In Blow to Chevron, Judges Rule that Ecuador Pollution Dispute Belongs In The Courts of Ecuador

A five-judge panel from a respected New York appeals court has dealt a blow to Chevron in a dispute between two groups of villagers related to the company's $9.5 billion pollution liability in Ecuador.

In a decision issued this week, the court unanimously ruled that any dispute among Ecuadorian villagers over the distribution of proceeds from the historic judgement should be heard in the same courts that issued it. American law professor Judith Kimerling, who claims to represent a handful of indigenous families out of an estimated 30,000 affected Ecuadorian villagers, had asked the New York trial court to issue an order that her clients were entitled to a proportional share of the proceeds.

Kimerling's theory was sound but her choice of forum was nuts from the get go. Although she purports to be a human rights lawyer, in reality she was doing the bidding of Chevron by attacking Ecuador's courts as incapable of dealing with the dispute. She could not point to a single instance in the history of American jurisprudence where a U.S. court tried to resolve competing claims among foreign citizens over the proceeds of a foreign judgment issued in the courts of their own country.

The latest appellate court decision, issued unanimously, is a direct rebuke to Chevron and raises yet more questions about the wrongheaded approach of U.S. trial judge Lewis A. Kaplan in a similar case brought by the oil giant.

At Chevron's request, Kaplan in 2014 refused to seat a jury and then entered a bizarre and unprecedented order that tries to block the Ecuadorians from collecting the proceeds of their judgment anywhere in the world. Kaplan refused to even review the 105 technical evidentiary reports that demonstrated Chevron had deliberately disposed of its toxic waste in the rainforest, decimating indigenous groups and causing an outbreak of cancer that has cost the lives of numerous local residents.

Dozens of international law scholars filed a "friend of the court" brief blasting Kaplan's decision as a violation of international law. The Kaplan ruling is under appeal before a separate federal panel.

In the meantime, just a few blocks away, five judges from a New York state appeals court used logic and common sense sorely lacking in Kaplan's courtroom. The court agreed with Steven R. Donziger, a New York attorney who has represented the affected communities in Ecuador for two decades. Donziger had argued that any dispute over the judgment obviously should be resolved in the nation that conducted the trial.

According to the state appellate court,

"Ecuador is the forum more convenient to the parties and witnesses in New York; there is no unfairness in requiring plaintiffs to prosecute their claims in Ecuador where they reside; the underlying litigation took place there; the underlying judgment to which plaintiffs claim a proportional share, was issued there; and defendant Amazon Defense Coalition, which was directed to distribute the proceeds of the judgment, is domiciled there."

Donziger, in his own statement, praised the court's logic and implicitly criticized Kaplan:

"The New York state appellate court properly recognized that issues related to an Ecuadorian judgment against Chevron should be resolved by the courts of Ecuador, not by U.S. trial judges who not only lack jurisdiction but have no expertise regarding Ecuadorian law or procedure."

One must remember that Ecuador's courts spent 11 years in trial and appellate proceedings only because Chevron insisted the trial be held there after the original action was filed in New York in 1993. Once damning evidence of extensive contamination was presented in Chevron's preferred courts of Ecuador, the oil company shifted gears and began to attack the very judicial system it had previously praised.

In the meantime, Chevron came back to the same U.S. court where it had blocked the original case to beg Judge Kaplan to try to rescue it from the Ecuadorian judgment. Kaplan -- who has undisclosed investments in Chevron -- was more than happy to oblige. He allowed the oil giant to present fabricated witness testimony and otherwise make a mockery of justice in his courtroom, as this document explains. (For Donziger's explanation of the case, see this article from The Huffington Post and this legal brief appealing Judge Kaplan's decision.)

In the meantime, the affected villagers are not waiting around to hear from U.S. courts. They have hired counsel in Canada and Brazil where they are pursuing Chevron's assets to force the company to comply with the rule of law. Chevron has responded in its usual fashion to its latest spate of bad news -- by trying to cyberbully a respected journalist who exposed that its entire defense to the judgment is falling apart.

For Donziger's full statement on the recent court decision, see this press release. For the court's full decision, see here.

