Wednesday, January 29, 2014

Donziger's New Appellate Team Comes Out Firing; Asks for Nullification of RICO Case

It was only last week that lawyers for Steven Donziger as well as the Ecuadorian victims of Chevron's pollution in the rainforest—sued alongside their longtime legal advocate—filed their final reply briefs in the oil giant's retaliatory RICO case. Judge Lewis Kaplan is expecting to deliver a ruling in the coming weeks or months.

But long expecting an adverse ruling from a judge who his former lawyer John Keker says has shown “implacable hostility” towards him, Donziger didn't wait for a ruling in the case before securing  appellate counsel.

And that appellate team, lead by a lawyer that the Wall Street Journal calls a "heavy" came out firing, filing a motion asking for the RICO case to be dismissed altogether.

As noted in a press release issued yesterday by Donziger:
The move to dismiss the RICO case – which comes after the close of evidence but before decision – is based largely on Chevron's surprise admission in its final post-trial brief that it cannot block foreign enforcement proceedings that rainforest villagers are using to collect on their $9.5 billion environmental judgment.

“In the end, Chevron all but admits that is it not asking this Court to resolve any concrete case or controversy,” said the motion, filed by Deepak Gupta of Gupta Beck in Washington, D.C. “This unseemly spectacle of a case must come to an end.”
Deepak Gupta is, of course, the "heavy" referred to by the WSJ. He is a principal at Gupta Beck, a firm he founded in 2012, and formerly held a high-level post at the Consumer Financial Protection Bureau. Before working at the CFPB, he worked as a litigator with Public Citizen for seven years, where he argued some high-profile cases before the Supreme Court.

The press release continues:
“Motions to dismiss usually happen at the beginning of a trial, not after three years of litigation,” said Gupta. “But when Chevron dropped all of its damages claims to avoid a jury trial, it painted itself into a corner and deprived the court of jurisdiction.”

“After analyzing the case for the last several weeks, we have come to the conclusion that Chevron has not identified a single injury that would give it standing,” said Gupta. “That’s because none exists.”
The motion itself was heralded by respected lawyer and legal analyst Ted Folkman. In a post on his Letters Blogatory site, headlined Lago Agrio: Deepak Gupta In The House, he writes:
If you spend your days reading and writing memoranda of law, you know a good one when you see it. And so when I read Steven Donziger’s latest brief in the RICO case last week, my first thought was that his lawyers had finally found their groove. But then I looked at the cover and saw that Donziger had actually gotten a new legal team! I assume (but I do not know) that the new member of the team, Deepak Gupta of Gupta/Beck, had a big hand in the new brief that’s both legally compelling and a pleasure to read.
Back to yesterday's press release:
What Chevron really wants from Judge Kaplan is an advisory opinion that it can use for public relations purposes in the U.S. and around the world, a judicial function prohibited by the Constitution, said Gupta. “Courts exist to decide actual cases,” said Gupta. “They are not debating societies. Nor do they exist to write advisory opinions for foreign courts.”

Gupta said Chevron faces two other intractable problems – first, that the injunction it seeks from Judge Kaplan to block the Ecuador judgment is not authorized by the RICO statute; and, second, that the injunction is functionally equivalent to one declared illegal by the Second Circuit Court of Appeals in an earlier phase of the case.

To get around the latter problem, Chevron is now claiming that its proposed injunction would only stop the Ecuadorians from “collecting” on their judgment, but would not stop the enforcement actions themselves.

“Chevron is now seeking an anti-collection injunction rather than an anti-enforcement injunction,” said Gupta.

“Although Chevron never has had standing to bring this lawsuit, whatever argument it might have had for standing (before dropping its damages claim) is now gone – and, with it, so too is this Court’s authority over the dispute,” said the motion.
Read the rest of the press release here, and the motion to dismiss here.

Tuesday, January 28, 2014

Since When Did Lobbying and PR Become Extortion?

