submit it to your Honor.

16

HON. LYNCH: Just so it's clear,

17

I take it what you're saying is if the

18

Ecuadorian intermediate court affirms

19

this judgment which could happen

20

tomorrow or it could happen a year

21

from now since at least in this

22

country appellate courts are not under

23

any deadline, perhaps unfortunately,

24

for litigants with respect to issuing

25

their opinions.

I take it you're

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saying that's true from Ecuador as

EXHIBIT J

3

well, so we don't know when a judgment

4

might come, we don't know what that

5

judgment might be, and if that

6

judgment is adverse to Chevron, then

7

there would be some further

8

disputation as to whether a bond would

9

be required to appeal to the Supreme

10

Court.

11

possibly favorably to Chevron.

12

either way with if posting a bond is

13

required or without if not required,

14

they would then have an appeal to the

15

Supreme Court but we don't know how

16

long that would take.

17

That issue would be resolved
And

And your position to this court

18

today is that if all those steps are

19

taken, this judgment would not be

20

appealable -- would not be enforceable

21

until the Supreme Court has ruled;

22

that's what you're telling us?

23

MR. TYRELL: That's correct, your

24

Honor.

25

clients, in connection with the de

In fact, I should add my

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2

novo appeal in Ecuador, put in a

3

declaration that they will never seek

4

to enforce this judgment in New York

5

and put in a complementary declaration

6

before Judge Kaplan.

7

So your question leads me to my

8

argument.

9

controversy here.

There's no actual case or
There is nothing so

10

fixed in form that this court or the

11

district court can seize upon it.

12

And I'd like to turn, if I can,

13

to both of my intertwined arguments

14

which first has to do with comity in

15

China Trade and intertwined with it no

16

case or controversy.

17

The salient case here is of

18

course China Trade.

19

this circuit is very vile.

The standard in

20

sparingly with great restraint before

21

any antiforeign suit injunction is

22

entered.

23

the standard set here in 1987 was

24

reaffirmed by the Supreme Court as

25

recently as June 16 in Smith versus

Used

I suggest to the court that

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Bayer, which was an anti-injunction in

3

that case, but the same principles

4

applied.

5

decision rendered by this court in

6

1991, it said those principles

7

applied, those comity principles a

8

fortiori in the international context.

9

In fact, in the Chesney

HON. LYNCH: Do you agree, Mr.

10

Tyrell, that this is just a China

11

Trade kind of case, that that's --

12

that this is the sort of simple case

13

where the China Trade standard

14

occurred just like a lot of other

EXHIBIT J

15

cases where Plaintiff sues Defendant

16

in New York and Defendant sues

17

Plaintiff or may sue Plaintiff

18

somewhere else?

19

your position would be that this is it

20

even more dramatic than the situation

21

in China Trade.

22

I would have thought

MR. TYRELL: Absolutely, which is

23

why I said I didn't know whether to

24

argue my second point first or my

25

first point second.

But in reality,

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this is a case where there is

3

absolutely no case or controversy.

4

you wrote, Judge Lynch, in the

5

Republic of Ecuador opinion, no one

6

knows what's going to happen in

7

Ecuador.

8

believe under Dow Jones, under all the

As

In those circumstances, we

9

principles articulated by this court

10

there is no case or controversy now.

11

That goes to this court's subject

12

matter jurisdiction if you agree with

13

us and the right result, the right

14

result would be to send this back

15

hopefully not to Judge Kaplan but to a

16

different judge or to the wheel with

17

instructions to dismiss this case.

18

This isn't a simple China Trade

19

decision.

20

issue that can now be resolved by the

There is no firm fixed

21

district court.

22

it can never be resolved by a district

23

court in New York because my clients

24

and all of the Ecuadorian plaintiffs

25

have eschewed ever seeking enforcement

And I suggest to you

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in New York.

3

When you look at what the

4

underlying premise is for the

5

substantive law ruling that Chevron

6

seeks, it's the New York Recognition

7

Act.

8

aside from the fact that it says on

The New York Recognition Act,

9

its face will not apply unless the

10

judgment is final and enforceable

11

where rendered, and both sides have

12

stipulated that that isn't the case,

13

our clients have said we're not coming

14

to New York when that is met.

15

never going to come to New York.

16

We're

HON. LYNCH: I think your client

17

said that after this preliminary

18

injunction action got going.

19

MR. TYRELL: There's no doubt

20

about that, your Honor, there's no

21

doubt about that.

22

But nonetheless --

HON. LYNCH: Well, at the time

23

Chevron sought its preliminary

24

injunction and whatever the merits of

25

entry or other arguments, they had no
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way of knowing that your clients would

3

never come to New York if indeed your

4

clients at that point had already

5

decided that they would never come to

6

New York; right?

7

MR. TYRELL: What they did know

8

is that there was no ability with a

9

final enforceable judgment to invoke

10

at that time the New York Recognition

11

Act.

12

an advisory opinion and Judge Kaplan

13

permitted it.

This was a preemptory strike for

14

HON. WESLEY: Excuse me a second,

15

but I hoping the chair will indulge us

16

just bit.

17

The fact that they choose New

18

York doesn't have to necessarily be

19

tied to whether you decide to come to

20

New York to enforce the judgment

21

because if you're here, present in an

22

in personam sense, they can go

23

wherever they wish because if they can

24

get a judgment precluding you from

25

enforcing a judgment based on in
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personam grounds, they can pursue that

3

anywhere that you are, in the

4

jurisdictional sense.

5

assurance is not necessarily a

6

jurisdictional deterrent; is it?

7
8
9

So that

MR. TYRELL: Let me try to answer
your question.
HON. WESLEY: I mean, there may

10

be serious questions as to whether the

11

LAP plaintiffs in the Ecuadorian

12

action are here because of what

13

Donziger does.

14

MR. TYRELL: That's what I was

15

going to respond.

16

they're here under 301 or whatever.

We don't think

17

But the other point is not right, I

18

don't think, your Honor.

19

agree with that.

20

would stand the law on its head for

21

the loser in a judgment to be able to

22

go anywhere in the world and select

23

the forum of its choice to argue for

24

nonenforcement.

25

law predicate, even if there were

We don't

We think that it

The only substantive

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personal jurisdiction over my clients,

3

the only substantive law predicate

4

that lets them come to New York is

5

judgment enforcement.

6

already concluded the case is all

7

about Ecuador.

8
9

This court has

HON. WESLEY: Let me make it
easier.

EXHIBIT J

10

If they lived here, if they

11

lived here, wouldn't this be an

12

appropriate forum to seek that

13

determination?

14

MR. TYRELL: I don't believe so.

15

Because the party who wins the

16

judgment can enforce it where they

17

wish.

18

HON. WESLEY: Well, no, I

19

understand that.

20

personal jurisdiction over them, then

21

you have the ability to preclude them

22

from doing something anywhere.