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The Nation Magazine Exposes Chevron's Lies About Its Toxic Dumping In Ecuador

More journalists are beginning to expose the lies behind Chevron's retaliation campaign against the indigenous and farmer communities who held it accountable in a court of law for dumping billions of gallons of toxic waste in Ecuador's rainforest.

The communities own a $9.5 billion judgment against Chevron, but the company refuses to pay even though it had accepted jurisdiction in Ecuador's courts and insisted the trial be held in the South American nation.

The latest to weigh in: James North of The Nation.

In a fascinating article called Ecuador's Battle for Environmental Justice In Ecuador, North describes a trip he took recently to the affected area of rainforest that Texaco claims it had remediated after operating there from 1964 to 1992. North describes a trip with Donald Moncayo, a local resident:

We set off into the rainforest.  Moncayo...started at Aguarico 2, a well that has been closed for years... The oily residue is still floating on the surface. Then he marched down a steep slope to a stream, where you could see and smell the oil as well.

Moncayo then took North to a well site called Lago 2 -- one that Texaco in 1998 specifically had certified as "remediated" to Ecuador's government in exchange for a bogus "release" that it still tries to argue absolves it of all legal responsibility. This is how North describes it:

Moncayo went to Pozo Lago 2, which is near the modest wood-frame house where he lives with his wife and baby daughter. He pulled out his core sampler and set to work. After only a meter and a half, he struck some viscosity; before two meters, he hit heavy oil soak... Less than 50 yards away, people were washing in a stream.

North also takes certain legal reporters to task for adopting Chevron's world view that it has been victimized by the very people in Ecuador that it poisoned. He writes:

On closer inspection, the truth is totally different. If the plaintiffs finally win in the end, the rain-forest inhabitants will not just have their habitat start to be cleansed of the oil muck that oozes into their water supply, or enjoy improved health facilities to treat what they argue are elevated levels of cancer and other diseases. They will also have proved the success of an innovative legal strategy that recruits financial help in the rich developed world to provide at least a fighting chance against a corporate colossus like Chevron, which has already spent, by some estimates, $2 billion it its massive legal and propaganda campaign.

Aside from from North, other journalists to expose Chevron's wrongdoing in Ecuador in recent years include Alexander Zaitchik of Rolling Stone, who summarized the company's unethical intimidation tactics;  William Langewiesche of Vanity Fair, who wrote a stirring profile of Ecuadorian lawyer Pablo Fajardo; and the producers of 60 Minutes, whose award-winning segment Amazon Crude had Chevron spokesperson Sylvia Garrigo tying herself in knots by suggesting the oil on the ground in Ecuador was as harmless as the oil in the makeup on her face.

Most recently, Adam Klasfeld of Courthouse News -- himself a victim of Chevron's cyberbullying for his independent reporting -- exposed that the oil giant had donated a whopping $13 million to the U.S. State Department while inappropriately trying to lobby Hillary Clinton and other government officials over the Ecuador litigation. Klasfeld earlier reported on a new forensic analysis that suggests Chevron presented false evidence about the case to a U.S. federal judge.

The underlying environmental matter was heard in Ecuador at Chevron's insistence after the company praised the country's justice system. The litigation in Ecuador resulted in a Supreme Court decision in 2013 that requires the oil giant to remediate more than 1,000 toxic waste pits as well as rivers and streams where the company discharged an additional 15 billion gallons of oil waste. Locals call the disaster the "Amazon Chernobyl".

For background on the case and Chevron's retaliation campaign, see this summary of the evidence and this legal brief  from Steven Donziger, the longtime U.S. legal advisor to the Ecuadorian communities.

You can also learn from North's article why Chevron and its CEO John Watson so hate Ecuador President Rafael Correa, one of the most popular leaders in Latin America.

Correa has the temerity to call out Chevron for its malfeasence, much like President Obama did to BP in 2010 after its spill in the Gulf of Mexico. North quotes Correa accusing Chevron of "shamelessly lying" to evade paying for a clean-up in Ecuador. Correa also explains what already has been confirmed by three layers of courts: Chevron polluted deliberately to inflate its profits.

