Federal Judges Beginning To Question Chevron Legal Strategy In Ecuadorian Lawsuit

Amazon Defense Coalition
7 October 2010 – FOR IMMEDIATE RELEASE
Contact: Karen Hinton at 703-798-3109 or karen@hintoncommunications.com

New York, New York -- Federal courts are beginning to raise questions regarding Chevron’s efforts to use the U.S. legal system in service of an effort by the oil giant to derail a potential multi-billion dollar environmental lawsuit in Ecuador, according to a review of several U.S. federal court decisions.

In court orders stretching across various federal jurisdictions, federal judges and magistrates have suggested that Chevron’s litigation tactics are “spiraling out of control;” that the company is “making a mountain out of molehill;” that the company is trying to “use” federal courts to retry its case in Ecuador; and, that Chevron wanted the case tried in Ecuador when the government was “in the pockets of oil companies” but now wants it back in the U.S. because it no longer can exercise political influence over Ecuador's courts.

Chevron has filed discovery lawsuits against 23 persons in the United States (including two lawyers) associated with the case in Ecuador. Most of the discovery sought by Chevron concerns materials prepared by consulting experts and provided to a court-appointed expert, Richard Cabrera who adopted some of the materials pursuant to various court orders in Ecuador. Chevron chose to boycott working with Cabrera but did provide materials to a variety of other experts.

Prof. Cabrera’s report eventually found that the evidence presented at court overwhelmingly indicates that Chevron was responsible for the contamination of a swath of rainforest the size of Rhode Island by illegally dumping oil-related waste from 1964-1990. Cabrera estimated that the company may face as much a potential liability of as much as $27.3 billion to remediate the damage.

The lawsuit against Chevron was originally filed in the U.S. in 1993. In 2002, after Chevron filed 14 sworn affidavits praising Ecuador’s judiciary as unbiased and fair, the case was dismissed out of U.S. court and was transferred to Ecuador, where it was refilled in 2003.

Plaintiffs have charged Chevron’s discovery efforts are a misrepresentation of the trial record in Ecuador and nothing more than a sideshow designed to distract attention from the voluminous scientific evidence before the Ecuador court that points to its culpability.

A summary of the some of the questions raised by some of the judicial officers overseeing Chevron’s U.S. lawsuits:

• Judge Fortunato P. Benevides, a member of the Fifth U.S. Circuit Court of Appeals, said that Chevron used “hyperbole” and was “throw(ing) these words like massive fraud” in its allegations that the plaintiffs “colluded” with a court-appointed expert.

• Judge Benevides said that “in the system that they (Ecuadorians) have, they have an inquisitorial system, and they gather evidence. They--they gather evidence from different folks. I mean, that’s just the way they operate, and then they--then they make their report, and the Court either adopts it or doesn’t. It’s not--it’s not the--it’s not the system—oral system that we have in the United States. I mean, the fact that things were turned over to [a court expert] doesn’t bother me at all. I think the question is was he supposed to report the documents...that he referred to…because he’s supposed to be independent, and--and--and you’re not entitled-- you’re not entitled…not to have him talk to people he wants to or gather information that you don’t want him to get, but you are en-, it sounds like, you’re entitled to know, under the Ecuadorian order, what he referred to. …. That’s all you’ve got. I mean, you can throw these words about massive fraud and, uh, all this hyperbole, but that’s--that’s what this case is about….. you’re making a mountain out of a molehill. This is a very simple case. Either Cabrera’s being honest when he doesn’t provide (consultant) materials as a source for his report, or he’s not being honest about that, and that’s just--that’s--that’s it.”

• Judge Benevides emphasized that the company’s stated purpose of its discovery lawsuits has been met and is before the Ecuadorian court to determine any misconduct.

• Judge Benevides said: “Well, if you’ve already shown that--wait a minute, if you’ve already shown that, why--and--and if what you’re saying is true, then you’ve already got what you want to get to the Ecuadorian Court; that there’s a, uh, that there’s already been, uh, a fraud perpetrated on the Ecuadorian Court, haven’t you, I mean, uh, how can you say that you’ve already got Cabrera’s line? That’s what you’re trying to--to--to develop by this evidence, right?.....And if you’ve already proved it, you don’t need it, do you?”

• Magistrate Judge Joe B. Brown said that what should be a limited proceeding is quickly “spiraling out of control.” Judge Brown ruled that the oil giant cannot “use” the U.S. federal court “to try a dispute that is pending in a foreign proceeding.”

