Showing posts with label $18 billion. Show all posts
Showing posts with label $18 billion. Show all posts

Wednesday, June 26, 2013

Appeals Court Asks Judge Kaplan To Defend Bizarre Rulings In Ecuador Pollution Case

Federal Judge Lewis A. Kaplan’s actions in Chevron’s efforts to evade a $19 billion adverse judgment for toxic dumping in Ecuador has caught the attention of a New York appellate court.

In a move that has raised eyebrows around the New York bar, the state’s highest federal appellate court recently gave Judge Kaplan 30 days to file papers defending his unprecedented rulings in a “fraud” case Chevron has brought in New York.

The case is the baby of Randy Mastro, former deputy mayor to Rudolph Guliani and now a law partner at Gibson Dunn & Crutcher. (True to form, Mastro helped execute Guliani's racially divisive political strategy in the mid-1990s.)  The lawsuit is designed to help Chevron evade the judgment in Ecuador and retaliate against the indigenous communities and lawyers who have held the company accountable for what is thought to be the largest environmental catastrophe in history.

The Second Circuit invited Kaplan to defend himself in light of a petition filed by the Ecuadorians and one of their lawyers, New York attorney Steven Donziger, seeking his reassignment. While most such requests are quickly dismissed, there clearly is something about Judge Kaplan’s behavior that is catching the Second Circuit’s attention.

Kaplan’s hostility toward Donziger and the Ecuadorians is puzzling because the judge is highly regarded in some quarters.  But in the mandamus petition the facts speak for themselves. For whatever reason, Judge Kaplan seems to be putting his formidable intellect at the service of Chevron rather than using it to administer the case fairly.  For more background, read this supplemental filing and an earlier mandamus petition that documents some of Kaplan’s biased comments toward the Ecuadorians from the bench.

And it what can only be described as an act of chutzpah, Judge Kaplan petitioned the appellate court for more time to file his defense.  The Second Circuit order inviting Kaplan to respond can be read here.

The irony of Judge Kaplan’s request for an extension should not be lost.  In 2011, the judge denied a similar request from Donziger, leaving the solo practitioner only three days to respond to Chevron’s 150-page “fraud” complaint before Kaplan imposed an illegal injunction blocking worldwide enforcement of the Ecuador judgment.  That move was later reversed by the Second Circuit in a unanimous order, but only after severe damage had been done to efforts by the Ecuadorians to clean up Chevron’s toxic mess.

Kaplan also found Donziger “waived” attorney-client privilege because he did not turn in a privilege log quickly enough. In a penalty that only be described as draconian, Kaplan then forced Donziger to turn over to Chevron his entire 19-year case file.

In the meantime, Judge Kaplan continues to do all he can to protect Chevron from having to disclose information about its own corruption, witness tampering, and bribes in Ecuador.  He also has ruled that the Ecuadorians and Donziger cannot defend themselves by showing the overwhelming scientific evidence that formed the basis of the Ecuador court judgment against Chevron.

(For background on how Chevron lies about and distorts basic facts in the case, read this response to allegations from a law professor paid by Chevron.)

Kaplan is also trying to block key evidence that Chevron and its outside lawyers have mounted an espionage ring to spy on adversary counsel.  That’s a flagrant violation of the ethical rules governing the legal profession, and is likely illegal.  But to Kaplan, apparently that’s just what big oil companies do to protect their asset base.

Chevron has admitted it has used at least 180 investigators on the case, mostly from Kroll. Kroll is a large investigations firm that functions in numerous countries like a private KGB for its corporate clients.

Kroll employee San Anson was caught trying to pay $20,000 to an American journalist to spy on consultants to the Ecuadorians.  Another former Kroll spook, Yohi Ackerman, was caught in Ecuador offering $20,000 cash from a suitcase to an Ecuadorian judge in exchange for favorable testimony on behalf of Chevron.

Many of Kroll’s investigators like Anson and Ackerman are bad boys who thrive in the underworld.  But Judge Kaplan and his Special Masters on the case, including his former law partner Max Gitter, have essentially shut down the ability to question these individuals about their misconduct.