Today, Politico Magazine published a powerful op-ed from Karen Hinton, who has long served as a tenacious spokesperson and advocate for the Ecuadorian communities fighting to hold Chevron accountable for its abuses in the Amazon. It's aimed at an audience of people, who like herself, advocate for the interests of others. In it, she asks whether some basic, constitutionally-protected activities could be in jeopardy because of Chevron's scorched earth legal tactics to evade accountability for its crimes in Ecuador.

Posted in its entirety below, it's a must-read.

Since When Did Lobbying and PR Become Extortion?

I do advocacy work. So why am I accused of being part of a criminal conspiracy?

January 28, 2014

Within the next two months, a New York federal judge is expected to rule in an environmental case that goes to the core of how lobbyists, publicists and other advocates up and down K Street make their living.

If you are one of them and you know nothing about Chevron’s racketeering lawsuit against a group of Ecuadorian indigenous peoples, farmers and their attorneys (Chevron Corp. vs. Donziger), it’s time to tune into this 20-year battle over who should pay to clean up one of the world’s worst oil contamination disasters.

The U.S. Chamber of Commerce and other business groups are backing Chevron. They hope a favorable ruling from U.S. Federal Judge Lewis A. Kaplan will help put trial lawyers out of business and weaken the ability of human rights advocates to hold corporations accountable for their misconduct. Billions of dollars are at stake. But the business groups should be careful what they ask for. The result could yield a double-edged sword that strikes not just at contingency-fee lawyers and environmental activists but encourages internecine corporate warfare as well.

Chevron is likely to win its lawsuit in the lower court—a retaliatory fight to try and avoid a $9.5 billion Ecuador judgment. Kaplan, who’s hearing the case, made numerous prejudicial statements against the Ecuadorians even before he read or heard one statement in their defense. Tellingly, Kaplan suggested the oil giant file the racketeering and extortion (RICO) charges against the Ecuadorians and their attorneys. In turn, the defendants have argued that Kaplan is biased and should be recused. As proof, they cite comments Kaplan has made that disparage Ecuador’s courts and government and question whether the Ecuadorian villagers harmed by Chevron’s pollution actually exist. He appears to be utterly unbothered by the fact Ecuador’s Supreme Court affirmed the judgment against Chevron after knocking about $10 billion off the company’s liability.

Meanwhile, Chevron maintains it’s a victim of a conspiracy campaign that works something like this:

The attorneys, who head up this “criminal enterprise” and are to be paid on a contingency basis, filed a fraudulent lawsuit with the sole purpose of enriching themselves. Publicists for the Ecuadorians (I’m one), lobbyists and unpaid environmental advocates, recruited by the attorneys, colluded with them and the Ecuadorians to pressure Chevron to pay a judgment or settle – a violation of the RICO statute, according to Chevron and Kaplan.

In other words, Chevron’s theory is that hard-hitting press releases and lobbying before Congress and government agencies to draw attention to the U.S.-based company’s actions in Ecuador equal economic extortion and are part of a grand conspiracy to pressure them to pay.

Put another way, hard-hitting press releases and lobbying before Congress and government agencies by (insert you and your client) against (insert your client’s competitors or opponents) about (insert issue that financially benefits your client) could equal extortion and be a violation of the RICO statute. Plaintiffs who win civil RICO cases are entitled to treble damages, which could bankrupt many companies or trade associations if they were to be so targeted.

U.S. case law establishes that if you lie about others to pressure them for a monetary advantage or payment, then you could be guilty of economic extortion. Chevron has charged that the Ecuadorian “conspirators” and their “co-conspirators,” like me, lied, manufactured evidence about the contamination, and committed fraud. I find this utterly preposterous and assumed we would be allowed to aggressively refute and defend against these charges in court. We were not.

During the six-week trial, which took place in October and November, Kaplan refused to allow any testimony into the record that would prove we did not lie about the contamination – our reason for demanding Chevron pay to clean up the contamination. He struck page after page of witness statements and witness testimony on the stand alleging that Texaco, now owned by Chevron, dumped more than 16 billion gallons of untreated toxic production water into the rainforest waterways and built hundreds of huge, unlined pits to store permanently pure crude and toxic water left over from oil exploration at well sites. This was the evidence relied on by the Ecuador court, an appellate court and the country’s Supreme Court to find Chevron liable.