• Judge Brown wrote that the discovery proceeding initiated by Chevron “is not an opportunity to put on a full trial” and ruled that “Chevron is not entitled to pierce the work-product protection…because it has not shown the ‘exceptional circumstances’ required” by the Federal Rules of Civil Procedure.
• Judge Brown noted "The case against Chevron is being heard in Ecuador at the request of the company after 30,000 Ecuadorians originally filed suit in U.S. federal court in 1993.“Chevron had the opportunity to litigate this matter in the United States and strongly opposed jurisdiction in favor of litigating in the Ecuadorian courts. While fraud on any court is a serious accusation that must be investigated, it is not within the power of this court to do so, any more than a court in Ecuador should be used to investigate fraud on this court.”

• In an appeal to the U.S. Court of Appeals for the Second Circuit, Judge Gerard E. Lynch referenced Chevron’s allegations that Ecuador’s judiciary is unfair or biased, saying “Well yes, you you…like the Ecuadorian Court when they were in the pockets of the oil companies and you don’t like them now that they’re in the pocket of a populist regime that doesn’t like your oil companies.”

• U.S. District Judge Marcia Crone asked a Chevron lawyer about the company’s effort to have the case transferred to Ecuador: “Weren’t you trying to circumvent the procedures of the Ecuadorian Court?....You’re not getting what you want there, so now you come to the United States and--where there’s more liberal discovery allowed perhaps than in Ecuador, and I--and I think that you, in the first place got a forum non conveniens dismissal from - - in the United States in favor of having procedures in Ecuador, and now maybe this is kind of what you bargained for.”

Read More

New Discovery Shatters Oil Giant’s So-Called “Evidence” Against Ecuadorians in Multi-Billion Dollar Contamination Lawsuit

They say a picture is worth a thousand words but, as the Ecuadorian plaintiffs have learned, a manipulated video can be worth a thousand lies. Take the inaccurate translation that Chevron has offered into evidence in its last-ditch effort to discredit the Ecuadorian eco-disaster lawsuit against the oil giant. This new discovery has shattered a key piece of evidence that the company said proved “collusion” between the plaintiffs and a court-appointed expert. Chevron’s lawyers intentionally misled U.S. federal courts with inaccurate and hidden translations. It’s not the first time Chevron has lied to courts, both here and in Ecuador. Read the press release below.

Chevron Misleads U.S. Courts with Inaccurate Translation in Multi-Billion Dollar Ecuador Contamination Lawsuit
Gibson Dunn’s Aggressive Legal Strategy Backfires In Federal Court

Amazon Defense Coalition
1 October September 2010 – FOR IMMEDIATE RELEASE
Contact: Karen Hinton at 703-798-3109 or Karen@hintoncommunications.com

New York, New York – Chevron has been submitting an inaccurate and misleading translation to U.S. federal courts as part of its effort to evade liability in the multi-billion dollar Ecuador environmental lawsuit, according to court papers filed recently.

Chevron’s lawyers at Gibson Dunn & Crutcher, who recently took over the Ecuador litigation for the company, submitted a highly misleading and inaccurate translation of lead Ecuadorian attorney Pablo Fajardo describing the role of court-appointed expert Richard Cabrera. Attacking Cabrera, who in 2008 submitted a damages assessment against Chevron of $27 billion, has been the centerpiece of the oil giant’s strategy to discredit the Ecuadorian judicial system to defeat enforcement of an expected adverse judgment.

Gibson Dunn brags on its website that its litigators in the Ecuador case have been described by American Lawyer magazine as the “Game Changers”; the firm notes that “clients in deep trouble turn to Gibson Dunn for fresh, aggressive thinking and innovative rescues.”

In a brief filed on Sept. 28 by representatives of the Amazonian communities in federal courts in New York and elsewhere, the plaintiffs blast Chevron for its erroneous translation of comments made by Fajardo. According to Chevron’s translation of a 2007 meeting, Fajardo told a group of scientists in Quito that Cabrera would simply “sign the report and review it.”

According to an accurate translation of the exchange, Fajardo actually said that what Cabrera “will do is give his criteria… right… his opinion, and sign the report, and review as well.”

Chevron also excluded from its court submission the contemporaneous translation of Fajardo during the meeting, which verifies that Chevron’s translation was manipulated.

"What Fajardo actually said in the meeting is radically different from what Chevron claimed he said via its bogus translation," said Karen Hinton, a spokeswoman for the communities. "Once again, Chevron is misrepresenting facts to courts around the country in support of its contrived 'fraud' narrative."

