Ahead of Trial, Chevron Drops $60 Billion Damages Claim Against Ecuadorians in RICO Suit; Maneuvering to Avoid Airing of its Crimes in Ecuador

In a clear 11th-hour retreat that suggests it does not believe its own allegations, Chevron has taken the extraordinary step of pleading with a U.S. judge to block a jury from deciding its retaliatory “fraud” and RICO claims against Ecuadorian villagers and their U.S. lawyer. The company also said it was even prepared to drop a $60 billion damages claim if the judge agrees to deny the defendants a jury trial. Chevron's $60 billion figure is based on three times the $19 billion Ecuadorian judgement, plus costs.

Thus reads the introduction of a press release today—the headline: 'Bombshell Retreat: Chevron Seeks to Drop $60 Billion in Damages In Ecuador Case'—from the Gowen Group, whose founding partner Chris Gowen is serving as an adviser to the Ecuadorians and their longtime New York-based lawyer, Steven Donziger.

Chevron filed a series of motions over the weekend in the retaliatory lawsuit the oil giant filed against Donziger as well as the Ecuadorians whose names appear as representative plaintiffs in the original lawsuit against Chevron for massive contamination of their rainforest communities. Here is the motion dropping its damages claims against the Ecuadorians.

Adviser Chris Gowen said, “Chevron has shown over and over that its only legal strategy is to outspend everyone and continue to run from the law for another twenty years. When a litigant tries to avoid a jury, you can be certain that litigant knows it has no case. This is an extraordinarily telling moment that suggests a collapse of confidence in the Chevron camp.”

The press release continues:

Donziger and his clients have long contended that Chevron’s RICO case was a function of distorted and manufactured evidence helped along by Judge Kaplan, who has consistently made disparaging remarks about Ecuador’s judicial system. Donziger filed detailed counterclaims accusing Chevron of using the RICO case as a smokescreen to hide its environmental crimes, fraud and bribery attempts in Ecuador. (Kaplan has refused to let those claims go forward in the context of the RICO trial.)

And then it quotes Donziger:

“For three years, Chevron has used its RICO suit largely for public relations purposes to falsely taint the Ecuador case and tarnish my personal reputation. When it comes time to put their allegations to the test, Chevron chickens out and runs into the arms of its favorite judge for protection. The entire situation is an affront to American values.”

Advocates for the indigenous and farmer communities in the areas polluted by Chevron have for several years kept a spotlight on exactly why Judge Lewis Kaplan is what Donziger calls “its favorite judge.” He has shown shocking pro-Chevron bias; he calls the environmental lawsuit "a giant game" and the Ecuadorians the “so-called plaintiffs” and refers to them enforcing the judgment they won against the company by saying, "I don't think there is anybody in this courtroom who wants to pull his car into a gas station to fill up and finds that there isn't any gas there because these folks have attached [the company's assets] in Singapore or wherever else."

Donziger and the Ecuadorians have filed a writ of mandamus petition asking the 2nd Circuit Court of Appeals to remove Judge Kaplan for his impartiality in the case. On Sept. 26th, a 3-judge panel from the appellate court will hear arguments on the motion for Judge Kaplan's reassignment from the trial—that is, only a few weeks before the RICO trial is scheduled to begin on Oct. 15th. As the release states, “The scheduling of such an argument just before trial is a rare occurrence and suggests the higher court is watching Kaplan with great scrutiny.”

With these latest court filings, according to Donziger and his team, Chevron's goal is:

to have Kaplan conduct a rapid "show trial" that would bar Donziger and his clients from mounting a meaningful defense. Once Kaplan makes his expected “findings” against Donziger and the Ecuadorians, Chevron would then ask him to re-issue the same controversial global injunction purporting to bar worldwide enforcement of the Ecuador judgment that the Second Circuit Court of Appeals already ruled was illegal in 2011.

The most shocking stuff in Chevron's latest legal machinations is laid out plainly in their summary Notice of Motions in limine, which is an astonishing request to Judge Kaplan that he issues orders that would basically prevent Donziger and the Ecuadorians from mounting any sort of defense, or bring up any evidence of Chevron's contamination of the Ecuadorian Amazon, or its bad faith conduct during the trial in Ecuador.

Here is an excerpt:

Chevron requests that this Court enter an order:

• precluding Defendants from offering at trial evidence, arguments, or questioning in support of the proposition that the findings of the Cabrera report, the Ecuadorian judgment, or Defendants’ allegations in the Ecuadorian proceeding were accurate or supported by evidence and sound scientific analysis, including but not limited to a prohibition on the submission of evidence, arguments, or questioning regarding the following topics, except insofar as the evidence is otherwise relevant: 

• alleged environmental and human conditions in the Oriente region of Ecuador, including scientific or other studies, testing or sampling results, video or still images, or personal testimonies; and 

• the procedures employed in the TexPet Remediation, the efficacy of those procedures, or their compliance with agreements and with Ecuadorian law.

