Last August, a US appeals court may have finally brought to a close a case that the court described as “among the most extensively chronicled in the history of the American federal judiciary”: a lawsuit, initially filed in 1993, seeking damages for adverse environmental and health consequences of oil exploration and drilling by Texaco (later acquired by Chevron) in the Ecuadorian Amazon. Chevron and the plaintiffs each have their own version of the long, complicated, and contentious litigation. (For a concise, relatively balanced summary see here.) For present purposes, the essential facts are as follows: After eight years of US litigation, in 2001 Chevron persuaded a US court to send the case to Ecuador. In 2011, after an additional decade of litigation in Ecuador, the Ecuadorian courts ultimately found in favor of the plaintiffs, ordering Chevron to pay an $18.5 billion judgment (later reduced to $9 billion). Unfortunately for the plaintiffs, Chevron doesn’t have any assets in Ecuador, so the plaintiffs have been trying to enforce their judgment in a number of other jurisdictions, including the United States. In its August ruling, the US appeals court affirmed the district court’s 2014 holding that the Ecuadorian judgment could not be enforced in the United States because it was a product of fraud and corruption—including the shocking finding that plaintiff’s attorneys had bribed the judge with a promise of $500,000, and ghostwrote the multi-billion dollar judgment.
At first glance, there appears to be a contradiction, or at least a tension, between how the US courts treated allegations of judicial corruption in Ecuador at two different stages in the proceedings. After all, Chevron was able to successfully persuade a US court to send the case to Ecuador in 2001 because Chevron had successfully argued that Ecuador’s judiciary was sufficiently insulated from corruption to prevent injustice, yet in the most recent ruling, Chevron convinced the court not to enforce the judgment on the grounds of judicial corruption in an Ecuadorian court. But what might at first glance appear to be a contradictory set of rulings can be explained by the fact that US courts apply divergent standards when assessing judicial corruption at different stages of litigation.
In 2001, when Chevron moved to transfer the case from the US courts to the Ecuadorian courts, the basis of its argument was that the Ecuadorian courts would provide the more suitable forum for adjudicating the case, in light of practical considerations such as access to witnesses and evidence. The technical legal term for Chevron’s objection to continuing to litigate in US courts is forum non conveniens (“inconvenient forum”). Defendants involved in international litigation often ask US courts to dismiss cases on forum non conveniens grounds; in such cases, the defendant usually must agree to submit itself to the foreign jurisdiction, and to convince the US court that the foreign court is an adequate forum for resolving the dispute fairly. In the Chevron litigation, the Ecuadorian plaintiffs argued that Ecuador’s courts could not provide an adequate forum because they were subject to corrupt influences. The district court judge rejected this claim, citing several sources of evidence: US State Department reports on the Ecuadorian judiciary, affidavits by Ecuadorian government officials submitted by Chevron, and opinions by other US courts. The district judge also noted that the intense public scrutiny of the case made “even the possibility that corruption or undue influence might be brought to bear if this litigation were pursued in Ecuador seem exceedingly remote.” Thus finding that the courts of Ecuador could “exercise… that modicum of independence and impartiality necessary to an adequate alternative forum,” the district court dismissed the case on forum non conveniens grounds, and this dismissal was affirmed on appeal.
In 2014, however, the US district court ruled that the Ecuadorian judgment could not be enforced because it was procured by fraud—and this decision was also affirmed on appeal. Was it inconsistent for the same district court that had such a high opinion of the Ecuadorian judiciary at the forum non conveniens stage in 2001 to nullify the plaintiff’s judgment produced by that judiciary at the enforcement stage? After all, Ecuador’s judicial system in 2010 posted the same ratings by the State Department as it did in 2001 when Chevron was arguing that Ecuadorian courts were fair and adequate.
As previous scholars have discussed, this seemingly asymmetric result is due to the application of two different standards that US courts apply, at different procedural stages, to allegations of foreign judicial corruption: a lenient, generalized, and plaintiff-focused approach at the forum non conveniens stage, and a rigorous, specific, and defendant-focused approach at the enforcement stage. In evaluating a forum non conveniens motion, judges are trying to determine whether a foreign court’s procedures and protections are “adequate” – a fairly deferential standard. At the enforcement stage, most courts are applying a specific state statute that establishes when you can or cannot recognize and enforce a foreign judgment. These statutes generally ask courts to gauge the merits and procedural soundness of an individual judgment with a much more cautious and probing examination than what is expected at the forum non conveniens stage. The difference in the scope of inquiry at each stage drives most of the resulting inconsistency: As the appeals court noted in its more recent ruling, its findings exclusively apply to evidence of corruption in this specific case, not to the Ecuadorian judiciary in general. There are good reasons why courts do this: gauging the adequacy of a venue ahead of time is predictive and imprecise and would require an enormous amount of resources to conduct accurately, while evaluating a particular judicial outcome after the fact turns on the specific evidence of what occurred in that particular case.
The differences between these two standards raise a number of questions as to how American courts assess corruption in foreign courts. These assessments can determine the outcomes of litigation and profoundly impact the ability of parties to obtain justice or prevent injustice. To what extent should US courts be making broad judgments about the weaknesses of foreign judiciaries at all? Should US courts be more cautious about dismissing cases for forum non conveniens? What tools can or should US courts use to judge the corruptibility of foreign courts at this preliminary stage? Does the evaluation of a foreign forum or judgment function as an anticorruption mechanism? Should American courts have more deference towards judgments issued by foreign judiciaries? I will continue to explore these and related issues in future posts.