"When the facts don't fit the contrived narrative, Chevron's lawyers seem content to just make them up," she added.

Chevron has claimed to U.S. courts that ex parte contacts with experts in Ecuador is illegal, when in fact the practice was commonly used by both parties and sanctioned by the court, said Hinton. Lawyers on both sides of the dispute were invited by the court to provide materials to Cabrera and other experts; Cabrera and these other experts adopted some of the materials provided by the parties.

The plaintiffs also have submitted evidence that Chevron's lawyers, on a regular basis, met ex parte with judges overseeing the trial.

This is not the first time that Chevron has manipulated the meaning of translations for legal or public relations purposes.

In 2009, Chevron accused the Ecuadorian judge then presiding over the case of saying an appeal by Chevron of an adverse decision would only be a "formality" when what he actually said was the parties would have to observe the "formalities" of the appeals process. Chevron then used the misleading translation to claim to the media that the judge had "fixed" the trial.

So far this year Chevron has sought to depose 23 persons in the U.S. associated with the Ecuador case, including two lawyers who have represented the plaintiffs.

Chevron’s strategy of using U.S. discovery rules to harass the Amazonian communities in Ecuador – termed “abusive litigation” by the plaintiffs -- has not gone unnoticed. One U.S. federal magistrate judge recently ruled that Chevron’s discovery strategy is “spiraling out of control” and is an attempt to circumvent the rules of Ecuador’s courts, where Chevron had the trial moved after it was originally filed in U.S. federal court in 1993.

Read More

Almost 10,000 Ecuadorians Face Risk of Dying From Contamination

Chevron argues the that lawyers for the Ecuadorian communities have submitted inflated damage claims as the oil giant seeks to derail the lawsuit against it for extensive oil contamination in the rainforest. That argument has now been turned on its head. Last week, several leading American technical experts submitted damage estimates on behalf of the Amazonian communities that found costs higher than those found in the earlier Cabera report, which calculated damages at $27 billion. One reason the damages assessment rose is because the American experts -- using official mortality and census data -- found that 10,000 Ecuadorians risk death from cancer in the coming decades as a result of Chevron’s contamination, even if the contamination is cleaned up over the next ten years. The truth is the Ecuador rainforest will never be the same due to Chevron’s contamination, and no amount of money will ever restore it to its original condition. But whatever can be done to address the contamination should be done – and Chevron, as the operator responsible for the contamination, should take the lead in fixing it just like BP is doing in the Gulf of Mexico. Below is the press release about the new economic valuation analyses of damages in Ecuador’s rainforest -- valuations prepared by American experts that put the lie to Chevron's claims about "fraud" in the Cabrera report.

Uterine cancer victim Rosana Sisalima with her granddaughter

at their home in San Carlos on November 24, 2004.

Rosana succumbed to cancer in 2006.

Chevron Faces Tens of Billions in Clean-up Costs
Top American Technical Experts Weigh In On High-Profile Damages Case

Lago Agrio, Ecuador (September 17) – A group of highly respected American technical and medical experts, using conservative assumptions, have concluded that it could cost Chevron up to tens of billions of dollars to clean up oil waste discharged into Ecuador’s rainforest and compensate local communities for the damage it caused over the 26 years it operated a large oil concession, according to valuation assessments submitted Thursday to the Ecuador trial court.

Relying on official Ecuador census and mortality data, as well as relevant studies, the analysis finds that what is believed to be the world’s largest oil-related catastrophe likely will cause nearly 10,000 Ecuadorians to be at significant risk of dying from cancer by the year 2080 even if Chevron cleans up in the next ten years. The numbers could rise substantially if no remediation takes place.

The assessments analyzed numerous categories of damages, including soil and groundwater contamination, drinking water, excess cancer deaths, natural resources damage, and health costs. While the high end of the damages range of $113 billion is substantially greater than the $27.3 billion damages number set forth in a report in 2008 by court-appointed expert Richard Cabrera, some categories of damages were found to be lower than those estimated in that report.

For example, the combined cost of clean-up for soil and groundwater contamination in the new analysis – which relied mostly on Chevron’s own internal environmental audits -- at the high end of the range was roughly $1.8 billion, compared to more than the $5 billion estimate in the earlier Cabrera report. The analysis found the existence of other categories of contamination, such as oil sediment in rivers, but they could not be accurately quantified.

The differences in the soil and groundwater remediation numbers is largely a function of the fact the new analyses used far more conservative assumptions than the Cabrera report. For example, the Cabrera report concluded soil should be cleaned to a depth of five meters, while the recent analysis assumed only four meters.

