By Marcus Fields
Last Wednesday in Chevron Corp. v. Page, the Fourth Circuit ruled, in a matter of first impression, that decisions on applications for discovery filed pursuant to 28 U.S.C. § 1782 were immediately appealable and affirmed the United States District Court for the District of Maryland’s ruling in favor of Chevron. The Fourth Circuit also determined that it could not hear an appeal from a discovery order on a subpoena filed under Federal Rule of Civil Procedure 45 because it lacked subject matter jurisdiction.
The two discovery decisions at issue on appeal were sought by Chevron as part of a complex history of litigation spanning three decades and taking place in three different countries. The Fourth Circuit notes, and provides an excellent summary of, the extensive history of the conflict between Chevron and certain citizens of Ecuador over alleged pollution by one of Chevron’s acquired subsidiaries.
This history culminated in 2011 when an Ecuadorian court awarded 47 plaintiffs an $18.2 billion judgment against Chevron. Steven Donziger was the lead attorney for the plaintiffs and was assisted by Aaron and Daria Page, the appellants in the present case along with two of the Ecuadorian plaintiffs. Chevron alleges that Donziger, with the help of the Pages, fraudulently obtained the judgment in Ecuador and has pursued efforts to prevent the execution of that judgment. These efforts include appellate proceedings in Ecuador, arbitration against Ecuador at The Hague, and an action against Donziger and others in the United States District Court for the Southern District of New York. In support of these efforts Chevron has filed multiple discovery requests in the United States, including the two at issue here.
In 2011, Chevron issued subpoenas in the District of Maryland to both of the Pages pursuant to Rule 45 requesting various documents for use in Chevron’s lawsuit in the Southern District of New York. After the Pages failed to adequately respond, the District Court of Maryland granted a motion to compel the Pages to turn over certain documents but stayed that motion while the proceedings in New York were stayed for unrelated reasons. In 2013, the district court re-ordered the Pages to produce these documents.
While discovery under Rule 45 was stayed in Maryland, Chevron filed an application in the District Court of Maryland pursuant to 28 U.S.C. 1782 (empowering district courts to order discovery “for use in a proceeding in a foreign or international tribunal.”) Chevron was seeking discovery of the exact same documents from the Pages for use in Chevron’s proceedings in Ecuador and at The Hague. The District Court again ordered the Pages to turn over the documents in question. The Pages timely appealed both decisions which were consolidated into the present case.
After an extensive explanation of background material, the Fourth Circuit conducted an analysis of whether jurisdiction was appropriate for each appeal. In analyzing the appeal of the discovery decision arising out of the Rule 45 subpoena, the court noted the general rule against hearing immediate appeals of discovery decisions. The court determined that this rule applies just as readily to ancillary discovery proceedings, especially when, as in the current case, “the party from whom discovery is sought is not a party to the primary underlying action.” The Fourth Circuit typically requires those wishing to appeal a discovery order to fail to comply with that order, be held in contempt, and then challenge the validity of the order on appeal of the contempt ruling.
The appellants urged the court to find jurisdiction under the so-called Perlman exception which sometimes allows an immediate appeal to prevent the risk of a disinterested third party disclosing potentially privileged information rather than risk contempt. Those holding the alleged privilege may appeal a discovery order in this limited situation on the disinterested third party’s behalf. The Fourth Circuit held that even if it were to adopt the Perlman exception, none of the appellants would meet its requirements as the Pages are not disinterested parties. As a result the court dismissed the appeal for lack of jurisdiction.
The issue of “whether a decision on an application for discovery under 28 U.S.C. § 1782 is immediately appealable” is a matter of first impression for the Fourth Circuit. In deciding that such decisions were immediately appealable, the court relied on three main arguments. First, the Fourth Circuit had previously reviewed such a decision in a case in which their power to act was passed sub silentio. While not dispositive, this previous assumption of jurisdiction carries some weight with the circuit court. Second, all other circuit courts that have considered the issue have found subject matter jurisdiction, including two circuit courts dealing with decisions related to the Chevron dispute. Third, the reasons for prohibiting immediate appeals on discovery decisions disappear when there is no underlying action on the merits in the United States.
After determining that it could properly hear the appeal, the Fourth Circuit affirmed the decision below, determining that the district court did not abuse it’s discretion in applying a Second Circuit ruling stating that any privilege pertaining to the documents in question had been waived (referred to as the Donziger Waiver). The Fourth Circuit, held that deciding otherwise would violate the principle of comity and undermine the decisions of United States District Court for the Southern District of New York.