In the motion, Chevron shows real hubris going even further, asking Judge Kaplan to preclude the defendants from raising at trial:

• Chevron’s purported conduct in the Lago Agrio Litigation, including contacts with Ecuadorian government officials, arguments made by Chevron to the Lago Agrio Court, the cancellation and subsequent rescheduling of the Guanta inspection, Chevron’s purported “sting” operation against an Ecuadorian judge, Chevron’s use of a purported “sham laboratory”, Chevron’s purported “procedural misconduct” in filing motions in the Lago Agrio Litigation, Chevron’s purported ex parte contacts with Ecuadorian judges and court experts, any “harassment” supposedly suffered by Defendants or their co-conspirators, and any argument that their actions were justified by virtue of Chevron’s alleged misconduct; 

• Chevron’s conduct in this and other litigation in the United States, including Chevron’s purported misuse of Section 1782 to obtain discovery for use in the Lago Agrio Litigation, Chevron’s subpoenas to email providers seeking information about Defendants and their co-conspirators, and Chevron’s surveillance of Defendants and their co-conspirators; and 

• alleged promises and representations made by Texaco and/or TexPet in the Aguinda litigation.

You can read the entire motion here, and see how Chevron is hoping to abuse the judicial process in this RICO show trial, in a similar way that the company abused the judicial process in Ecuador, in an attempt to evade accountability for its disaster in the Amazon.

But the 2nd Circuit is watching. As are global supporters of the Ecuadorian communities. As are the communities themselves, who continue fighting for justice, despite the abuse they continue to deal with, from the oil-polluted environment they live in to courtrooms thousands of miles away.


For background on how Chevron decimated indigenous and farmer communities by dumping billions of gallons of toxic waste in Ecuador’s Amazon, watch this video overview or this 60 Minutes segment, or review this summary of the overwhelming evidence against the company.  Chevron is now fighting a $19 billion judgment against the company.

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Appeals Court to Consider Removing Key U.S. Judge in Chevron-Ecuador Case

A New York appellate court has said it will consider a petition to reassign federal judge Lewis A. Kaplan from an Ecuador environmental case that resulted in a $19 billion judgment against Chevron.

A press release issued today by the DC-based Gowen Group law firm outlines this potentially game-changing legal update in the case. Founding partner Chris Gowen has taken up duties as an adviser to and spokesperson for Steven Donziger, the New York human rights lawyer who has earned the ire of Chevron for his dogged two-decade effort to bring the oil giant to justice for massive pollution and human rights abuses in the Ecuadorian Amazon.

The press release continues:

The Second Circuit Court of Appeals has set Sept. 26 for oral argument on the petition to reassign the judge, who has been criticized for unfairly promoting a retaliatory Chevron “fraud” case against Ecuadorians villagers and their U.S. counsel. The reassignment petition, which is based primarily on Judge Kaplan’s refusal to follow prior appellate court orders in the case, can be read here and here.

Judge Lewis A. Kaplan is presiding over a lawsuit brought by Chevron against Donziger, Ecuadorian community leaders and Goldman prize winners Pablo Fajardo and Luis Yanza, as well as dozens of the "named plaintiffs" in the original suit against the oil company. Most of the named plaintiffs are from indigenous communities living in an area of the Ecuadorian Amazon devastated by Chevron's oil pollution. These communities have seen their livelihoods destroyed by pollution, their culture decimated by rainforest destruction, and lost loved ones to cancer and other diseases related to the toxins Chevron has admitted dumping into their environment. But that hasn't stopped Chevron from retaliating, and Judge Kaplan has wondered aloud whether these people even exist.

From the press release:

Judge Kaplan has been accused of bias for calling the Ecuador case a "giant game" invented by lawyers to “fix the balance of payments deficit” of the United States. He also referred to thousands of indigenous Ecuadorians as the "so-called" plaintiffs before imposing an illegal injunction purporting to block the Ecuador judgment from being enforced anywhere in the world. For background, see here and here.

Judge Kaplan’s injunction was reversed unanimously in 2011 by a three-judge appellate panel, dealing a stunning rebuke to Chevron’s primary defense in the case. The current petition for reassignment explains how Kaplan has continued to defy that appellate order by issuing a series of decisions disparaging Ecuador’s judicial system.

Donziger and the other defendants in the Chevron's retaliatory RICO case filed what is called a petition for a writ of mandamus, asking the Appeals Court to remove Kaplan form the case due to the bias he has repeatedly shown towards Chevron.

Amazon Watch's Eye on the Amazon blog writes that Kaplan insinuates that an "important company like Chevron should be guarded from judgment collection efforts that apparently might be acceptable if the company were deemed less vital" and quotes Judge Kaplan from an early court proceeding:

"[W]e are dealing here with a company of considerable otherwise importance to our economy that employs thousands all over the world, that supplies a group of commodities, gasoline, heating oil, other fuels and lubricants on which every one of us depends every single day. I don't think there is anybody in this courtroom who wants to pull his car into a gas station to fill up and finds that there isn't any gas there because these folks have attached it in Singapore or wherever else."

Back to today's press release for comment from Chris Gowen, an adjunct professor at the Washington College of Law who is advising the Ecuadorians and Donziger: “Chevron is desperately suing everybody it can to evade a valid judgment won by the rainforest communities the company has contaminated with toxic waste,” he said. “Chevron’s approach is clearly one of the greatest abuses of the legal system ever.”

Judge Kaplan has made numerous rulings and comments that will likely come under additional scrutiny when oral arguments on the mandamus petition take place in front of the Second Circuit Court of Appeals on Sept. 26th.