A large portion of the damages in the new analyses can be attributed to Chevron’s “unjust enrichment” – money saved by using sub-standard drilling practices – and compensation for potential excess cancer deaths that have a significant chance of occurring in coming decades due to exposure to cancer-causing crude oil. Most of the damages in the Cabrera report were from the same two categories.

“The new valuation analyses are different, in many ways, than the damage assessment report from 2008 but both present reasonable and sound assessments based on the evidence,” said Pablo Fajardo, the lead lawyer for the Amazonian communities suing the oil giant.

“The Ecuador court has more than enough evidence and expert analyses to determine the cost of remediating the extensive oil pollution that has devastated thousands in the region for decades,” Fajardo added. “There are more than 100 different expert reports in evidence, dozens of them produced by Chevron, which overwhelmingly demonstrate extensive contamination at all of Chevron’s former oil production facilities.”

The new damages analyses came in a supplemental report submitted by lawyers for the dozens of Amazon communities suing Chevron for what is believed to be the world’s worst oil-related disaster – larger than the size of the BP Gulf spill. Unlike the BP Gulf spill, the Ecuador disaster has been contaminating the rainforest ecosystem for almost 50 years.

Ecuadorian law provides that the court can consider the supplemental information when reaching a decision, but under Ecuadorian law the judge is under no obligation to adopt the estimates. Chevron, which has attacked the credibility of Cabrera’s damages assessment, had the opportunity to submit its own valuations analysis but the company previously indicated it would boycott the process.

Lawyers for the affected communities have asserted Chevron has been trying to sabotage the Ecuador trial by bombarding the court with frivolous motions and boycotting any part of the case that addresses damages. The indigenous and farmer communities first filed the lawsuit in 1993 in U.S. federal court, but it was shifted to Ecuador at Chevron’s request.

“The information in this submission is highly significant because it reflects clearly that there is a terrible oil-related disaster in Ecuador in the area where Chevron operated,” said Fajardo.

“What these analyses make chillingly clear is that thousands of Ecuadorian citizens may well contract and die of cancer in the coming decades because of Chevron’s contamination,” he added.

The analyses, based largely on technical information found in the 200,000-page trial record and relevant studies, found the following damages:

· Soil Remediation: A conservative estimate of potential costs to remediate contaminated soils at all of Chevron’s 378 former oil production facilities in Ecuador ranges from $487 million to $949 million depending on the clean-up standard used. The actual cost could be significantly higher.

· Groundwater Remediation: Based on data in the trial record, the range for clean-up of groundwater is $396 million to $911 million.

· Rivers and wetlands: Data indicates that sediment contamination exists, but no clean-up number was presented pending further investigation.

· Health Care: Using recent data from the World Health Organization and the Ecuadorian Ministry of Health, an estimated $1.4 billion will be needed to provide health care to the thousands of affected persons over the next three decades.

· Drinking Water: Degradation of the environment with petroleum hydrocarbons associated with Chevron’s production activities has been documented at numerous locations. The cost of a comprehensive series of regional water systems is estimated to be between approximately $326 million to $541 million.

· Excess Cancer Deaths: Actuarial life-table methodology demonstrates that the aggregate cost of excess cancer deaths due to exposure to oil contamination in the area where Chevron operated could be approximately $69.7 billion. This is the based on the value of a statistical life used by averaging relevant data used in the U.S. court system and by the U.S. Environmental Protection Agency ($7 million for each lost life), and comparing it with official Ecuador mortality data and census information. Up to 9,950 people in the affected area will face a significant risk of dying from cancer in the coming decades even if the area is remediated in the next ten years. Even if the analysis stops in 1990 – the year when Chevron ceased being the operator of the oil fields – the aggregate cost of excess cancer deaths is still estimated at $12.1 billion based on 1,732 deaths from cancer. (The earlier Cabrera report estimated 1,401 deaths from cancer, but he did not project future deaths.)

· Natural Resources Losses: This estimate is based on the evidence that concentrations of petroleum hydrocarbons and harmful metals in soil, groundwater, and surface water have exceeded levels considered to be toxic to terrestrial and aquatic biota. While determining the exact values of service losses in the rainforest with precision is not possible, it is not clear that further studies would produce a range of plausible values different from the range posited earlier by Mr. Cabrera – approximately $874 million to $1.7 billion, depending on the methodology employed.