23

But if you have

MR. TYRELL: You may have the

24

power but you then have to have a

25

substantive law right and the
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substantive law right here is

3

derivative of the -- is based on the

4

Recognition Act and the Recognition

5

Act can't apply.

6

substantive law basis could you have

7

to come to just come to New York and

8

go after my client but the Recognition

9

Act?

10
11
12

What other

HON. POOLER: Which was
preserved.
HON. WESLEY: I appreciate your

13

fervor, but the judgment is a piece of

14

property and they own it, your

15

plaintiffs own it.

16

wherever they are, that shows an

17

action is here and you have control

18

over them because they're the only

19

people who can enforce.

20

If they're here,

MR. TYRELL: Just if I may, your

21

Honor, I don't want to take any

22

additional time.

23

your point do they own it, one of the

24

points I was going to get to if time

25

permitted under the China Trade

But in response to

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analysis is they don't own it.

3

court in Ecuador has decided that a

The

4

commercial trust to be established

5

under the control of the court in

6

Ecuador will own the judgment, not my

7

clients.

8

real party in interest.

9

part is even that can change.

My clients are no longer the
But the real
Because

10

the de novo intermediate appellate

11

court can make somebody else the real

12

party in interest.

13

real party in interest in New York now

14

that is firm and fixed as required by

15

the first prong of China Trade.

16
17

So there is no

HON. WESLEY: Does Judge Kaplan's
order deal with that trust issue?

18

MR. TYRELL: He says yes, that

19

it's one and the same thing because

20

the beneficiaries of the trust are the

21

forty-seven LAPs and the front, the

EXHIBIT J

22

Amazonian Front.

23

the judgment itself, it says the

Well, if you read

24

beneficiary is all the residents of

25

the area affected by Chevron's
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conduct.

3

second piece, it can't be dispositive.

4

And if I could just -- the

HON. POOLER: So you argue on the

5

first ground of China Trade that it's

6

not identity of the parties?

7

MR. TYRELL: We do.

But we even

8

argue more persuasively on the second

9

grounds, and you're indulging me with

10

time and I do not want to follow the

11

prior examples so the moment you say

12

stop -- when I clerked for Judge Garth

13

on the Third Circuit, he said the most

14

important thing is to answer the

15

court's questions and even more

16

important to stop.

17

stop, I guarantee I will.

18
19

HON. POOLER: Well your time has
expired.

20

You're reserving time for --

21
22

MR. TYRELL: Yes, I reserve three
minutes.

23
24

So when you say

Would you wish an answer to your
second point or not?

25

HON. POOLER: Yes, just answer
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that.

3

MR. TYRELL: Just briefly, it

4

can't be dispositive because the law

5

says that every jurisdiction, every

6

foreign country has the right to apply

7

its own standards to judgment

8

enforcement.

9

decides or whoever decides it here in

So whatever Judge Kaplan

10

New York can only govern New York

11

enforcement standards can never be

12

dispositive around the world if that

13

judgment is taken to --

14
15

HON. POOLER: But what I asked
you I had more question on --

16

MR. TYRELL: Thank you, your

17

Honor.

18

entitled to respond to that, too.

I'm going to consider myself

19

HON. POOLER: He said the

20

recognition under New York was

21

preserved in the original forum non

22

conveniens decision?

23

MR. TYRELL: No, in the original

24

forum non conveniens decision, they

25

unilaterally said we'll make all these
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representations to let it go to

3

Ecuador but we're reserving this

4

right.

My clients never agreed to

EXHIBIT J

5
6

anything about that.
Do they have a right to try to

7

bring the case into New York?

8

have the right to try.

They

I suggest they

9

can because of the argument I made.

10

Judge Lynch held that they had a try

11

to try to do something with the BIT

12

arbitration.

13
14

HON. LYNCH: It wasn't me, it was
a unanimous panel.

15

MR. TYRELL: Judge Pooler

16

decided, you decided, and your

17

colleague decided.

18
19
20
21
22
23

HON. POOLER: Thank you, counsel.
MR. TYRELL: Thank you very much,
your Honor.
HON. POOLER: We'll hear from
your co-counsel.
HON. LYNCH: You know, Mr.

24

Tyrell, I used to be able to decide

25

things in my days in the district
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2

court but, as the saying goes, now I'm

3

only one-third of a judge.

4

case, it was one-third of a judge that

5

decided this.

So in this

6

MR. TYRELL: Your Honor, if

7

you'll indulge me, when I clerked for

8

Judge Garth, it was his first year on

9

the circuit and he had moved up from

10

the district court.

11

-- he apologized.

12

for the district court and he said my

13

experience on the circuit would be

14

much less exciting.

15

He told me he was
He said he hired me

MR. KEKER: Good morning, your

16

Honors.

17

Mr. Donziger.

18

view, has been convicted by Judge

19

Kaplan in the court below already

20

without any meaningful opportunity to

21

fight back, to talk back, to present

22

any evidence.

23

three minutes, I'm not going to talk

24

about that today.

25

I'm John Keker.

I represent

Mr. Donziger, in our

But because I have

There is a silver bullet in this
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appeal.

You've been talking about it

3

already.

The silver bullet is that

4

there is no subject matter

5

jurisdiction because there's not an

6

actual controversy before the court

7

first on the preliminary injunction

8

when the preliminary injunction was

9

issued, only on the Declaratory

10

Judgment Act.

11

equally important to us, there won't

And then second and

12

be any subject matter jurisdiction in

13

this trial that Judge Kaplan intends

14

to have in November where he's going

15

to try the Ecuadorian court system

16

without ever looking, having a

EXHIBIT J

17

judgment to evaluate.

18

HON. POOLER: Did he set that

19

November day with reference to what

20

the Ecuadorian courts will do?

21

MR. KEKER: Yes, ma'am.

22

Kaplan said he was quite sure the

Judge

23

appeal would be immediately affirmed,

24

further showing his attitude, and

25

therefore he was going to set as
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speedy a trial as he could, set it in

3

November, promptly went through

4

various machinations to cut Mr.

5

Donziger out of the trial, did it in

6

such a way that Mr. Donziger, because

7

he left him enough intervention rights

8

so that this court has said it's not

9

an appealable order, we have to wait

10

until after Judge -- until after the

11

final decision.

12

So during a period where the

13

LAPs, the Lago Agrio plaintiffs were

14

doing no discovery, not getting any

15

experts, now they've begun in late

16

July, after all this period the case

17

has simply been undefended and it's

18

about to be a show trial where Chevron

19

gets to put on its evidence with the

20

Lago Agrio plaintiffs, if you'll

21

excuse me, basically tethered to a

22

stake like a goat during that trial.

23

HON. POOLER: Is there any

24

indication that should the

25

intermediate court not issue a
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2

decision before the November trial

3

that Judge Kaplan would adjourn the

4

trial?