Already, Chevron has displayed some jitters as the the company's retaliatory lawsuit approaches a trial date. As reported here last week:

In an otherwise routine scheduling conference recently before Judge Lewis A. Kaplan, Gibson Dunn lawyer Randy Mastro suggested the oil giant was prepared to drop all damages claims against the Ecuadorians and their counsel, Steven Donziger, just to avoid a jury trial.

Chevron was hoping that it could get a fraud finding from Judge Kaplan without having a new round of evidence of the company's abuses put under a spotlight before a jury and the public. But with Judge Kaplan under scrutiny himself, he doesn't look inclined to go that route.

It would seem that Judge Kaplan has been one of Chevron's best assets in the company's cynical efforts to evade responsibilty for its disaster in Ecuador.  Should the Appeals Court re-assign him, it would be a huge blow to those efforts.

Stay tuned.

And as always: for background on how Chevron decimated indigenous and farmer communities by dumping billions of gallons of toxic waste in Ecuador’s Amazon, watch this video overview or this 60 Minutes segment, or review this summary of the overwhelming evidence against the company.  Chevron is now fighting a $19 billion judgment against the company.

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Chevron Getting the Jitters Over Its RICO Case

Shaky Evidence and Appellate Court Scrutiny Starting to Disrupt Company’s Master Plan

Chevron’s vaunted 114-lawyer “rescue team” at Gibson Dunn seems to be getting the jitters over its upcoming RICO trial in federal court in New York.   

In an otherwise routine scheduling conference recently before Judge Lewis A. Kaplan, Gibson Dunn lawyer Randy Mastro suggested the oil giant was prepared to drop all damages claims against the Ecuadorians and their counsel, Steven Donziger, just to avoid a jury trial.   The company’s “Plan B” appears to be to seek a fraud finding from Judge Kaplan alone -- something the judge does not seem inclined to do, and something that would have little chance of working even if he did.

The fact Chevron is even thinking of this possibility is a huge retreat.  It’s also a strong indication that Chevron believes its billion-dollar investment in the RICO case has suddenly become a high-stakes gamble with far greater risk than CEO John Watson is letting on to shareholders and the financial markets.   A loss in the case via a jury verdict would be disastrous for the company both in the U.S. and in defending enforcement actions targeting its assets in countries around the world. 

If it were to drop the damages claims, Chevron might avoid a civil jury trial which in most cases is only guaranteed to a defendant when money is at stake.  But if Chevron chooses to go down this path, it will be left with virtually nothing to litigate.  It might get a “finding” from the discredited Judge Kaplan, but that will be of little or no use in foreign courts who already see the judge as a vassal of U.S. judicial arrogance.

To be clear: Chevron never thought the RICO case would get this far.  Juries are inherently unpredictable.  For a large corporation like Chevron with a $19 billion liability and the reputations of its senior management team at stake, that’s also terrifying.  Chevron simply cannot afford to lose this case.

Chevron assumed that the small legal team for the Ecuadorians would be ground to a pulp by now.  Or that Judge Kaplan would have found a way to rule in Chevron’s favor on pre-trial motions.  Both strategies have failed.

After being unanimously reversed in 2012 when he tried to block the Ecuador judgment from being enforced anywhere in the world, Judge Kaplan appears anxious to push Chevron’s allegations into the hands of a jury.  (That will come after the judge continues to make evidentiary decisions to rig the trial in Chevron’s favor.  See here and here for a taste of Kaplan’s bias.)  In the end of the day, Judge Kaplan knows any finding he makes alone has little chance of surviving appeal and his own instincts at this point are to protect himself, even if it means Chevron cannot get everything it wants.

Chevron also knows juries tend to follow their gut.  That does not bode well for Chevron’s absurd notion that it is the victim of a global  “racketeering scheme” foisted on it by the very indigenous groups who have had their ancestral lands poisoned by the company’s toxic dumping. This “blame the victim” approach is classic historical revisionism practiced the world over by oppressors and Chevron is no different.  

(For an understanding of the overwhelming evidence against Chevron in Ecuador, see this video, this 60 Minutes segment, and this summary of the evidence relied on by the Ecuador court to find the company liable for both polluting the delicate rainforest ecosystem and for trying to corrupt the trial that held it accountable.)

In 2011, the Second Circuit Court of Appeals reversed Judge Kaplan’s illegal injunction purporting to block worldwide enforcement of the Ecuador judgment. Judge Kaplan’s ham-fisted attempt to rescue Chevron from its misdeeds in Ecuador remains a sad example of ugly Americanism at its worst.  See here, and here to get a feel for the international scorn provoked by this short-lived attempt by a U.S. trial judge to control the Ecuador judgment on a global basis.  

Despite this personal setback – no Judge likes to get reversed -- Kaplan does not appear to be the least bit chastened from the experience.  And that’s bad for Chevron because Judge Kaplan’s hubris has put him in serious trouble yet again.

Just last week, the appellate court set oral argument in late September to determine whether Judge Kaplan should be removed from the RICO case altogether given his continued defiance of the Second Circuit’s order that he not opine on the validity of the Ecuador judgment.   See here for the latest facts underlying the petition for his removal.  Let’s just say it is serious business whenever a trial court thumbs its nose at an appellate court.  To do it on multiple occasions and blatantly is even more perilous. 

