I’ve written a couple times before about the Lago Agrio / Chevron litigation in Ecuador, from questioning why the plaintiffs’ political tactics drew so much criticism but the same standard wasn’t applied to Chevron to commenting on how one side won an appeal by ignoring the Supreme Court’s advice on how to write a brief. It’s a fascinating case not because it’s a David–versus–Goliath battle, as these plaintiffs are backed by a hedge fund, but because of the wide variety of important issues the case raises.

This post isn’t really about the case, though. Anyone who cares to follow the case need only follow Letters Blogatory’s Lago Agrio tag. This post is about one of the important issues raised by the case: where does due process end?

The phrase “due process of law” first appeared in a version of the Magna Carta published more than a century after the original Magna Carta was enacted, with “due process of law” roughly replacing the phrase “lawful judgment of his equals or by the law of the land.” The phrase, however, didn’t mean much in the practice of British law, which is why James Madison, who drafted the due process clause found in the Fifth Amendment, said that the phrase wasn’t by itself sufficient to protect any of the “great rights” like trial by jury, freedom of the press, or “liberty of conscience.” That’s part of why we have those First, Fourth, Sixth, and Seventh Amendments, too.

“Due process” encapsulates the very essence of the rule of law, and so the phrase has shaped American law for generations. As every lawyer learned in their Constitutional Law class back in law school — but which is rarely discussed outside of the legal profession — there are two types of due process, procedural due process which defines the steps the government has to take before criminally punishing you or enforcing a civil judgment against you, and substantive due process, which reflects the rights so fundamental to individual freedom that no procedure could adequately justify their taking.

Substantive due process occupies far more of our national debate because it touches upon the perennial obsessions about reproductive rights and homosexuality. But, as a matter of the application of law, procedural due process touches upon far more lives on a daily basis. In the court system, procedural due process — and the specific procedural protections Madison spelled out for criminal prosecutions in the Sixth Amendment (speedy trial, right to counsel, etc) and civil lawsuits in the Seventh Amendment (jury trial, rules of common law) — touches upon every criminal case from the moment of an arrest and every civil lawsuit from the moment it is filed.

It is sometimes, for example, a violation of due process to apply principles of estoppel to parties that weren’t a party to civil litigation in the first place. Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 329, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971) (“Some litigants—those who never appeared in a prior action—may not be collaterally estopped without litigating the issue. . . . Due process prohibits estopping them despite one or more existing adjudications of the identical issue which stand squarely against their position.”). Similarly, just earlier this week the Supreme Court held that it was a violation of the Sixth Amendment for a criminal defendant to have ineffective assistance of counsel while plea bargaining.

But it’s due process, not limitless process. At some point the court system has rightly or wrongly reached its conclusion. 

When the defense lawyers for Keystone Health were sanctioned for deliberately thwarting discovery in a case alleging the health insurer systematically cheated doctors, the Third Circuit found the conduct sanctionable, but refused to allow the District Court to enter the sanctions:

Ordinarily, we would remand the case to the District Court to allow it to apply the “substantial justification” standard to sanctions under Rules 26(g) and 37(c)(1) and to undertake a more specific and individualized analysis under 28 U.S.C. § 1927 and Local Rule 83.6.1. However, in this situation, where the parties have settled the matter of the attorneys’ fees, there is no reason to remand. It is time the tumult in the legal community caused by this case came to an end.

Similarly, when the Winklevoss twins sought to undo their settlement with Mark Zuckerberg, alleging the settlement was procured by fraudulently stating the value of Facebook shares, the Ninth Circuit affirmed the District Court’s refusal to re-open the settlement, holding:

The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace. And the courts might have obliged, had the Winklevosses not settled their dispute and signed a release of all claims against Facebook. With the help of a team of lawyers and a financial advisor, they made a deal that appears quite favorable in light of recent market activity For whatever reason, they now want to back out. Like the district court, we see no basis for allowing them to do so. At some point, litigation must come to an end. That point has now been reached.

As I’ve mentioned before, I appreciate it when judges state the real reasons for their holdings, and I appreciate that the Third Circuit and the Ninth Circuit both plainly stating that they ended the cases because they felt, respectively, that “It is time the tumult in the legal community caused by this case came to an end” and “At some point, litigation must come to an end.” It is a painful rationale for a party to hear, but in some cases it is the right decision.

If you’re a major oil company it seems that litigation can continue until you win, which brings us back to Chevron. The litigation has gone through plenty of twists and turns since the Ecuadorian trial court entered an $18.2 billion judgment against Chevron. Chevron has fought vigorously in New York federal courts — the same courts where the litigation was first filed by the plaintiffs, but moved at Chevron’s request to Ecuador — to have the Ecuadorian judgment rendered unenforceable. As but one part of their strategy, Chevron has sued the plaintiffs and their lawyers, and have demanded both an expedited trial and a pre-trial “attachment” order that would hold the judgment itself as collateral for the judgment Chevron expects to win against the plaintiffs. (It would be an overstatement to call this sort of pre-trial attachment “rare,” but the presiding judge has indicated he is seriously considering it.)