5

MR. KEKER: Totally the opposite,

6

your Honor.

7

saying please let us intervene now

We kept going back and

8

that, for example, Chevron filed

9

twenty-nine experts which they

10

eventually cut down to nineteen

11

experts, making plain that the trial

12

is going to be a do-over of this

13

environmental dispute that's going on

14

in Ecuador, a complete do-over;

15

scientific evidence, whether there was

16

pollution, the whole thing.

17

all right, let us in.

18

something about whether or not

19

Donziger is guilty of fraud as you've

20

alleged, please let us participate.

21

No way.

22

this.

23

motions saying there's a difference

24

between extrinsic and intrinsic fraud.

25

You can't try things that are being

We said

You're deciding

We're going to go ahead with
The Lago Agrio plaintiffs filed

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2

tried in Ecuador and were tried by the

3

court.

4

there's no distinction says Judge

5

Kaplan, we're going ahead with the

6

whole thing.

7

That's intrinsic fraud.

No,

But my point is, with respect to

8

what's before you now, which is the

9

preliminary injunction decision, if

10

there is no -- on this record, if

11

there is no actual controversy, it's

12

very important that that be said now

13

because it will make plain to whatever

14

district court judge handles this case

15

that it cannot be tried, there's no

16

jurisdiction to try it under this

17

severed case.

18

the RICO.

19

the judgment in Ecuador is enforceable

20

anywhere in the world.

21
22

HON. POOLER: Is that the count
nine?

23

MR. KEKER: That's count nine.

24
25

Because they've severed

The dispute now is whether

And what Judge Kaplan suggested
to Chevron is why don't we sever that,
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cut Donziger out of that, and then

3

we'll just try that quickly and I'll

4

make a decision about essentially

5

whether or not Ecuador stinks, if you

6

permit me the colloquialism.

7

What Judge Wesley was asking

8

about are questions that we believe go

9

to what might be considered after you

10

actually have a judgment in Ecuador

11

and then questions about can you use

12

the recognition statute defensively

13

under the Declaratory Relief Act would

14

become important, was there estoppel

15

because there was promises.

16

would become important.

17

that happens and there's no guarantee,

18

nobody knows what's going to happen in

19

Ecuador, I wanted to emphasize one

20

other thing.

21

novo review in Ecuador but both

22

parties are throwing tremendous amount

23

of new information into the record,

24

both arguments and facts.

25

-- the diatribe that you just heard

That

But until

That not only is it de

Everything

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from Mr. Mastro is being presented to

3

the Ecuadorian court.

4

some point they will make a decision.

5

Either Chevron will win or they'll say

6

let's do the case again down in

7

Ecuador or they will say we completely

8

affirm or they will say we partially

9

-- who knows what they're going to

10

say?

11

will look like?

Presumably at

And who knows what that decision
They may say we've

EXHIBIT J

12

ignored all of this evidence and

13

therefore make the following -- we

14

just don't know.

15

purely hypothetical, as this court

16

collectively has said, in the Republic

17

of Ecuador case.

18

It's completely,

HON. LYNCH: Mr. Keker, one other

19

question.

20

of your argument to the idea that this

21

is premature and that the judgment is

22

not enforceable.

23

wanted to clarify.

24
25

You said -- you used most

There's something I

Let's suppose it does become
enforceable.

Some day, I take it, it

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is the position of your -- I hope of

3

your side of the table that it will be

4

affirmed and it will become

5

enforceable.

6

Are you conceding that at that

7

point it would be appropriate and

8

permissible for Chevron to ask a New

9

York court to apply the New York

10

recognition of foreign judgments act

11

offensively even if the underlying

12

plaintiffs don't come to New York as

13

opposed to defensively to resist

14

enforcement of the judgment in New

15

York?

16
17

MR. KEKER: I said defensively.
I got it mixed up.

18

Absolutely not.

At that point

19

that decision would have to be made

20

and those arguments would have to be

21

made.

22

Recognition Act can only be used or

23

the recognition of judgment act where

24

you claim fraud, you claim it's an

25

impartial tribunal can only be used

Our position is the New York

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2

defensively.

3

case here, then you can make those

4

arguments.

5

the case here, you can't, by forum

6

shopping, come to New York, say

7

there's a danger that this is going to

8

be enforced in Kazakhstan and

9

therefore I want a New York

10

let me overturn it under the

11

recognition statute when there's

12

absolutely no reason for the court to

13

take that on.

14

If somebody brings the

If somebody doesn't bring

court to

HON. POOLER: The court had a

15

memo -- I know you've gone beyond your

16

time -- but the court had a memo that

17

talked about an enforcement strategy

18

that included countries all over the

19

world and the court relied on that

20

memo; didn't it?

21

MR. KEKER: The court -- you can

22

use relied or it certainly cited and

23

used it as its argument for why it

EXHIBIT J

24

made sense.

25

HON. POOLER: Correct.
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MR. KEKER: What that memo said

3

is we could try -- it was a think

4

piece which you, yourself, identified

5

in another hearing as kind of a think

6

piece and there's probably one like it

7

about resisting enforcement.

8

basically one of the things it

9

mentioned that the court picked up on

10

is prejudgment attachment.

11

But

magical thinking.

That is

12

I mean, first of all, there

13

hasn't been any prejudgment attachment

14

in all the time that we're there.

15

Second, think of it.

You go up

16

and you slap a writ on a pipeline in

17

Kazakhstan and you say a court in

18

Ecuador may some day have a final

19

enforceable judgment and therefore,

20

because this $200 billion revenue each

21

year corporation might not be able to

22

pay, we'd like to attach this

23

pipeline.

24

remote, it's kind of silly, and I

25

called it magical thinking.

I mean, it is -- it's

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In our brief, that's our

3

argument about why you can't create an

4

actual controversy out of that kind of

5

magical thinking.

6

controversy has to be more

7

substantial, has to be imminent, has

8

to be kind of real.

9

some lawyer sitting in an office

An actual

This idea that

10

thought maybe we should think about

11

that in a privileged memo which never

12

should have seen the light of day if

13

it weren't for various rulings, I

14

mean, it's just -- we don't think that

15

makes an actual controversy.

16

Judge Kaplan used it to create an

17

actual controversy.

18

And yes,

HON. POOLER: Thank you.

19

MR. KEKER: He gave one paragraph

20

to questions whether or not there was

21

an actual controversy here.

22
23

HON. POOLER: Thank you, Mr.
Keker.

24

MR. KEKER: Thank you, ma'am.

25

HON. POOLER: Mr. Mastro, both
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opponents went overtime so I'll be

3

flexible with you.

4

MR. MASTRO: I appreciate it,

5

your Honor, and I will also be

6

cognizant of the time.

EXHIBIT J

7

Mr. Keker just said that Judge

8

Kaplan shouldn't have credited that

9

Invictus memo.