A ruling in favor of Chevron will mean that corporations unhappy about attacks, possibly from competitors, will be empowered to file RICO lawsuits without having to prove whether the underlying attacks are, in fact, substantially true. Truth is no longer a defense, and that should trouble not only anti-corporate activists but corporations as well – and their lobbyists and publicists.

While Kaplan did allow a limited defense of a fraud charge involving an alleged bribe of the judge who ruled in the Ecuadorians’ favor and the alleged “ghost-writing” of the judge’s final ruling, the only solid evidence of fraud Chevron presented was the testimony of an admittedly corrupt former Ecuador judge – a man who Chevron is paying at least $350,000 during the next two years in exchange for his testimony, which we argue is tainted. Chevron also has arranged for the man and his entire family to live in the United States and apply for political asylum.

No one knows exactly how Kaplan will craft his opinion or if it will survive on appeal.

But, if Chevron gets what it wants, K Street and its corporate clients could easily find themselves on the wrong end of a RICO case. Free speech, especially in Washington, D.C., and New York City, will suddenly cost a whole lot more than the cars and drivers delivering the endless line of talking heads for the political punditry that feeds the cable news beast.

Of course, advocating for what you believe is right and just would be in jeopardy. There’s that, too.

See the original at Politico Magazine.

Tuesday, January 21, 2014

Biting Satire Video from Pulitzer-winning Animator Blasts Chevron over Retaliation Tactics

According to a press release from Amazon Watch, long-time staunch allies of the Ecuadorian communities demanding justice from Chevron:
Today Amazon Watch released an edgy satire created by Pulitzer-winning animator Mark Fiore blasting Chevron's unprecedented tactics to avoid responsibility for its admitted acts of environmental destruction in the Ecuadorian Amazon. Despite losing a 20-year legal battle and receiving a $9.5 billion judgment, Chevron maintains that it will never pay for its damage. The company launched an extraordinary racketeering and extortion (RICO) lawsuit against the Ecuadorian plaintiffs, U.S. attorneys and various consultants alleging that the original case was “sham litigation." Fiore's piece comes on the heels of a campaign supported by a diverse coalition including Amazon Watch and the Sierra Club calling on members of the Senate to investigate and put a stop to Chevron's vilification of the environmental and human rights community.

And here's the animated video, a funny and biting satire of Chevron's gangster-like ways:

As Amazon Watch writes in their press release:
Chevron's actions set a dangerous precedent and represent a growing and serious threat to the ability of civil society to hold corporations accountable for their misdeeds around the world. Now a wide cross-section of U.S.-based environmental and corporate governance groups have condemned Chevron's most recent retaliatory attacks to intimidate the Ecuadorian indigenous peoples and farmers who have been harmed by the oil giant's massive contamination of their ancestral lands.

Amazon Watch has also posted an article on its Eye on the Amazon blog in the voice of Donny Rico, the animated star of its new video:
Donny Rico here to deliver a message to all you long-haired hippie activist types complaining about the environment and human rights. Be warned: things have changed in America and you need to keep your mouths shut. Corporations are the top of the food chain and you need to keep your place or you'll be what's for dinner. Got it?

See, me and Chevron are paving the way for corporate freedom in America. Freedom from accountability, freedom from watchdog punks and freedom from caring about how our actions affect the rest of yous. When those pesky Ecuadorians spouted off about the fact that Chevron did a piece of work and chose to dump billions of gallons of toxic waste in their rainforest, we decided to turn the tables and it worked like a real charm. Chevron's tired of being the victim just because over a thousand people died of cancer in Ecuador and we wrecked the Amazon rainforest. 
Visit the Amazon Watch website to read the rest of Donny RICO's diatribe, and to share the video with friends, colleagues, and any of those long-haired hippie activist types you may know

Monday, January 20, 2014

HuffPost: New Christie Attack Dog Attorney Randy Mastro No Friend to Ecuador's Indigenous Peoples

New York City-based writer Nikolas Kozloff has written a powerful indictment of the lawyer that embattled New Jersey Governor Chris Christie has hired to help him handle a scandal that threatens to engulf the Governor's administration and destroy any chance he may have at a White House run.

