Chevron’s New York RICO lawsuit is fast going from shock
and awe to doom and gloom.
Legal briefs filed this month before a New York federal
appeals court appear to dismantle the very foundation of the shameful
Chevron-financed “racketeering” show trial that went down in late 2013 in the courtroom
of controversial federal judge Lewis A. Kaplan. By reading the briefs – which are summarized
below-- one can gain even more insight into what might have been one of the
most abusive trials in recent memory.
What comes through loud and clear is that presiding
Judge Kaplan essentially turned over his federal courtroom to a gigantic oil company
so some of its
2,000 lawyers from 60 law firms could have a jolly good time billing huge
fees to beat up on impoverished Ecuadorian villagers and their U.S. lawyer, solo
practitioner Steven Donziger. Donziger,
who for years has worked out of his apartment in Manhattan to hold Chevron
accountable for its human rights crimes in Ecuador, is the lead target of what
is probably the most well-financed corporation retaliation campaign in history.
During the RICO trial– attended daily by Chevron’s $7
million-per-year General Counsel R. Hewitt Pate – Kaplan excluded almost all
evidence that would have contradicted Chevron’s fake
narrative that it was the victim of the very indigenous groups it poisoned.
Kaplan not only denied the defendants a jury of impartial fact finders, he excluded
the overwhelming scientific evidence of Chevron’s contamination in Ecuador and
generally behaved as an overwrought prosecutor for the oil company.
The key takeaway from the briefs is that Kaplan never
had the legal right to let the case proceed in the first place. This is why we repeatedly have called the
RICO proceeding a show trial designed to produce bogus “factual findings” to help
Chevron evade enforcement of the Ecuador judgment in foreign jurisdictions. It bears noting that in 2011, Kaplan was unanimously
reversed after he tried to impose an unprecedented injunction purporting to
block the Ecuadorian villagers from enforcing their judgment anywhere in the
world.
Except in rare circumstances not present here, both U.S. law and international law prohibit one country’s
courts from trying to rule on another country's final judicial decisions. This is exactly what the hyper-excited Kaplan
purported to do in March is in his bloated 487-page RICO opinion, which reads more
like spin from an oil industry talking head than sound legal reasoning. Having made up his mind, Kaplan clearly started writing his magnum opus even before the trial started or the
evidence came in.
It is even more clear from the appellate briefs that Kaplan's findings are based on a stinky stew of Chevron lies, distortions, and the judge's obvious ignorance of the law of a foreign nation whose language he does
not speak. Kaplan did
not read the 220,000-page Ecuador trial record, the 188-page trial judgment against
Chevron, or the country's civil code. Nor did he see any of the contaminated sites with his own eyes. Yet Kaplan decided from his Manhattan courtroom that he knows better how to apply
Ecuadorian law than the courts of Ecuador.
As Deepak Gupta, Donziger’s appellate lawyer wrote, it
would be hard to find a more extreme example of American “judicial imperialism”
that Kaplan's handiwork in this case.
Kaplan thought he was clever to reverse-engineer the
trial in Chevron’s favor by excluding key evidence. But the briefs, which confirm what we have
been saying all along about Kaplan’s intellectual
dishonesty as a jurist, show him (at least in this case) to be the
trickster that he is.
You heard it here first: after reading these briefs, it is simply inconceivable that Kaplan’s decision
survives appeal. Those journalists
who for years have been shamelessly cheerleading the Chevron/Kaplan sideshow – we
are thinking mostly of Business Week’s Paul Barrett, Michael Goldhaber of
American Lawyer Media, and the once-esteemed Roger Parloff of Fortune who
refuses to even print our responses challenging his
misleading reporting – better inch back off the Chevron limb if they want
to retain even of smidgeon of credibility going forward.
