Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 1 of 18. x : : : : : : : : : : : x

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1 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 1 of 18 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK CHEVRON CORPORATION, -against- Plaintiff, STEVEN R. DONZIGER, et al., Defendants x : : : : : : : : : : : x Case No. 11 Civ (LAK) CHEVRON CORPORATION S RESPONSE TO DEFENDANTS MEMORANDUM OF LAW IN RESPONSE TO THE COURT S ORAL ORDER TO SHOW CAUSE ON WHY DEFENDANTS SHOULD NOT BE DEPRIVED OF A JURY DESPITE CHEVRON S WITHDRAWAL OF ITS MONEY DAMAGES CLAIMS GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, New York Telephone: Facsimile: Attorneys for Plaintiff Chevron Corporation

2 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 2 of 18 TABLE OF CONTENTS PRELIMINARY STATEMENT... 1 ARGUMENT... 2 Page A. There Is No Right to a Jury Trial Where the Plaintiff Seeks Only Equitable Relief B. Any Seventh Amendment Right to a Jury Trial a Party May Have Had at the Outset of a Case Is Eliminated Once Damages Are Waived C. Chevron s Unjust Enrichment Claim Would Not Create a Jury Trial Right D. Defendants Remaining Arguments Are Baseless and Irrelevant CONCLUSION EXHIBITS i

3 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 3 of 18 TABLE OF AUTHORITIES Cases Page(s) Alcan Int l Ltd v. S.A. Day Mfg. Co., 179 F.R.D. 398 (W.D.N.Y. 1998)... 8 Anti-Monopoly, Inc. v. General Mills Fun Grp., Inc., 195 U.S.P.Q. 633 (N.D. Cal. 1976)... 6 Atlas Roofing Co., Inc. v. Occupational Safety & Health Review Comm n, 430 U.S. 442 (1977)... 1 Austin v. United States, 509 U.S. 602 (1993) Barry v. Edmunds, 116 U.S. 550 (1886)... 8 Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959)... 5 Black v. Boyd, 248 F.2d 156 (6th Cir. 1957)... 5 Boyd v. United States, 116 U.S. 616 (1866) Conroy v. New York State Dep t of Corr. Servs., 333 F.3d 88 (2d Cir. 2003)... 3 Cunningham v. State, 835 N.E.2d 1075 (Ind. Ct. App. 2005) Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962)... 5 Daisy Grp., Ltd. v. Newport News, Inc., 999 F. Supp. 548 (S.D.N.Y. 1998)... 7, 8 Design Strategies, Inc. v. Davis, 367 F. Supp. 2d 630 (S.D.N.Y. 2005)... 3 Dimick v. Schiedt, 293 U.S. 474 (1935)... 8 Empresa Cubana Del Tabaco v. Culbro Corp., 123 F. Supp. 2d 203 (S.D.N.Y. 2000)... 1, 7 F.T.C. v. Verity Int l, Ltd., 443 F.3d 48 (2d Cir. 2006)... 1, 4 ii

4 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 4 of 18 Francis v. Dietrick, 682 F.2d 485 (4th Cir. 1982)... 6 George Basch Co., Inc. v. Blue Coral, Inc., 968 F.2d 1532 (2d Cir. 1992)... 7 Granfinanciera v. Nordberg, 492 U.S. 33 (1989)... 3 In re Friedberg, 131 B.R. 6 (S.D.N.Y. 1991)... 4 Kemp v. Tyson Foods, Inc., No. CIV JRT (RLE), 2001 WL (D. Minn. Nov. 19, 2001)... 6 Maersk, Inc. v. Neewra, Inc., 687 F. Supp. 2d 300 (S.D.N.Y. 2009)... 5 Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996)... 2 Molloy v. Primus Auto. Fin. Servs., 247 B.R. 804 (Bankr. C.D. Cal. 2000)... 5 NSC Int l Corp. v. Ryan, 531 F. Supp. 362 (D. Ill. 1981)... 5 Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1999) Partecipazioni Bulgari, S.p.A. v. Meige, No CIV RYS (KAMP), 1988 WL (S.D. Fla. May 23, 1988)... 6 People by Abrahms v. 11 Cornwell Co., 695 F.2d 34 (2d Cir. 1982)... 6 Pereira v. Farace, 413 F.3d 330 (2d Cir. 2005)... 3 Plechner v. Widener College, Inc., 569 F.2d 1250 (3d Cir. 1977)... 5 R.B. Ventures, Ltd. v. Shane, 112 F.3d 54 (2d Cir. 1997)... 1, 8 Rosenman Colin Freund Lewis & Cohen v. Richard, 656 F. Supp. 196 (S.D.N.Y. 1987)... 7 S.E.C. v. Commonwealth Chem. Sec., Inc., 574 F.2d 90 (2d Cir. 1978)... 3, 9 Skippy, Inc. v. CPC Int l, Inc., 674 F.2d 209 (4th Cir. 1982)... 4 Stonewall Ins. Co. v. Nat l Gypsum Co., No. 86 Civ (JSM), 1992 WL (S.D.N.Y. Sept. 25, 1992)... 4, 6 iii