He shouldn't have

10

credited all these other statements

11

that come out of the mouths of the

12

plaintiffs' agents themselves, Mr.

13

Donziger and the other lawyers.

14

credited largely undisputed record

15

evidence that comes right out of the

16

mouths of the plaintiffs' counsel, the

17

plaintiffs' agents, the plaintiffs'

18

attorneys.

19

He

HON. LYNCH: Wouldn't any

20

plaintiff who had a big judgment

21

against a company with worldwide

22

operations undertake planning as to

23

where it would be advantageous for

24

them to go and enforce the judgment

25

and wouldn't it be a part of that
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thinking for anybody as to whether a

3

settlement would be more likely if

4

they found the best place among any

5

places?

6

MR. MASTRO: Your Honor, prudent

7

planning on where to enforce is one

8

thing.

9

what that memo screams out is not

What Judge Kaplan found and

10

about an enforcement strategy.

11

about, their words, using the

12

political connections of the Patton

13

Boggs law firm to find the, quote the

14

path of lease resistance in countries

15

that will not have a, quote, jaundiced

16

eye and won't care whether the

17

judgment was rendered in circumstances

18

that raised substantial doubt about

19

the integrity of the rendering court,

20

obtain, their words, ex parte

21

prejudgment attachments to disrupt

22

Chevron's operations worldwide,

23

pressure it into settlement.

24
25

It is

HON. WESLEY: Well, you know, way
back when I was practicing law in
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small rural communities, I had a

3

fellow that didn't want to pay child

4

support and I found him on Christmas

5

Eve and I had him thrown in jail.

6

changed his mind about child support.

7

Sometimes folks have a way of using

8

restraining orders and other things to

9

produce reasonableness.

10

He

So I mean, seriously, the

11

problem I have here is that presume

12

that this was a judgment by a Canadian

13

trial court and it's a $12 billion

14

judgment against Chevron in a Canadian

15

trial court and you have reason to

16

believe that the judge was in cahoots

17

with the plaintiff's lawyers.

18

You mean to tell me that because

EXHIBIT J

19

the underlying -- and that they were

20

ready and willing and able to go after

21

this and enforce this against you in

22

Kazakhstan because Kazakhstan

23

regularly recognizes Canadian

24

judgments; we won't worry about other

25

jurisdictions.
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You mean to tell me that a judge

3

in the Southern District before even

4

an intermediate appeal had been

5

completed would have the appropriate

6

jurisdiction to, under China Trade or

7

any other theory, to enjoin those

8

plaintiffs from pursuing that?

9

MR. MASTRO: Yes, your Honor,

10

under the circumstances presented

11

here.

12

absolutely right.

13

that New York is not only an

14

appropriate jurisdiction for this

15

action, it's the most appropriate.

And I think your Honor had it
There's no question

16

HON. WESLEY: Don't you have to

17

separate the banality of the conduct

18

from the legitimacy of the process?

19

Don't we have some sense of comity to

20

the legitimacy of the process?

21

just to say to the people of Ecuador

22

you're all corrupt and your process

23

doesn't matter to the United States or

24

a United States federal judge is not

25

going to hear anything about the

Are we

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legitimacy of your process, a process,

3

by the way, which you invoked?

4

MR. MASTRO: Your Honor,

5

actually, Judge Kaplan hasn't said

6

that.

7
8
9
10

He's issued a -HON. WESLEY: Well, he's issued a

restraining order.
What's the premise of it?
MR. MASTRO: So that he can have

11

a trial to determine whether this

12

judgment was procured by fraud, to

13

determine whether this judgment

14

resulted from a system that failed to

15

enforce due process and impartial

16

tribunal.

17

injunction.

18

It's a temporary status quo

HON. WESLEY: Doesn't it seem

19

like you're spending an awful lot of

20

money to finish a trial in November

21

where on the last day of trial the

22

Ecuadorian intermediate court vacates

23

the judgment, finds it's procured by

24

fraud, and absolves Chevron of all

25

liability?
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EXHIBIT J

2
3
4

MR. MASTRO: If that happens,
your Honor -HON. WESLEY: I wonder what the

5

shareholders of Chevron are interested

6

in with regard to the money that's

7

being spent on behalf of Defendants

8

pursuing this.

9

MR. MASTRO: Your Honor, here's

10

why a trial is so necessary and

11

appropriate.

12

question of what's the appeal in

13

Ecuador.

14

been issued for $18.2 billion that is

15

now on appeal.

16

evidence was undisputed, undisputed

17

that these plaintiffs could take that

18

judgment right now.

19

Donziger and Fajardo said they don't

20

plan to wait for the appeal, they plan

21

to enforce now.

22

It's not simply a

There is a judgment that has

But the record

Their lawyers

HON. LYNCH: They've already

23

stipulated that they're not going to

24

do that.

25

that the judgment is not enforceable.

And it's clear under law

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MR. MASTRO: They have most

3

definitely not, your Honor.

4

is, under treaty with Latin American

And it

5

countries like Colombia, Argentina,

6

and Venezuela right now something that

7

these plaintiffs could take to those

8

countries and seize Chevron's

9

substantial assets in those countries.

10

There is a real and immediate danger

11

right now, and they never stipulated.

12
13
14

HON. LYNCH: This is under
Venezuelan law?
MR. MASTRO: No, under

15

international Latin American treaty

16

which is undisputed, it's in the

17

Coronel affidavit.

18

give your Honors the exact cite.

19

exact cite to that, your Honors, is on

20

pages 6167 through 6170 of part

21

twenty-two of the appendix.

22

noted Ecuadorian law expert,

23

undisputed by them, and Judge Kaplan

24

credited there's a Latin American

25

treaty to give them the right to ex

I'll be happy to
The

Coronel,

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parte freeze assets right now in those

3

countries.

4

danger right now.

It's a real and immediate

5

HON. LYNCH: To take preliminary

6

steps to enforce an order that is not

7

enforceable under Ecuadorian law?

8
9

MR. MASTRO: Correct, correct,
and that's absolutely the state of law

10

in Ecuador and it's undisputed below

11

that they could be doing that right

12

now and the injunction is the only

13

thing that has held them off.

EXHIBIT J

14

HON. WESLEY: But you then said,

15

in response to Judge Lynch's question,

16

that not all of them have so

17

stipulated.

18

MR. MASTRO: Absolutely.

19
20

HON. WESLEY: Is that the LAP,
the LAP plaintiffs?

21

MR. MASTRO: Absolutely, before

22

this court and Judge Kaplan repeatedly

23

asked why don't you all stipulate,

24

because Donziger can't do it alone,

25

stipulate to forbear, that you won't
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try to get the judgment or to enforce

3

it.

4

this is their plan and that's why the

5

Invictus memo is so disturbing.

6

They refused.