Judge Kaplan encouraged Chevron to bring the RICO action in the first place.  Without his efforts, it likely never would have gotten past first base.  The judge has jerry-rigged the evidence by repeatedly violating the due process rights of the Ecuadorians and Donziger.  He even has ruled they will not be allowed to present testimony about Chevron’s massive pollution in Ecuador, thus making it virtually impossible to mount a meaningful defense.  Should the case be reassigned to a fair judge, look for Chevron’s claims to lose all traction. 

As for the lawyers, Mr. Donziger and others are still confident.  It was Donziger who recently forced Chevron CEO Watson to testify about Ecuador during a deposition – a shocking risk given that he now could be charged with perjury if it is found that he lied under oath. This industry royal was forced to endure the humiliation of answering live questions posed by a solo practitioner (Donziger) he previously called a “criminal” on earnings calls with investors.  (Chevron has gone to great lengths to keep Watson’s testimony confidential.  When the lies and memory lapses get exposed, Watson will be further embarrassed and the global shareholder campaign against him will pick up even more steam.)

Given these problems, it is understandable why Mastro is nervous about a jury trial.  But there are other reasons.

First, Mastro is known far more as a political fixer than a trial lawyer.  He will fight like a pit bull to avoid ceding the high-profile trial stage to the many more talented lawyers at Gibson Dunn, including his colleagues Theodore Boutrous and former star federal prosecutor Reed Brodsky. Any defendant would want Mastro to lead the Chevron show before a jury.  Let’s hope he hangs in there.

We have seen from previous hearings before Judge Kaplan how Mastro and his sidekick, Andrea Neumann, lack basic courtroom agility and have an off-putting personal style.    Mastro already lost three key appellate arguments in the case and literally was laughed out of court in 2011 when he couldn’t answer the most basic questions when trying to defend Judge Kaplan’s illegal injunction before a three-judge appellate panel.  

Second, Chevron’s witness list reads like a Who’s Who of small-time thugs, criminals, and cartoon characters.  Almost all have agreed to testify because of some combination of bribes or intimidation coming from Chevron headquarters.  While the oil goliath has packaged this testimony for maximum effect in affidavits clearly ghostwritten by its own lawyers (leading to a lot of slanted reporting in its favor), under the klieg lights of trial it is doubtful that any of these people will retain even the slightest veneer of credibility.

Exhibit A is former Ecuador Judge Alberto Guerra Bastides, an admitted con artist who received a suitcase full of cash from Chevron lawyer Andres Rivero in Quito in exchange for favorable testimony.   In a deal negotiated directly by Mastro, Chevron has committed to paying Guerra at least $326,000 or roughly ten times his annual salary.  These payments are a clear violation of the ethical rules.  Given his many credibility problems, it is unclear if Guerra will even take the stand.  If he does, he will help the Ecuadorians more than Chevron.

Exhibit B is Christopher Bogart, the disgraced CEO of the litigation hedge fund Burford Capital.  Bogart helped to fund the legal battle of the Ecuadorian communities until Chevron threatened to add Burford as a RICO defendant.  In a panicked response, Bogart betrayed his clients and engaged in some cowardly double-dealing with Chevron – privately negotiating an exit from the case with Chevron’s lawyers while supporting the Ecuadorian communities publicly.   Bogart even emailed Mastro after the Chevron RICO filing and just weeks after he funded the Ecuadorians:  “Randy – congratulations on a superbly executed campaign!” 

Bogart eventually signed an affidavit to help Chevron where he clearly lied to the court about being “misled” by the Patton Boggs law firm and Donziger (Bogart’s own emails, which are nauseating to read, showed he actually believed the opposite).  See this devastating take-down of Bogart in a court brief filed by Patton Boggs as it seeks to strike his affidavit and impose sanctions against Chevron. It is unclear to us after reading this brief how Bogart will ever again work in the funding business.

(If any investor out there is thinking about Burford as an opportunity, they should read about the lack of ethics displayed by Bogart and another Burford director, Ernest J. Getto.  Since Bogart cannot be trusted to disclose this document – it is nowhere to be found on Burford’s website -- we have decided to post it here.)

Chevron’s other main witnesses have been similarly discredited.  It is now clear that Chevron threatened Douglas Beltman and Ann Maest – former scientific consultants to the Ecuadorians -- with personal bankruptcy and career destruction before they signed affidavits that contradicted prior sworn statements under oath attesting to the company’s responsibility for massive pollution in Ecuador.  [http://thechevronpit.blogspot.ca/2013/04/the-truth-behind-stratus-affidavits.html]   Beltman and Maest, who since have been fired from their jobs, will have little credibility if they take the stand and try to help Chevron. Expect lawyers for the rainforest communities to call these Chevron witnesses as their own if Mastro gets cold feet.

Chevron’s internal documents suggest the company is hanging itself by its own petard.  When faced with overwhelming scientific evidence of its guilt in Ecuador, Chevron decided to launch a strategy to “demonize” Donziger to distract attention from its own environmental crimes and fraudulent remediation.  This included using six Kroll operatives to spy on Donziger and his family in Manhattan.  How will a jury view a big oil company that tries to cover up its atrocities by demonizing a human rights lawyer who helped hold it accountable?

