PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
No. 10-2815
______________
IN RE Application of CHEVRON CORPORATION for
an Order Pursuant to 28 U.S.C. Section 1782 to
Conduct Discovery for Use in Foreign Proceedings
Uhl, Baron, Rana & Associates, Inc;
Ecuadorian Plaintiffs,
Appellants
______________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 2-10-cv-02675)
Honorable Stanley R. Chesler, District Judge
______________
Argued November 17, 2010
BEFORE: AMBRO, FISHER, and GREENBERG, Circuit
Judges
(Filed: February 3, 2011)
______________
O. Andrew F. Wilson (argued)
Ilann M. Maazel
Adam R. Pulver
Emery Celli Brinckerhoff & Abady
75 Rockefeller Plaza
20th Floor
New York, New York 10019
James T. Hunt, Jr.
Slater, Tenaglia, Fritz & Hunt
2300 New Road
Northfield, New Jersey 08225
Attorneys for appellants
Randy M. Mastro (argued)
Gibson, Dunn & Crutcher
200 Park Avenue
47th Floor
New York, New York 10166-0193
Scott A. Edelman
Andrea E. Neuman
Julian W. Poon
William E. Thomson
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071-3197
2
Ashley E. Johnson
Gibson, Dunn & Crutcher
2100 McKinney Avenue, Suite 1100
Dallas, Texas 75201-6912
Herbert J. Stern
Stephen M. Plotnick
Justin A. Marchetta
Stern & Kilcullen, LLC
75 Livingston Avenue
Roseland, New Jersey 07068
Attorneys for appellee
______________
OPINION OF THE COURT
______________
GREENBERG, Circuit Judge.
I. INTRODUCTION
This matter comes on before this Court on appeal from a
District Court‟s order entered June 15, 2010, granting Chevron
Corporation the opportunity to engage in discovery pursuant to
its application under 28 U.S.C. § 1782. Section 1782(a)
provides in material part that “[t]he district court of the district
in which a person resides or is found may order him to give his
testimony or statement or to produce a document or other thing
for use in a proceeding in a foreign or international tribunal[.]”
3
Section 1782(a), however, includes the limitation that “[a]
person may not be compelled to give his testimony or statement
or to produce a document or other thing in violation of any
legally applicable privilege.” The District Court, following a
hearing that consisted of arguments of counsel, found that it was
appropriate for it to grant a portion of Chevron‟s section 1782
application. In reaching its result the Court rejected a privilege
issue raised in the proceeding by appellants, the plaintiffs in an
environmental damages action in Ecuador and a New Jersey
environmental consulting firm, Uhl, Baron, Rana & Associates,
Inc. (UBR), engaged by the plaintiffs in the Ecuadorian case as a
non-testifying environmental consultant.1 The Court in rejecting
the claim of privilege held that “[t]o the extent that any privilege
or immunity from disclosure would otherwise apply to some or
all of the discovery sought by Chevron pursuant to its
Application, any such privilege has been waived and/or does not
apply pursuant to the crime-fraud exception[.]”2 App. at 3.
We now hold that the District Court applied the
appropriate standards in considering Chevron‟s section 1782
application and correctly determined that the provision of
documents to an Ecuadorian court-appointed expert to assess
1 Sometimes we use the terms appellants and UBR
interchangeably inasmuch as both the Ecuadorian plaintiffs and
UBR are appellants and the Ecuadorian plaintiffs engaged UBR.
2 The order listed the documents, materials, information, and
communications to which the crime-fraud exception had been
waived or did not apply.
4
damages resulted in a waiver of any work-product protections
and attorney-client privileges that might otherwise have
precluded discovery of those documents. We limit our opinion,
however, because we also hold that the District Court‟s ruling
that the crime-fraud exception to the attorney-client privilege
was applicable, to the extent that the privilege was not waived,
was too sweeping and has the potential to pierce the attorney-
client privilege for documents that were not created or used in
furtherance of the alleged fraud and thus are not subject to
disclosure through the application of the exception. We
therefore will vacate the District Court‟s determination with
respect to the crime-fraud exception to the attorney-client
privilege and will remand the case to the District Court so that it
can conduct an in camera review of the relevant documents and
determine whether the crime-fraud exception to the attorney-
client privilege is applicable to any of the documents and, if so,
which ones.
II. HISTORY
It is helpful in this case, arising out of 17 years of still
ongoing litigation spanning across two continents, to provide
background information to place this case in its proper
perspective. In 1993, certain communities in the Amazon River
area of Ecuador3 (the Ecuadorian plaintiffs) filed a class action
in the United States District Court for the Southern District of
3 Some of the plaintiffs were Peruvian but we do not further
discuss their position in the case as the parties do not focus on
them on this appeal.