"They weren't interested in the human beings who lived in the Amazon region,"  Correa told North in an interview. "To me, it is question of racism."

Thank you, President Correa. We could not have said it better. And thanks to James North and The Nation for highlighting this latest sad chapter in American corporate wrongdoing.

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Judge Kaplan's Decision For Chevron Based on Falsified Evidence, Says New Report

Chevron is on the ropes yet again in the Ecuador pollution case as its main defense continues to unravel, according to prominent appellate lawyer Deepak Gupta of the Gupta Beck law firm in Washington, D.C.

An explosive new forensic report from Ecuador's government filed recently before a federal appellate court in New York proves that U.S. Judge Lewis A. Kaplan accepted false evidence from a paid witness to try to help Chevron evade paying its $9.5 billion pollution liability to rainforest villagers in the South American nation, according to Gupta. Gupta's letter brief on the issue can be read here.

Gupta has charged Chevron with presenting false testimony to try to frame his client, New York-based human rights lawyer Steven R. Donziger. Chevron's goal for years has been to evade paying the court judgment in its chosen forum of Ecuador, primarily by trying to demonize Donziger to distract attention from its own crimes and fraud. Donziger has been working on the case for 22 years.

Chevron executive Rodrigo Perez Pallares admitted during an eight-year trial in Ecuador that the company dumped at least 15 billion gallons of toxic oil waste into streams and rivers in Ecuador relied on by indigenous groups for their drinking water, bathing, and fishing. Multiple health evaluations have found skyrocketing cancer rates in the affected area. A half-hearted Chevron remediation turned out to be a sham; even Chevron's own technical reports proved during the trial that its former well sites were contaminated with life-threatening toxins. (For a summary of the overwhelming evidence against Chevron see, here.)

Donziger and one of his Ecuadorian colleagues, Goldman Prize winner Pablo Fajardo, have been the primary targets of a Chevron smear campaign that involves at least six public relations firms. One of those firms, CRC Public Relations, is notorious for having executed the Swift Boat campaign attacking John Kerry's patriotism in the 2004 presidential campaign.

In his latest filing, Gupta accused Judge Kaplan of accepting the false testimony from disgraced former Ecuadorian trial judge Alberto Guerra as part of Chevron's strategy to exact revenge against the lawyers who helped the villagers win their historic judgment. (For the specific details of Guerra's false testimony, see this legal brief.)

Gupta demonstrates in his latest brief that Chevron's main allegation -- that lawyers for the villagers "ghostwrote" the trial judgment -- is irrefutably false.

Gupta points out that after being found guilty in Ecuador, Chevron looked for a way to blow up the judgment against it. It suddenly found a man (Guerra) who had been defrocked as a judge in Ecuador for accepting bribes. At the time, he was making $500 monthly but was willing to accuse Donziger (whom he had met briefly on two occasions) and Fajardo of orchestrating the "ghostwriting" of the 188-page trial court judgment in exchange for a princely fee.

Guerra struck a deal with Chevron to be paid $2 million in cash and benefits. He then told a story that the document that became the trial court judgment in Ecuador was given to the trial judge (Nicolas Zambrano) on a flash drive just days before it was issued.

Donziger, who has never received an ethics complaint in 23 years of law practice and who had never even met or seen the trial judge who wrote the judgment, always claimed that testimony was a lie. But how do you prove a negative?

Enter the new forensic report that became available only after Kaplan made his horrendously flawed findings of ghostwriting.  Based on an examination of the hard drives of the office computer of the Ecuadorian trial judge, the report clearly demonstrates that the Word document that became the judgment was saved no fewer than 484 times on the computer of the trial judge in the four months before it was issued. So much for Guerra's flash drive story.

Gupta's brief explains how the new report, prepared by American computer expert J. Christopher Racich ("Racich report") for a related arbitration proceeding between Chevron and Ecuador's government, blows the lid off the oil major's defense.

Gupta nails Chevron for corrupting the court process:

"On this record, and even more so in light of the new forensic analysis not available to the district court, it is no exaggeration to say that Mr. Donziger was framed by Chevron on the basis of a paid witness who admitted to making false statements to sweeten his deal with Chevron."