Governor Christie has hired none other than Gibson Dunn's Randy Mastro to try and fend off the scandal over the administration's recent abuses.

The Governor's bullying ways were brought into stark relief after inquiries into what turned out to be punitive traffic gridlock for Fort Lee residents, who were unlucky enough to find themselves in the Governor's cross-hairs for having the temerity to elect a Mayor who refused to endorse Mr. Christie during his successful re-election bid.

If you want a preview of the way in which Randy Mastro will try and rescue Christie, you need look no further than the cynical, deceptive, and abusive legal counter-attack Mastro has led for Chevron in the company's efforts to evade accountability for its Ecuador disaster.

Kozloff writes:
Realizing that the company probably could not win its case on the merits, Mastro decided to change the nature of the debate entirely. In a rapidly unraveling kangaroo process, Mastro took advantage of a bizarre legal tactic which states that U.S. courts may force testimony to assist foreign courts. If Chevron prevailed, the U.S. would probably assist Chevron in defending against the Ecuadoran judgment in other countries where the plantiffs might seek to pursue the case.

Taking his cue from the earlier Nicaraguan Dole case, Mastro shifted the focus from pollution to attorney ethics. Through a calculated campaign of obfuscation, denial, personal attacks and claims of bias by the Ecuadoran legal system, Mastro sought to divert attention away from the suffering plaintiffs.
It makes sense, in a perverse kind of way: bully Governor hires bully lawyer to defend himself against charges of bullying.

An expert in Latin American history (with a Ph.D from Oxford University), Nikolas Kozloff has explored the impact of oil companies in the Amazon, authoring the recent landmark book, No Rain in the Amazon: How South America's Climate Change Affects the Entire Planet. He has explored Chevron's toxic legacy in the Amazon. In his latest piece on Huffington Post, he provides a brief history of Chevron's toxic legacy in Ecuador:
In order to put Chevron's problems in context, we must go back in time some twenty years. According to Ecuadoran Indians, from 1964 to 1990 Texaco caused serious damage to human health and the environment by employing obsolete technology in drilling operations at hundreds of wells spread throughout the jungle. Indigenous peoples claim that contamination created a virtual "death zone" in an area the same size of the state of Rhode Island. Within the area, they say, local people have suffered from increased rates of cancer, leukemia, birth defects, and a variety of other medical problems.
And finally, Kozloff concludes:
In light of Mastro's tactics in the Ecuador affair, perhaps we should expect the unexpected when it comes to the unfolding investigation into Chris Christie's affairs. If history is any indication, Mastro will probably try to wear out investigators or to turn the tables. A master of the counter-suit, Mastro might seek to question the credibility of Christie opponents or to underhandedly change the "narrative." From Nicaragua to Ecuador, these are strategies that have worked for Gibson & Dunn over the years, and the firm may well be tempted to employ such an approach once more.
Read the entire article at Huffington Post, and stay tuned for more on Randy Mastro and the Gibson Dunn, and Crutcher law firm.

Thursday, January 9, 2014

Desperation: Chevron CEO Asked Venezuela President for Help On Ecuador

In 2014, Watson Faces Host of  Challenges As Company Tries to Evade Accountability for Toxic Dumping

With shareholder discontent over its Ecuador liability on the rise yet again, Chevron CEO John Watson is facing a new series of challenges in 2014 as the company continues its two-decade campaign to evade accountability for the toxic contamination it left in the Amazon rainforest.   One example of the company's desperation: news reports from Latin America recently disclosed that Watson pleaded in person with Venezuela’s new President, Nicolas Maduro, for help in blocking enforcement of the Ecuador judgment.

