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New Haven, Conn., Superior Court Judge Lynda B. Munro is wrestling with a case that may push the envelope of ordinary civil litigation. And it really isn’t even in court yet. A Shell Oil marketing company, Motiva Enterprises LLC, has been trying to get a $5.7 million pretrial lien on the assets of Wyatt Energy Inc., a New Haven fuel terminal. Wyatt had a deal to pay fees to Motiva for the fuel it pushed through southern New England by pipeline and tanker truck. Wyatt sold the terminal for $30 million — and the “throughput” fees stopped. Even before the case goes to court on the merits, Motiva hit Wyatt with a “prejudgment remedy” lien. Wyatt countered with antitrust and unfair trade claims, and sought a counter-PJR. Wyatt is asking Munro to compel discovery from Motiva at this early stage, and Shell counters that the rules of civil litigation simply don’t allow it. There once was a time when the “PJR” was quick and easy — the very first thing a lawyer did when, for instance, collecting a bank loan in default. As an officer of the court, a lawyer could take out a PJR by opining that there was “probable cause” that the court action would succeed. The remedy made the property illiquid, but easy to seize to pay a judgment. Known only in New England, and harshest in Connecticut, the PJR didn’t require notice to the other side, a hearing or the approval of a judge. DUE-PROCESS BLACK EYE Lawyers for lenders swore by it. Debtors swore at it. And a fistfight between two Meriden, Conn., neighbors put it to a constitutional test. John F. DiGiovanni got a PJR on Brian K. Doehr’s house by simply averring that Doehr gave him a black eye and broke his wrist, and asserting he had probable cause to win a money judgment in court. New Haven solo Joanne Faulkner, a consumer lawyer, argued Connecticut v. Doehr before the U.S. Supreme Court 12 years ago and won. In a unanimous decision authored by the late Byron White, the Court ruled that prior notice to the affected party and a “meaningful” hearing are required. After comparing Connecticut to other states, the justices bluntly criticized the old PJR application procedure. White described the typical submissions as “one-sided, self-serving and conclusory.” But within months of the ruling, lawyers openly questioned whether it was a step forward, even for debtors, to have an extra step requiring more legal fees, and a new “mini-trial” before the trial on the merits. Shipman & Goodwin’s Paul D. Sanson, who represents Motiva and Shell, says that if court-ordered discovery is now permissible, such PJR “mini-trials” could grow considerably less “mini.” COMPLICATIONS Once adversarial discovery commences, the parties may need a judge to referee the procedures and enter rulings. And that’s just the start. “There may be privilege issues, there may be confidentiality issues,” said Sanson, adding, “even once you’ve decided what the scope is going to be, if it’s adversarial you get into those problems.” The case is complicated, even in its list of the parties. Plaintiff Motiva Enterprises LLC is a marketing venture formed by Shell, Texaco and Saudi Aramco. Wyatt has counterclaimed against Shell Oil Co., Shell Oil Products Co. and Equiva Trading Co. Sanson’s co-counsel on the case is Alexandra M. McHugh. Wyatt, which is no longer actively in business, is represented by Robert A. Izard Jr., Barbara F. Wolf, Nanch A. Kulesa and Wayne T. Boulton, of Hartford, Conn.’s Schatz & Noble. From Izard’s viewpoint, the request for court-ordered discovery at the PJR stage is not groundbreaking, but could speed resolution of the case, he said. The parties agree that Wyatt can assert defenses and counterclaims in PJR hearings. Indeed, Wyatt has claimed fraud, violations of the Connecticut Unfair Trade Practices Act and state antitrust statutes. In an April 1 memorandum of law, Sanson argued that “Wyatt is attempting to convert a limited temporary attachment proceeding into a full-fledged civil action, with wide-ranging discovery demands. This it cannot do through the vehicle of a PJR.” The statutes that permit discovery cover “civil actions,” and a PJR is not a civil action, Sanson said. GO DISCOVER But in an oral ruling from the bench May 3, Munro granted a portion of Wyatt’s discovery requests. A written opinion may follow. Izard contends that mandated discovery during PJR proceedings is not unprecedented, and was expressly authorized in Connecticut’s case against the big tobacco companies in 1998. Waterbury, Conn., complex litigation Judge Michael R. Sheldon, ruling on a $2 billion PJR sought by Connecticut against Philip Morris and others, wrote that “meaningful discovery must be provided before a meaningful hearing can be held.” Izard notes that the tobacco companies’ $2 billion PJR represented less than 1 per cent of Philip Morris’ total assets, while $5 million is 16 per cent of Wyatt’s $30 million. The argument that a PJR is not a “civil action” is “irrelevant,” Izard contends, as is the argument that discovery is barred because Motiva and Wyatt’s contract contains an arbitration clause. Motiva argues that since the parties hadn’t bargained for court-imposed discovery in their arbitration, it’s wrong to compel it in a PJR setting. Wyatt contends its counter-claims under CUTPA and antitrust law fall outside the terms of the arbitration agreement and are ripe for discovery.

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