Case of the Day: United States v. Alarcon

USS Constitution with battle ensign
This is how we do it in Boston. Credit: US Navy.

The case of the day is United States v. Alarcon (S.D.N.Y. 2015). The US Coast Guard intercepted a small boat on the high seas approximately 280 miles from the coast of Ecuador. It found 600 kg of cocaine on board and charged the three Ecuadoran men on the boat, Javier Joaquin Alarcon Prado, Luis Armando Valencia Bautista, and Hector Valencia Bautista, with drug offenses under the Maritime Drug Law Enforcement Act. The defendants moved to dismiss the indictment.

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Case of the Day: Altos Hornos de Mexico v. Rock Resource Ltd.

The case of the day is Altos Hornos de Mexico, S.A.B. de C.V. v. Rock Resource Ltd. (S.D.N.Y. 2015). Altos Hornos moved for confirmation of an arbitral award it had obtained against Rock Resources. Altos Hornos sought to serve Rock Resources with process in Hong Kong via the Central Authority, using the address Rock Resource had given in the arbitration. The Central Authority couldn’t make service because Rock Resource’s address had changed. Altos Hornos was able to find the new address. Estimating that it would take four to six months to make a second attempt, Altos Hornos sought leave to serve process by alternate means under FRCP 4(f)(3), namely by postal channels and by email.

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Lago Agrio: Guerra Unravels?

The transcripts of the Track 2 hearings in the Lago Agrio BIT arbitration have now been made public. In this post I want to focus on the proceedings of April 23 and 24, namely, the cross-examination of Alberto Guerra Bastidas. Guerra, recall, was one of Chevron’s key witnesses—maybe the key witness if you had to pick just one—at the RICO trial.

Pastel De Manzana
Honey & Honey’s Pastel De Manzana. Credit: Vivi (used by permission from Foodspotting)
He is the witness whose testimony led Judge Kaplan to conclude that the plaintiffs had ghostwritten Judge Zambrano’s judgment. He is the witness who claims he had the key meeting with Steven Donziger, Pablo Fajardo, and Luis Yanza at the Honey & Honey in Quito. He is the witness who says he tried and failed to bribe Chevron. He is, in other words, a big deal. To be sure, even without Guerra’s testimony, Chevron had a strong case for fraud in the first-instance proceedings, focused on the fake Cabrera report. But as I just noted yesterday, if the plaintiffs are right there may be a very significant difference between intrinsic fraud and extrinsic fraud, between fraud on the court and fraud by the court.

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Lago Agrio Update: The Tribunal’s Site Visit and Motions for Summary Judgment

I do not have an update for you on the BIT Tribunal’s visits to several sites in the Oriente, which I briefly covered on October 19. The reason I don’t have an update is the same reason, more or less, I copped out on the Louis Berger Group report. On the one hand, it seems that the site visits allowed the Tribunal to see that oil was present at sites that only TexPet had operated. On the other hand, Chevron has legal defenses to claims about those sites, primarily that they were not sites that Texaco had to remediate under the remediation plan. On the one hand, the plaintiffs say their measurements show levels of toxic substances in excess of applicable standards. On the other hand, Chevron’s experts have technical objections to the results that I am in no position to judge, at least without consulting with third parties and doing a bunch of work. In short, as with the Louis Berger report, I find it difficult to come to firm conclusions about the import of the site visits.

I do, however, have an update on the Canadian proceedings.

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Case of the Day: Savage v. Zelent

The case of the day is Savage v. Zelent (N.C. Ct. App. 2015). Alan Savage and Julie Anne Zelent lived together as a couple in Scotland. They eventually separated, and Zelent moved to North Carolina. She sued Savage in the Inverness Sheriff’s Court under the Family Law (Scotland) Act 2006, claiming that she was entitled to support from him. After a trial, the Sheriff found that Zelent was not entitled to contribution. Zelent did not appeal. Zelent’s counsel withdrew from the representation, which under the governing procedure meant that a peremptory diet—a kind of hearing— had to be held. The hearing was held, but Zelent did not appear despite receiving notice. In her absence, as permitted by Scots law, the Sheriff awarded Savage his expenses in an amount to be later determined by the Auditor. The Auditor held a diet of taxation, a hearing for the purpose of determining the amount of expenses. Again, Zelent did not attend. The Auditor found expenses in the amount of £148,516.75, and the Sheriff approved the report and awarded the expenses. Zelent did not appeal, but she also did not pay.

Savage sought recognition and enforcement of the judgment in North Carolina. The trial court recognized the judgment, and Zelent appealed.

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The New FRCP 26(b)(1)

European readers, who love to hate US pretrial discovery—this one is for you. Absent action by Congress, on December 1, 2015, an amendment to FRCP 26 adopted by the Supreme Court will go into effect. The main change concerns the scope of permissible pretrial discovery. Under the old rule:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense.


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Lago Agrio: The Tribunal Makes A Site Visit

The tribunal hearing the BIT dispute between Ecuador and Chevron has made site visits to three sites in the Ecuadoran Amazon. The tribunal, along with the lawyers and experts for both sides, visited the Aguarico 6, Lago Agrio 2, and Shushufindi 34 sites. You can follow the links to read copies of the transcript of the proceedings at the site visits.

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Case of the Day: In re Vitamin C Antitrust Litigation

The case of the day is In re Vitamin C Antitrust Litigation (E.D.N.Y. 2015). The plaintiffs obtained a $148 million judgment on a jury verdict against Hebei Welcome Pharmaceutical Co. and North China Pharmaceutical Group, both Chinese firms, for violations of the Sherman Act. The plaintiffs served discovery requests in aid of the judgment under FRCP 69. When the defendants failed to provide discovery, the plaintiffs sought an obtained an order requiring the defendants to respond. The defendants stated, however, that they would not respond to the discovery, because under Chinese law, specifically the rules of the State–Owned Assets Supervision and Administration Commission of Hebei Province, they would be subject to criminal sanctions if they provided the discovery. The plaintiffs sought to hold the defendants in contempt and sought a per diem monetary sanction in order to coerce compliance with the court’s orders.

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Case of the Day: Munoz v. Boyard

Christopher Columbus Lands in America
Letters Blogatory wishes its readers a happy Columbus Day!
The case of the day is Munoz v. Boyard (Bankr. E.D.N.Y. 2015). Regis Munoz was a French inventor. He had developed a new battery charger, and he needed capital. So he entered into a partnership agreement with Crisor A. Boyard, under which Boyard would produce and market the invention. Munoz transferred his rights in the invention to the partnership, Avendale Investments, LLP, in return for a 20% stake in the partnership, at 10% interest in a French company, Innov-Nature, and royalties on sales. For his part, Boyard agreed to contribute $250,000 to the partnership.

In 2010, the partnership ceased doing business. Boyard started a new business, Avendale Technology, LLC, to develop the battery charger. Boyard owned 50% of the business and Munoz owned 49%. The operating agreement included an agreement to mediate disputes, and if mediation failed, to arbitrate.

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