The recent chatter was over a paid-for amicus brief and blog post at Opinio Juris by Doug Cassel, a human rights litigator and law professor, arguing that, indeed, the Ecuadorian judgment was likely procured by fraud. Cassel concludes:

In an open letter to the human rights community, I set forth these concerns at greater length. Plaintiffs’ lawyers now accuse me (and previously the arbitral tribunal members) of abandoning principle for lucre — without mentioning the millions in fees they stand to gain if the “judgment” stands (or the several-hundred-million dollar bonus the judgment awards to their NGO).

Most important, the credibility of the human rights movement is at stake. We cannot vindicate human rights by violating them. The ends — securing reparations — do not justify the means: sham judicial proceedings.

In my opinion, this argument is irrelevant. Texaco / Chevron demanded the litigation be moved to Ecuador, and so they were bound by that decision, whether it worked out for them or not. As I wrote in the comments on Opinio Juris:

If the lawsuit had stayed in New York, the plaintiffs lost at trial and filed an appeal, and then they asked a court in Ecuador for a mulligan while the US appeal was still underway, they would be rightly derided as attempting a collateral attack on the judgment of their chosen forum. Why is it different when Chevron tries the same?

Someone responded, not Cassel, but they didn’t answer the question either. Ted Folkman follows up thoughtfully on the Cassel controversy here, discussing some of the details about the estoppel argument and about the difference between fraud in the trial court and fraud in the Ecuadorian justice system as a whole. I’m sure there are arguments to be made there for Chevron: look closely enough at any legal issue and, much like in quantum mechanics, the lines become blurry.

But I still can’t get past the fact that “at some point, litigation must come to an end.” I can’t get by what happened in Grider, and Winklevoss, and in the Anderson case at the heart of A Civil Action, and a million other cases in which the courts held that enough was enough, that all the procedural safeguards we can reasonably offer had been exercised and it was time for the litigation to end.

The Lago Agrio plaintiffs sought relief from the courts of the United States, where Chevron was based. Chevron, in turn, argued successfully that the case must be heard in the courts of Ecuador, and promised to abide by the result. In that time Ecuador has not suffered a coup or a radical restructuring of its government; whatever was the possibility of judicial corruption there — or here in the United States — back when the litigation was moved, it was just as apparent then as now. When Chevron asked for the litigation to move to Chevron, they asked for the whole system, not just the parts they liked, and they are right now also availing themselves of the Ecuadorian appellate procedures. That is the due process they requested in the first place; the plaintiffs wanted the due process of the United States.

At some point, litigation must come to an end, and this litigation should end in Ecuador, the venue Chevron demanded.

  • Guest

    Cassel got paid for the amicus brief? Huh. He sounds more like a “friend of a party,” rather than a “friend of the court.” I wouldn’t trust a word of it.

  • RichNewsome

    Fascinating case and great post. Been following this on and off for several years as the case surfaces now and then in the media. Would love your take on how you think this whole thing will eventually shake out…

  • Max, I’m sympathetic to the idea of some kind of estoppel to prevent gamesmanship when a company gets a US case dismissed on forum non conveniens grounds. But that issue really will only come to the fore when the Lago Agrio plaintiffs seek to give the Ecuadoran judgment some effect in the United States (as they arguably have done in their affirmative defenses to the RICO case against Donziger and others), and so it seems to me that Chevron has to be allowed to present its defenses to the plaintiffs’ claims, even if the defenses ultimately fail. I think the argument that litigation must have an end sometime applies most strongly when you seek to relitigate something in the same court that resolved the underlying case, not when you are arguing about the effects of the first court’s decision in another court that is not necessarily obligated to recognize the first court’s judgment.

    • Ted,

      Thanks for the comment. I would be sympathetic if Chevron was merely trying to defend itself from enforcement of the Ecuadorian judgment in the US. But that’s not what’s happening. Instead, Chevron has filed its own affirmative RICO claim for damages and has, appallingly, sought *worldwide* pre-judgment enforcement of the not-yet-entered judgment in its RICO case.

      That throws all equitable considerations out the window for Chevron. The US cannot both be an ‘inconvenient’ forum when you think you’re going to lose your defense and then the appropriate forum for you as plaintiff to demand worldwide relief. That shows Chevron has taken nothing but tactical positions throughout the case; equity does not provide special treatment, like the RICO “do over” suit challenging the Ecuadorian process it demanded.

    • Ted,

      Thanks for the comment. I would be sympathetic if Chevron was merely trying to defend itself from enforcement of the Ecuadorian judgment in the US. But that’s not what’s happening. Instead, Chevron has filed its own affirmative RICO claim for damages and has, appallingly, sought *worldwide* pre-judgment enforcement of the not-yet-entered judgment in the US case.
      That, to me, throws all equitable considerations out the window for Chevron.