5
New York against Texaco, Inc. (Texaco), claiming that its
subsidiary, Texaco Petroleum Company (TexPet), had caused
massive environmental contamination and degradation in
Ecuador that sickened and killed numerous persons in the
Amazon River area. See generally Aguinda v. Texaco, Inc., 303
F.3d 470 (2d Cir. 2002). Texaco, and later Chevron after
Texaco and Chevron partially merged in 2001, sought a
dismissal of the suit on the basis of their claim of forum non
conveniens and principles of international comity, contending
that the Ecuadorian courts provided a more appropriate forum
for the litigation. In advancing their forum non conveniens
argument, Texaco, and then Chevron, contended that the
Ecuadorian courts offered a fair and adequate forum for the
litigation and the Ecuadorian judiciary was impartial and free
from corruption. Id. at 474-80. After protracted litigation
which resulted in the rendering of several opinions by the
United States District Court for the Southern District of New
York and the United States Court of Appeals for the Second
Circuit, the District Court dismissed the action on the grounds of
forum non conveniens and the Court of Appeals affirmed the
District Court‟s dismissal of the case. The Courts conditioned
the dismissal, however, on Chevron‟s agreement to consent to
the jurisdiction of the Ecuadorian courts and to waive any
statute of limitations defenses that it might have if the
Ecuadorian plaintiffs refiled the case in Ecuador.
Promptly after the dismissal, the Ecuadorian plaintiffs
refiled the case in a court in Lago Agrio, Ecuador, against
Chevron (the Lago Agrio litigation).4 Though a trial began that
4 Chevron asserts that when the Ecuadorian plaintiffs filed the
6
year in the Lago Agrio litigation, the case still is pending in the
Lago Agrio Court.5 It is an understatement to characterize the
Lago Agrio litigation as contentious, as both sides of the
litigation vigorously have opposed nearly every move by the
other, and have accused the other side of criminal or fraudulent
conduct in the course of the litigation.6 Appellants represent
Lago Agrio litigation they did not simply refile the earlier action
from the Southern District of New York, apparently because the
parties in the two cases are not identical. We have no need to
discuss that point further.
5 It is our understanding that the Ecuadorian courts conduct
trials, or at least have conducted the trial in this case, by the
examination of written submissions.
6 Indeed, two of Chevron‟s attorneys face criminal prosecution
in Ecuador arising out of the Lago Agrio litigation. Chevron
believes that the Ecuadorian plaintiffs or their attorneys were
responsible for those prosecutions. Moreover, appellants note
that a court-appointed global damages expert filed an official
complaint with the Lago Agrio Court asserting that individuals
associated with Chevron were interfering with his work and
threatening him and his team, and that the court responded to
this complaint by providing the expert with law enforcement
protection when he was conducting field work. For its part,
Chevron claims that the Ecuadorian plaintiffs perpetrated a
fraud on the Lago Agrio Court by illegally and surreptitiously
colluding with the supposedly independent global damages
expert that the Lago Agrio Court appointed and by essentially
ghost-writing his report for him.
7
that the Lago Agrio litigation has generated a massive record
containing “more than 200,000 pages of evidence, roughly
63,000 chemical sampling results produced by laboratories
contracted by both parties and the court experts, testimony from
dozens of witnesses, and dozens of judicial field inspections of
former Chevron wells and production sites conducted over a
five-year period under the oversight of the Lago Agrio court.”
Appellants‟ br. at 9.
Early in the Lago Agrio litigation, both sides employed
experts who submitted reports concerning the contamination at
former TexPet well sites. In October 2003, the Ecuadorian
plaintiffs petitioned the Lago Agrio Court to appoint an expert
to conduct a global damages assessment of the contamination
that TexPet allegedly caused. At that time Chevron did not file
a similar petition, but in 2007 it petitioned for appointment of a
global damages assessment expert, a request that the court
denied as untimely. Consequently, the Lago Agrio Court
determined that it would appoint a single global damages expert,
with the Ecuadorian plaintiffs and Chevron each nominating a
candidate for the position. Ultimately, however, the Lago Agrio
Court did not appoint either candidate and instead appointed
Richard Stalin Cabrera Vega (Cabrera), an Ecuadorian
environmental engineer and geologist who had served as a
court-appointed expert earlier in the case, as the global damages
expert. Although the Lago Agrio Court appointed Cabrera, it
ordered the Ecuadorian plaintiffs to pay his fees because they
had requested the appointment of such an expert.
Cabrera accepted the appointment, and he and his team
conducted numerous field inspections of the contamination sites,
8
with the parties being given notice of the date and location of
those inspections and being allowed to participate in the
inspection process. Moreover, Cabrera, from time to time,
requested that the parties submit materials to him. In response
to Cabrera‟s requests, the Ecuadorian plaintiffs submitted
documents to him in support of their claims, but Chevron did
not submit any documentation in support of its position to him.
The process of this document submission has given rise to one
of the primary issues in dispute between the parties because they
are at odds on the question of whether they were permitted to
submit documents on an ex parte basis to Cabrera for his
consideration in drafting his report. Indeed, Chevron regards
the suggestion that the Lago Agrio Court permitted the
submission of documents on an ex parte basis as “absurd.”
Appellee‟s br. at 17. On the other hand, the Ecuadorian
plaintiffs contend that the submissions were authorized and that
the Lago Agrio Court actually “encouraged” the parties to
provide documents in support of their positions to Cabrera.
Appellants‟ br. at 44.
Cabrera‟s final assessment calculated the global damages
at $27.3 billion. Chevron reacted to that assessment by filing a
motion with the Lago Agrio Court seeking to have it strike the
global damages assessment from evidence and declare that
Cabrera‟s appointment as global damages assessment expert was
null and void. Though the Lago Agrio Court did not give
Chevron the relief it sought when it filed its motion, the court
indicated that it understood that Chevron was dissatisfied with
Cabrera and his final report, and reiterated that “the court is not
9
required to abide by the opinion of the experts.”7 Appellee‟s
Request for Judicial Notice at ex. 7.8 The court then, in what it
explained was an effort to “receive further enlightenment and
illustration and additional elements for judgment,” provided the
parties with an additional 45 days to make new damages
submissions for it to consider in reaching its judgment. Id.