For good measure, Gupta added that the Racich report proves "Guerra's story was a lie designed to net him a massive payout from Chevron." You would have to be obtuse not to figure that out even before the Racich report was disclosed.

But Kaplan, who called Donziger a "field general" and allowed Chevron to make a mockery of the rule of law in his courtroom, still credited Guerra's internally inconsistent and wholly unreliable testimony.

Chevron's exorbitant payments to Guerra were themselves an utterly indefensible act as federal law prohibits payments to fact witnesses. None other than distinguished Dean Erwin Chemerinsky has confirmed this in a sworn affidavit that Kaplan predictably ignored.

It gets worse. Before taking the stand, Chevron lawyers coached Guerra on what he would say for 53 consecutive days. Those engaged in this unprecedented witness "prep" for Chevron were Avi Weitzman, Andrea Neumann, Reed Brodsky and Randy Mastro. That group hails from a law firm (Gibson Dunn & Crutcher) that the High Court of England recently found falsified evidence in another case to try to frame a man who had become a threat to another of its high-profile clients.

Sound familiar?

Guerra has gotten rich off of Chevron. Among the other perks the oil giant provided for his testimony: immigration from Ecuador to the U.S. for several family members, health insurance, housing, a car, and a team of lawyers to help him secure political asylum. He lives in a secret location in the U.S. under Chevron's protection.

Donziger repeatedly has called Chevron's allegations a frame-up and criticized Judge Kaplan for making disparaging comments from the bench. (Kaplan referred to the affected communities as the "so-called" plaintiffs "said to reside" in the rainforest.) Donziger also exposed that Kaplan held undisclosed investments in Chevron during the trial, further un-endearing himself to a judge widely known for his bullying tendencies.

(For more detail on Kaplan's bias against Donziger and his clients, see this petition to remove him from the case.)

Donziger and a team of Ecuadorian lawyers secured the judgment against Chevron after eight years of hard-fought litigation where the oil giant repeatedly tied to corrupt and paralyze the proceedings. At one point, Chevron threatened the judge with jail time if he refused to grant a company motion to nullify the proceedings. At another point, the company filed 39 duplicative motions in 50 minutes to throw sand into the gears of the court. For part of the background on the company's corruption, see this affidavit from Ecuadorian lawyer Juan Pablo Saenz.

As if 105 technical evidentiary reports proving contamination was not enough evidence, just recently a Chevron whistleblower turned over internal company videos showing the oil giant's scientists laughing at the pollution at well sites in Ecuador that the company claimed to have remediated.

The judgment against Chevron was affirmed by two separate appellate courts in Ecuador, including by the country's Supreme Court in a unanimous 5-0 decision. The judgment was based almost completely on scientific evidence Chevron itself put before the court. The damages are relatively modest compared to the $30 billion paid out by BP for the far smaller Gulf of Mexico spill.

Even though Chevron insisted the the trial be held in Ecuador, as the evidence mounted the company quickly became a sore loser and announced it would never pay the judgment. In 2011, it sued Donziger and Fajardo in New York for roughly $60 billion -- thought to be the largest potential personal liability in U.S. history. Yet Chevron General Counsel R. Hewitt Pate had so little confidence in his own evidence that he dropped the entire damages claim on the eve of trial to avoid a jury of impartial fact finders.

Chevron's 32-year-old forensic expert Spencer Lynch -- who also examined the trial judge's hard drives -- had no answer for the Racich report. He has tried to claim flash drives were used in the judge's computer 56 times during the four-month period the judgment was written. But Racich showed that not a single one of those flash drives contained the judgment or any related documents. Most contained personal items such as family photos.

We might add that CEO John Watson had no answer to the Racich report either when confronted about it by Ecuadorian indigenous leader Humberto Piaguaje at the company's annual meeting last week.  See here for how Watson continues to mislead his own shareholders about the Ecuador case.

The question now is whether the United States Court of Appeals for the Second Circuit can absorb this disturbing evidence and reverse a case where a federal judge so clearly relied on false evidence for his factual findings.

(For Donziger's view of the case, see this article in The Huffington Post and this article published on the legal website Law360.)

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