Kroll’s CEO, Daniel Karsen, was deposed in early June.  Because of Kaplan’s rulings, Karsen didn’t have to answer most of the questions posed.  Chevron’s harassment of opposing counsel was considered off-limits under Kaplan’s rules.

For a small window into Chevron's spy operation, read this affidavit about how a team of unknown individuals followed Donziger around Manhattan.  For evidence of how Chevron tries to intimidate and “flip” witnesses, read this affidavit from a consultant to the Ecuadorians.

Kaplan also is letting Chevron maintain as “confidential” a series of damning internal videos that prove the company committed a massive fraud in Ecuador by hiding evidence of contamination from the court. Chevron itself shot the videos of its own technicians laughing at the pollution the company left behind and discussing how they would hide it from the court.  Under Kaplan’s rules, this type of criminal activity cannot be used at trial and must remain hidden from the public.

And in a clearly abusive practice, Judge Kaplan has allowed Chevron to hide numerous internal company emails that clearly show corruption and bribe attempts in Ecuador .........


THE REST OF THIS SENTENCE HAS BEEN CENSORED AT CHEVRON'S REQUEST. HERE IS CHEVRON LETTER demanding information be removed.

To Kaplan, this kind of payment apparently qualifies as “proprietary” business information.

Judge Kaplan also has allowed Chevron to hide embarrassing internal emails demonstrating that ... CENSORED BY CHEVRON. That email – CENSORED BY CHEVRON – is “confidential” under Kaplan’s rules.

It is now part of the public record that Chevron has used roughly 2,000 legal personnel and 60 different law firms to try to win by might what it cannot win on the merits.   Read this blistering critique of Kaplan’s biased rulings by famed San Francisco lawyer John Keker, who used to represent Donziger but left the case because of Kaplan’s mismanagement of the litigation.  Keker once famously said he felt “like a goat tethered to a stake” when litigating before the judge.

Despite Chevron’s overwhelming advantage in resources, Keker pointed out that Judge Kaplan consistently bends over backwards to help the oil giant as if it was an orphan or a widow. Chevron grossed about $250 billion last year and paid its CEO John Watson close to $30 million, while the average annual income of the residents who suffer at the hands of the company’s pollution is about $1,000.

We are looking forward to reading how Judge Kaplan tries to explain his rulings that are both helping Chevron evade a valid judgment and are raising questions worldwide about the fairness of the American judiciary.

(For a summary of the Ecuador court decision see here; for a video about the case see here or this 60 Minutes segment about Chevron’s deliberate contamination of the Amazon rainforest.)



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Thursday, December 13, 2012

Chevron’s Self-Deluded CEO John Watson


Shareholders can now reasonably question whether Chevron CEO John Watson is fit to lead America’s second-largest energy company.  Increasingly, Watson is acting like a palace dictator surrounded by yes men who only deliver good news as the streets rage in protest.

It is well-documented that Chevron’s share price recently has taken a hit due to the $19 billion Ecuador liability and other litigation problems around the world, including a potential $22 billion liability in Brazil.  Wall Street has begun to take notice, with the company’s share price down 10% since October. 

Recently, Watson ventured out of corporate headquarters and entered what he thought would be a friendly setting at the prestigious Council On Foreign Relations in New York City.

Even there, he was confronted by the Ecuador reality.

After his remarks, the first question that hit Watson was from a Wall Street Journal editor who asked about the Ecuador liability that he said was “dogging” the company.  Watson had this to say in response:

"We are largely winning in the court of public opinion. You see much less written because anyone who has done their homework knows it’s a fraud and so we’re winning in the court of the public opinion, we’re making great progress in the courts but yes we do have to fight and we’ll fight it till we win."

This is a man not in touch with reality.

If Watson thinks the case is a fraud, how does he explain how Chevron’s fraud allegations have been examined and rejected by two courts in Ecuador, the U.S. Supreme Court, multiple U.S. appellate courts, and did not bother an enforcement court in Argentina that recently froze $2 billion of Chevron assets in that country?

