Alison Frankel

Keker & Van Nest tries (again!) to intervene in Chevron trial

Alison Frankel
Aug 12, 2011 20:54 UTC

We’re less than three months away from Manhattan federal judge Lewis Kaplan’s trial to determine whether an Ecuadorean court’s $18 billion judgment against Chevron for contaminating the Lago Agrio region of the rainforest is enforceable in the U.S. In the declaratory judgment proceeding, Chevron’s lawyers at Gibson, Dunn & Crutcher will argue, as they have for the last 18 months, that the Ecuadorean judgment was the result of political and public relations chicanery, much of it committed by the plaintiffs lawyer who spearheaded the Ecuadoreans’ case, Steven Donziger. But according to Donziger’s lawyers at Keker & Van Nest, Judge Kaplan won’t give them or their client a chance to be heard as the declaratory judgment case races to trial.

On Thursday, Keker filed its third motion asking Judge Kaplan to reconsider a May 31 ruling limiting Donziger’s participation in the case. “The exclusion of Donziger from full intervention in this ‘do-over’ trial has reached the point of absurdity,” Keker partner Elliot Peters wrote in the 11-page Donziger filing. “The trial will be about him, and he won’t be there to defend himself against Chevron calumny.”

“This is ironic, in the bitter sense,” Peters told me in an interview Friday. “The U.S. court is denying due process to a litigant in a case in which the U.S. gets to decide whether the court of a different sovereign nation denied due process.”

The controversy over Donziger’s participation arose in May, after Judge Kaplan split Chevron’s 2010 suit against Donziger and several other witnesses into two pieces — a declaratory judgment action to determine the enforceability of the Ecuadorean judgment and racketeering claims against Donziger and the other defendants for their allegedly fraudulent prosecution of the Ecuadorean case. Gibson Dunn then re-filed the declaratory judgment piece of the original case against Donziger as a separate suit, without naming Donziger as a defendant. Judge Kaplan subsequently concluded that Donziger couldn’t intervene in the declaratory judgment action because he wasn’t a party, didn’t have a financial interest in the outcome, and couldn’t repair any damage to his reputation in the separate racketeering case.

The judge granted Donziger’s lawyers the right to cross-examine deposition witnesses testifying directly about his conduct, but said that was all Keker & Van Nest could do. Though Kaplan said he might revisit the ruling, he denied two July reconsideration motions by Keker & Van Nest. The transcript of an August 2 phone conference shows that those two motions hadn’t swayed the judge at all. At the end of the conference, John Keker said, “Your honor, can I say something?” Kaplan replied: “No, Mr. Keker. You’re not in the case for this purpose.You’re being given the courtesy of being conferenced in but the scope of your intervention has been fixed.”

Twitter, Facebook, and the peril of e-discovery

Alison Frankel
Aug 4, 2011 15:16 UTC

It’s been more than 15 years since e-mail began to enliven (or blight, depending on your perspective) the discovery process. By now — despite some notable fiascos (see, for instance, here and here) — we’ve got well-established case law to guide lawyers and their clients in e-mail production. Too bad that’s yesterday’s means of communication. Today it’s all about Twitter, Facebook, and Google+, whatever that is. So to celebrate establishing a Twitter account for On the Case (@AlisonFrankel), I figured I’d look at the e-discovery frontier of social media.

The news isn’t very good. What little consideration the courts have given to social media discovery has been in the context of postings by individuals, not corporations. And all signals indicate that social media data is broadly discoverable. As Gibson, Dunn & Crutcher explains in its just-published e-discovery report, courts continue to find that when you post to Facebook, Twitter, or their equivalents, you give up the expectation of privacy, even if you’ve sent private messages or set up restrictions on who can see your profile. Judges are increasingly likely to order litigants to provide access to their social media accounts and to preserve their posts. In May, for instance, a Pennsylvania state court judge ruled that a personal injury plaintiff had to turn over even his private Facebook posts to the defense.

It’s no giant leap from that kind of ruling to a looming problem for businesses. As corporations venture into social media to promote their brands and reach out to clients and customers, they have to be prepared to face the same discovery demands. In late July, a Symantec flash poll of 1,225 information tech executives reported that “social media incidents” — such as employees posting confidential corporate information – cost businesses an average of $4.3 million, of which more than $650,000 was attributed to litigation costs. That’s just the beginning, though, according to Symantec, which says corporations face increasing risk of scrutiny for their social media posts. E-discovery of such posts is a certainty, according to Symantec. (Caveat emptor: Symantec has an ulterior motive for predicting social media e-discovery doom. On Monday the company introduced a new version of its e-mail archiving software that includes social media archiving as well.)

Picard drops $2bl in claims against UBS? Um, no, he doesn’t

Alison Frankel
Jul 20, 2011 22:44 UTC

The damages claims in Irving Picard’s pursuit of the banks that allegedly helped Ponzi schemer Bernard Madoff are so outsized that even a simple two-page letter from a federal judge can lead to a $2 billion kerfuffle. On Tuesday, Manhattan federal district court judge Colleen McMahon sent a letter to lawyers for Picard, the bankruptcy trustee for Bernard L. Madoff Investment Securities, and to lawyers for UBS, which is a defendant in two of Picard’s suits. UBS’s counsel at Gibson, Dunn & Crutcher had moved in June to transfer two Picard suits naming the bank as a defendant out of bankruptcy court and into federal court; Judge McMahon, who is overseeing Picard’s case against JPMorgan Chase, agreed to take the cases on July 7 and began requesting information, by letter, from Picard counsel at Baker & Hostetler and UBS counsel at Gibson Dunn.

To understand Judge McMahon’s July 19 letter — and how it was misinterpreted — it’s important to know that in the two actions naming UBS defendants, Picard is asserting different causes of action and seeking different amounts of money. In the case known as Luxalpha, Picard and Baker & Hostetler claim that UBS breached its fiduciary duty and aided and abetted fraud. That suit demands $2 billion from UBS and other defendants. The other case, known as LIF, is a clawback action demanding the return of all the money the bank and other defendants redeemed from Madoff or earned in fees, a total of $550 million, according to Picard. Though the press release announcing the LIF suit refers to “alleged financial fraud” by UBS, the suit actually claims only unjust enrichment and another common-law cause of action as an alternative to the clawback theory.

In a July 14 letter, Judge McMahon told Baker & Hostetler and Gibson Dunn that she needed more explanation of how the LIF and Luxalpha cases intersected and overlapped, and warned the lawyers that she wasn’t going to slow down the JPMorgan case to address complications in the UBS suit. In response, the Picard lawyers decided to simplify matters, reasoning that if they dropped the alternative-theory common law claims in the $550 million LIF case, there would be no reason for the case to stay in federal court. Picard could simply go after the $550 million in a bankruptcy court clawback action.