The Recognition Act, Anti-Suit Injunctions, the DJA, and Much More Fun: The Story of the Chevron-Ecuador Litigation and the Resulting Problems of Aggressive Multinational Enforcement Proceedings

Article excerpt

Introduction I.   Origins of the Chevron-Ecuador Litigation II.  Relevant Law      A. Recognition of Foreign (Money) Judgments in the         United States      B. Anti-Suit Injunctions      C. The Declaratory Judgment Act      D. Ripeness III. Problems Posed by the Chevron-Ecuador Litigation      A. The Donziger Decision      B. The Naranjo Decision      C. Shell Oil      D. Ripeness and Libel Tourism IV.  Discussion      A. Problems with the Naranjo Decision      B. Problems with the Donziger Decision      C. The Ripeness Analysis      D. So, What is the Remedy? Conclusion: The Aftermath of Naranjo     Oh, the places you'll go! There is fun to be done!    There are points to be scored There are games to be won.    And the magical things you can do with that ball    will make you the winning-est winner of all.    Fame! You'll be famous as famous can be.    with the whole wide world watching you win on TV.    ...    You'll get mixed up, of course,    as you already know.    You'll get mixed up    with many strange birds as you go.    So be sure when you step.    Step with care and great tact    and remember that Life's    a Great Balancing Act.    Just never forget to be dexterous and deft.    And never mix up your right foot with your left. (1) 

INTRODUCTION

International litigation is fraught with procedural issues, from choice of forum and choice of law to forum non conveniens, the Foreign Sovereign Immunities Act, anti-suit injunctions, and of course, recognition of foreign judgments. To further complicate things, as the Chevron-Ecuador story will demonstrate, as soon as one of those procedural issues crops up, the rest will inevitably follow.

Indeed, international litigation can become incredibly complicated and drawn out, at great cost to all parties--particularly when there are parallel proceedings. (2) The variety and utility of procedural devices available when a dispute spans multiple countries creates greater opportunity for abuse. If, for example, one forum will not enforce a judgment that a litigant has obtained in a different jurisdiction, that litigant (the judgment-creditor) could try to enforce that judgment in a different forum where the defendant (the judgment-debtor) may have assets. This practice forces the judgment-debtor to defend in multiple places. Likewise, defendants can use tools like forum non conveniens or parallel proceedings to drag out the litigation or force the plaintiff into a quick settlement. (3) The presence of multiple potential fora and complicated questions of choice of law or recognition of foreign judgments create great potential for litigants to be procedurally abusive--particularly when a potentially unfair judgment is involved and the plaintiff attempts to enforce it by any means possible.

The infamous Chevron-Ecuador litigation presents many of the procedural issues that arise in international disputes. During that litigation, a class of plaintiffs from the Lago Agrio region (the judgment-creditors) obtained a multi-billion dollar money judgment in the Republic of Ecuador (ROE) against Chevron (the judgment-debtor), and eventually attempted to enforce that judgment in fora around the world. (4) Chevron brought an action in the Southern District of New York against the judgment-creditor seeking, among other things, a preliminary injunction principally to bar enforcement of the judgment outside of the ROE. (5) Various common law tort and RICO claims created the gravamen of the lawsuit, providing the basis for jurisdiction over all the parties and, hence, the injunction. Judge Kaplan granted Chevron's request for a worldwide injunction against the judgment-creditors pursuant to the anti-suit injunction analysis articulated in China Trade & Development Corp. v. Choong Yong. (6) The Second Circuit reversed that judgment in Chevron Corp. v. Naranjo, concluding that China Trade's anti-suit injunction standard should not apply. (7) The Second Circuit instead asserted that the requested relief was an anti-enforcement injunction, and invoked New York's version of the 1962 Uniform Foreign Country Judgments Recognition Act (the Recognition Act). …

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