· Unjust Enrichment: Chevron’s unjust enrichment ranges from $4.57 billion to $9.46 billion assuming a 100% probability of detection and ultimate payment, and from $18.26 billion to $37.86 billion assuming a 25% probability of detection and ultimate payment. Given the evidence of Chevron’s malfeasance in Ecuador, the plaintiffs assume the company had at best a 25% probability of detection and ultimate payment, and therefore the unjust enrichment award should at minimum range from $18.26 billion to $37.86 billion. This is a conservative figure, as in reality it is highly unlikely that Chevron believed it had more than a 10% probability of detection and ultimate payment.

· Cultural Impacts on Indigenous Groups: Representatives of the Amazonian communities, noting the acute interdependence between indigenous groups and the rainforest ecosystem, analyzed the impact of hydrocarbon contamination on indigenous culture. The team reviewed economic valuations to repair the loss of cultural and ancestral practices, including a program to purchase unspoiled land, and to construct pools of native fishes and centers to restore flora and fauna. The cost for this restoration is estimated at $481.5 million.

The analyses were submitted by the following scientists and technical experts:
· Douglas Allen, who has 25 years of experience as an environmental consultant working in soil and groundwater remediation;
· Dr. Lawrence Barnthouse, one of the nation’s leaders in ecological risk assessment and a Fellow at the American Association for the Advancement of Science;
· Carlos Emilio Picone, a medical doctor certified in critical care medicine and Chief of the Pulmonary Section at Sibley Memorial Hospital in Washington, D.C.;
· Jonathan S. Shefftz, a financial economist from Harvard who has performed economic modeling on theories of unjust enrichment for the U.S. Environmental Protection Agency and the U.S. Department of Energy;
· Dr. Daniel L. Rourke, who has extensive experience applying advanced statistical techniques to solve complex litigation problems; and
· Dr. Robert Paolo Scardina, a civil and environmental engineer and member of the faculty at the Virginia Polytechnic Institute.

The analyses in both English and Spanish, as well as background information on the scientists, can be found at http://www.chevrontoxico.com/

Read More

Chevron Critical of Cabrera’s Damages But Won’t Submit Its Own Estimate

Over 100 Expert Reports Show Contamination That Oil Giant Hides From US Judges

Chevron, you are getting what you asked for! Now what’s the problem? Chevron lawyer Andrea Neuman has said the oil giant simply wants to “get to the truth” about the oil contamination in the Amazon rainforest, yet Neuman and other Gibson Dunn lawyers are refusing to adhere to a court order requiring them to submit their own damage assessments reports about the extent of the contamination and the cost to remediate it.

New damages assessments from both Chevron and the Amazonian communities are due in Ecuador’s court Thursday, but Chevron has indicated it likely will refuse to participate despite complaining previously it never had the opportunity to submit its own damages report. For more than two years, Chevron has protested a previous $27 billion report submitted by court-appointed expert Richard Cabrera.

“We predict that Chevron’s bad faith will be on full display yet again,” said Pablo Fajardo, the lead lawyer for the Amazonian communities. “Chevron complained that it did not have an opportunity to produce its own damages assessment. But when given the opportunity, company lawyers accuse the judge of bias against Chevron and launch attacks on the justice system.”

Fajardo said the Amazonian communities will submit their own damages assessment to the court on Thursday and that it was prepared by a team of scientific and medical experts. Chevron, on the other hand, recently filed a motion in Ecuador to remove the judge and cited the order asking for the new damages assessments as a basis.

Chevron has filed 104 separate motions before the Ecuador court in the last several weeks as part of a strategy to delay the trial, which has been litigated now for seven years, said Fajardo. Most of the recent motions concern efforts to nullify the report of Cabrera, who in a 4,000-page summary of the evidence found Chevron could be liable for up to $27.3 billion in damages.

The $27.3 billion would only partially clean up the damage given that a significant portion of the harm caused by Chevron to the delicate rainforest ecosystem can never be fully remediated, said Fajardo.

As an example of Chevron’s abuse of the judicial process, in just one 30-minute period on August 5 – just three days after the court ordered the parties to submit their own damages assessments – Chevron bombarded the court with 19 separate and largely repetitive petitions, said Fajardo.

“It’s extraordinary how Chevron tries to abuse the judicial process while thousands of people, many sick from cancer, cannot afford to pay for the most basic medical treatment,” he said. “Tragically, many suffering people will not live long enough to see justice done.”