Chevron now faces asset seizure actions targeting $15 billon in company assets around the world, including massive oil fields in Brazil and Canada critical to the company’s long-term strategic growth.   In the meantime, Watson’s lead U.S. law firm fighting the litigation – Gibson Dunn & Crutcher -- has been slammed for committing ethical violations on behalf of Chevron. 

The Ecuador case is not only costing Chevron massive sums in legal fees, but is putting Chevron at a competitive disadvantage worldwide. The company already is being forced to suspend planned investments in places where it faces asset seizure actions.

Watson believes much less is being written about the case?  Click on the links below and see just how out of touch Watson has become.

Small Sampling of Recent News Coverage of Ecuador Case
12/9/12 

11/30/12

11/28/12

11/7/12

10/31/12

10/23/12

10/9/12

10/7/12

6/28/12

6/1/12
San Francisco Chronicle: Ecuadorans Take Right Against Chevron To Canada



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Thursday, June 14, 2012

Chevron Lies Through Teeth About Groundwater Contamination In Ecuador

The Ecuador indigenous and farmer communities who recently won an $18 billion judgment against Chevron have long maintained that the oil giant has been taking their comments out of context and is lying in its long-running effort to discredit the lawsuit.

Here’s a good example.

This week in a blog on its web site, Chevron claimed that Dr. Ann Maest, a prominent U.S. scientist who worked as an expert for the rainforest communities, testified under oath “that she was not aware of any scientific data indicating that drinking water wells have been impacted in any way by Texpet’s operations” in Ecuador.  (Texpet is a Chevron subsidiary.)  

What Maest said during three days of deposition testimony was that there was extensive groundwater contamination at Chevron’s production sites, but that there was no data from the plaintiffs about contamination in drinking water wells because no such wells were tested

In her deposition, Maest repeatedly cites multiple and widespread instances of groundwater pollution at every single waste pit in Ecuador where such testing took place. Yet Chevron claims in its blog that "even the plaintiffs own scientists" agree with Chevron's fabricated theory that there is no groundwater contamination in Ecuador.   

Here are some relevant excerpts from the Maest deposition that Chevron failed to mention in its blog:

“There has been some sampling of groundwater that's down gradient of pits, and they did find quite high concentrations of TPH [Total Petroleum Hydrocarbons] in groundwater.” (see 1/20/11 deposition, page 133)

The plaintiffs found "elevated concentrations of total petroleum hydrocarbons and polycyclic aromatic hydrocarbons...downstream of one of the separation stations in the concession." (see 12/8/10 deposition, page 161)

Samples tested from the plaintiff's and Chevron proved that "there are also PHs [a type of oil hydrocarbon] that are high in soil and groundwater immediately under the…pits that were allegedly remediated". (see 12/8/10 deposition, page 203)

Here is how Maest answered questions from a Chevron lawyer about groundwater contamination in Ecuador at a deposition that took place on December 8, 2010 (see page 212) -- an exchange Chevron ignored in its blog posting:

Q.  You had no worry about finding -- whether you were going to find it or not?

A. No. We knew at that time that they (the plaintiffs technical team) had found groundwater contamination.

Q. And where was that found?

A. Under pretty much every pit that they looked at.

Just in case you missed that last line: groundwater contamination was under pretty much every pit that they looked at.     

So much for Chevron’s claim that plaintiff's consultants agree with Chevron that there was no groundwater contamination in Ecuador.

For more on how Chevron lies to shareholders about the Ecuador litigation, see this report from securities lawyer Graham Erion and this letter from Congresswoman Jan Schakowsky (D-IL), asking the Securities and Exchange Commission to investigate the company.



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Thursday, May 31, 2012

Ecuadorians File Suit In Canada Against Chevron To Collect Money Awarded By Court In Historic Lawsuit

Ecuadorian plaintiffs started the process of enforcing the $18 billion court judgement by filing a lawsuit in the Superior Court of Justice in Ontario to take over various assets that Chevron and its subsidiaries hold in Canada. Press release with more details below.