Chevron‟s responses to what it plainly regarded as
unpalatable proceedings in Ecuador did not stop with it taking
steps in that country, as it obviously, and ironically in view of its
contentions on its forum non conveniens application that
resulted in the dismissal of the Southern District of New York
litigation, had lost faith in the Ecuadorian courts. Thus, in an
out-of-Ecuador response, Chevron filed a notice of arbitration
under the United Nations Commission on International Trade
Law (UNCITRAL) pursuant to the United States-Ecuador
Bilateral Investment Treaty (BIT) on November 23, 2009,
7 Apparently, under Ecuadorian law, the presiding judge will
not be permitted to rule on the objections to the global damages
assessment report Cabrera prepared until the judge issues the
final judgment in the case.
8 Even though, as we explain below, we deny the parties‟
motions to supplement the record on appeal, we are considering
the Lago Agrio Court‟s response to Chevron‟s motion because
of the significance of the response in the context of this section
1782 application and because the court filed the response on
August 2, 2010, a date after the District Court rendered its ruling
on June 15, 2010.
10
challenging the Ecuadorian proceedings in an attempt to obtain
an award that would preclude international recognition of the
judgment that the Lago Agrio Court will enter in the Lago Agrio
litigation.9 The parties to the arbitration proceeding are Chevron
and the Republic of Ecuador, but not the Ecuadorian plaintiffs
even though they have an interest in the outcome of the
arbitration. Chevron asserts that it is entitled to the relief it
seeks because it believes that the Ecuadorian government has
conspired with the Ecuadorian plaintiffs to influence the
outcome of the Lago Agrio litigation.10
9 According to appellants, Chevron has asked the BIT
arbitration panel to tell the Ecuadorian government to direct the
judge in the Lago Agrio litigation to dismiss the case but
Chevron denies that it has asked for such relief and asserts, as
we have pointed out, that it seeks an outcome precluding
enforcement of a judgment entered in the Lago Agrio Court
outside of Ecuador.
10 Both the Ecuadorian plaintiffs and the Republic of Ecuador
filed suits in the United States District Court for the Southern
District of New York seeking to obtain an order staying the BIT
arbitration. In those actions the plaintiffs contended that
Chevron should be precluded from challenging the fairness of
the Ecuadorian court system inasmuch as Texaco argued so
vehemently when pressing its forum non conveniens motion that
the case should be venued in Ecuador in part because the courts
in that country were fair and impartial. The District Court in the
Southern District of New York has declined to stay the BIT
arbitration, but the parties seeking that relief have appealed to
the United States Court of Appeals for the Second Circuit and
11
In addition to having instituted the BIT arbitration in
reaction to the Ecuadorian proceedings, Chevron has brought an
extraordinary series of at least 25 requests to obtain discovery
from at least 30 different parties pursuant to section 1782 in
United States District Courts throughout the United States.
These requests, which include the proceedings before us now,
seek evidence to support Chevron‟s claim that the Ecuadorian
plaintiffs committed fraud in the prosecution of the Lago Agrio
litigation. Chevron‟s overarching contention in seeking the
section 1782 discovery is that the judicial process in Ecuador is
corrupt and that the Ecuadorian plaintiffs and their associates
have fraudulently conspired with Cabrera to produce a skewed
damages report that the Ecuadorian plaintiffs ghost-wrote.
Chevron seeks to use the discovery it obtains pursuant to its
section 1782 requests in the Lago Agrio litigation and the BIT
arbitration to support this contention.
In the section 1782 case now before us, Chevron filed its
suit in the District of New Jersey, contending that UBR, the
New Jersey-based environmental consulting firm that the
Ecuadorian plaintiffs engaged, employed Juan Cristóbal Villao
Yepez (Villao), one of the 14 technical experts participating in
the preparation of Cabrera‟s global damages report. Chevron
contends that the appearance of materials in Cabrera‟s final
global damages assessment report with UBR‟s logo
demonstrates that Cabrera‟s report was not impartial and that
Cabrera improperly conspired with the Ecuadorian plaintiffs and
that appeal currently is pending. Apparently the BIT arbitration
panel has not yet decided whether it has jurisdiction to entertain
the arbitration proceeding.
12
UBR in drafting his report.
Appellants, on the other hand, express no surprise that
Cabrera‟s report incorporates documents that they provided to
him, including documents that UBR prepared, for they maintain
that, as we pointed out above, the Lago Agrio Court sanctioned
their providing Cabrera with the documents. Appellants further
contend that Cabrera was free to accept or reject the Ecuadorian
plaintiffs‟ submissions and consequently was free to incorporate
the submissions into his report so long as he found them to be
credible. Nevertheless, in light of Villao‟s dual employment and
the presence of materials from UBR in Cabrera‟s report,
Chevron urges that it is entitled to an order under section 1782
compelling UBR and Villao to turn over any documents
transmitted between UBR and Cabrera, between Villao and
Cabrera, and between counsel for the Ecuadorian plaintiffs and
Villao. Chevron‟s application led to the proceedings in the
District Court and thus has led to this appeal.