5 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 5 of 18 United States v. Carson, 52 F.3d 1173 (2d Cir. 1995)... 4, 9 United States v. Int l Brotherhood of Teamsters, 708 F. Supp (S.D.N.Y. 1989)... 4, 9, 10 United States v. Philip Morris, Inc., 273 F. Supp. 2d 3 (D.D.C. 2002)... 4, 9, 10 United States v. Private Sanitation Indus. Ass n, 44 F.3d 1082 (2d Cir. 1986) United States v. Stein, 452 F. Supp. 2d 276 (S.D.N.Y. 2006)... 5 Whitson v. Knox Cnty. Bd. of Educ., 468 F. App x 532 (6th Cir. 2012)... 6 Windsurfing Int l, Inc. v. Osterman, 534 F. Supp. 581 (S.D.N.Y. 1982)... 5 Woodell v. Int l Brotherhood of Elec. Workers, 502 U.S. 93 (1991)... 3 Other Authorities Charles Alan Wright, et al., Federal Practice & Procedure 2311 (3d ed. 2013)... 5 Moore s Federal Practice - Civil (3d ed. 2013)... 4 N.Y. Pattern Jury Instr. Civil 4:2 (3d ed. 2013)... 7 Rules Fed. R. Civ. P. 39(a) (b)... 6 iv

6 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 6 of 18 PRELIMINARY STATEMENT The sole question presented here is straightforward: Whether Defendants have a Seventh Amendment right to a jury trial despite the fact that Chevron Corporation ( Chevron ) has waived money damages and has declared its intention to pursue only equitable relief at the upcoming trial. The answer to this question is a resounding no. The fact that only an equitable remedy is available eviscerates the defendants-appellants contention that the Seventh Amendment confers a right to a jury trial in this case. F.T.C. v. Verity Int l, Ltd., 443 F.3d 48, 67 (2d Cir. 2006). Indeed, this has been a settled question since the Seventh Amendment s ratification in See, e.g., Atlas Roofing Co., Inc. v. Occupational Safety & Health Review Comm n, 430 U.S. 442, 460 (1977) ( [T]he Seventh Amendment was never intended to establish the jury as the exclusive mechanism for factfinding in civil cases. ). Defendants also claim that if this Court allows Chevron to reinstate its claim for unjust enrichment it will somehow trigger a jury trial right. Defendants are wrong. Courts have consistently held that disgorgement of profits via unjust enrichment is an equitable claim. See, e.g., Empresa Cubana Del Tabaco v. Culbro Corp., 123 F. Supp. 2d 203, 206 (S.D.N.Y. 2000); see also R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 60 (2d Cir. 1997) (under New York law, unjust enrichment is a non-contractual, equitable remed[y] ). And that is all Chevron seeks by way of reinstatement of its unjust enrichment claim an equitable remedy to prevent these Defendants from being unjustly enriched now that they have obtained beneficial ownership of Chevron IP trademarks through foreign enforcement proceedings in Ecuador. Devoid of any plausible right to have a jury decide Chevron s equitable claims, Defendants have filed yet another press release under the guise of a legal brief. They continue to hurl baseless insults at this Court contending, for instance, that the result of any bench trial would lack legitimacy and credibility, Dkt at 1 just eight days after the Second Circuit 1

7 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 7 of 18 rejected this scurrilous strategy the same day the matter was argued. In addition, Defendants claim that a jury right attaches because Chevron has called Donziger a criminal and stigmatized him. To be sure, Donziger is a criminal. But this case is a civil proceeding subject to well-established Seventh Amendment principles, which do not provide a jury trial right here now that Chevron is pursuing only equitable relief. Defendants also lodge several critiques about the form of injunction that Chevron seeks and whether it is available, but this has nothing to do with the jury-trial question presented here. Those are questions to be resolved by the Court later if and when it finds liability. There is no question now, though, that this is a bench trial. In sum, waiver of money damages means Defendants have no right to a jury trial. The Court should so find, and the bench trial should proceed as scheduled on October 15. ARGUMENT A. There Is No Right to a Jury Trial Where the Plaintiff Seeks Only Equitable Relief. The civil RICO statute, 18 U.S.C. 1964, and New York Judiciary Law section 487 do not provide a statutory jury-trial right. Accordingly, the only possible right to a jury trial that could exist here would be under the Seventh Amendment. But the Seventh Amendment does not provide a jury-trial right where a plaintiff seeks only equitable relief, as Chevron does here. The Seventh Amendment provides that [i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved. U.S. Const., Amend. 7. [T]he right of trial by jury thus preserved is the right which existed under the English common law when the Amendment was adopted. Markman v. Westview Instruments, Inc., 517 U.S. 370, 376 (1996). In other words, the Seventh Amendment preserves the right to jury trials in [s]uits at common law, which refers to suits in which legal rights were to be ascertained and determined, in contradistinction to those where equitable rights alone were recog- 2