That's because

HON. WESLEY: Well, what are you

7

going to do if Mr. Tyrell stands up in

8

open federal court and states they'll

9

stipulate that they'll not take any

10

enforcement actions anywhere in the

11

world pending the outcome of the

12

intermediate court?

13

then?

14

What do you do

MR. MASTRO: Well, ask him if

15

he'll do that.

16

of the plaintiffs --

He's only here for two

17

HON. WESLEY: But there are only

18

two of the plaintiffs in front of us;

19

aren't there?

20

MR. MASTRO: Your Honor, the

21

others all defaulted so there's

22

default judgments against them.

23

were all sued in our action.

24
25

They

But your Honor, Mr. Tyrell, ask
him if he'll do that.

Because if he

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really represents all the plaintiffs

3

and they will come into court and

4

stipulate, that would be different.

5

But I have to say this, I have to say

6

this, they've consistently refused to

7

this court and others.

8
9
10
11
12
13

And let me come to a few other
points that I think are extremely
important because -HON. LYNCH: Let me ask you a
question first.
About the New York judgment act,

14

do you have any precedent of the New

15

York court or the federal court

16

applying New York law utilizing the

17

New York judgment statute offensively

18

as opposed to defensively to rule that

19

an enforcement -- that the act, forget

20

all the jurisdictional questions and

21

everything else and whether it's right

22

and everything else, that the New York

23

law authorizes an action to prohibit

24

the enforcement of a judgment rather

25

than simply being a direction to the

EXHIBIT J

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New York courts as to when they may

3

and may not enforce a judgment when

4

someone asks them to?

5

case that utilizes the statue that

6

way?

7
8

Do you have any

MR. MASTRO: Your Honor, we have
not cited such a case.

9

HON. LYNCH: You know one but you

10

haven't cited it?

11

summer associate research this and

12

that person has not come up with such

13

a case; right?

14

such case; right?

15

wrong?

16

You have had some

Because there is no
Am I right or

MR. MASTRO: You're correct, but

17

that's because of the unique

18

circumstances of this case.

19

HON. LYNCH: Now, was there

20

anything in the statute that suggests

21

that it creates an affirmative cause

22

of action, is there any language there

23

that says anything other than these

24

are the circumstances in which a New

25

York court may and may not enforce a
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foreign judgment when someone asks it

3

to?

4

such a cause of action and, if so,

5

could you point me to it?

6

Is there any language suggesting

MR. MASTRO: Your Honor, the

7

statute speaks of the defenses.

8

this is an action brought under the

But

9

Declaratory Judgment Act as a

10

declaratory judgment to seek a

11

resolution of that question which is

12

ripe and ready for adjudication now.

13

And as your Honor said --

14

HON. LYNCH: If the shoe were on

15

the other foot, the plaintiff called

16

in a not-yet-enforceable foreign

17

judgment -- and the statute refers to

18

a judgment that is enforceable where

19

made, that's what starts it, because

20

after all, this is a statute about the

21

recognition, not about

22

non-recognition, because when would we

23

recognize it, and the answer is it has

24

to be at square one, it has to be

25

enforceable where made.
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Are you suggesting to me that a

3

plaintiff holding a judgment that was

4

not enforceable where made could evade

5

that requirement of the statute by

6

coming in and saying, you know, the

7

defendants are saying that this is not

8

going to be enforceable in New York,

EXHIBIT J

9

we'd like a declaratory judgment; that

10

if and when we get an enforceable

11

judgment in this other country you

12

will enforce it?

13

York courts would entertain that kind

14

of action?

15

Do you think the New

MR. MASTRO: Your Honor, I think

16

that there's a huge difference between

17

the plaintiffs' attempting to do that

18

and Chevron, in defending itself

19

against this judgment where it faces

20

an immediate jeopardy of them being

21

able to take it into Latin American

22

countries and freezing assets in an ex

23

parte manner, being able to get the

24

protection --

25

HON. LYNCH: So you're not
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concerned, you're not concerned about

3

the enforcement of the judgment in New

4

York at all, you're concerned about

5

the enforcement of the judgment in any

6

-- pick one out of a hat -- Venezuela?

7

MR. MASTRO: I am concerned about

8

their enforcement of the judgment

9

which seems to us and Judge Kaplan

10

found based on his review of an ample

11

record of how much the government has

12

been influencing on this case the

13

courts that the appeal process is

14

likely not to be any different than

15

the trial process.

16

the fact is what we have here is

17

Chevron going to the only jurisdiction

18

that is sure to apply the New York

19

recognition statute.

20

But your Honor,

HON. LYNCH: Of course.

New York

21

is the only jurisdiction that is going

22

to apply New York law to decide

23

whether a judgment is enforceable in

24

New York.

25

That makes sense.

Again, if the shoe were on the
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other foot, that is speaking of

3

international comity, how do you think

4

the New York courts would react if a

5

Venezuelan court attempted to enjoin a

6

holder of a judgment from Russia and

7

in New York by enjoining the

8

plaintiffs and saying under Venezuelan

9

law, this is not enforceable so do not

10

go into New York and attempt to

11

enforce a judgment which might be

12

enforceable under New York law because

13

we find it not enforceable under

14

Venezuelan law?

15

any chance that the New York courts

16

would respect such a judgment or

17

should respect such a judgment?

18

Do you think there's

MR. MASTRO: No, your Honor, but

19

what makes this case unique, as your

20

Honor knows and as you know, Judge

EXHIBIT J

21

Pooler, there were commitments made.

22

It's not true what Mr. Tyrell told

23

you.

24

the BIT panel and what Judge Sand was

25

told by the LAPs counsel was that

What you were actually told on

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there was, quote, an express agreement

3

to adjudicate these claims in Ecuador

4

subject to only 5304 and that 5304 --

5

that's the New York recognition

6

statute -- gives them, Chevron, the

7

forum and a venue post judgment to

8

challenge any judgment.

9

A3756.

10
11

That's page

HON. POOLER: That's in Texaco.
Didn't you just say that you

12

would move to be not judicially

13

estopped from declaring that you were

14

bound by Texaco's agreements?

15

MR. MASTRO: Your Honor, you all

16

defined in your opinion on the BIT

17

stay what rights were reserved to

18

Chevron and you told us that we have

19

reserved the right --

20

HON. POOLER: Excuse me, didn't

21

Judge Kaplan recently conclude that

22

you were not judicially estopped from

23

denying the concessions made by

24

Texaco?

25

MR. MASTRO: Judge Kaplan ruled
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based on the evidence before him in

3

the context of motion practice that it

4

remained, as far as he was concerned,

5

a matter that Chevron and Texaco had

6

separate corporate forums.

7

HON. POOLER: And if it was

8

Texaco that reserved the 5304; right?

9

So you want it both ways yet again?

10

MR. MASTRO: I don't, your Honor,

11

I want it the way you all directed the

12

parties which was you all said that

13

having reserved our rights under the

14

New York recognition statue, Chevron

15

was free to assert them whenever and

16

wherever.