The District Court heard oral argument on Chevron‟s
application on June 11, 2010, and issued a decision from the
bench on that day granting Chevron‟s section 1782 discovery
request as to UBR.11 The Court then entered an order on June
15, 2010, requiring UBR to produce documents transmitted
11 Because section 1782 only applies to a person who “resides”
in the district of the District Court and Villao lives in Ecuador,
the District Court dismissed Chevron‟s request to the extent that
it related to Villao but did so “without prejudice to Chevron‟s
right to later establish that he is found in the district.” App. at 2.
13
between UBR and Cabrera, and, so far as UBR possessed them,
any documents transmitted between Villao and Cabrera or
Villao and the attorneys for the Ecuadorian plaintiffs or their
representatives. The order also permitted Chevron to cause a
subpoena to be served in furtherance of the discovery. We
reiterate that the District Court rejected appellants‟ claims that
the documents that Chevron requested were privileged by
reasoning that “[t]o the extent that any privilege or immunity
from disclosure would otherwise apply to some or all of the
discovery sought by Chevron pursuant to its Application, any
such privilege has been waived and/or does not apply pursuant
to the crime-fraud exception[.]” App. at 3. The Court directed
UBR to produce a list of all of the documents that appellants
believed were privileged and thus were not subject to disclosure,
so that the Court could review the list and reach its own
conclusion as to whether any of the documents remained
privileged.12
Following the District Court‟s issuance of its order on
June 15, 2010, appellants appealed to this Court and
simultaneously filed a motion for a stay pending appeal. The
District Court denied appellants‟ application for a stay pending
appeal, but issued a temporary stay pending appellants‟
12 It would seem to have been inconsistent for the District Court
both to rule that the attorney-client privilege had been waived or
did not apply because of the crime-fraud exception and yet to
direct UBR to produce a list of communications that appellants
believed were privileged for the Court‟s review. Nevertheless,
in view of our outcome we need not address this point further.
14
application for a stay to this Court. We subsequently granted
appellants a stay pending appeal on July 6, 2010, and also
ordered that the appeal be expedited.13
III. JURISDICTION AND STANDARD OF REVIEW
The District Court had jurisdiction under 28 U.S.C. §
1782 and we have jurisdiction pursuant to 28 U.S.C. § 1291.
We review the District Court‟s decision on the section
1782 discovery request for an abuse of discretion. See In re
Bayer AG, 146 F.3d 188, 191 (3d Cir. 1998). However, if “the
district court misinterpreted or misapplied the law,” or if “the
court relied on inappropriate factors in the exercise of its
discretion, our review is plenary.” Id. We review the District
Court‟s ruling regarding waiver of the work product privilege
for an abuse of discretion. In re Grand Jury (Impounded), 138
F.3d 978, 980-81 (3d Cir. 1998). Finally, we review the legal
issues underlying the District Court‟s application of the crime-
13 The parties have moved on several occasions to supplement
the record on appeal and we now deny those motions except that
we have taken judicial notice of one proceeding in the Lago
Agrio Court that was not in the original record in the District
Court as it took place after the District Court decided this case
and the proceeding is quite significant. Our denial of the
motions to supplement the record has not affected the outcome
of this appeal as most of the evidence with which the parties
seek to supplement the record is related only tangentially to the
issues on this appeal.
15
fraud exception to the attorney-client privilege de novo, and its
factual determinations for clear error. In re Impounded, 241
F.3d 308, 312 (3d Cir. 2001).
IV. DISCUSSION
Appellants first claim that Chevron‟s discovery request
was not proper under section 1782 because Chevron sought
discovery not intended “for use in a proceeding in a foreign or
international tribunal.” See 28 U.S.C. § 1782(a). Appellants
argue that as a matter of statutory interpretation “[d]iscovery is
not „for use in a proceeding before a foreign tribunal‟ where its
purpose is to attack the tribunal itself.” Appellants‟ br. at 22
(emphasis in original). The initial problem with appellants‟
contention is that Chevron intends to use the evidence that it
uncovers in an attempt to show the Lago Agrio Court that the
Ecuadorian plaintiffs have engaged in fraud in the proceedings
before that court. Furthermore, use of the evidence uncovered
in a section 1782 application in the BIT arbitration to “attack”
the Lago Agrio Court unquestionably would be “for a use in a
proceeding in a foreign or international tribunal.” The
possibility that the evidence may be utilized to cast doubts on
the impartiality of the Lago Agrio Court does not mean that
Chevron‟s request for the evidence runs afoul of section 1782
and that Chevron therefore may not obtain the evidence.
Appellants next contend that the District Court abused its
discretion when it granted Chevron‟s section 1782 discovery
request. The seminal case exploring the parameters of section
1782 is Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S.
16
241, 124 S.Ct. 2466 (2004), in which the Supreme Court
explained that section 1782 “is the product of congressional
efforts, over the span of nearly 150 years, to provide federal-
court assistance in gathering evidence for use in foreign
tribunals.” Id. at 247, 124 S.Ct. at 2473. In Intel, the Court
rejected the “suggestion that a § 1782(a) applicant must show
that United States law would allow discovery in domestic
litigation analogous to the foreign proceeding.” Id. at 263, 124
S.Ct. at 2482. The Court also held that section 1782 does not
contain a “threshold requirement that evidence sought from a
federal district court would be discoverable under the law
governing the foreign proceeding.” Id. at 247, 124 S.Ct. at
2473. The Court reasoned that “[b]eyond shielding material
safeguarded by an applicable privilege . . . nothing in the text of
§ 1782 limits a district court‟s production-order authority . . . .”