Ecuadorians Hit Chevron With $18 Billion Enforcement Action In Canada 

Toronto, Ontario – Villagers from Ecuador's rainforest today filed a lawsuit in Canada as the first step in forcing the company to comply with an $18 billion court judgment rendered in Ecuador and imposed to permit the clean-up of what experts believe is the largest oil disaster on the planet.

The lawsuit, filed in the Superior Court of Justice in Ontario, (see here) targets Chevron and various subsidiaries that together hold significant assets in the country – including Canada's largest offshore drilling project and new investments in oil sands in the province of Alberta, said Alan Lenczner, the noted Canadian litigator representing the Amazon communities. Canada also has a law that allows interest to run on a foreign judgment during the enforcement process, potentially adding a significant amount to the judgment against the oil giant.

The Ecuadorians, who consist of the inhabitants of five indigenous groups and approximately 70 farmer communities, are being forced to file enforcement actions because Chevron refuses to pay the judgment imposed by an Ecuador trial court in February 2011, which was later affirmed by Ecuador's court of appeals in January. The oil giant has virtually no assets in Ecuador.

Pablo Fajardo, the lead lawyer for the Ecuadorians and the recipient of the Goldman Environmental Prize and a CNN "Hero" Award, said his clients were intent on collecting the entire judgment.

"The time for delay is over," he said. "For decades Chevron refused to address the contamination that has devastated our ancestral lands. While Chevron might think it can ignore court orders in Ecuador, it will be impossible to ignore a court order in Canada where a court may seize the company's assets if necessary to secure payment.

"We plan to exercise our legal right to collect every penny of the legitimate judgment from Ecuador, even if we have to drag Chevron kicking and screaming into courts around the world," said Fajardo, who grew up in poverty working in Ecuador's oil fields and who put himself through law school specifically to hold Chevron accountable for the environmental disaster. See this article in Vanity Fair about Fajardo.

The judgment in Ecuador resulted from an eight-year trial that produced more than 64,000 soil and water samples that pointed to extensive contamination at more than 350 Chevron well sites and oil production stations in a large swath of Ecuador's northern Amazon region, known as the Oriente. This area was considered one of the most bio-diverse areas on earth before Chevron – to lower production costs – deliberately discharged billions of gallons of toxic waste into the environment, decimating local tribesmen and plummeting the region into a tailspin of despair from which it has yet to recover, according to evidence before the court.

(A video that explains Chevron's substandard operational practices in Ecuador and efforts to corrupt the trial process can be seen here.)

The result of the dumping, according to evidence presented at trial, is a public health crisis and the poisoning of a large swath of pristine rainforest that indigenous communities had relied on for millennia for their sustenance. Five indigenous groups – the Cofan, Secoya, Siona, Quichua, and Huaroni – are struggling to survive. Part of the judgment will be used to restore the forest so that the indigenous communities can return to their hunting and gathering traditions, said Fajardo.

Lenczner, the Canadian litigator who is representing the Ecuadorians, is considered by Chambers Global to be one of the top lawyers in Canada, having appeared in courts in all ten provinces and argued numerous cases before the country's Supreme Court. He is the founding partner of Lenczner & Slaght, a boutique litigation firm with approximately 50 lawyers that recently was named one of the top ten litigation firms in the country by Canadian Lawyer magazine.

"I am honored to have been asked by the indigenous people of Ecuador to correct a historic injustice visited upon them by Chevron," said Lenczner, who visited Ecuador and reviewed the extensive trial and appellate records of the case, which exceed 250,000 pages.

"Chevron fought for nine years to move the trial from the United States to Ecuador, and then had a full opportunity for eight years to defend itself in Ecuador," Lenczner added. “This is a legitimate judgment and I believe Canadian courts will recognize it and enforce it as such."