17

And if there was no --

HON. LYNCH: But isn't there a

18

difference between your having the

19

right to resist enforcement of the

20

judgment which otherwise you said you

21

would pay if someone comes to New York

22

and tries to enforce it, you still

23

have the right to resist, you reserve

24

that right?

25

saying that you have the right to have

Is that the same thing as

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a New York court settle for Australia,

3

for Kazakhstan, for Denmark, for

EXHIBIT J

4

Canada, for Chile, whether under --

5

because the law is not -- the judgment

6

is not enforceable under New York law,

7

assuming that's true, that neither is

8

anyone to try to enforce the judgment

9

in any country where it might be

10

enforceable?

11

that that was either the agreement, if

12

you want to call it that, that the

13

parties struck when you were trying to

14

get the case to Ecuador or your

15

predecessors were or what this court

16

was referring to when that issue came

17

up in the completely different context

18

of whether a BIT arbitration was a

19

violation of that agreement?

20

Is there any indication

MR. MASTRO: Your Honor, the

21

short answer to your question is that

22

yes, Chevron should be recognized to

23

have those rights because, because

24

Chevron has the right under the

25

Declaratory Judgment Act when there is
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a ripe controversy as there is now

3

because that judgment, even if there's

4

still an intermediate appeal level --

5

and that, by the way, will make it

6

final -- it can still be enforced in

7

other countries.

8

in other countries, those Latin

So if it is enforced

9

American countries, it will, based on

10

the Invictus memo, it will be used to

11

pressure Chevron and disrupt its

12

operations worldwide, force it into

13

making payment, and therefore it will

14

moot out the proceedings in New York

15

to determine under the New York

16

recognition statute whether this

17

judgment passes muster.

18

Honors, that's the right that we

19

supposedly had reserved, that's the

20

right this court said we had reserved.

21

If will never get litigated if that

22

happens.

23

And your

HON. LYNCH: Let's look back to

24

when that decision was made.

25

succeeded in getting the case

You

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transferred to Ecuador.

3

understand there's a dispute about

4

who's you in the context.

5

side of the table got the case sent to

6

Ecuador by promising that you would

7

pay the judgment except that you

8

reserved certain defenses.

9
10

I say you, I

But your

MR. MASTRO: Yes, your Honor.
HON. LYNCH: And now you're

11

telling me that that means that even

12

though, as you just told me, this

13

judgment might be enforceable today in

14

Venezuela under Venezuelan law, the

15

fact that, if it is a fact, the

EXHIBIT J

16

judgment would not be enforceable in

17

New York authorizes a New York court

18

to trump Venezuelan law along with

19

every other country in the world,

20

whatever it may be, by ordering the

21

plaintiffs not to seek to present the

22

judgment to the courts of sovereign

23

countries to see whether they will

24

enforce it or not?

25

MR. MASTRO: That's correct, your
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Honor.

3

correct?

4

because there was a reservation of

5

rights that Texaco, now Chevron, in

6

the BIT stay decision, reserved its

7

rights to challenge under the New York

8

recognition statute.

9

can challenge the judgment under the

10

New York recognition statue and they

11

can't get around that, this is

12

something that they said was, to this

13

court, an agreement, they said it was

14

our escape hatch that we could

15

challenge under the New York

16

recognition statute.

17

the right to come into court in New

18

York to make sure that a New York

19

court reviews the New York recognition

20

statute, what do we have --

21

We're back where we started;
We're back in New York

The only way we

If we don't have

HON. LYNCH: But what if the New

22

York statute does not recognize a

23

cause of action to do that?

24

the New York statute only authorizes

25

the defense which you have reserved in

What if

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the event it should become relevant?

3

MR. MASTRO: But your Honor,

4

again, the New York recognize statute

5

makes plain that these are defenses to

6

enforcement of a judgment.

7

ripe controversy under the Declaratory

8

Judgment Act.

9

We have a

HON. LYNCH: But even assuming

10

that you did, what gives you have the

11

right to a declaratory judgment under

12

New York law to anything beyond the

13

statement that this judgment is not

14

enforceable in New York under the New

15

York statute?

16

that.

17

first it is a ripe controversy, that

18

it is for declaratory judgment, and

19

the true answer under New York law is

20

that this judgment is not enforceable

21

in New York.

22

Assume you could get

Assume that you can demonstrate

MR. MASTRO: Yes, your Honor.

23

HON. LYNCH: What in the New York

24

law authorizes broader relief than

25

that?
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MR. MASTRO: Your Honor, the

3

federal court, in entertaining a ripe

4

declaratory judgment action, obviously

5

has the inherent authority right to

6

protect its jurisdiction, to present

7

vexatious bad faith litigation, and

8

most importantly to prevent a fraud

9

from being effected.

10

HON. LYNCH: What would be

11

vexatious to go to a country where the

12

judgment might be enforceable under

13

that country's law because the New

14

York court has decided that it's not

15

enforceable under New York law?

16

is that vexatious litigation rather

17

than just the right to go to a forum

18

where the law allows something that

19

happens not to be allowed in New York?

Why

20

MR. MASTRO: But your Honor, we

21

know that the aim, as spelled out in

22

the memo, is to bring these foreign

23

litigations as vexatious litigation

24

not necessarily to enforce because New

25

York and the U.S. are, in fact, the
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jurisdictions where they could

3

potentially satisfy the judgment, they

4

would prefer to go to jurisdictions

5

where they can disrupt Chevron's

6

operations ex parte.

7

HON. POOLER: But isn't that

8

their right to go and enforce the

9

judgment?

10

MR. MASTRO: Not, your Honor,

11

under circumstances such as this where

12

knowingly procuring a judgment by

13

fraud and then are going to use a

14

vexatious litigation strategy to try

15

and shake down a settlement or an

16

extortion statement.

17

should tolerate that kind of behavior,

18

no U.S. court.

No U.S. court

19

HON. POOLER: Why wouldn't the

20

Venezuelan court itself look to the

21

quality of the judgment?

22

for a fact they wouldn't?

23

Do you know

MR. MASTRO: They say in Invictus

24

that they're going to try to find

25

those jurisdictions where they can use
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their political connections in those

3

courts to --

4

HON. LYNCH: No, no, no, I think

5

what you quoted was that Patton Boggs

6

would use its vaunted ability to have

7

connections everywhere to find out

8

what countries take what kinds of

9

positions on this.

10

said.

That's what it

What you quoted to us, that's

EXHIBIT J

11

what it said.

12

MR. MASTRO: They said much more

13

than that, your Honor.

14

wanted to identify the path of least

They said they

15

resistance, places that wouldn't have

16

a jaundiced eye, they wouldn't look at

17

whether the judgment was procured by

18

fraud.