Id. at 260, 124 S.Ct. at 2480.
The Supreme Court cautioned, however, that “comity and
parity concerns may be important as touchstones for a district
court‟s exercise of discretion in particular cases[.]” Id. at 261,
124 S.Ct. at 2481. To that end, the Court discussed factors that
a district court should consider when ruling on a section 1782(a)
request:
First, when a person from whom discovery is
sought is a participant in the foreign proceeding . .
. , the need for § 1782(a) aid generally is not as
apparent as it ordinarily is when evidence is
sought from a nonparticipant in the matter arising
abroad. A foreign tribunal has jurisdiction over
those appearing before it, and can itself order
17
them to produce the evidence. . . .
...
Second, as the 1964 Senate Report
suggests, a court presented with a § 1782(a)
request may take into account the nature of the
foreign tribunal, the character of the proceedings
underway abroad, and the receptivity of the
foreign government or the court or agency abroad
to U.S. federal-court judicial assistance. . . .
Specifically, a district court could consider
whether the § 1782(a) request conceals an attempt
to circumvent foreign proof-gathering restrictions
or other policies of a foreign country or the
United States. . . . Also, unduly intrusive or
burdensome requests may be rejected or trimmed.
Id. at 264-65, 124 S.Ct. at 2483 (citations omitted). Inasmuch as
relevant evidence is presumptively discoverable, “[t]he party
opposing discovery [under section 1782(a)] has the „burden of
demonstrating offense to the foreign jurisdiction, or any other
facts warranting the denial of a particular application.‟” Bayer
AG v. Betachem, Inc., 173 F.3d 188, 190 (3d Cir. 1999)
(quoting In re Bayer AG, 146 F.3d at 196).
The first Intel factor favors allowing Chevron to obtain
the discovery it seeks because UBR is not a participant in the
Lago Agrio litigation and, so far as we can determine from the
record before us, is not subject to the jurisdiction of the Lago
18
Agrio Court.14 Moreover, though we are aware that appellants
argue that the documents transmitted to Cabrera are within the
jurisdictional reach of the Lago Agrio Court, we have no basis
to question the District Court‟s observation or its conclusion that
followed at the hearing on Chevron‟s application that “Cabrera
has apparently indicated that he has not been in receipt of any
documents from UBR,” and for that reason “directing Mr.
Cabrera to produce documents which he says he did not have
would be pointless and fruitless as an exercise by the
Ecuadorian court.” App. at 50. Additionally, though we cannot
come to a conclusive determination on the issue, it is
questionable whether the jurisdictional reach of the BIT arbitral
panel embraces either UBR or Cabrera, which, after all, are not
parties to the arbitration proceeding, so that the panel may
compel them to produce documents. In this regard, we note that,
according to the District Court, the arbitration panel “does not
have the authority to order such a production,” and so those
documents “would not be obtainable for use in the [BIT]
arbitration absent discovery under Section 1782(a).” Id. at 50-
51.
Appellants claim, with respect to the second Intel factor,
that the Lago Agrio Court is not receptive to the documents
Chevron is seeking in its section 1782 request. We regard this
14 We see nothing in the briefs advancing arguments similar to
the contention advanced in countless cases in courts in the
United States, that an entity foreign to the forum, by its conduct
that had consequences within the governmental jurisdiction of
the forum court, became subject to the jurisdiction of that
government‟s courts.
19
claim as naked because appellants do not present adequate
evidence to support this contention and, as they are the parties
opposing discovery under section 1782, they bear the “burden of
demonstrating offense to the foreign jurisdiction.” Bayer AG,
173 F.3d at 190 (internal quotation marks and citation omitted).
We recognize that, according to appellants, the Lago Agrio
Court has denied Chevron‟s requests for many of these same
documents, and we are aware of their argument that the denial
indicates that the Lago Agrio Court would not be receptive to
Chevron obtaining the documents in the Lago Agrio litigation.
But in our consideration of appellants‟ argument regarding the
Lago Agrio Court‟s position with respect to the receipt of the
documents, we also take into account Chevron‟s contention that
the Lago Agrio Court has not denied Chevron‟s requests for the
documents. Overall, the status of Chevron‟s requests is not
clear from the record.
In any event, regardless of the Lago Agrio Court‟s
disposition of Chevron‟s request for the documents, it is plain
that appellants‟ argument conflates the question of whether a
foreign court would allow analogous discovery leading to the
production of documents with the question of whether that court
would consider evidence revealed in a section 1782 proceeding.
We have no reason to believe that the answers to those two
questions necessarily are in harmony inasmuch as a court might
offer limited discovery opportunities yet accept relevant
evidence tendered to it if procured without its assistance.
Furthermore, appellants‟ argument overlooks the circumstance
that Chevron seeks the section 1782 discovery for use in both
the Lago Agrio litigation and the BIT arbitration. In this regard,
we point out that while appellants suggest that the BIT arbitral
20
panel would not be receptive to the evidence, so far as we can
ascertain they base this suggestion on pure speculation. In these
circumstances, appellants‟ argument is insufficient given that
they bear the burden of proof on the receptiveness issue as they
are the parties opposing discovery under section 1782.