He added: “Chevron’s actions demonstrate the company’s blatant disregard of the people of Ecuador and prove its double standard in asking that the case be tried here. No litigant, including Chevron, would ever get away with this in the United States.”

Chevron is accused in the lawsuit of deliberately dumping billions of gallons of toxic waste into Amazon waterways when it operated a large oil concession from 1964 to 1990. Independent studies demonstrate cancer rates in the area are higher than in other parts of Ecuador, and several indigenous groups have seen their traditional lifestyles decimated.
After the communities submit their new damages assessment to the court on Thursday, the judge will have in evidence 105 expert reports and more than 64,000 chemical sampling results from dozens of former Chevron well sites, all of which show extensive contamination, said Karen Hinton, a spokesperson for the communities.

Most of the evidence comes from Chevron’s own sampling, which alone prove the claims in the lawsuit, said Hinton. In all, the court has voluminous scientific evidence to impose liability and damages on Chevron independent of the Cabrera report, she added.

In the meantime, Chevron’s outside counsel at Gibson Dunn & Crutcher have filed a series of discovery actions in U.S. federal courts where they claim there is no evidence of contamination left by Chevron in Ecuador – a blatant misrepresentation, said Hinton.

“The company’s own test results in Ecuador show that Chevron’s lawyers are mischaracterizing the entire case before U.S. courts,” said Hinton. “What’s worse is that these misrepresentations have grave human consequences.”

The case against Chevron was originally filed by 30,000 rainforest residents in 1993 in U.S. federal court, but was shifted to Ecuador at Chevron’s request in 2002. Once the trial evidence in Ecuador pointed to a possible multi-billion dollar judgment against Chevron, the company launched a public relations and lobbying campaign to discredit Ecuador’s justice system as well as the lawyers who represent the communities.

As a condition of the removal of the case from U.S. federal court to Ecuador, Chevron promised to subject itself to jurisdiction in Ecuador and to satisfy any judgment imposed by Ecuador’s courts.

Read More

Fortune's Roger Parloff Sucked In By Chevron Spin

More headlines on Chevron’s fraud. A post on ChevroninEcuador.com:


Enough to Make You Sick: Chevron's Successful Spin & Toxic Lies in Ecuador

Yesterday, I began my workday drinking coffee and reading over a brutal article on Fortune.com by legal reporter Roger Parloff, entitled Evidence of fraud mounts in Ecuadorian suit against Chevron.
My hopes that the article would help to highlight Chevron's long history of corruption and fraud were quickly dashed... it was not exactly the start to the week I had hoped for.

As I read Parloff's review of the latest in the titanic legal battle to force Chevron to clean up its poisonous legacy in the Ecuadorian Amazon, my chest tightened as it ocurred to me how good Chevron has become at making this case about everything except for the ravaged rainforest and the men, women, and children who have suffered over the decades due to the oil giant's greedy, reckless, behavior.

The article begins:

Over the past ten months, Chevron's outside lawyers at Gibson, Dunn & Crutcher have filed 11 civil actions in federal courts across the United States, each designed to pull back the curtain on what they say is an elaborate, two-year-long charade in which plaintiffs lawyers covertly planned and ghostwrote a crucial report on damages that was ostensibly being authored by an independent expert appointed as an "auxiliary" to the Ecuadorian court. The expert's final report, issued in November 2008, recommended that Chevron pay the plaintiffs $27.3 billion.

And throughout the article, Parloff does an exceptional job at presenting the story as if it wasn't lifted almost entirely from a bunch of Chevron talking points. The gist of Chevron's claim is that the lawsuit against the company is a giant baseless swindle concocted by contingency fee lawyers looking to get at the oil giant's deep pockets. And now, as Parloff's writes, Chevron's multiple discovery actions – most notably its successful subpoena of hundreds of hours of outtakes from Joe Berlinger's documentary film CRUDE – have produced evidence that the plaintiffs attorneys have engaged in fraud.

Except that neither Parloff, nor any of the federal judges who have opined about the case in rulings granting Chevron's motions for discovery, have any basis upon which to draw their conclusions except for Chevron's self-serving, dishonest, and, apparently, superbly-made arguments.

In fact, as the lawyers for the Ecuadorians noted in a response to Parloff's article:

"...Parloff has never been to Ecuador, never examined the 200,000-page trial record, never seen an original lab report from the 64,000 sampling results at trial, never talked to any witnesses who have testified in the case, and utterly fails to understand either the enormous quantum of evidence or the procedural rules that govern trials in Chevron’s preferred forum of Ecuador."