Consider the contents of some of the submissions to
the Second Circuit Court of Appeals from the principal defendants and their
supporters, who filed “friend of the court” or amicus briefs:
New York
Lawyer Steven Donziger: Donziger, the main target of Chevron’s
retaliation campaign, explains in his fact section how the company pays the
investigations company Kroll to spy on adversary counsel – including himself
and his family. The brief exposes the
dirty tricks used by Kaplan and Chevron’s lawyers to try to prejudice him at
every turn – from presenting misleading film outtakes, to ordering him to turn
over his entire privileged case file, to forcing him to sit for an American record 19 days
of sworn depositions. He also points out how Kaplan let Chevron use a clearly corrupted witness bribed with more than $1
million of company money to falsely claim Donziger bribed a judge. The brief demonstrates how Kaplan denied the
defendants their right to a jury; how he never had jurisdiction; how he let
Chevron unlawfully use the RICO statute to attack lawyers; and how he simply
made up out of whole cloth – after
the trial -- a common law fraud claim that Chevron never even asserted as part
of a preposterous effort to salvage the company’s weakened legal position. The brief also points to internal company
emails to demonstrate how Chevron mounted a campaign to “demonize” Donziger and
ruin his reputation, of which the RICO case was a central feature.
Donziger’s brief, prepared by rising appellate star
Gupta of Gupta Beck and John Campbell and Justin Marceau, two young law
professors at the University of Denver, can be read here.
Ecuadorian
villagers: Javier Piaguaje and Hugo Camacho, the two
Ecuadorians who appeared in the RICO case (45 others rejected Kaplan’s
jurisdiction), pointed out that Kaplan did not understand some of the basic differencse
between a civil law system used in Latin America and the common law system of
the U.S.
As a result, Kaplan spent his 487 pages attacking the wrong judgment – the one from
the trial level, rather than the de novo appellate court judgment that was
unanimously affirmed by Ecuador’s Supreme Court and is the only relevant decision at this point in the case. A copy of the brief, prepared pro bono by noted law scholar Burt
Neuborne from New York University, can be read here.
International
law scholars: More than 35 prominent international law
experts from 11 countries – including Australia, Austria, Spain, the U.S., and
Israel – submitted an amicus brief that explains the many ways that Kaplan’s decision violates
international law. The scholars accused
Kaplan of trying to unlawfully “dictate” to judges in other countries how they
should rule on the enforceability of the Ecuador judgment, in direct
contravention of the sovereignty of those countries and U.S. domestic law. That brief can be read here;
a press release about it is here.
U.S. civil society organizations: Several prominent U.S.-based non-profit
organizations -- including Amnesty International, Friends of the Earth, and
Amazon Watch – lambasted Kaplan for letting Chevron use the RICO statute as a weapon to trample
on the First Amendment rights of the numerous critics of the company’s Ecuador environmental
disaster. The brief persuasively
demonstrates that Chevron used the RICO case as a SLAPP suit designed to harass
and silence its critics, in violation of the Constitution. They also point out that Kaplan, in a clear
case of reversible error, never even considered the First Amendment
implications of the defendants and their supporters before deciding the
case. That brief can be read here.
Government
of Ecuador: In urging reversal of the RICO decision, the
government of Ecuador directs fire at Kaplan’s unprecedented frontal attack
on the judiciary of a democratic nation, U.S. ally, and commercial trading
partner. The brief points out that Kaplan’s
“finding” that Ecuador’s entire judicial system falls below international
standards was based largely on the discredited testimony of Dr. Alvaro Grau, an
Ecuadorian politician who is an opponent of the current President of Ecuador
and who formed his conclusions based on newspapers stories from the opposition
press. The government also points out that Chevron
repeatedly had praised Ecuador’s court system in the 1990s to transfer the
matter from U.S. federal court (where it was originally filed in 1993) to the
South American nation, and therefore should be prohibited now from complaining
about Ecuador’s courts. Only when the
scientific evidence of toxic pollution began to mount against Chevron did the
company switch gears and begin to attack Ecuador’s courts in a clear case of
sour grapes, argued the government. The
brief, prepared by the American law firm Winston & Strawn, can be read here.