8 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 8 of 18 nized, and equitable remedies were administered. Granfinanciera v. Nordberg, 492 U.S. 33, 41 (1989) (emphasis in original; quotation marks and citation omitted). Federal courts employ a two-part test to determine whether the Seventh Amendment provides a jury-trial right for a particular claim, examining both the nature of the claim and the remedy sought. Courts first must compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity and second, must examine the remedy sought and determine whether it is legal or equitable in nature. Woodell v. Int l Brotherhood of Elec. Workers, 502 U.S. 93, 97 (1991). The second inquiry [remedy] is the more important in our analysis. Id.; see also Granfinanciera, 492 U.S. at 42 ( The second stage of this analysis is more important than the first. ); Pereira v. Farace, 413 F.3d 330, 337 (2d Cir. 2005) (courts must giv[e] greater weight to the second inquiry). 1 Indeed, the second inquiry (the form of remedy) is dispositive where as here a plaintiff seeks only equitable relief. See, e.g., S.E.C. v. Commonwealth Chem. Sec., Inc., 574 F.2d 90, (2d Cir. 1978) (Friendly, J.) (explaining the longstanding view that a suit for an injunction, whether by the Government or a private party, was the antithesis of a suit at common law in which the Seventh Amendment requires that the right to trial by jury ); Conroy v. New York State Dep t of Corr. Servs., 333 F.3d 88, 99 n.1 (2d Cir. 2003) (noting that a plaintiff [sought] 1 Defendants rely on Design Strategies, Inc. v. Davis, 367 F. Supp. 2d 630 (S.D.N.Y. 2005), for the proposition that the label that attaches to a given cause of action or remedy may not by itself tell us whether the claim is legal or equitable. Dkt at 3 (citing Design Strategies, 367 F. Supp. 2d at 637). Chevron, however, is not relying merely on labels, but on the fact that will be seeking traditional equitable remedies rather than money damages. A look behind the labels does not compel a finding that there is a right to a jury trial, as Defendants own case demonstrates. The court in Design Strategies proceeded to analyze the plaintiff s claims for which it did not seek money damages and concluded that they were equitable in nature [and] there is no longer any basis on which [plaintiff] may correctly claim to be entitled to a jury. Id. at

9 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 9 of 18 only equitable relief, and therefore, is not entitled to a jury trial under the Seventh Amendment ); Verity Int l, 443 F.3d at Courts have thus held that civil RICO defendants do not have a right to a jury trial where the plaintiff seeks only equitable relief, including relief in the form of disgorgement. See United States v. Philip Morris, Inc., 273 F. Supp. 2d 3, 8 (D.D.C. 2002) (concluding that disgorgement under RICO is equitable in nature ); United States v. Int l Brotherhood of Teamsters, 708 F. Supp. 1388, 1408 (S.D.N.Y. 1989) (where government sought an injunction and disgorgement in civil RICO suit, the relief sought was equitable in nature, thereby not giving rise to the right to a jury trial ); see also Moore s Federal Practice - Civil (3d ed. 2013) (civil RICO claims do not warrant a jury trial where only equitable relief is sought); United States v. Carson, 52 F.3d 1173, 1181 (2d Cir. 1995) ( Included within [a court s] broad equitable power [under 18 U.S.C. 1964] is the power to order defendants to disgorge any proceeds from the unlawful conduct of or participation in the enterprise s affairs. (quotation marks and citation omitted)). 3 Similarly, claims grounded in fraud are not distinctively legal or equitable, and the jury right turns on the remedy sought and the context in which the claim of fraud arises. In re Friedberg, 131 B.R. 6, 12 (S.D.N.Y. 1991) (quotation marks and citation omitted); see also Skippy, Inc. v. CPC Int l, Inc., 674 F.2d 209, 214 (4th Cir. 1982) ( [T]he jury right [in fraud 2 Defendants cite a single case where a court required a jury trial on equitable claims after a plaintiff withdrew its request for damages. Dkt at 4. But the case is inapposite. In Stonewall Ins. Co. v. Nat l Gypsum Co., the plaintiff sought a declaratory judgment that its insurers were obligated to pay certain sums and indemnify [the plaintiff] for sums within the policy limits. No. 86 Civ (JSM), 1992 WL , at *1 (S.D.N.Y. Sept. 25, 1992). At bottom, the claim sought monetary relief under a contract and such claims were deemed common law claims pre-merger thus giving rise to a jury trial right. Id. The court acknowledged, however, that [w]ere [the plaintiff s] remaining claims solely equitable in nature, the Court would be compelled to grant [the plaintiff s] demand for a bench trial. Id. 3 Moreover, at least one court has expressly found a civil RICO action not to be an action at law under the first prong of the Seventh Amendment inquiry. See Philip Morris, 273 F. Supp. 2d at