This is what the oil giant does.  It uses its political muscle to interfere in court systems around the world.  As a Chevron lobbyist told Newsweek, "We can't let little countries like Ecuador screw around with large companies."  Ecuador's Supreme Court has affirmed the judgment against Chevron.  But Watson simply ignores court decisions from Ecuador that he doesn't like while his lawyers continue their  scorched-earth campaign to avoid paying what the company owes.  For background, see this 60 Minutes segment and this video from Steven Donziger, one of the lawyers who has fought for years to hold the oil company accountable.

These are some of the colossal challenges Watson faces in 2014 because of the company's failure to pay the Ecuador judgement:

**Legal actions to enforce the Ecuador judgment against Chevron are proceeding in Canada, Argentina, Brazil, and Ecuador.  These actions can no longer can be pushed under the rug by the company. Just last month, a Canadian appellate court green-lighted an enforcement proceeding that puts an estimated $15 in Chevron assets in play; Chevron’s defense brief is due later this month.  The Canadian court also openly derided Chevron’s two-decade effort to challenge jurisdiction in three different countries. 

** Canada is now considered one of the most strategically important oil producers in the world, with the third largest proven reserves.  If the Ecuadorian villagers prevail in what is widely seen as one of the world’s most reputable judicial systems – one that, unlike the U.S., is not the product of constant political warring -- they can collect the entirety of their $9.5 billion judgment and begin a long-awaited clean-up.

**On the shareholder front, Watson is likely to face a firestorm over Chevron's Ecuador quagmire.  Displeasure over his $32 million compensation package is at an all-time high.   Prominent shareholders – including the New York state comptroller – are backing resolutions related to the Ecuador case that directly challenge Watson’s stewardship.  One calls for the separation of the CEO and Chairman positions; another calls for the appointment of a Board member with environmental expertise.  In 2011, these resolutions garnered a whopping 38% of shareholder support.

Copies of the three resolutions related to Chevron that will be voted on at the 2014 annual meeting in May are
 here, here and here.   Background on Chevron’s shareholder dissent can be read here

**Watson has become so nervous about the fallout from the Ecuador judgment in Latin American that he personally asked Venezuela President Maduro for help during a recent visit to that country, according to media reports.   Watson must shudder at the thought of an enforcement action against Chevron in the oil-rich country, which has the largest proven reserves in the world.  Any action against Chevron by Venezuela’s courts could have a massive impact on the company’s prospects.  It also could lead to huge problems for Watson and R. Hewitt Pate, Chevron's General Counsel and the mastermind behind the company's exorbitantly expensive ($400 million per year) legal strategy.

**Another way to understand why Watson visited Venezuela is that Ecuador President Rafael Correa is waging diplomatic war against Chevron in Latin America.  Chevron's lobbying effort in Washington to cut off U.S. trade preferences to Ecuador could cost the small country 300,000 jobs.  Correa has called Chevron’s campaign against Ecuador “criminal” and has vowed to defend his country's sovereignty.  Chevron's bullying tactics hardly endear itself to the people of the region.  Correa, who polls show is South America’s most admired leader, has launched the anti-Chevron offensive through ALBA, a regional body that includes Venezuela, Brazil, Bolivia and Argentina.   

**Citizen committees in solidarity with the Ecuadorian villagers have sprouted up in several countries (like Venezuela and France) in response to Chevron’s abominable behavior.   A recent report by famed Argentina journalist Jorge Lanata has spread firsthand proof through Latin America of Chevron’s environmental crimes in Ecuador.   A huge new Chevron investment in Argentina’s gas fields is being hampered by grass roots support for efforts to enforce the Ecuador liability in that country, according to local news reports and 

 The New York Times.  

**In Ecuador, the country’s Supreme Court in November issued a 222-page decision that unanimously affirmed an intermediate appellate court decision in favor of the villagers.  The judgment is now final and ironclad, which opens up the possibility of enforcement actions being filed in yet more jurisdictions.  The court rejected each element of Chevron’s fake narrative that it was the victim of an “extortion” plot by the villagers, who suffer from high cancer rates and other diseases due to Chevron’s sub-standard operational practices.    See these photos on the Huffington Post to get a sense of the human impact on the people Chevron claims are trying to extort money from the company.