A major focus of Chevron's latest legal & PR blitz is the relationship between the plaintiffs and court-appointed expert Richard Cabrera. Unsurprisingly, this is also the major focus of Parloff's article.

Richard Cabrera is the court-appointed expert who was asked to come up with an overall damages assessment – in the end, $27.3 billion – to assist the judge overseeing the trial in Lago Agrio to make a final ruling about Chevron's liability for massive oil contamination across a vast swath of the Ecuadorian Amazon.

Parloff rolls with Chevron's cynical narrative:

Chevron claims that the logs already prove that the plaintiffs' consultants ghostwrote Cabrera's report, and the plaintiffs lawyers do not deny that they and their consultants provided materials to Cabrera.

He then goes on to detail the ex parte contacts between the plaintiffs side and Cabrera as if it's a smoking gun (ex parte is a Latin legal term that in this context refers to contacts between one party and the court or experts without the opposing party present).

But, as the plaintiffs explain in a legal filing in U.S. Federal Court opposing a subpoena served upon the lead U.S. attorney in the case (an extraordinary over-reach unto itself):

“Ex parte” contacts with Mr. Cabrera remain at the heart of this petition, yet (i) the matter of contacts between Plaintiffs and Cabrera is undisputedly before the Lago Agrio Court, and that court has given no indication that such contacts are improper; (ii) Chevron has still not denied it that also had ex parte contacts with court experts in Lago Agrio; and (iii) Chevron still cannot point to a single order, rule, regulation, or law prohibiting such contact; to the contrary; it is reduced to relying on lengthy expert opinions to resolve what it had claimed was a cut and dry example of fraud under Ecuadorian law.

Chevron complains about the “ghostwriting” of expert reports, yet it has become clear that Chevron’s private expert, John A. Connor, ghostwrote part of the report of another independent, neutral court expert in Lago Agrio: Mr. Barros. Attached as Exhibit 67 is a report Chevron’s private expert, Mr. Connor, prepared dated June 16, 2005 titled Prácticas y Reglamentos Internacionales Para el Uso y la Remediación de Piscinas de Campos Petroleros. Apparently without any attribution, the neutral and independent expert appointed by the Lago Agrio Court, Mr. Barros, copied entire pages of Chevron’s report, word for word.

The legal memorandum continues:

Nowhere does Barros appear to acknowledge that he has cut and pasted Chevron’s expert’s materials into his own avowedly neutral and independent report. Does Chevron deny it had ex parte conduct with Barros? It does not.

Is it a miraculous coincidence that an entire section of the Barros report is a clever cut and paste of disparate portions of Chevron’s work product? It is not.

By Chevron’s argument, this is fraud on the court, collusion with a neutral, independent expert, and criminal conduct that should send the people at Chevron who engineered the fraud to jail.

Chevron also fails to refute the now-undisputed declarations that Chevron’s lawyers met secretly and repeatedly not just with experts, but with the Court, and specifically discussed the Lago case. When this ex parte conduct was exposed, Chevron’s security guards tried to keep plaintiffs’ representative away. This secret contact was pursued by Chevron’s counsel, yet counsel is completely silent in Chevron’s opposition: not one declaration, not one response on the facts. If it is acceptable for Chevron’s lawyers to meet ex parte with the Court itself, why is it unacceptable for plaintiffs to meet “ex parte” with an expert? Chevron does not and cannot explain.

Evidently, Parloff has chosen the convenient path of simply ignoring the plaintiffs' thorough debunking of Chevron's breathless accusations.

In a brief aside, Parloff writes:

It should be noted that the fraud claims -- even if true -- do not necessarily impugn the legitimacy of the Indians' underlying cause, or even the genuineness of their lawyers' belief in that cause..."

But as Parloff also notes, to the certain gratification of Chevron and its highly-paid American corporate lawyers, legitimacy of the indigenous communities' cause – and the reality of their continued suffering – won't necessarily secure them justice in court.

I'm not sure what is more devastating about an article like this, but either choice is just a different side of the same coin. Yesterday, I was saddened that a man as smart as Parloff can be so completely taken in by the dishonest narrative that Chevron has spun. Today, I'm sickened by how astonishingly good at their devious task the Chevron lawyers and spinmasters have grown to manipulate a man as smart as Parloff.

Chevron has scored another PR victory, yes. But the truth, as I've said before, has a way of bubbling to the surface like crude in the Amazon.