10 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 10 of 18 claims] turns on the remedy sought. ). 4 Here, to the extent Chevron seeks only equitable relief not damages this is relief of a kind historically available only in equity, and therefore there is no right to a jury on a common-law fraud claim. Charles Alan Wright, et al., Federal Practice & Procedure 2311 (3d ed. 2013); see also Plechner v. Widener College, Inc., 569 F.2d 1250, 1258 (3d Cir. 1977) (no right to jury where claimant can be made whole by specific relief available in equity); Black v. Boyd, 248 F.2d 156, (6th Cir. 1957) (no jury right attached to fraud claim seeking only equitable relief); cf. United States v. Stein, 452 F. Supp. 2d 276, 279 (S.D.N.Y. 2006) ( Actions for specific performance and for injunctions always have been equitable in nature. The Seventh Amendment therefore affords [defendant] no right to a jury trial. ). 5 In short, the Seventh Amendment does not provide a right to a jury trial where, a party has waived money damages, as Chevron has done here, and seeks only equitable relief on its RICO, fraud, and other claims. 4 Defendants cite three cases as support for their argument that they are entitled to a jury trial on Chevron s RICO claims. Dkt at 5. In all three of those cases, however, the plaintiff sought money damages, not merely injunctive relief. See Maersk, Inc. v. Neewra, Inc., 687 F. Supp. 2d 300, (S.D.N.Y. 2009) (noting that the plaintiffs sought money damages, which the court recognized was the more important consideration and what ultimately gave rise to a jury trial right); Molloy v. Primus Auto. Fin. Servs., 247 B.R. 804, 807 (Bankr. C.D. Cal. 2000) ( Plaintiff seeks compensatory and punitive damages.... ); NSC Int l Corp. v. Ryan, 531 F. Supp. 362, 363 (D. Ill. 1981) ( Monetary damages for injury to property have traditionally been considered a legal remedy for purposes of the seventh amendment. ). 5 Ignoring these settled principles and well developed case law, Defendants argue that the Seventh Amendment provides a right to a jury trial on Chevron s fraud claim because Chevron will have to show irreparable harm and inadequacy of legal remedies in order to obtain an injunction. Dkt at 6. Defendants assert that Chevron has not and cannot make this showing. Id. But whether or not Chevron is able to prove entitlement to equitable relief at trial (and Chevron believes that it will) has nothing to do with the Seventh Amendment and whether a jury or court decides this issue. Even further afield is Defendants reliance on Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959), and Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962). Dkt at 6. These cases address whether a defendant is entitled to a jury trial on equitable issues that are in common with issues presented in a plaintiff s claims for damages, which must be tried to a jury. When courts are confronted with such common issues, the legal claims involved in the action must be determined prior to any final court determination of respondents equitable claims. Dairy Queen, 369 U.S. at 479. Again, this rule is inapplicable here because it presupposes a legal claim for damages which Chevron has waived. For this same reason, Windsurfing Int l, Inc. v. Osterman, 534 F. Supp. 581 (S.D.N.Y. 1982), cited on pages 4 5 of Defendants brief, is also irrelevant. See id. at 585 (denying request to strike jury demand where the complaint sought both damages and injunctive relief, and the plaintiff s decision to seek declaratory relief first did not extinguish the jury trial right on the other claims). 5

11 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 11 of 18 B. Any Seventh Amendment Right to a Jury Trial a Party May Have Had at the Outset of a Case Is Eliminated Once Damages Are Waived. Defendants also suggest that Chevron would be bound by the jury demand in its complaint, even after expressly waiving money damages. See Dkt at 1 ( Fundamental fairness requires a jury trial. Chevron demanded a jury when it filed the instant matter more than two years ago. ). Defendants are wrong. [T]he right to a jury trial does not depend only on the initial pleadings. When subsequent events leave only equitable issues to be resolved, the right to a jury trial does not exist and is not preserved by the Seventh Amendment or Federal Rule of Civil Procedure 38. Whitson v. Knox Cnty. Bd. of Educ., 468 F. App x 532, (6th Cir. 2012); see Francis v. Dietrick, 682 F.2d 485, (4th Cir. 1982) (affirming denial of request for a jury trial after plaintiff amended his complaint to withdraw a request for legal damages). 6 Federal Rule of Civil Procedure 39 makes clear that if before trial the Court finds that on some or all of those issues [to be tried] there is no federal right to a jury trial, then the issues are to be tried by the court. Fed. R. Civ. P. 39(a) (b). Accordingly, [i]t is well settled that when a party withdraws its damages claims and pursues only equitable relief, a jury trial is no longer available and issues must be tried by the court. Stonewall, 1992 WL , at *1; see also People by Abrahms v. 11 Cornwell Co., 695 F.2d 34, 43 (2d Cir. 1982) ( Once the State withdrew its claim for damages, however, the suit was entirely in equity and there was no right to trial by jury. ), vacated on other grounds, 718 F.2d 22 (2d Cir. 1983); Rosenman Colin Freund 6 See also Kemp v. Tyson Foods, Inc., No. CIV JRT (RLE), 2001 WL , at *2 (D. Minn. Nov. 19, 2001) (holding that the nature of [plaintiff s] claims and withdrawal of its damage claims... require[d] that the jury demand... be stricken ); Partecipazioni Bulgari, S.p.A. v. Meige, No CIV RYS (KAMP), 1988 WL , at *3 (S.D. Fla. May 23, 1988) (holding that the right to trial by jury is determined by the issues, not by the pleadings, and a plaintiff may amend his complaint and withdraw his claim for damages, and where the remaining issues are only equitable in nature there is no right to trial by jury ); Anti-Monopoly, Inc. v. General Mills Fun Grp., Inc., 195 U.S.P.Q. 633, (N.D. Cal. 1976) (holding that the plaintiff no longer had a right to a jury trial because the defendant withdrew its claim for damages). 6