Appellants also contend that, under the third Intel factor,
Chevron‟s section 1782 discovery request is nothing more than a
concealed attempt to circumvent Ecuadorian proof-gathering
restrictions or other Ecuadorian policies. Again, appellants base
their argument on the proposition that the Lago Agrio Court has
denied Chevron‟s requests for these same documents, but, as we
have discussed already, the parties disagree about the status of
Chevron‟s requests to the Lago Agrio Court and we are
uncertain as to that status. Without a definitive determination
that the Lago Agrio Court has denied Chevron access to the
same documents that Chevron seeks in its section 1782
discovery application, an issue on which appellants bear the
burden of proof as the parties opposing discovery, it cannot be
said that Chevron‟s section 1782 application is “an attempt to
circumvent foreign proof-gathering restrictions.” Intel, 542 U.S.
at 265, 124 S.Ct. at 2483. Moreover, as we indicated above, the
Lago Agrio Court might be receptive to section 1782 evidence
and, if so, regardless of that court‟s rulings on Chevron‟s request
for documents, it would be a stretch to conclude that the section
1782 proceeding was an attempt to circumvent Ecuadorian
restrictions that somehow was offensive to the Lago Agrio
Court.
We also point out that, as the Court made clear in Intel,
there is no requirement that the material be discoverable in the
21
foreign country for it to be discoverable pursuant to a section
1782 request in the United States. See id. at 247, 124 S.Ct. at
2473. Moreover, appellants‟ argument once again minimizes
the fact that Chevron‟s section 1782 discovery request seeks the
documents for use in the BIT arbitration. Furthermore, we have
no basis on which we could hold that the section 1782 request is
an attempt to circumvent proof-gathering restrictions or other
policies of the BIT arbitral panel. Overall, we are satisfied that
none of the first three Intel factors caution against discovery.
Finally, in our consideration of Intel, we find no evidence
that Chevron‟s section 1782 discovery request is “unduly
intrusive or burdensome.” See id. at 265, 124 S.Ct. at 2483. We
therefore conclude that the District Court did not abuse its
discretion in applying the Intel factors in considering Chevron‟s
request in this case.
In addition to the factors that the Supreme Court
elucidated in Intel to establish when, as a positive matter, a court
could grant a section 1782 application, section 1782 provides
that “[a] person may not be compelled to give his testimony or
statement or to produce a document or other thing in violation of
any legally applicable privilege.”15 Appellants maintain that the
District Court erred in its rulings relating to various evidentiary
15 It should be noted that section 1782(a), when providing for
protection of documents shielded by “any legally applicable
privilege,” does not limit the protected documents to those of
which the respondent in the section 1782 proceedings is the
holder of the privilege.
22
privileges.16 To start with, appellants assert that both the work-
product doctrine and the attorney-client privilege shield the
documents from discovery. They then contend that the District
Court improperly concluded that the disclosure of the documents
to a third-party waived that shield. Appellants also contend that
the Court improperly concluded that, to the extent that the
attorney-client privilege was not waived, application of the
crime-fraud exception to the attorney-client privilege trumps the
protection of the privilege.17 Of course, if a privilege applied,
then the Court should not have ordered UBR to produce the
documents even though they were otherwise within the scope of
disclosure that the Court could order when considering
Chevron‟s section 1782 application.18
16 Appellants advance the contention that the District Court
erred in failing to apply Ecuadorian privilege law. We,
however, need not address that contention because even if we
assume that privileges under Ecuadorian law should be
considered in adjudicating Chevron‟s section 1782 application,
appellants have not presented any reliable or credible evidence
that there is a privilege under Ecuadorian law that would
preclude the discovery sought here.
17 We agree with the District Court that the non-testifying
expert privilege, see Fed. R. Civ. P. 26(b)(4), is not applicable
here because, “[b]y providing consulting expert reports to a
testifying expert, the privilege is lost.” App. at 47.
18 The order may include documents as to which appellants do
not claim a privilege.
23
Though they both operate to protect information from
discovery, the work-product doctrine and the attorney-client
privilege serve different purposes. The purpose behind the
attorney-client privilege is “„to encourage clients to make full
disclosure of facts to counsel so that he may properly,
competently, and ethically carry out his representation. The
ultimate aim is to promote the proper administration of justice.‟”
In re Impounded, 241 F.3d at 316 (quoting In re Grand Jury
Proceedings, 604 F.2d 798, 802 (3d Cir. 1979)). The work-
product doctrine, by contrast, “promotes the adversary system
directly by protecting the confidentiality of papers prepared by
or on behalf of attorneys in anticipation of litigation. Protecting
attorneys‟ work product promotes the adversary system by
enabling attorneys to prepare cases without fear that their work
product will be used against their clients.” Westinghouse Elec.
Corp. v. Republic of the Phil., 951 F.2d 1414, 1428 (3d Cir.
1991) (citations omitted).
Though evidentiary privileges have important purposes,
their recognition may result in the withholding of relevant
information and so may obstruct the search for truth. Indeed,
the protections are effective only if they shield evidence and
thus they necessarily obstruct the search for the truth at a trial at
which they are recognized either implicitly or explicitly.
Consequently, privileges should be recognized only when
necessary to achieve their respective purposes. See Fisher v.
United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 1577 (1976).