Fajardo said that the Ecuadorians have a list of countries that are possible targets for enforcement actions and that additional actions are likely to be filed to ensure the full amount of the judgment can be satisfied. A significant portion of Chevron's assets are located around the world in over 70 wholly-owned subsidiaries and 75% of the company's annual profits are derived outside of the U.S., according to an analysis by the plaintiffs.

Almost all countries have specific laws governing the recognition and enforcement of foreign judgments. Most of the laws favor enforcement, subject to specific exceptions such as lack of jurisdiction or fraud. Chevron has stated it will try to block enforcement by alleging fraud, but the Ecuadorian trial and appellate courts directly addressed the allegations and rejected them. See the lower court judgment and the appellate court judgment.

Representatives of the affected population, who meet every two months in the rainforest in a body called the Assembly of the Affected Ones (Asamblea de Afectados), were thrilled that the first enforcement action was filed. The local population has suffered from high rates of cancer, spontaneous miscarriages, and oil-related diseases. See here, here, and here.

"This is a historic day for us," said Luis Yanza, the coordinator of the Assembly. "We might be impoverished materially but we are rich in spirit. The time has now come to use the force of law to make Chevron clean up its pollution. No company, even one as rich and powerful as Chevron, is above the law."

In Canada, Chevron's biggest assets are a 20% interest in the Athabasca Oil Sands Project, which yields a capacity of 255,000 barrels per day and supplies 10% of Canada's oil needs; the Hibernia project, which is Canada's largest offshore drilling project; and the Ells River concession, which covers 75,000 acres and contains up to an estimated 7.5 billion barrels of oil.

Chevron also is the largest gasoline convenience store marketer in British Columbia through a network of 162 service stations, 134 Town Pantry convenience stores, and 21 White Spot Triple O quick-serve restaurants. Chevron also owns the Burnaby refinery, which processes over 50,000 barrels of oil per day.

Total daily production for Chevron in Canada in 2011 averaged 29,000 barrels of crude oil, 4 million cubic feet of natural gas, and 40,000 barrels of synthetic oil from oil sands, according to public disclosures of the company. Canada is one of the top ten markets in the world for Chevron's capital spending in 2012, according to the company's filings with the U.S. Securities and Exchange Commission.

The filing of the enforcement action comes on the heels of a major challenge by Chevron shareholders over the Ecuador matter.

Today Chevron CEO John Watson suffered a stunning reprimand during a tense annual meeting when investors holding over 38% of the company's shares (representing $73 billion worth of stock) voted for a resolution that directly challenged his authority because of the Ecuador case. Last week, 40 institutional shareholders representing $570 billion under management – including the New York state pension fund – urged the company to settle the Ecuador litigation.

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Thursday, February 2, 2012

Either You Did Or You Didn't

Fess Up Chevron

It's a pretty simple question, Chevron. Did you change this document to look like this document so you could hide from the court huge amounts of life-threatening toxins at your old well sites in Ecuador? 

If you did, then it proves what the Ecuadorians have been saying since testing at the sites began in 2004 and 2005 during the long-running Ecuador trial: Chevron manipulated soil and water samples. In other words, the company "cooked" evidence.

Readers of The Chevron Pit might ask, so what? The Ecuadorians won. They defeated Chevron in both U.S. and Ecuador courts, winning an $18 billion judgment to cleanup damages resulting from the company's deliberate poisoning of the rainforest's soil and water.

It matters because Chevron is trying to get an Ecuador-funded taxpayer bailout from an international arbitration tribunal, run by private lawyers. See here for details. In Chevron's twisted view of the world, the Government of Ecuador should pay the $18 billion judgment. 

But the government, of course, is the people. Now that it’s lost in legitimate courts both in the U.S. and in Ecuador, Chevron turns to a body with no authority to have the Ecuadorians pay to fix a horrific mess of gigantic proportions of its own creation.

Only an oil company would think it could get away with this.

The Government of Ecuador has this smoking gun document and will present it to the tribunal, which explains why Chevron is parsing its statements carefully. 

In response, Chevron's lawyers wrote a long letter to the Ecuadorians' lawyers, making all kinds of nasty threats, but they never denied Chevron doctored the document to induce two professors of note to endorse fake testing methods.

