Chevron's Legacy

Chevron's Legacy
The Pollution Chevron Left Behind...Shushufindi pit 38. Chevron's scientists found no contamination at this pit.

Thursday, February 3, 2011

Chevron's Corporate Bullying

Two interesting perspectives on Chevron’s efforts to turn the victims of its misconduct into criminals. One is from a Huffington Post blogger, Joanna Zelman, who concludes her piece with:

“The finger pointing, intimidation, lawsuits, and countersuits all blur into what might appear to be just a big game. But at its core, there are human beings seeking justice, and a company terrified of what justice might find.”

The second blog is by Marco Simon of EarthRights International who notes:

“For me, the take-home message is that, regardless of whether any (or all) of what Chevron alleges is true, it doesn't (or shouldn't) absolve them of their responsibility to clean up the mess in Ecuador, and it doesn't give them any reason to proceed against the Lago Agrio plaintiffs themselves.”

Chevron Countersues In Ecuador Pollution Case, Accused Of 'Corporate Bullying’

The Huffington Post
Joanna Zelman

Is Chevron's countersuit against Ecuador's plantiff lawyers legitimate or an act of intimidation? Chevron's recently filed Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit suggests that the oil company may be resorting to threats in a last ditch effort to derail a historic case that has dragged on for nearly 20 years - the original lawsuit was first filed back in 1993.

Chevron's subsidiary, Texaco Inc. used to run several Ecuadorian oil fields until the 1990's, when Petroecuador took over. The plaintiff reports that when Chevron operated the oil fields, the company engaged in acts harmful to the local health and environment.

Specifically, the plaintiff claims that Chevron dumped billions of gallons of toxic waste into rivers, spilled thousands of oil barrels, and abandoned 900 toxic waste pits.

Chevron meanwhile has stated that after a $40 million cleanup, any remaining contamination is Petroecuador's responsibility. R. Hewitt Pate, Chevron's vice president has stated that the company "has no intention of giving these plaintiffs' lawyers the payday they seek."

Now, as judgment nears, Chevron has made some bold moves. This past Tuesday, Chevron filed a countersuit against Ecuador's lawyers and consultants. Chevron accused the consultants of ghost-writing an expert's report and fabricating a peer review. With these claims of fraud, Chevron asks the court that any judgment against the company be deemed unenforceable.

Meanwhile, plaintiff spokeswoman Karen Hinton has deemed Chevron's countersuit an act of "corporate bullying." A press release from the Amazon Defense Coalition claims that Chevron has also recently threatened the trial judge with criminal liability, sued each of Ecuador's 47 impoverished indigenous plaintiffs in New York federal court, tried to bar any American lawyer from enforcing a judgment outside of Ecuador (an unprecedented injunction), and may have broken the record for the longest deposition of a lawyer on a sitting case.

According to The New York Times, the recently filed RICO lawsuit makes sense, as it "fits squarely within Chevron's strategy of seeking to turn U.S. courts against the plaintiffs."

While Chevron's recent conduct has come under scrutiny, the company's past conduct in Ecuadorian courts has also been questioned. The Amazon Defense Coalition's press release accuses Chevron of undercounting toxins in the soil and water with their field sampling methods, forcing an Ecuadorian judge's recusal through entrapment, and exposing more locals to toxins while obtaining a legal release from claims. A Chevron contractor also reportedly accused the company of cooking the books, switching out contaminated samples for clean ones.

Karen Hinton claims that Chevron's recent civil RICO suit was filed out of concern over Wall Street and shareholder reactions. With tens of billions of dollars on the line for Chevron's shareholders, it would certainly make sense for the company to try and pull out all the stops. Ultimately though, Ecuador's lead attorney Pablo Fajardo believes, "Irrefutable scientific truth will triumph over Chevron's intimidation tactics and desperation."

The finger pointing, intimidation, lawsuits, and countersuits all blur into what might appear to be just a big game. But at its core, there are human beings seeking justice, and a company terrified of what justice might find.

The Kitchen Sink Defense: Chevron Files Retaliatory Lawsuit Against Indigenous Ecuadorians Seeking Amazon Cleanup
By Marco Simons

Chevron, facing a landmark lawsuit in Lago Agrio, Ecuador, over pollution left in the Amazon by its predecessor, Texaco, has increasingly gone on the offensive against the Amazonian communities bringing the lawsuit. Chevron has accused the plaintiffs, their lawyers and supporters of all manner of dirty tricks, and even denounced the awarding of the Goldman Environmental Prize to the two leading Ecuadorian lawyers. The plaintiffs in turn allege that Chevron's personnel have admitted tampering with evidence, and that Chevron hired a convicted drug trafficker to attempt to entrap the presiding judge in a bribery scheme, among other things [1].