12 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 12 of 18 Lewis & Cohen v. Richard, 656 F. Supp. 196, 196 (S.D.N.Y. 1987) (striking jury demand because the instant petition is equitable in nature and therefore must be tried to the court ). C. Chevron s Unjust Enrichment Claim Would Not Create a Jury Trial Right. Defendants admit that an unjust enrichment claim may be equitable in nature depending on the remedy sought. Dkt at 11. Defendants also concede that pure disgorgement may be wholly equitable. Id. And because the only remedies Chevron seeks on its unjust enrichment claim are equitable that is, to have its trademarks restored and a constructive trust to ensure that any ill-gotten gains obtained by the LAPs are disgorged the reinstatement of Chevron s unjust enrichment claim does not give Defendants a right to a jury trial. 7 Contrary to Defendants arguments, Chevron s request for disgorgement as a remedy for unjust enrichment is not a rough proxy for damages. Dkt at 11. Despite Defendants attempt to muddy the waters, Dkt at 11, the Second Circuit has resolved the issue of whether disgorgement of profits in a trademark case constitutes a claim for damages entitling the defendant to a jury trial. Empresa Cubana Del Tabaco, 123 F. Supp. 2d at 206. Specifically, in George Basch Co., Inc. v. Blue Coral, Inc., the Second Circuit explained that courts have the equitable power to grant complete relief by awarding profits for unjust enrichment in trademark infringement suits. 968 F.2d 1532, 1538 (2d Cir. 1992). Accordingly, disgorgement of profits on an unjust enrichment theory did not entitle the parties to a jury trial in Empresa. 123 F. Supp. 2d at 206. The district court in Daisy Grp., Ltd. v. Newport News, Inc., on which De- 7 Defendants also claim that because of Chevron s unjust enrichment claim, if the case is tried to the bench, significant parts of the case if not the whole case would have to be re-tried in front of a jury. Dkt at 11. This is incorrect. The model jury instructions issued by the New York judiciary, on which Defendants rely, presume a legal claim exists in the case, giving rise to the jury trial right. See N.Y. Pattern Jury Instr. Civil 4:2 (3d ed. 2013) (stating that [t]his charge is for use in unjust enrichment cases involving quasi-contractual remedies and that [i]t should never be left for the jury to decide whether equitable considerations warrant a finding of unjust enrichment ). The issue here is whether there exists any Seventh Amendment right to a jury trial if Chevron seeks only equitable relief under its claim for unjust enrichment. 7

13 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 13 of 18 fendants also rely, arrived at a different result because the plaintiff sought disgorgement as a rough proxy measure of its damages. 999 F. Supp. 548, 552 (S.D.N.Y. 1998). The plaintiff had no evidence of lost sales as a result of the alleged trademark infringement, so it sought disgorgement of the defendant s profits as a surrogate for damages, thus the remedy [was] fundamentally compensatory and legal in nature. Id. (quotation marks and citation omitted). But the court in Daisy acknowledged that a straightforward claim for profits based on a theory of unjust enrichment, a traditionally equitable theory of recovery, is triable without a jury. Id. (emphasis added); cf. Alcan Int l Ltd v. S.A. Day Mfg. Co., 179 F.R.D. 398, (W.D.N.Y. 1998) (holding that where a claim for profits for trademark infringement is a rough proxy measure [of] damages as distinct from a claim profits based on a theory that defendant has been unjustly enriched the remedy is compensatory). The harm for which Chevron seeks restitution is neither the mere entry of the judgment against it nor any of its lost profits. Dkt at 11. Instead, Chevron has requested that its property i.e., its Ecuadorian trademarks be restored and that any unjust windfall to the LAPs from the use or sale of those trademarks be disgorged. 8 Dkt Chevron s unjust enrichment claim does not result from, for example, Defendants and Chevron being parties to a broken contract. Rather, Defendants unjustly possess Chevron s property, which Chevron seeks to have returned. This is an equitable action. See R.B. Ventures, 112 F.3d at 60 (under New York law, unjust enrichment is a non-contractual, equitable remed[y] ). Because the court is not awarding 8 Defendants also rely on Dimick v. Schiedt, 293 U.S. 474 (1935), and Barry v. Edmunds, 116 U.S. 550 (1886), to argue that a determination of the extent of LAPs unjust enrichment is a factual matter[] that cannot be abrogated from the jury. Dkt at 12. But Dimick and Barry addressed whether a court may reject or alter a verdict issued by an already empaneled jury, which only begs the question. See Dimick, 293 U.S. at 486; Barry, 116 U.S. at 565. Thus, both cases are inapposite, because each involved claims for money damages in which it was clear that a Seventh Amendment jury right existed in the first instance. But whatever limitations may apply when a court believes a jury has come to the wrong decision, those limitations are inapplicable here. 8

14 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 14 of 18 damages to which plaintiff is legally entitled but is exercising [its] discretion to prevent unjust enrichment, the disgorgement sought here is an equitable remedy. Commonwealth Chem. Sec., 574 F.2d at 95 (Friendly, J.); see also Carson, 52 F.3d at 1181; Philip Morris, 273 F. Supp. 2d at 8; Teamsters, 708 F. Supp. at D. Defendants Remaining Arguments Are Baseless and Irrelevant. Lacking any plausible support under the Seventh Amendment, Defendants also invoke various other Amendments, and notions of fairness, in an effort to conjure up a jury trial right that does not exist. Defendants various arguments can be easily dispatched. First, Defendants claim that [f]undamental fairness requires a jury trial because this Court is biased against them. Dkt at 1; see also id. (arguing that the Court has promoted, encouraged, and amplified Chevron s global smear campaign against Donziger); id. at 2 (claiming that Chevron is retreat[ing] to the safe offices of [this] court instead of an impartial fact finder ); id. ( Your Honor (with all his documented biases readily obvious).... ); id. (arguing that any decision by this Court will lack legitimacy and credibility ). As the Court is well aware, this Court s alleged bias formed the cornerstone of Defendants failed petition and reassignment request, which the Second Circuit denied last week. Defendants attacks on this Court are disgraceful and sanctionable, and at the very least they do not give rise to a jury trial right. Second, Defendants claim that they have a right to a jury trial because Chevron has called Donziger a criminal in open court and elsewhere, and because Chevron has stigmatiz[ed] Defendants with the terrorizing effect of civil RICO. Dkt at 1, 3. As noted above, Donziger is a criminal, and the supporting evidence is overwhelming. But Chevron is a civil plaintiff seeking equitable relief on civil claims. No Seventh (or Sixth) Amendment right to jury trial attaches merely because the plaintiff in a civil case refers to the defendant as a criminal. And as discussed above, courts have held that there is no jury trial right in a civil RICO action 9