**Chevron is now openly conceding in legal papers that it faces enormous risk to its operations from the Ecuador case.   In a recent filing in New York, Chevron admitted that the seizure of the company’s trademarks in Ecuador is “causing millions of dollars of harm to Chevron” and that the Ecuadorian villagers have “injured Chevron is both calculable and incalculable ways” by winning their case. Yet the company has continually failed to disclose these monumental risks to shareholders in its public filings, prompting calls by a group of shareholders and a U.S. Congresswoman for an SEC investigation of the company.

**Aside from Venezuela, another game changer for Chevron is that an Ecuador court recently froze $96 million in cash owed the company from Ecuador’s government from an international arbitration decision.  If these funds are recovered by the villagers, one of Chevron’s main tactical advantages – superior resources – will be significantly mitigated. The villagers will then be able to expand and redouble their legal efforts to force Chevron to clean up its toxic waste.

**The backlash against Chevron for its fugitive-like behavior and aggressive counterattack strategy has begun to take shape.  Just last week numerous environmental and human rights organizations, including Amazon Watch and the Sierra Club, slammed the company in an open letter for using the legal system to try to intimidate and silence its critics.  An announcement that several more prominent civil society organizations have signed is expected soon.

**Chevron’s retaliatory RICO case in New York remains a trial to nowhere, while outraging civil society organizations and public interest groups.  (For a great summary of the trial, see this recent blog  from the Huffington Post.)  After being helped along by an activist judge who seems to despise the concept of tribal leaders suing an American company in their own courts, Chevron lost credibility when it suddenly dropped all damages claims on the eve of trial to avoid a jury.  On the legal front, Chevron's case faces enormous obstacles and is highly unlikely to survive appeal.  The remedy sought by Chevron – an injunction from a U.S. court preventing enforcement of a foreign court judgment – already has been declared illegal by a federal appeals court and produced scorn from legal scholars worldwide.

Chevron has a track record of bribing witnesses for favorable testimony , trying to pay off Ecuadorian government officials to quash the case, trying to entrap a judge in a video scandal, spiriting its own employees out of Ecuador to avoid criminal prosecution, trying to threaten Ecuadorian judges with jail time if they did not rule in the company’s favor , trying to pay journalists to spy on the villagers, using 180 agents from Kroll to spy on adversary counsel, breaking promises to U.S. courts that it would pay the Ecuador judgment, and having top officials like Sylvia Garrigo claim on camera that the company does not believe it should be in court at all over the Ecuador contamination.

The Ecuador-related problems faced by Watson are largely of his own making.  The company has invested an estimated $2 billion to beat back the Ecuador judgment.  It has used 60 law firms, 12 investigative firms, and dozens of lobbyists and public relations firms to try to intimidate its critics.  And it has done so for years and years.

Only two weeks into 2014, Chevron’s grand strategy to avoid paying for a cleanup of its contamination in Ecuador is fraying at the edges.  Its “lifetime of litigation” strategy is sputtering.  Days after the closing arguments in the RICO trial— with no remedy even if the company wins — a court in Ontario gave the Ecuadorians an early Christmas present.

Ontario Court of Appeal Justice James C. MacPherson wrote:

Even before the Ecuadorian judgment was released, Chevron, speaking through a spokesman, stated that Chevron intended to contest the judgment if Chevron lost.  He said: ‘We’re going to fight this until hell freezes over.  And then we’ll fight it out on the ice.’

Chevron’s wish is granted.  After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard on the merits in an appropriate jurisdiction.  At this juncture, Ontario is that jurisdiction.
This is shaping up to be a perilous year indeed for Watson and his management team.   The deep freeze and long winter north of the border does not bode well for Chevron's fight on the ice to block enforcement.  The odds favor the villagers.

For background on Chevron’s contamination, see this video, this summary of the evidence against the company, and this video from Steven Donziger, a longtime lawyer for the Ecuadorians and the principal target of Chevron’s retaliation campaign.