Chevron also launched a campaign to attack the government of Ecuador and to declare war on its courts even though Chevron fought for years to venue the case there.  A memo by Chevron consultant Sam Singer suggests the company adopt “message themes” that would portray Ecuador as “the next major threat to America” and “as the next Cuban missile crisis in the making.”    This type of overreach actually reflects Chevron’s level of desperation.  The company’s incessant attacks against Ecuador’s popular President, Rafael Correa, have started to alienate almost every oil-producing nation in South America and put the company’s business operations at further risk.

The Singer memo will not sit well with a New York jury either.  Nor will other internal documents that show Chevron tried to bribe judges, pay off Ecuador’s government to illegally quash the case, or ask its employees to engage in obstruction of justice by destroying damning documents about its many oil spills in the Amazon. 

Chevron’s entire strategy with the RICO case has been to obtain a huge judgment that it can then use to offset the enforcement actions (currently pending in Canada, Brazil, and Argentina) where the rainforest communities are targeting company assets.  Chevron has sued Donziger and his clients for upwards of $60 billion, thought to be the largest potential personal liability in U.S. history.  Giving up on that cannot be an easy decision.

Chevron is now caught in a maze of its own creation.   Here is Chevron’s dilemma.  If it takes the case to trial before a jury, the entire house of cards is at risk of falling down.  If it drops the damages claims to avoid a jury, any decision by Judge Kaplan will have little or no impact.   And the court of appeals is watching so closely that Chevron simply cannot expect Kaplan to run roughshod over the Ecuadorians and Donziger as before, even if he is allowed to stay on.

After billing Chevron outrageous sums and making grandiose promises to the world, the pressure is now all on Gibson Dunn.  The firm’s lawyers know a jury is risky business for a major client like Chevron with a proven record of human rights abuses and other corrupt activities in Ecuador. See this gripping photo essay from journalist Lou Dematteis for a sense of the profound human devastation Chevron has caused and that Gibson Dunn with Judge Kaplan’s help is trying to bury.

It would be a personal and professional disaster for Mastro and Chevron General Counsel R. Hewitt Pate to fail to deliver a verdict in the company’s favor.  Watch for more furious maneuvering by Chevron as the October trial date nears.  

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Judge Lewis A. Kaplan Allowing Chevron to Use Secret Witnesses Against Ecuadorians and Donziger

Decision Compared to “Spanish Inquisition” and “Star Chamber”

We already have reported how New York federal Judge Lewis A. Kaplan has been under furious criticism of late from prominent lawyers, including famed San Francisco-based attorney John Keker, for trying to mount a “show trial” in New York to help Chevron evade its $19 billion liability in Ecuador for dumping billions of gallons of toxic waste into the Amazon rainforest.

Never one to mince words, Keker publicly accused Chevron of trying to drown Judge Kaplan’s court in “chicken shit” discovery motions and said, “I’ve never seen a judge treat an oil company… like a widow or orphan.  Everything they [Chevron] want, they get.”  Read the extraordinary article from the San Francisco legal newspaper, where Keker recounts what he calls Kaplan’s “implacable hostility” toward his client Steven Donziger, a longtime lawyer for the rainforest communities in Ecuador and the main target of a vicious Chevron retaliation campaign.

Lately, there is evidence that Judge Kaplan is going even more off the rails in what appears to be an increasingly  personal crusade to destroy the case of the Ecuadorians.

Judge Kaplan is now routinely entertaining Chevron motions to deny the Ecuadorians and Donziger the right to know the identities of witnesses the oil giant plans to use against them.  See this motion Chevron filed today.   Kaplan already has granted Chevron’s request with respect to two “secret” witnesses; Chevron’s latest motion seeks the same status for a third.
 
A well-known Texas law firm is now joining Keker in calling out Judge Kaplan for acts that indigenous leaders in Ecuador have characterized as xenophobic, arrogant, and racist.  See this article for a summary of how Judge Kaplan has insulted the Ecuadorians from the bench.

Craig Smyser, of Smyser Kaplan & Veselka in Houston filed a powerful motion (available here) in response to Chevron’s extraordinary request to hide its witnesses from the accused.  (Smyser represents two Ecuadorians who are part of the class that won the judgment, Hugo Camacho and Javier Piaguaje.)

Smyser writes:

“Chevron files motions to conceal identities of accusers that would be right at home in the Spanish Inquisition or the Star Chamber, confident that the Court will grant the motions every time…  The motion is offensive to basic principles of U.S. law … that permit an accused to confront his accuser.  Only totalitarian and repressive regimes permit, especially in a civil context such as this, an accuser to hide his or her name from the accused.”

Chevron is trying to claim the secret affiant might be subject to reprisals in Ecuador, but Smyser pointed out correctly that Chevron has presented not a shred of evidence to support its claim.  In fact, nobody from Chevron involved in the 19-year case – including hundreds of people from Chevron’s 2,000-person legal team and 60 law firms – has ever reported being harmed by anybody in Ecuador, a nation that enjoys warm diplomatic relations with the U.S. and is a mecca for U.S. tourists visiting Quito (a UNESCO world heritage site) and the Galapagos.

Most of Quito is far safer than parts of New York City, where Judge Kaplan lives.  That’s especially true when you work for Chevron and get to travel abroad with beefy security dudes at your side.  Just last week Chevron officials, some from the U.S., held a large press event in Quito to discuss the company’s view of the case.  All apparently got out alive.