15 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 15 of 18 where the plaintiff seeks only equitable relief. See, e.g., Philip Morris, 273 F. Supp. 2d at 8; Teamsters, 708 F. Supp. at Third, Defendants argue that injunctive relief is unavailable on Chevron s RICO claim. Dkt at 5. This Court has stated that it will deal with that question when, as, and if [Chevron] prevail[s] on liability. Ex. 1 (Hr g Tr. 12:09 10 Sept. 3, 2013). Accordingly, assuming Chevron does prevail in the liability phase of the upcoming trial, Defendants will have the opportunity to persuade this Court that Chevron may not obtain equitable remedies on its RICO claim. In any event, this question has nothing to do with Defendants supposed jury trial right. Fourth, Defendants claim that the precise form of equitable relief that Chevron seeks is obviously and perilously close to the relief that the Court entered and the Second Circuit vacated in the Count 9 injunction. Dkt at 6. Again, even if true, this is irrelevant to the question of whether Defendants have a jury trial right. And as the Second Circuit necessarily found in denying Defendants mandamus petition, Count 9 was a different case if this Court ultimately awards Chevron any equitable remedies, such relief will be reviewable on appeal. 9 Fifth, Defendants posit a new rule that whenever a civil plaintiff seeks to invoke criminal law or concepts, or even just the stigmatizing language of criminal law, the right to a jury trial attaches. Dkt at 8 9 (emphasis added). Defendants cited authorities say no such thing. See Boyd v. United States, 116 U.S. 616, 634 (1866) (no mention of the Seventh Amendment, but noting that certain the Fourth and Fifth Amendment protections applied in civil forfeiture proceedings); Cunningham v. State, 835 N.E.2d 1075, 1079 (Ind. Ct. App. 2005) (defendant 9 It bears mention that during the Second Circuit argument last week, Judge Parker asked the LAPs counsel: [A]ssuming arguendo... that the judge who entered a judgment had been bribed, would it be beyond the authority of the court to enjoin the person who paid the bribe from benefitting from the judgment? Ex. 2 (Hr g Tr. 24:13 17 Sept. 26, 2013 (2d Cir.)). The LAPs counsel eventually conceded: As a legal proposition -- as against the person who gave the bribe, I would not have a problem with that. Id. at 25:

16 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 16 of 18 in a speeding case had a right to a jury trial under the Indiana Constitution, because speeding infractions remain quasi-criminal in nature ). Finally, Defendants argue that a jury right attaches here because courts have required strong procedural safeguards when awarding punitive damages, which are quasi-criminal punishment. Dkt at 10 (quoting Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 54 (1999)). But such safeguards do not include a jury trial right and in any event this is entirely beside the point where Chevron is not seeking any damages, punitive or otherwise. Likewise, Defendants cannot locate a jury trial right anywhere in the Eighth Amendment. Dkt at 10 (citing Austin v. United States, 509 U.S. 602 (1993) (discussing the Eighth Amendment s Excessive Fines Clause in the context of a civil forfeiture remedy)). 10 CONCLUSION For these reasons, the Court should find that Defendants do not retain a Seventh Amendment right to a jury trial as Chevron has waived money damages and has indicated it will be pursuing only equitable relief at the upcoming trial, and accordingly that this case will be tried to the Court. Dated: October 5, 2013 New York, New York Respectfully submitted, /s/ Randy M. Mastro Randy M. Mastro Andrea E. Neuman GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, New York Defendants also quote Judge Heaney s dissent in United States v. Private Sanitation Indus. Ass n, Dkt at 10, but omit the italicized text: Government-prosecuted civil RICO actions in which the remedies go beyond rough compensation must be considered quasi-criminal. 44 F.3d 1082, 1086 (2d Cir. 1986) (Heaney, J., dissenting) (emphasis added). The quoted language is irrelevant here because this is not a Government-prosecuted action. In any event, Judge Heaney s view which he acknowledged was contrary to the law of the Circuit was that the conventional summary judgment standards should not apply to a government-prosecuted RICO case. Id. at 1085, That view has no bearing on Defendants right to a jury at the upcoming trial. 11

17 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 17 of 18 Telephone: Facsimile: William E. Thomson 333 South Grand Avenue Los Angeles, California Telephone: Facsimile: Attorneys for Chevron Corporation 12

18 Case 1:11-cv LAK-JCF Document 1496 Filed 10/05/13 Page 18 of 18 EXHIBITS Index of Exhibits to Chevron Corporation s Response to Defendants Memorandum of Law in Response to the Court s Oral Order to Show Cause on Why Defendants Should Not Be Deprived of a Jury Despite Chevron s Withdrawal of Its Money Damages Claims Exhibit 1: Excerpts from the transcript of a hearing held before the Southern District of New York on September 3, 2013 in Chevron Corp. v. Donziger, No. 11 Civ. 691 (LAK). Exhibit 2: Excerpts from the transcript of a hearing held before the Second Circuit Court of Appeals on September 26, 2013 in Naranjo v. Chevron Corp., No cv. 13