But on Tuesday Chevron's efforts to discredit the case reached a new level, as Chevron sued the Ecuadorian plaintiffs themselves in federal court in New York, accusing them of fraud, interfering with contracts, trespass, unjust enrichment, and conspiracy. Chevron has also levied even more serious charges against the lawyers, expert witnesses and affiliated organizations, accusing them of racketeering under the Racketeer Influenced and Corrupt Organizations Act (RICO).

Most of Chevron's allegations arise out of a court-appointed expert report in Ecuador, over which theplaintiffs allegedly had improper influence, and various statements by the plaintiffs' lawyers and allies which Chevron contends are false and are calculated to force Chevron into a settlement. I have no idea whether there is any truth to Chevron's allegations, though it wouldn't surprise me if some of what has happened in the Ecuadorian court proceedings would seem unusual or even outrageous by US standards. Indeed, the plaintiffs themselves originally filed this case in New York, and wanted to litigate in the US--they didn't want the case moved to Ecuador because they feared the court system was subject to political influence and not up to the task of hearing a case like this. (At one stage when the case was in the US, ERI filed an amicus brief [2] supporting the plaintiffs.)

But three extraordinary things jumped out from my quick look at Chevron's complaint. First, while Chevron seeks orders that would prevent the plaintiffs from enforcing any judgment against them, nothing in their complaint establishes that Chevron is not responsible for environmental damage in the Ecuadorian Amazon. What Chevron is trying to do is to use alleged misconduct by the plaintiffs' lawyers to absolve them of any responsibility; a sort of judicial get-out-of-jail-free card. In fact, Chevron probably can't ask the US court to decide whether they're responsible for the environmental damage--the plaintiffs filed that case in New York fifteen years ago, and it was Chevron (or Texaco, at the time) that successfully moved it to Ecuador. One telling fact here is that Chevron only sued some of the plaintiffs' lawyers--they did not, for example, sue Patton Boggs, which is now heading up the U.S. team supporting the Lago Agrio litigation. That seems like an acknowledgement that the Lago Agrio litigation itself is not fraudulent, even if Chevron thinks some of the tactics employed by some of the lawyers have been.

Second, Chevron admits that it doesn't even have any evidence that the plaintiffs themselves had any part in the allegedly fraudulent conduct, but simply alleges that they might benefit from it: "Whether or not the individual Lago Agrio Plaintiffs were or are aware of the fraud... [they] cannot benefit from the fraud and corrupt conduct ostensibly perpetrated on their behalf." That's usually not enough to sue someone over, especially before they actually have benefited. And it doesn't at all explain why Chevron has named the plaintiffs themselves as defendants on claims of--you guessed it--fraud. Chevron needs the plaintiffs in the case because just suing the lawyers (i.e., the people who are allegedly responsible for the misconduct) won't get them a ruling that prohibits the plaintiffs from enforcing a judgment against Chevron, but the complaint against them is pretty thin. (Arguably, so is the case for jurisdiction in New York over Ecuadorians litigating a case in Ecuador.)

Third, Chevron has put the lawsuit in front of a judge who apparently suggested that Chevron should file it. I don't know Judge Lewis Kaplan, and I have no idea if he's biased or not. But Judge Kaplan did preside over two earlier cases filed by Chevron seeking discovery from the filmmaker who made the documentary "Crude" and from one of the plaintiffs' lawyers himself, and issued rulings favorable to Chevron. Chevron's own complaint states that in one of these hearings, Judge Kaplan stated, after summarizing his view of the evidence: "Now, do the phrases Hobbs Act, extortion, RICO, have any bearing here?" Whether Judge Kaplan's earlier decisions were correct or not, it certainly looks bad to have him presiding over a case that he suggested should be filed--it could give the kind of appearance of impropriety that the judicial system is supposed to avoid. Furthermore, in order to put the case in front of Judge Kaplan, Chevron used a "related cases" mechanism--they suggested that the case was related to the two other discovery cases. But they also said that no similar case had ever been filed in New York, which ignores the fact that the original case filed by the plaintiffs was in the same court. Acknowledging that might have led to the case being assigned to a different judge, however--possibly Judge Jed Rakoff, who presided over the original case.

For me, the take-home message is that, regardless of whether any (or all) of what Chevron alleges is true, it doesn't (or shouldn't) absolve them of their responsibility to clean up the mess in Ecuador, and it doesn't give them any reason to proceed against the Lago Agrio plaintiffs themselves. If I were representing the Lago Agrio plaintiffs, my first response would be to seek dismissal of the plaintiffs from this case and probably to seek sanctions against Chevron's lawyers--filing a complaint that admits that there's no evidence they engaged in fraud, yet sues them for fraud anyway, is a pretty dubious tactic, even for Chevron.