Concluding their response to Parloff's article, and to Chevron's increasingly dishonest and abusive legal tactics, the lawyers for the communities in Ecuador write:

Chevron’s problem in Ecuador is that it is losing the case based on the evidence and that its own officials are under criminal indictment for fraud related to a sham remediation. The real story is that the evidence convincingly demonstrates that an American company went to a foreign nation and deliberately devastated the Amazon rainforest environment out of greed. The destruction was done in violation of Ecuadorian laws, industry standards, Chevron’s own operating contract, and all sense of basic decency. Chevron’s allegations of “fraud” are themselves part of an elaborate scheme to cover up the company’s pervasive illegality in its Ecuador drilling operation and in its advocacy during the trial.

– Han

Read More

Chevron Caught Misrepresenting Facts about Expert Report in Ecuador Trial

In its latest attempt to evade a $27 billion liability in Ecuador, Chevron is misrepresenting key facts about a court-appointed expert who conducted a damages assessment not to the company’s liking, representatives of the plaintiffs announced today.

“Chevron is again trying to strong-arm the court by misrepresenting facts,” said Steven R. Donziger, an American legal advisor to the plaintiffs. “This is part of an underhanded attempt to derail a trial Chevron is losing based on the voluminous scientific evidence.”

On Tuesday, Chevron in a press release announced it had “newly discovered” evidence that the court-appointed Special Master who conducted a damages assessment, Richard Cabrera, owns a remediation company in Ecuador that stands to benefit from a clean-up should the plaintiffs win the case. The filing is the 29th official motion Chevron has made to the court to disqualify Cabrera but the court has never accepted Chevron’s arguments, said Donziger.

For more details about Chevron’s misrepresentations, see this response: http://chevrontoxico.com/assets/docs/2010-02-09-cabrera-response.pdf

Chevron is accused in the underlying lawsuit of deliberately dumping more than 18 billion gallons of waste into Ecuador’s Amazon when it operated oil fields in that country from 1964 to 1990, causing a spike in cancer rates and decimating indigenous groups. The communities claim the pollution left is still leaching into soils and groundwater and has poisoned an area the size of Rhode Island.

Cabrera, working with a team of 14 scientists, found damages could be as high as $27.3 billion. A court will make a final determination on liability and damages later this year.

According to Pablo Fajardo, the lead Ecuadorian lawyer in the case, in its latest court filing Chevron fails to note that:

• Cabrera disclosed to the court that he owned a clean-up company before his appointment as Special Master. This fact was properly cited by the court as one of the reasons he was qualified to do the damages assessment.
  
• Chevron thought so highly of Cabrera’s qualifications that it accepted him as a court-appointed expert in an earlier part of the case and paid his fees as required by court rules.
  
• The fact Cabrera’s company is qualified to bid on clean-up contracts offered by Ecuador’s state-owned oil company is irrelevant. That company, Petroecuador, is not a party to the case against Chevron and would have no role in any eventual cleanup.
  
• Cabrera by virtue of his role in the case would be barred from having a role in a future clean-up.
  
• Chevron misrepresents Cabrera’s role. Contrary to Chevron’s assertions, Cabrera did not rule on the critical question of liability and did not “exculpate” Petroecuador. Liability can only be determined by the court.

The case was transferred in 2002 to Ecuador from U.S. federal court (where it was originally filed in 1993) at Chevron’s request. Once the trial began in Ecuador in 2003 and the evidence pointed to Chevron’s culpability, the company began to try to delay the proceedings and discredit the court and Cabrera.

In the 1990s, in its effort to move the case to Ecuador, Chevron filed 14 sworn affidavits in U.S. federal court praising the fairness and competency of Ecuador’s courts. Once it was clear the company could lose the trial in Ecuador, Chevron filed multiple legal actions in the U.S. to shift the potential liability to Ecuador’s government, said Donziger.

Not one of the U.S.-based legal actions -- including one that was denied by the U.S. Supreme Court -- have succeeded. Chevron’s latest move is to seek a closed-door international arbitration under a trade pact between the U.S. and Ecuador, but the Amazon communities and Ecuador’s government have filed separate motions in U.S. federal court to block that proceeding, said Donziger.

“Chevron loses credibility in front of the court and the world each time it files a frivolous motion based on unsubstantiated facts,” said Donziger. “Each of these motions is part of an evidentiary record that we will use to prove that Chevron completely abused the court process in Ecuador to evade a judgment, in violation of the law.”

“We believe all of these Chevron attacks will backfire against the company in a later enforcement action to collect on any judgment,” said Donziger. “Judges are not as naïve as Chevron seems to think they are.”

Read More