In an open joint letter, the two professors, who are on the Chevron dole, also failed to put to rest the charges that Chevron used the altered document to dupe them into endorsing the company’s sampling protocol. 

They are Dr. Pedro J. Alvarez currently the chair of the Department of Civil and Environmental Engineering at Rice University, and Dr. Douglas Mackay, an adjunct professor at the University of California, Davis.

The smoking gun document shows that Chevron's legal team concocted a plan to guarantee the company would find only "clean" soil samples from dozens of contaminated well sites inspected by the court while "dirty" samples would be sent to a secret laboratory where they would not be disclosed.

But don't take our word for it. Check out a comparison of a "before" and "after" document. You decide. 

Meanwhile, Chevron, a simple yes or no answer will suffice.

Speaking of “cooked” evidence, read this old Chevron Pit to see how Chevron’s fraud in Ecuador is coming into focus. 


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Monday, January 30, 2012

Chevron’s Deceit Exposed In “Legal Misapprehension” Ruling

Less than 24 hours after the U.S. Second Circuit Court of Appeals threw out Chevron's case against a group of Ecuadorian indigenous peoples, the oil giant's CEO John Watson accused them of fraud in an analyst call, while trying to explain his $18 billion problem in Ecuador and his $11 billion one in Brazil.

Yet, a close read of the court's opinion reveals Watson’s lawsuit itself was the actual fraud that not only cost the indigenous groups greatly -- both emotionally and financially -- but also delayed a cleanup of the oil company's toxic mess in the Amazon rainforest that is costing lives.

Last week the three-judge panel dismissed in its entirety a lower court ruling that sought to block enforcement of the $18 billion Ecuador judgment against Chevron for the deliberate and massive contamination of the Amazon rainforest.

Judge Gerard Lynch wrote that lower court’s "endorsement" of Chevron's "theory of relief" was a "legal misapprehension."

We don't use the word "misapprehension" a lot. Here are a few synonyms, according to Thesaurus.com:
absurdity, blunder, boo-boo, delusion, fallacy, falsehood, goof, howler, screamer, screw-up, sin, transgression, trespass, untruth, wrongdoing
Chevron’s “theory of relief” revolved around twisting a New York state statute used to enforce foreign judgments to make it an affirmative weapon to block the enforcement of foreign judgments anywhere in the world. 
 
The theory was opposed by almost every legal academic the world over, many of whom filed amicus briefs explaining how absurd it was for a U.S. trial court judge to think he could dictate to judges around the world how they should rule on the enforceability of a foreign country's judgment. See here and here.

Chevron sold off its holdings in Ecuador in anticipation of an adverse judgment in that country, forcing the rainforest communities to consider standard collection actions against company assets around the world. 
 
The panel wrote that the Recognition Act "nowhere authorizes a court to declare a foreign judgment unenforceable on the preemptive suit of a putative judgment-debtor (Chevron) .... (the act) and the common law principles it encapsulates are motivated by an interest to provide for the enforcement of foreign judgments, not to prevent them." (Emphasis added.)
 
So, Chevron was allowed to drag the Ecuadorians, their country, and their courts threw the mud for almost a year due to a legal "boo-boo" and a "goof".
 
The appellate panel also wrote that concerns about jurisdictional mutual respect among countries become "far graver" when "a court in one country attempts to preclude the courts of every other nation from ever considering the effect of that foreign judgment .....
 
"In such an instance the court risks disrespecting the legal system not only of the court in which the judgment was issued, but also of those other countries, who are inherently assumed insufficiently trustworthy to recognize what is asserted to be the extreme incapacity of the legal system from which the judgment emanates."
 
The lower court, the panel wrote, did not address the legal rules that would "govern enforceability of an Ecuadorian judgment under the laws of France, Russia, Brazil, Singapore, Saudi Arabia or any of the scores of countries, with widely varying legal systems, in which the plaintiffs might undertake to enforce their judgment."

That's some humbling stuff for Chevron and its theory of relief.


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