The courts, in recognition of the purposes of the work-product
doctrine and the attorney-client privilege, hold that purposeful
disclosure of the purportedly privileged material to a third-party,
if that disclosure undermines the purpose behind each privilege,
24
may waive both protections. Thus, the courts recognize that
because the attorney-client privilege serves to protect the
confidentiality of communications between clients and their
attorneys, “disclosure to a third party waives the attorney-client
privilege unless the disclosure is necessary to further the goal of
enabling the client to seek informed legal assistance.”
Westinghouse Elec. Corp., 951 F.2d at 1428.
On the other hand, the work-product doctrine protects an
attorney‟s work from falling into the hands of an adversary, and
so “disclosure to a third party does not necessarily waive the
protection of the work-product doctrine.” Id. Rather, the
purpose behind the work-product doctrine “requires [a court] to
distinguish between disclosures to adversaries and disclosures to
non-adversaries[,]” id., and it is only in cases in which the
material is disclosed in a manner inconsistent with keeping it
from an adversary that the work-product doctrine is waived. See
id.
Appellants argue that work-product and attorney-client
protections should apply in this case and UBR‟s submission of
documents to Cabrera did not waive the protections. In
furtherance of this argument, appellants contend that the
submission of documents to Cabrera was not inconsistent with
the holders of the privileges having the intention of keeping the
materials from Chevron. Appellants predicate this argument on
their contention that the parties to the Lago Agrio litigation
could submit documents to Cabrera on an ex parte basis, with
the understanding that the documents would remain
confidential. We find that argument to be at odds with the
record inasmuch as the lead attorney for the Ecuadorian
25
plaintiffs acknowledged in an affidavit that “to the extent that
Mr. Cabrera put into his report any of the information that I
supplied to him, it would be viewable by Chevron or any other
member of the public that viewed Mr. Cabrera‟s report.” App.
at 1453.
In fact, even if we disregarded the attorney‟s affidavit,
something we will not do, we can discern no reason for
appellants‟ submission of the documents to Cabrera other than
for him to consider those documents to advance appellants‟ hope
that Cabrera‟s final global damages assessment report would
reflect the materials and conclusions in the documents. Indeed,
it is quite clear that appellants intended that by submitting the
documents to Cabrera they would place him in a position to
serve as a conduit to transmit the documents to Chevron because
they hoped that Cabrera would agree with the documents‟
assessment of damages and thus would incorporate the
documents, or at least the conclusions in them, into his report.
Consequently, we are satisfied that the documents were
submitted to Cabrera in a manner inconsistent with keeping
them from Chevron, and therefore the work-product doctrine
and the attorney-client privilege were waived as to the
documents submitted to Cabrera. We therefore will affirm the
District Court‟s order that all materials transmitted from UBR to
Cabrera are subject to discovery notwithstanding any claim of
work-product or attorney-client privilege protections.
The District Court also ruled that the crime-fraud
exception operated to pierce the attorney-client privilege for all
communications between Villao and Cabrera and between
Villao and anyone affiliated with counsel for the Ecuadorian
26
plaintiffs. As we have discussed, the attorney-client privilege
promotes the attorney-client relationship and, in turn, furthers
the administration of justice by protecting communications
between attorneys and their clients. See In re Impounded, 241
F.3d at 316. That purpose “would be frustrated if the client used
the lawyer‟s services to further a continuing or future crime or
tort.” Id. (quoting In re Grand Jury Proceedings, 604 F.2d at
802) (internal quotation marks omitted). Therefore, in situations
where the client consults the attorney for the purpose of
committing a future crime or fraud, the crime-fraud exception to
the attorney-client privilege applies and communications made
in furtherance of the anticipated crime or fraud are not protected
from disclosure as recognition of “the privilege is no longer
defensible.” Id. at 317 (quoting In re Grand Jury Proceedings,
604 F.2d at 802) (internal quotation marks omitted); see also
United States v. Zolin, 491 U.S. 554, 563, 109 S.Ct. 2619, 2626
(1989) (“It is the purpose of the crime-fraud exception to the
attorney-client privilege to assure that the seal of secrecy
between lawyer and client does not extend to communications
made for the purpose of getting advice for the commission of a
fraud or crime.” (Internal quotation marks and citations
omitted)).
A party seeking to invoke the crime-fraud exception to
the attorney-client privilege bears the burden of demonstrating
that the exception is applicable. In re: Grand Jury Investigation,
445 F.3d 266, 274 (3d Cir. 2006). Specifically, before the
crime-fraud exception can be invoked successfully, the party
contending that it applies
must make a prima facie showing that (1) the
27
client was committing or intending to commit a
fraud or crime, and (2) the attorney-client
communications were in furtherance of that
alleged crime or fraud. A prima facie showing
requires presentation of evidence which, if
believed by the fact-finder, would be sufficient to
support a finding that the elements of the crime-
fraud exception were met.
Id. (quoting In re Grand Jury Subpoena, 223 F.3d 213, 217 (3d
Cir. 2000) (internal quotation marks omitted)).
Appellants admit that UBR employed Villao when he
was also an expert on Cabrera‟s staff. Though we recognize that
the Lago Agrio Court may view what seems to us to be a
conflict of interest differently than we do, we believe that this
showing of Villao‟s dual employment is sufficient to make a
prima facie showing of a fraud that satisfies the first element of
the showing necessary to apply the crime-fraud exception to the
attorney-client privilege. Thus, we agree with the District
Court‟s conclusion that the first element of the crime-fraud
exception to the attorney-client privilege applied on the basis of
the alleged fraud predicated on the presence of the conflict of
interest attributable to Villao‟s dual and, at least to us,
inconsistent employment.