In fact, Chevron conducted a hotly-contested eight-year trial in its preferred forum of Ecuador -- and continues to do battle on appeal there -- without being able to cite a single incident of harm needed to justify such an extraordinary request.  Dozens of Chevron lawyers and advisors, many from the U.S., participated in the trial.

The irony is telling. Those who really have been, and continue to be, under threat are the Ecuadorians and Donziger. They have been subject to death threats, espionage, and defamatory attacks by the oil giant and its “investigators” at Kroll and generally labor under a cloud of hostility created by Chevron’s goon squad. Donziger himself was a victim of a Chevron espionage campaign in Manhattan.

Chevron’s sudden use of “secret” witnesses is an old trick used by lawyers at Gibson Dunn & Crutcher to create the optical illusion that the human rights abuser in this case (Chevron) is actually under “threat” from its victims, the indigenous communities who have seen their cultures decimated by the company’s pollution. (See here for a summary of the evidence used to find Chevron liable, and here for a video about the case.)

The lawyers on Gibson Dunn’s dream team, led by the ethically-challenged Randy Mastro and Andrea Neumann (both have been sanctioned for their work on behalf of Chevron – see here and here), pulled the same “secret witness” stunt in another case in Florida.  That was before the firm quickly withdrew its motion for the court to hear secret testimony when it was clear the maneuver was going to backfire.  (Read this rather shocking and extensive legal brief for details of how Gibson Dunn paid secret witnesses to present false testimony in court on behalf of the Dole company.)

Smyser’s criticism of Judge Kaplan should not be taken lightly.  He and two partners founded their boutique litigation firm as refugees from the prominent Houston corporate firms of Vinson & Elkins and Baker Botts.  Smyser has been recognized repeatedly as one of the top litigators in Texas and has a roster of prominent clients.

Two weeks ago, Keker – a decorated former Marine who knows a thing or two about courage -- asserted in a brief that Judge Kaplan has let the New York case “degenerate into a Dickensian farce” where “Chevron is using its limitless resources to crush defendants and win this case through might rather than merit.”

Keker has moved to withdraw from the case because Donziger cannot pay his fees.  Donziger recently filed a notice of appearance and is prepared to defend himself alone against Chevron’s army (114 lawyers at Gibson Dunn work on the case), although he has very little trial experience.

Chevron is suing Donziger for roughly $60 billion; Donziger lives in a two-bedroom apartment with his family.

It is also obvious that Judge Kaplan does not want the truth about Chevron to come out in his courtroom.  He already has ruled that Donziger cannot use as evidence the extensive scientific evidence of Chevron’s contamination in Ecuador that the court there relied when finding the company liable.  This essentially neuters Donziger’s ability to defend himself from Chevron’s preposterous claim that he was pursuing “sham litigation” in Ecuador.

Judge Kaplan also has signaled he will deny Donziger the right to pursue counterclaims against Chevron that provide a chilling picture of the company’s crimes, fraud, espionage, and bribery in Ecuador. Donziger’s counterclaims against Chevron are not what Judge Kaplan wants in his hoped-for script.

Chevron’s public relations flaks have been pretty open about the company’s strategy to evade justice by “demonizing” Donziger, as shown in a 2009 email from Chris Gidez, the company’s longtime press representative from Hill & Knowlton.  (We will have more on that soon.)  Copied on the Gidez email are two employees of CRC public relations, the right-wing extremist entity in Northern Virginia responsible for the Swift Boat campaign against John Kerry when he was running for President.

Donziger recently released this statement and this press release explaining why he believes he cannot get a fair trial in Judge Kaplan’s courtroom.

The Second Circuit Court of Appeals this week set May 28 as the date it will consider a petition by the Ecuadorians and Donziger that Judge Kaplan be taken off the case. The appellate court already unanimously reversed Judge Kaplan in 2012 when he tried to impose an illegal and unprecedented injunction purporting to block the Ecuadorians from enforcing their winning judgment in other countries – an injunction that brought scorn on the U.S. federal judiciary from academics and lawyers worldwide.

 We will keep you posted. 

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Chevron's Lies In Ecuador Case Evident in NBC News Report

NBC Nightly News Ann Curry recently returned from Ecuador with this account of how impoverished indigenous groups in the Amazon rainforest are preparing to fight -- literally and metaphorically -- their government's efforts to explore for oil on their native, pristine lands.

Meanwhile, some of these same groups are fighting in a U.S. courtroom 3,000 miles away 2,000 Chevron lawyers and a U.S. federal judge who believe a $19 billion judgment the Ecuadorians won in an Ecuador court is a fraud. Needless to say, The Chevron Pit strongly disagrees, while Chevron refuses to pay the judgment.

Curry's cameras document the beauty and the uniqueness of the Ecuadorian jungle in the Yasuni Park, reminding viewers that this was what another part of the rainforest once looked like before Texaco, now owned by Chevron, explored for oil five decades ago, using substandard drilling practices to maximize its profits. See this video to understand how Texaco, now Chevron, ruined the rainforest and destroyed a way of life for at least five indigenous groups.

Curry features an interesting proposal by Ecuador President Rafael Correa, who is asking developed countries driven by huge oil consumption to pay Ecuador NOT to explore for oil in the Yasuni Park, given that its thick and heavy vegetation helps keep the world's air supply cleaner by soaking up carbon dioxide.