19

fundamentally violates U.S. and New

20

York policy, that we don't tolerate

21

judgments procured by fraud, we don't

22

tolerate judgments --

23

And your Honor, to me, that

HON. LYNCH: Anywhere in the

24

world, New York is in charge of --

25

excuse me, New York is in charge of
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deciding that we will not tolerate a

3

South African judgment being procured

4

by fraud and enforced in Russia?

5

MR. MASTRO: I think, your Honor,

6

where there has been a reservation of

7

rights, and their own counsel told you

8

and the Southern District during the

9

BIT case that there was an this was an

10

agreement that the New York

11

recognition statute would apply.

12

think that changes the equation.

I

13

HON. WESLEY: Are you saying that

14

in essence that stipulation is somehow

15

a choice of law with regard to the

16

stipulation, that somehow that

17

stipulation has a broader sweep than

18

just the particular prospect of coming

19

back to New York and that that somehow

20

you've imprinted New York law onto any

21

ability to enforce the judgment

22

anywhere in the world?

23

MR. MASTRO: I believe, your

24

Honor, that the parties committed that

25

the New York recognition statute would
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cover enforceability.

3

way to have that determination made

And the only

4

and therefore hopefully to give it

5

effect elsewhere around the world is

6

for that determination to be made and

7

that's a determination that Judge

8

Kaplan is prepared to make.

9

this temporary preliminary injunction,

And if

10

this is a status quo injunction were

11

to be lifted, you will see, just like

12

you saw a judgment come out of Ecuador

13

in a matter of days, one hundred

14

eighty-eight single spaced judgment as

15

soon as a TRO entered even though the

16

judge there said he still had fifty

17

thousand pages of the record to go,

18

you will see that appeal decision come

19

out in a red hot second and them

20

trying to enforce around the world.

21

We have a status quo injunction, your

22

Honor.

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23

HON. POOLER: We don't deal with

24

predictions here, counsel.

25

is up.

Your time

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3

MR. MASTRO: I understand.

Thank

you very much, your Honors.

4

I implore your Honors just one

5

last point, if I may, please, your

6

Honor?

7

maintain the status quo injunction

8

because there will be an opportunity

9

for a full trial.

I implore your Honors to

But we had other

10

claims in this case as well.

11

severed at their request.

It was

12

also RICO and fraud claims that would

13

also have justified injunctive relief

14

here based on the massive fraud that

15

occurred here and Judge Kaplan should

16

have the opportunity to decide whether

17

injunctive relief is appropriate under

18

those claims.

But we had

19

HON. LYNCH: If we were to

20

reverse this order, speaking of

21

predictions and what's going to happen

22

in a red hot second, are you telling

23

us that you would then go back to

24

Judge Kaplan and ask to reactivate the

25

RICO claims and seek the same
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injunction under those claims?

3
4

MR. MASTRO: Judge Kaplan didn't
decide --

5

HON. LYNCH: I know, he didn't do

6

anything with that because he severed

7

it.

8
9
10

MR. MASTRO: I don't want to make
predictions either.
HON. LYNCH: Oh, you don't want

11

to predict what you'll do.

12

want to predict what the Ecuadorian

13

intermediate appellate court is sure

14

to do, but you have no idea what

15

you're going to do?

16

You only

MR. MASTRO: Your Honor, I was

17

simply trying not to have predictions

18

about what this court might do, but if

19

this court were to alter the status

20

quo vis-a-vis the dec relief action,

21

I think that we would have every right

22

to go back to Judge Kaplan and we

23

would ask your Honors to give us that

24

opportunity to maintain the status quo

25

while we did that.

But we very

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strongly believe that it was perfectly

3

appropriate under these circumstances

4

for him to enter a status quo

5

injunction

and that this would

EXHIBIT J

6

benefit this court would benefit in

7

just a few weeks from now having a

8

full trial record where there would be

9

a full record of the full extent of

10

the fraud here, the full extent of the

11

lack of impartiality and due process

12

in Ecuador, and that this court should

13

decide this case on that kind of a

14

full record, not alter a status quo

15

injunction.

16

HON. LYNCH: I was just wondering

17

if any instructions to Judge Kaplan

18

with respect to what the law is with

19

respect to the New York foreign

20

judgment act would leave Judge Kaplan

21

on his own with respect to what might

22

be appropriate under RICO.

23

MR. MASTRO: And clearly there's

24

the ability to give injunctive relief

25

under RICO and under common-law fraud.
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Thank you very much, your Honor.

3

HON. POOLER: Thank you.

4
5
6
7
8
9

Mr. Tyrell, you've reserved
three minutes for rebuttal.
MR. TYRELL: Thank you, your
Honors, a few quick points.
Judge Lynch said doesn't anyone
plan for a judgment, hence the

10

invocation of the Invictus memorandum.

11

I'm rather proud of that.

12

that it's in the record, the court

13

read it it itself.

14

about acting like Somali pirates.

15

talks about the kinds of opportunities

16

that are available in the world to

17

enforce judgment under the laws of

18

various states, that's all it says, no

19

matter what nefarious tone Judge

20

Kaplan placed about it.

21

I suggest

It talks nothing
It

Mr. Mastro stands here and says,

22

oh, my God, you're going to go ex

23

parte and try to enforce that

24

judgment.

25

done in sixteen federal courts around

You mean like Mr. Mastro's

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the state using 1782 which is allows

3

you to go ex parte?

4

The important point is the memo

5

and the plan, which was highly

6

preliminary, was to be able to use the

7

law, not the lack of law that is

8

permitted in other countries.

9

is nothing wrong with that.

There

10

Judge Wesley made a comment

11

about his experience on Christmas Eve.

12

This court in China Trade made the

13

following observation which I think is

14

pertinent.

15

not appropriate merely to prevent a

16

party from seeking slight advantages

17

in the substantive or procedural law

It says an injunction is

EXHIBIT J

18

to be applied in a foreign court.

19

This court has always recognized that

20

the judgment creditor has a right to

21

seek procedural advantages where he

22

goes and enforces his judgment.

23

Judge Lynch asked a question of

24

can you cite any case in which the

25

Recognition Act was used
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2

affirmatively.

3

researched it and I'll give you a very

I can tell you we've

4

clear answer.

5

all.

6

for this court to decide and affirm

7

Judge Kaplan that it can be used

8

affirmatively.

We can't find any at

So it would be groundbreaking

9

Judge Lynch also asked a

10

question of Mr. Mastro which I picked

11

up on in which he said so you're

12

really not concerned about enforcement

13

in New York; are you.

14

can't be because of the stipulation

15

and they couldn't have enforced it

16

here before that anyway.

17
18

HON. LYNCH: Who stipulated that
they weren't coming to New York?

19
20

Well, they

MR. TYRELL: All of the
Ecuadorian plaintiffs.

