Sunday, October 5, 2014

Chevron Faces Risk of "Spectacular Implosion" In Ecuador Pollution Case

One of Chevron's many dark secrets -- one company management desperately tries to hide from  shareholders  -- is that its RICO defense in the Ecuador pollution case faces the risk of a "spectacular implosion" in the coming months.

At least that's the informed opinion of somebody in one of the best positions to assess the case.

That person is none other than Aaron Page, a young law professor and practitioner who has represented the indigenous and farmer communities of Ecuador since 2005. That's when Page joined the case in Quito as an intern just out of law school at the University of Michigan.

In between, he had a stint at a large corporate law firm before returning to work fulltime on his passion of human rights law.

Page now runs Forum Nobis, a law firm and consulting service dedicated to the advancement of international human rights. Page also was a member of the defense trial team in Chevron's RICO case last year in New York before judge Lewis A. Kaplan.

While Page did not stand up in court, he was part of the "brain trust" behind the scenes that fought Chevron's army of 114 lawyers at every turn. Though grossly outmatched in terms of resources, it is now clear that the trial team actually set up Chevron for the possibility of a spectacular fall on appeal.

(For the details of Chevron's many problems on appeal, read the appellate brief of New York attorney Steven Donziger; this brief from Professor Burt Neuborne of NYU school of law; and this brief from international law scholars criticizing Judge Kaplan.)

In a blog posting earlier this week on the Forum Nobis site, Page explained why Judge Kaplan's decision is unlikely to protect Chevron. He demonstrates how Chevron's attorneys -- led by the ethically-bereft Randy Mastro from Gibson Dunn -- seem desperate to salvage anything they can out of the case knowing a reversal is likely.

Page also explains how Kaplan's bloated 500-page "findings" in the RICO matter were based on tainted evidence, cultural ignorance, and a heavy dose of intellectual dishonesty as well as the judge's bullying of the Ecuadorian villagers and their counsel.

Here's Page in his own words:

While Chevron tries to pretend that Kaplan's decision is a juggernaut, it is increasingly apparent that it is really a Hindenberg, likely facing a spectacular implosion on appeal.  It is too controversial on too many fronts: too many sweeping jurisdictional assertions and novel legal conclusions; too little concern for core constitutional rights; too easy an embrace of deeply disturbing evidence, like the paid fact witness testimony; and ultimately, so much raw hostility directed at the defendants, on every page for 500 pages, that it starts to feel unseemly, no matter what your view of the facts.

Page also points out that Chevron, in its 185-page responsive brief, gives away its entire game in a single footnote.

In that footnote (#19 for the wonks among us), the company seems to prostrate itself before the appellate court and begs to let Kaplan's "freestanding" factual findings stand no matter what. Ouch.

Of course, Chevron ignores that Kaplan's factual findings are the result of a deeply flawed proceeding that excluded all evidence of the oil giant's contamination in Ecuador. The findings also purport to overturn a 5-0 decison by Ecuador's Supreme Court affirming Chevron's liability. (Ecuador is the venue where Chevron insisted the trial be held as a condition of the transfer of the litigation out of U.S. courts in 2001.)

Our apologies to Judge Kaplan, but we think Ecuador's Supreme Court might just know a little bit more than you about how to apply Ecuadorian law to the facts.

Page also quotes Judge Kaplan pontificating from the bench as to what he thought of Donziger and the historic enviroinmental litigation. Kaplan spouted on about the merits of the case even though the veteran jurist had not even held an evidentiary hearing.

Here is Page quoting Kaplan's own words:

The imagination of American lawyers is just without parallel in the world. It is our absolutely overwhelming comparative advantage against the rest of the world, apart from medicine. You know, we used to do a lot of other things. Now we cure people and kill them with interrogatories. It's a sad pass. But that's where we are. And Mr. Donziger is trying to become the next big thing in fixing the balance of payments deficit. I got it from the beginning.

Yes, we got it from the beginning too, Judge Kaplan. Your attitude is a most vivid example of U.S. judicial imperialism. It is also an embarrassment to the entire federal judiciary.

The entire blog can be read here.