Yet evidence of a crime or fraud, no matter how
compelling, does not by itself satisfy both elements of the crime-
fraud exception to the attorney-client privilege because to
establish the second element of the exception the party seeking
to circumvent the privilege by invoking the exception bears the
28
burden of making a prima facie showing that there were
communications between the client and attorney in furtherance
of that fraud. We believe that the evidence in the record is
simply too sparse for us to conclude that Chevron has met that
burden and thus, to date, Chevron has not made a sufficient
prima facie showing that the second element of the showing that
must be made to justify the application of the crime-fraud
exception to the attorney-client privilege is present here.
However, even if the party seeking to invoke the crime-
fraud exception to the attorney-client privilege cannot make out
a prima facie case sufficient to overcome the privilege, it still
may be entitled to have a court make an in camera review of the
documents in issue to determine if those documents and the
evidence placing the documents in context establish the
applicability of the crime-fraud exception to the privilege. See
generally Zolin, 491 U.S. at 570-72, 109 S.Ct. at 2630-31
(holding that in camera review of privileged documents to
determine if those documents establish that crime-fraud
exception applies is proper as long as party seeking to invoke
crime-fraud exception makes threshold showing). Because “in
camera inspection . . . is a smaller intrusion upon the
confidentiality of the attorney-client relationship than is public
disclosure[,]” it follows “that a lesser evidentiary showing is
needed to trigger in camera review than is required ultimately to
overcome the privilege.” Id. at 572, 109 S.Ct. at 2630-31
(quotation marks and citations omitted). Thus, “[b]efore
engaging in [an] in camera review to determine the applicability
of the crime-fraud exception, the judge should require a showing
of a factual basis adequate to support a good faith belief by a
reasonable person . . . that in camera review of the materials
29
may reveal evidence to establish the claim that the crime-fraud
exception applies.” Id. at 572, 109 S.Ct. at 2631 (internal
citation and quotation marks omitted).
We are satisfied that Chevron has made “a showing of a
factual basis adequate to support a good faith belief by a
reasonable person . . . that in camera review of the materials
may reveal evidence to establish the claim that the crime-fraud
exception applies.” See id. Thus, although we will vacate the
District Court‟s ruling to the extent that it determined that the
crime-fraud exception to the attorney-client privilege is
applicable, our ruling is by no means the last word with respect
to the applicability of the exception. Quite to the contrary, we
will remand the case to the District Court to conduct an in
camera review of the documents in issue to determine whether
they were created or used in furtherance of a fraud and thus
whether the crime-fraud exception to the attorney-client
privilege is applicable to some or all of the documents the Court
reviews.19
19 It is significant that appellants in their brief, though referring
to the application of Ecuadorian privilege law (which we have
found they have not sufficiently documented to demonstrate its
applicability), have suggested the use of the same process that
we find is applicable in an analysis of the crime-fraud exception
as they write that “[a]ny such waiver must also be understood in
light of a document by document analysis.” Appellants‟ br. at
19.
We do not suggest that in camera review is necessary in
every case in which the crime-fraud exception is invoked, as a
30
Finally we point out that, as we mentioned previously, the
District Court dismissed Villao from this case because he is not
within the District of New Jersey. Thus, because we lack
jurisdiction over Villao, any order relating to documents in his
possession that requires that he produce them will be
unenforceable; we only have jurisdiction over UBR and in these
proceedings we can order only UBR to produce documents. As
the District Court recognized, an order requiring disclosure of
documents transmitted between Villao and Cabrera or Villao
and any attorneys associated with the Ecuadorian plaintiffs is
valid only as to UBR and thus includes only those documents in
UBR‟s possession.
V. CONCLUSION
To summarize, we will affirm the District Court‟s order
of June 15, 2010, requiring UBR to turn over to Chevron
documents that it submitted to Cabrera because the transmission
of those documents to Cabrera waived any work-product
protection and the attorney-client privilege with respect to those
party may be able to satisfy both elements of the crime-fraud
exception without resort to the privileged documents
themselves. We simply hold that in this case, based on the
evidence before the District Court, Chevron has not met its
burden regarding the second element of the crime-fraud
exception, but has made the requisite showing necessary for the
District Court to conduct an in camera review of the documents
in issue in order to determine if the second element of the crime-
fraud exception is satisfied here.
31
documents. UBR should begin producing those documents
immediately in accordance with the District Court‟s order and to
the extent that our stay permitted UBR to delay producing those
documents, we vacate it.
We also will vacate the District Court‟s ruling that the
crime-fraud exception operates to pierce the attorney-client
privilege for all communications between Villao and Cabrera
and between Villao and anyone affiliated with counsel for the
Ecuadorian plaintiffs, and will remand the case to the District
Court so that it may conduct an in camera review of the
documents in issue. Predicated on that review and on what
other evidence is developed on the remand, the District Court
should determine whether any of the documents and, if so,
which ones, were created or used in furtherance of a fraud, as it
is only as to documents created or used in furtherance of a fraud
that the crime-fraud exception to the attorney-client privilege is
applicable. Finally, we express the hope that even though our
remand requires the District Court to examine individual
documents, a task that we recognize likely will be formidable,
the parties will cooperate in applying the directions in this
opinion to the documents to be examined so that the burden on
the District Court to resolve disputes is lessened. The parties
will bear their own costs on this appeal.
32