Lago Agrio: Judge Kaplan Mostly Denies The Lago Agrio Plaintiffs’ Motion for Judgment on the Pleadings

On November 7 I noted that the Ecuadoran plaintiffs had filed a motion for judgment on the pleadings on Chevron’s claims for fraud. Chevron’s claim is that the Ecuadoran plaintiffs deceived the Ecuadoran court, or in the alternative that the Ecuadoran plaintiffs participated in a deception perpetrated by the Ecuadoran court, and that the deception resulted in the Lago Agrio judgment. The Lago Agrio plaintiffs’ basic argument was that there can be no fraud without reliance and that Chevron did not allege that it had relied on the fraud. Chevron argued that under New York law, a fraud claim does not require first-party reliance but can rest on third-party reliance.

Donziger unsuccessfully made the same argument the Ecuadoran plaintiffs make, and the Ecuadorans proved to be just as unsuccessful as Donziger was. Judge Kaplan, in a memorandum endorsement, denied the motion for the same reason he denied Donziger’s motion earlier. New York decisions on this point may be somewhat ridiculous on this point, but Judge Kaplan asserted he was bound by them.

For reasons that are unclear to me, the Ecuadoran plaintiffs have sought to certify the judge’s decision for an interlocutory appeal. I will go out on a limb and predict that the Ecuadorans will not obtain an interlocutory hearing, which is an extraordinary and disfavored procedure.

In other Lago Agrio news, Donziger has finally responded to Chevron’s statement of facts on its claim of fraud. This is a lengthy document that probably deserves a full post, but I wanted to bring it to light.

And in a surprise move, the Huaorani who have sued Donziger have moved for leave to intervene in the RICO case. The purpose of the proposed intervention is to protect the Huaorani’s interest in the validity of the Ecuadoran judgment and to assert cross-claims against Donziger for a declaration, breach of fiduciary duty, unjust enrichment, etc. I continue to be astonished that the Huaorani and Donziger were not able to resolve their dispute privately. Chevron must be delighted that the dissension among the various factions of the Lago Agrio plaintiffs.

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