Since an appellate court in Ecuador affirmed the judgment last Tuesday, Chevron has renewed its motion in the Southern District of New York for an order of attachment. It’s asked the Second Circuit to restore an injunction on enforcement by the plaintiffs’ team. And it’s asked the Permanent Court of Arbitration panel to demand from Ecuador an accounting of what steps it has taken to halt enforcement.
On Friday morning, Judge Lewis Kaplan denied Chevron’s motion for attachment without prejudice. But on Friday afternoon, the Second Circuit granted expedited briefing on Chevron’s motion to restore the injunction on enforcement.
The motion for attachment was always a weird one. Pursuant to the RICO claim (which calls the Ecuador litigation a racketeering conspiracy), Chevron asked for the right to attach any assets that the Ecuador plaintiffs might recover from the company, and to stop them from taking steps to hide those assets. Judge Kaplan ruled, sensibly enough, that the motion is premature because, until the Ecuador plaintiffs have actually recovered something from Chevron, the company’s damages can’t be quantified. But Kaplan left the door open to granting such an order in the future.
Meanwhile, Chevron is asking the Second Circuit to lift its stay on Judge Kaplan’s injunction against enforcement by the plaintiffs. Chevron argues that the Second Circuit’s main objection to the injunction appeared to be ripeness – and the moment is now ripe for an injunction on enforcement because the judgment is now enforceable (unless Chevron posts an immense appeal bond).
Chevron is certainly correct that the plaintiffs are chafing at the bit to enforce their judgment. But at various points during oral argument, some of the Second Circuit judges raised issues other than ripeness, including subject matter jurisdiction and the test for injunctions against foreign suits. In effect, the Second Circuit is being forced to choose the scope of its much-awaited rationale for staying the injunction. The Second Circuit may be expected to decide on this motion soon after briefing is complete on January 17.
Even if the Second Circuit agrees that ripeness is the key, it remains unclear, as least to this reporter, whether the judgment is now enforceable. Notwithstanding Chevron’s current litigation position, both sides over time have expressed confusion under Ecuadorian law as to whether an appeal bond is required, or whether a judgment is enforceable if no bond is demanded pending appeal to Ecuador’s highest court. This point would have been academic had plaintiffs given the Second Circuit the stipulation it demanded: that it would not seek enforcement until all appeals had run their course. But plaintiffs stipulated only that they would not seek enforcement until Tuesday’s ruling. And so, here we are.
Finally, Chevron is asking international arbitrators to demand from Ecuador an accounting of the steps it has taken to comply with the interim measures currently in place, which ask the Republic of Ecuador to halt enforcement of the judgment. The judiciary is an instrumentality of the republic, and Chevron may take the position that Ecuador is in violation of the arbitral order if a court declares that the judgment is enforceable, or denies a motion to stay enforceability.
My estimable former colleague Alison Frankel characterized the motion for the order of attachment as Chevron’s Plan B. But Chevron has enough plans to run through the alphabet several times over. Some of them may even be working.