21

HON. LYNCH: But all of them

22

haven't conveyed the stipulation that

23

Mr. Mastro suggested with respect to

24

not taking advantage of this Latin

25

American treaty.
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MR. TYRELL: Right, we disagree

3

that the Latin -- no, they have not

4

made any such stipulation.

5

HON. LYNCH: Well, when you say

6

you disagree with whether that is

7

authorized, if you think it's not

8

authorized, why would there be any

9

problem with doing what Judge Wesley

10

suggested which is all the plaintiffs

11

stipulate that they aren't going to do

12

something that you said they couldn't

13

do anyway.

14

small concession to make.

15

I think that's a pretty

MR. TYRELL: Your Honor, there is

16

nothing wrong with it.

17

the authority today when I'm

18

representing two to get the approval

19

from the people that represent the

20

forty-five, I'm willing to go and ask

21

them.

22

And if I had

The point is what stipulation

23

was asked of us.

24

was demanded of us was not that of

The stipulation that

25

Judge Kaplan.

Judge Kaplan asked us

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to stipulate to the permanent -- to

3

the entry of the preliminary

4

injunction for an indefinite period of

5

time, in short waiving our appellate

6

rights in order to get a fair amount

7

of time to respond to the preliminary

8

injunction here.

9

HON. LYNCH: Mr. Mastro today

10

suggested that at least this of the

11

many, many, many disputed issues

12

between the parties would perhaps

13

disappear, at least this advantage

14

that he is pressing that he says -- I

15

understand you disagree -- that in

16

Latin American countries specifically

17

this judgment could be enforced today.

18

He's asking that the plaintiffs, the

19

Lago Agrio plaintiffs stipulate that

20

they need to do something that you say

21

they can't do anyway.

22

what the other members of the panel

23

think but I'd be interested in seeing

24

whether we get a letter in some

25

reasonable period of time saying that

I don't know

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sure, they'll do that.

3

HON. WESLEY: I was going to ask,

4

is it conceivable that you could or

5

are you willing to contact the other

6

forty-five and see if they will

7

stipulate to not enforcing the

8

Ecuadorian judgment until the

9

appellate process in Ecuador has run

10

its course?

11

MR. TYRELL: I understand that

12

request and we'll get back to the

13

court with a letter.

14

HON. WESLEY: I know your red

15

light is on, but I want to ask you a

16

couple of questions.

17

You raised a personal

18

jurisdictional objection under the

19

law?

20
21

MR. TYRELL: Yes.
HON. WESLEY: And I read the

22

complaint.

23

doesn't necessarily track what Judge

The complaint, although

24

Kaplan said, pretty much premises the

25

jurisdictional determination on the
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fact that the plaintiffs have appeared

3

on other occasions with regard to

4

actions in New York; is that correct?

5

MR. TYRELL: The answer is it is

6

based on two things.

There were four

7

actions in New York.

Three of them

8

were completely defensive.

9

appeared, the Ecuadorian plaintiffs --

10

They

HON. WESLEY: I was going to get

11

to what their status was.

12

plaintiffs, as to being plaintiffs --

But as to

EXHIBIT J

13

MR. TYRELL: Only Aguinda, only

14

the original eighteen year ago action

15

in Aguinda was their only affirmative

16

invocation of this court.

17

HON. WESLEY: They intervened in

18

the arbitration but the arbitration

19

has been resolved, the mandate's been

20

issued, there's no more proceeding in

21

that; is that the case?

22

MR. TYRELL: That's correct.

An

23

they had continued to try to not lose

24

their privileges in the Donziger 1782

25

action.

That's why they stepped in.
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They said we shouldn't forfeit

3

eighteen years of our attorney-client

4

communications.

5

defensively.

6

They did it

HON. WESLEY: I understand

7

the 1782 objection.

8

interested in just a couple of other

I'm also

9

things.

It seems clear that although

10

in New York -- and maybe it's foolish

11

to say that an individual couldn't do

12

business in New York.

13

strongly suspect the New York Court of

14

Appeals would tell us that.

15

doing this, in your view, were your

16

clients doing business in New York?

17

I would

But in

MR. TYRELL: Absolutely not, your

18

Honor.

19

for either purposes of general or

20

specific jurisdiction.

21

And the only analysis of it --

And if I may respond to you in

22

two ways, the only thing that Judge

23

Kaplan hangs his hat on is to say that

24

all of the actions of Mr. Donziger who

25

happens to maintain his home and an
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office in his home in New York, that

3

that is transacting business by my two

4

clients in New York, there isn't a

5

single suggestion that they aimed any

6

communication here, there isn't even

7

anything in the record to suggest that

8

my two, as distinct from the

9

Ecuadorian lawyer, ever spoke

10

personally with Mr. Donziger.

11

HON. WESLEY: Well, transacting

12

business when -- when hiring a lawyer

13

to represent you someplace else and

14

then the lawyer having a dispute with

15

you about a fee, that's the Fishbar

16

case, that's an appellate decision

17

just a couple of years ago, that's 303

18

and all there has to be a substantial

19

nexus in the activities because the

20

transaction of business and the

21

dispute.

22

Kaplan has said that because Mr.

23

Donziger sought out financing to

24

further the lawsuit in Ecuador, that

Here it seems to me that

EXHIBIT J

25

that was transacting business on
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behalf of your clients.

3

What's your view on that?

4
5

MR. TYRELL: We disagree strongly
with that.

6

First of all, there's no

7

suggestion that my two clients knew

8

anything about what Mr. Donziger was

9

doing.

There's no connection

10

whatsoever.

11

indigenous people living in the jungle

12

in Ecuador.

13

-- they have never authorized Mr.

14

Donziger to go seek funding for them.

15

There's no evidence to that

16

whatsoever.

17

the first prong.

18

second prong, if it was specific

19

jurisdiction, the case would have to

20

arise out of it.

21

course, can't.

22

My clients basically are

They have never probably

And you're focusing on
Of course on the

Here the issue, of

HON. WESLEY: Well, there has to

23

be a substantial nexus between the

24

activity and the claim asserted.

25

MR. TYRELL: And the claim here
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is that the Ecuadorian court system is

3

corrupt and that the judgment was

4

obtained by fraud.

5

in New York.

6

system is or is not corrupt.

7

nothing to do with New York.

8
9

That wasn't done

The Ecuadorian court
That has

HON. WESLEY: Fair enough.

Thank

you.

10

MR. TYRELL: Thank you very much.

11

HON. POOLER: Thank you, counsel.

12

Thank you all very much.
reserve judgment on the mandamus

14

We'll

13

motion.

15

MR. TYRELL: Your Honor, if I may

16

break my rule, we intended but I

17

forgot to, to renew our request for

18

the stay of the proceedings in the

19

district court in light of the

20

argument.

21
22

HON. POOLER: Thank you.
We'll let the room clear out and

23

we'll turn to our next matter.

24

(TIME NOTED: 11:17 a.m.)

25
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