19 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 1 of 5 EXHIBIT 1

20 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 2 of 5 D93nchea Argument 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT OF NEW YORK x 2 3 CHEVRON CORPORATION, 3 4 Plaintiff, New York, N.Y. 4 5 v. 11 Civ. 691(LAK) 5 6 STEVEN DONZIGER, et al., 6 7 Defendants x 8 9 September 3, :00 p.m Before: HON. LEWIS A. KAPLAN, District Judge APPEARANCES GIBSON, DUNN & CRUTCHER 16 Attorneys for Plaintiff 17 BY: RANDY M. MASTRO 17 REED M. BRODSKY 18 MARY BETH MALONEY 18 AVI WEITZMAN STEVEN R. DONZIGER 20 Attorney Pro Se JULIO C. GOMEZ 22 Attorney for Defendants Cammacho and Piaguaje SOUTHERN DISTRICT REPORTERS, P.C. (212)

21 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 3 of 5 11 D93nchea Argument 1 anything. 2 MR. MASTRO: I understand, your Honor. 3 I'm simply suggesting that one of the ways to relieve 4 the burden on the Court, since they would not meet and confer 5 about any of these issues, is the potential to have a special 6 master preside. 7 THE COURT: I have no intention of doing that. This 8 is a lawsuit. You know who your witnesses are at this point on 9 both sides. You know what the universe of exhibits is. You go 10 to trial in due course. I'll let you know what that means in 11 due course also. 12 MR. MASTRO: I understand, your Honor. 13 We are doing everything we can to move the case to 14 trial as quickly as possible, and we are considering ways to 15 streamline it and streamline the presentation, including claims 16 potentially that would be for equitable relief only. 17 Your Honor, we are trying to do everything we can to 18 streamline the case, make it as short a trial as possible, 19 whether it's a jury trial or a bench trial. That is all I 20 wanted to say, your Honor. 21 THE COURT: You are going to have to get off the dime 22 on that latter issue, Mr. Mastro. 23 MR. MASTRO: I understand, your Honor. There are two 24 respects in which I think that our ability to make that 25 decision, Chevron's ability to make that decision will be SOUTHERN DISTRICT REPORTERS, P.C. (212)

22 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 4 of 5 12 D93nchea Argument 1 advanced. One of them, your Honor, relates to a legal question 2 that is raised in the pending motion practice about the 3 affirmative defense they've raised about whether under RICO you 4 can seek equitable relief. 5 THE COURT: I am going to help you out a great deal, 6 Mr. Mastro. That is not an affirmative defense. 7 MR. MASTRO: I understand, your Honor. We moved to 8 strike the affirmative defense. 9 THE COURT: Right. I will deal with that question 10 when, as, and if you prevail on liability. 11 MR. MASTRO: I understand, your Honor. 12 The second part of this is, your Honor, when we, 13 pursuant to the Court's deadline, which I believe is September 14 8 for advising the Court in what respects we would ask that the 15 case be bifurcated, we will be advising the Court then as to 16 issues on which we would want bifurcation concerning equitable 17 relief, including the potential of equitable relief only 18 against the LAPs. I just wanted to apprise your Honor. 19 THE COURT: All right. 20 MR. MASTRO: Thank you, your Honor. 21 THE COURT: Thank you. 22 Anything very briefly in response from the defendants? 23 MR. DONZIGER: I will be very brief, your Honor. Can 24 I speak from here? 25 Look, you know, with regard to objections to their SOUTHERN DISTRICT REPORTERS, P.C. (212)

23 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 5 of 5 13 D93nchea Argument 1 submissions, they had 2200 exhibits. They have, I don't know, 2 a multi-page stipulated facts. It's going to take us time to 3 go through this. 4 THE COURT: Mr. Donziger, look, I have dispensed with 5 any requirement that the pretrial order contain objections to 6 exhibits. You want to try this case and make your objections 7 at trial, go right ahead. I will deal with them. It wouldn't 8 be the first case I tried that way. All criminal cases are 9 tried that way all the time. 10 Lawyers know how to do it. I don't mean to imply 11 anything by that. Please don't take it awry. But that is a 12 common thing lawyers do. 13 So that takes care of that. So far as stipulated 14 facts are concerned, it would seem to be that it would be in 15 the mutual advantage of both sides to agree on whatever they 16 can agree on. But you are talking to a judge who tried a 17 Section 7 merger case against the government with no stipulated 18 facts six weeks after the date the complaint was filed. 19 It can be done. It is not rocket science. Nobody can 20 force either of you to stipulate to anything, and if you want 21 to spend your time negotiating about stipulations, you're 22 welcome to do it. If there is a productive result, I will 23 welcome it; and a jury, if there is one, will welcome it. If 24 you don't, well, you'll just try the case without them. 25 MR. DONZIGER: Understood, your Honor. SOUTHERN DISTRICT REPORTERS, P.C. (212)

24 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 1 of 8 EXHIBIT 2

25 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 2 of 8 Page 1 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 Case No cv x 5 HUGO GERARDO CAMACHO NARANJO, 6 JAVIER PIAGUAJE PAYAGUAJE, 7 Petitioner 8 V 9 CHEVRON CORPORATION, 10 Respondent x 12 U.S. Court of Appeals 13 Thurgood Marshall U.S. Courthouse Foley Square 15 New York, New York September 26, :39 PM B E F O R E : 21 HON BARRINGTON D. PARKER 22 HON PETER W. HALL 23 HON DEBRA A. LIVINGSTON 24 U.S. CIRCUIT JUDGES 25 VERITEXT REPORTING COMPANY