By not developing the area, the rainforest is saved and the global environment improved but potential revenues from oil sales are not realized, depriving poor people of an education, safe housing and job opportunities. Correa believes Ecuador is, so to speak, scratching the developed world's back, but not getting any scratch in return.

On the other hand, Chevron would rather pay law firms like Gibson Dunn, Jones Day and King & Spalding hundreds of millions of dollars to fight the Ecuadorians in court, rather than spend even close to a similar amount on cleaning the soil and drinking water that Texaco contaminated. Chevron calculates that tactic is preferable than setting a precedent of actually helping people.

Though it's unlikely we've forgotten, the Nightly News segment reminds us that money -- the ability to make it and not lose it -- makes the world go around.  Watch the segment:

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Note to Chevron: Your Trial Lawyers At Gibson Dunn Need Some Serious Help

It is becoming increasingly clear that Chevron’s high-priced legal team in the $19 billion Ecuador case lacks basic trial skills.
 
One of the most intriguing sights in the three-day hearing last week in New York on a discovery dispute related to the case was not the fact Chevron trucked in about 35 lawyers for the event.
 
It was that with 35 lawyers backing them up, the lead lawyers for Chevron --  Randy Mastro and Andrea Neumann – seemed so disorganized and out of sorts.
  
They looked like what they are: corporate lawyers representing a big oil company trying to crush its indigenous victims and their lawyers.
   
That can't be good for Chevron.
 
Judge Lewis A. Kaplan will no doubt use the hearing to further script the RICO trial in Chevron’s favor by prohibiting the use of almost all evidence that makes Chevron look bad. Judge Kaplan, who was unanimously reversed once in the case, already ruled that the extensive evidence of Chevron’s contamination in Ecuador – evidence that proves the case was decidedly not a fraud -- cannot be discussed in court.
 
Judge Kaplan is now well on the way to throwing out counterclaims from Steven Donziger (a longtime lawyer for the Ecuadorians) that outline a chilling tale of Chevron’s environmental crimes in Ecuador, fraud, lies, espionage, and cover-up. Again, Judge Kaplan apparently does not have the guts to let the truth come out.
  
But even show trials don’t always go according to plan.
   
Both Mastro and Neumann seemed to fall over themselves in court, at times infuriating Judge Kaplan.
  
Mastro repeatedly made speeches before he asked his questions, prompting Kaplan to repeatedly sustain objections. Mastro would then try to reframe his questions, but had trouble figuring out how.
 
After one of his speeches, Judge Kaplan asked Mastro: “Sir, is there a part of that treatise from which you want to ask a question?”
 
Neumann appeared as charming as the class nerd who takes notes and regurgitates them back on the next multiple choice test. She read her questions from a thick binder, imposing a form of slow torture on the court by going page by page without adjusting depending on what the witness said or how the court reacted.
 
Kaplan repeatedly asked her to stop wasting the court’s time.
 
Neumann began her examination of one witness by reading from a sworn declaration signed by the witness. But she forgot to have a copy of the document available for the witness.
 
When Neumann had to interrupt her examination to ask her 35-person legal team to find another copy, it took a mind-numbing five minutes of frantic searching until one was discovered. In the meantime, Judge Kaplan fumed.
 
When Neumann gave another document to the witness, he mentioned that it had some writing in the margins from Chevron’s own lawyers. The Chevron team then scrambled for a clean copy while about two dozen associates did nothing.
 
Judge Kaplan said: “Please Ms. Neumann, now really…  I really don’t expect to see this from lawyers of your caliber.”
 
While the Gibson Dunn army (at least 114 lawyers from the firm are on the case) tries to drown the plaintiffs in motions, only one lawyer can talk at a time in open court. That neutralizes Chevron’s huge resource advantage when Mastro and Neumann are at the helm.
  
John Keker, the lawyer for Donziger, is a former Marine known for prosecuting and convicting Oliver North in the Iran contra scandal. Nobody on Chevron’s team can come close to him in terms of intelligence, presence, and persuasiveness.
 
Judge Kaplan, not surprisingly, often tried to shut down Keker by calling him up for “sidebar” conversations that take place in whispers in front of the bench – a bizarre move indeed given that there was no jury around. It underscores just how much Kaplan plays to the gallery.
 
Judge Kaplan’s challenge is to figure out how to keep Keker from getting his client a fair trial before a jury. That would be very risky bet for Chevron under any circumstances, but particularly with this duo running the show.
 
Mastro’s bigger problem is that he has better political connections than trial skills. He served as Deputy Mayor to Rudy Guliani when the Mayor carried out a racially divisive political strategy, which Mastro helped him implement with evident gusto. His friends suggest he sees the Ecuador case as the pinnacle of his career.
 
Also of note is that Mastro’s new star hire, former New York federal prosecutor Reed Brodsky, seems to be working as a junior law clerk on the Chevron trial team. In 2011, Brodsky used his formidable trial skills to win a conviction against hedge fund titan Raj Rajaratnam and parlayed that into a lucrative job under Mastro.
 
During the hearing, Brodsky was sitting next to Mastro and Neumann so he could pass notes and whisper in their ear. He never stood up to ask a question.

Ouch.

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Privacy Advocates Say Chevron Wants to "Harass and Intimidate" People Supportive of Ecuadorians' Lawsuit Against Oil Giant

Courthouse News writes that privacy advocates say Chevron "wants to  harass and intimidate critics of a massive oil contamination in Ecuador with intrusive subpoenas of more than 70 email accounts."

