Tuesday, February 8, 2011
Feb 3: In the U.S. Court of Appeals, Third Circuit, Case No. 10-2815. On Appeal from the United States District Court for the District of New Jersey. In this complicated case involving an environmental damages action in Ecuador, South America and a New Jersey environmental consulting firm, the Appeals Court explains, 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[.]"
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. 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.
The Appeals Court ruled, "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 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."
Access the complete opinion (click here).
Posted by JPMcJ at 4:29 PM