26 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 3 of 8 1 HEARING RE: Petition for a Writ of Mandamus, seeking to 2 vacate four orders issued by District Judge Lewis A. Kaplan 3 and for reassignment of this action to another district 4 judge Transcribed by: Sheri Monroe Page 2 VERITEXT REPORTING COMPANY

27 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 4 of 8 Page 3 1 A P P E A R A N C E S : 2 PATTON BOGGS 3 Attorneys for the Petitioner Avenue of the Americas 5 30th Floor 6 New York, New York BY: JAMES TYRRELL, ESQ GIBSON DUNN 11 Attorneys for the Respondent Connecticut Avenue, N.W. 13 Washington, DC BY: THEODORE OLSON, ESQ VERITEXT REPORTING COMPANY

28 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 5 of 8 1 not seeking to set aside the judgment, that this is all 2 about bad conduct. But the papers which we ve cited in our 3 -- Chevron s own papers that we ve cited in our mandamus 4 petition, indicate that they precisely asking to set aside 5 the judgment. That was early on. 6 The papers that have been filed in the last month, 7 dealing with what this trial is going to look like, this 8 trial is all about a declaration that the Ecuadorian 9 judgment was procured by fraud and is therefore not 10 enforceable. 11 It is all about determining that the Ecuadorian 12 judiciary is incompetent, is corrupt. Those are precisely 13 the things that in Naranjo this court said might come up if 14 a judgment creditor sought enforcement in this jurisdiction, 15 but are inappropriate to reach if a judgment creditor does 16 not do so. 17 I suggest JUDGE HALL: (Indiscernible) 19 MR. TYRRELL: Yes, Your Honor. 20 JUDGE HALL: (Indiscernible) 21 MR. TYRRELL: That is not our position here, Your 22 Honor. They may, but the issue is what are the JUDGE HALL: (Indiscernible) Page MR. TYRRELL: Because they are not allowed to 25 argue that the judgment in this court -- the creditor has VERITEXT REPORTING COMPANY

29 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 6 of 8 1 not come here, that the judgment is not enforceable and then 2 get the relief that they have asked for, that no enforcement 3 can take place in any foreign country that the benefits of 4 an enforcement recognized by a foreign country have to be 5 impressed with a constructive trust controlled by Judge 6 Kaplan. 7 The question is what relief they are allowed to 8 seek because of their fraud claim and what arguments they 9 are allowed to make. 10 JUDGE PARKER: Well, Mr. Olson just -- Mr. Olson can you help me understand what your objection specific objection is to the relief Mr. Olson just said he 13 was seeking? For example, assuming arguendo as Judge Hall 14 asked you to do, that the judge who entered a judgment had 15 been bribed, would it be beyond the authority of the court 16 to enjoin the person who paid the bribe from benefitting 17 from the judgment? 18 MR. TYRRELL: Your Honor, the answer is yes and 19 no. It is not appropriate to declare that judgment 20 unenforceable anywhere in the world and that is what Chevron 21 is asking. That is what Naranjo says. 22 Let s hypothetically assume that someone who 23 bribed that judge JUDGE PARKER: But Mr. Olson said that that s not 25 what they re going to be asking. Page 24 VERITEXT REPORTING COMPANY

30 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 7 of 8 1 MR. TYRRELL: Your Honor, that s what the pre- 2 trial order says. 3 JUDGE PARKER: No, they can t get that. That -- 4 something like that could give you powerful arguments on 5 appeal. But what he said was, they would, for example, the 6 alternative relief that they would be seeking, such as 7 enjoining the person who paid the bribe from benefitting 8 from it. What s wrong with that? 9 MR. TYRRELL: Your Honor, if what they JUDGE PARKER: Assuming, hypothetically, in this 11 case that s all they were asking, would you have a problem 12 with that as a legal proposition? 13 MR. TYRRELL: As a legal proposition -- as against 14 the person who gave the bribe, I would not have a problem 15 with that. As against the owners of this judgment as to 16 which the only claim is third-party fraud, which is not 17 recognized in New York and Judge Kaplan deliberately refuses 18 to reach that question, it is, respectfully, a set up. It 19 is an opportunity for Chevron to get Judge Kaplan to offer 20 the same kind of views that he did in the preliminary 21 injunction opinion, which has been vacated. So that those 22 views can be trotted out in enforcement courts around the 23 world, that s the pattern that they have followed so far. 24 JUDGE HALL: (Indiscernible) Page MR. TYRRELL: Your Honor, it is remediable from VERITEXT REPORTING COMPANY

31 Case 1:11-cv LAK-JCF Document Filed 10/05/13 Page 8 of 8 1 final judgment, but that, as I urge, is not the standard 2 here. In the case where there s already been a mandate, you 3 must first decide whether or not the court s conduct at 4 issue is in derogation of that mandate. 5 If you conclude that it is, it is inappropriate to 6 wait for final judgment. You have to make that threshold 7 determination. 8 JUDGE HALL: (Indiscernible) 9 MR. TYRRELL: Thank you, Your Honor. 10 JUDGE LIVINGSTON: We understand your arguments. 11 Thank you both. 12 JUDGE PARKER: Thank you both. 13 JUDGE LIVINGSTON: Well argued. 14 (Whereupon these proceedings were concluded at 2:12 PM) Page 26 VERITEXT REPORTING COMPANY