Earth Rights
International: This brief, filed by one of our nation’s most
prominent environmental and human rights legal organizations, urges reversal on
the grounds that Chevron agreed to submit to jurisdiction in Ecuador and therefore
should be bound by the rulings of its courts.
For more on this brief, read here.
As compelling as they are, these briefs capture only a
portion of Kaplan’s abuse. For example,
there is no mention of how Kaplan let Chevron pay 100% of the legal fees of his
former law partner Max Gitter to serve as “Special Master” during the discovery
phase of the RICO trial, but then let Gitter hide his actual invoices from
Donziger and the Ecuadorians. Chevron surely paid Gitter millions of dollars, but due to Kaplan the amount remains a secret. Whatever the amount, this back-slapping relationship between a supposedly neutral jurist and Chevron is ugly. And it helps explain why Gitter repeatedly ruled
in favor of Chevron and ordered the wholesale disclosure of Donziger's privileged documents, while blocking Donziger from getting almost all of Chevron's documents. See this
analysis for more background on Gitter's biased behavior.
We have come a long way from the “shock and awe” days
in 2010 when Chevron claimed every new piece of discovery was somehow
proof of the “fraud” that never was. Chevron
CEO John Watson and Pate launched discovery suits in more than 20 federal
courts to try to intimidate the villagers and their allies. The Cabrera damages report ended up being a
non-issue, as the Ecuador court refused to consider it; in any event Donziger and
several prominent Ecuadorian law scholars stand by it. The video outtakes of Donziger criticizing Ecuador’s courts are not relevant, and in any event they were manipulated
by Chevron to try to taint Donziger’s image and mislead courts throughout the country. And we now know that the real bribery in the case was
Chevron’s -- of its star witness, crooked former judge Alberto Guerra.
It can’t be fun for Watson and Pate to go from shock
and awe to doom and gloom, but that indeed is what has happened. The RICO games don't much matter given that foreign courts are not bound by anything Kaplan orders, and it is likely he will be reversed yet again. But the meltdown sure is interesting to watch.
Desperate to protect its favorite judge, Chevron has
retained former Solicitor General Theodore Olsen to argue its case before the
Second Circuit. As we pointed out before,
not even the great Supreme Court orator and now
ersatz filmmaker is capable of putting lipstick on Chevron’s pig.
Once the appellate court rules, Chevron likely will
have lost not only in the courts of its chosen forum of Ecuador, but also in the
U.S. where it enjoyed a home field advantage.
At that point, enforcement actions targeting billions of dollars of Chevron
assets (and currently pending in Canada and Brazil) will be given a huge boost.
In the meantime, the human consequences of Kaplan's folly grow more acute. Because Kaplan
essentially gave Chevron’s management a false sense of confidence, thousands of
rainforest villagers now have to put up with life-threatening levels of
contamination on their ancestral lands for years longer. Ultimately, the responsibility lies at the
foot of Chevron CEO and Chairman Watson and the notoriously passive members of the company’s
Board. These mostly pale people of
privilege, who collect huge fees for serving largely as “yes men” to company management, have done nothing
to try to ameliorate a humanitarian disaster created on their watch.
Lance Ito let the O.J. case spiral out of control
because of his failure to manage the proceedings. What is most disturbing from the new briefs
is how Kaplan so clearly orchestrated the entire process, even indicating to
Chevron’s lawyers how they should present evidence, how they should modify
their claims, and what he needed (wink wink) to best put the screws to
Donziger, against whom he had a clear personal vendetta. (See these
briefs here
and here
for Kaplan’s disparaging and inappropriate comments about Donziger and his
clients.)
The final death spasms of this sordid chapter in U.S.
legal history are in motion. Kudos to
the excellent appellate lawyers who are fighting on, despite Chevron’s pressure
campaign.