Read more about Chevron's aggressive tactics to invade people's privacy here.

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Chevron Facing Wall Street Criticism Over $19 Billion Ecuador Liability

Wall Street analysts rarely take controversial positions on publicly traded companies whose stock is doing well. But Chevron’s mishandling of its $19 billion liability in Ecuador for dumping toxins into the Amazon is beginning to look like the exception, at least to the analysts at Seeking Alpha and a commentator at the influential proxy advisor Glass Lewis.

One thing is indisputable: cracks are beginning to appear in Chevron’s determined effort to keep Wall Street in line with the idea that the Ecuador judgment represents no short-term threat to the company’s financial position.  One analyst even predicted the lawsuit eventually could lop as much as 20% off the company’s share price. Even worse, the U.S. Supreme Court just dinged Chevron’s final attempt to block enforcement around the world.

Some of these analysts are beginning to get that the judgment in Ecuador – from the very court where Chevron wanted the issues resolved– is based on overwhelming scientific evidence that proves Chevron committed what is probably the largest oil-related environmental disaster in world history. See here and here.

The fact that the plaintiffs now have launched seizure lawsuits targeting billions of dollars of Chevron assets in Brazil and Canada certainly takes the idea of litigation risk for Chevron to new and unchartered territory, leading one analyst to advise shareholders to dump the stock for now. Further, numerous U.S. courts, including the Supreme Court, recently denied Chevron’s increasingly desperate attempts to derail the litigation while several institutional shareholders and a U.S. Congresswoman have asked the SEC to investigate the company for lying about its Ecuador risk.

Consider the various analyses from Seeking Alpha, an award-winning website for stock research that has more than 800,000 followers.  Kiplinger’s recently named Seeking Alpha the Most Informative Website; it also received a “Best of the Web” award from Forbes.

Seeking Alpha recently dismissed Chevron’s fake fraud narrative and wrote in reference to the pending seizure action in Canada:

“Canada has a reputation for fair legal proceedings. This will make it incredibly difficult for Chevron to continue claiming that the lawsuit is based on fraud. I think it is highly unlikely, furthermore, that fraud is the reason for the charges against the company. In fact, I think that these recent developments may be the start of a downward trend for the company that it will struggle to recover from.” 

Another Seeking Alpha analyst, David White, said just this week that Chevron shareholders should sell. In a blog, entitled Chevron Can't Seem To Turn The Bad News Faucet Off, White devoted his entire analysis to all of Chevron’s many legal problems in Ecuador, Brazil and the company’s own home state, California.  Federal and state criminal prosecutions and hefty fines are a possibility due to safety problems at a refinery in Richmond, a small city just across the Bay from San Francisco. White wrote:

“…with all of these unexpected costs that CVX is facing, I think it is time to unload this historically strong, steady dividend payer….If you own CVX, it is time to sell it.”

Another Seeking Alpha analyst wrote that Chevron is “losing support from all corners” in its bid to evade the Ecuador judgment.  He also highlighted the growing number of courtroom setbacks suffered by Chevron’s legal team at Gibson Dunn & Crutcher, which was brought in two years ago to “rescue” the oil giant from its impending liability.

The analyst also reported concerns about the lawsuit from both shareholders and Members of Congress, writing that many of Chevron’s institutional investors have “made it clear … that a settlement is the preferred course of action, as it appears increasingly unlikely that Chevron will be able to avoid paying out a significant portion of its available cash over this lawsuit.”

“Although I believe it is in Chevron's best interests to settle the suit, this may represent a huge hit for the company, which I think could force its price per share as low as $80, a level not seen since 2010,” the analyst concluded.

Another Seeking Alpha analyst wrote that the $19 billion liability in Ecuador and a separate $20 billion potential liability in Brazil resulting from an oil spill there in 2011 is “cast(ing) a long shadow” on Chevron’s stock, which “could tumble” as a result.

He wrote:

“Chevron is continuing to build its cash balance, which now stands at $21.1 billion compared to $15.8 billion at the close of 2011. I think that fears over suits brought against it in Brazil and Ecuador, despite a Chevron show of bravado in casting these litigations as fraud, are contributing to Chevron's rapid accumulation of cash.” 

Noting that other oil majors give dividend increases, buy something and/or pay down debt when they have that much cash, the analyst projected that “it’s unlikely that its cash balance will be substantially drawn down until both of these super-suits are settled or dismissed, which could be a matter of years.” That was written in early September.  Chevron has yet to do anything with its huge surplus.

The analyst wrote that the liabilities in Ecuador and Brazil together “could wipe out Chevron's healthy cash balance as well as a significant portion of its equity. This in turn would lower Chevron's outlook across the board. Chevron is a comfortable hold, but a risky buy in the current environment.”

Glass Lewis, a leading proxy advisory firm, just this week urged shareholders to “remain vigilant” in holding Chevron accountable relative to its disclosure obligations. Courteney Keatinge, an analyst at Glass Lewis, wrote:

“As these legal battles consume considerable company resources and leave the company exposed to significant risk, shareholders should continue to remain vigilant in ensuring that Chevron is managing and disclosing these issues properly and sufficiently.” 

Another analyst, Fadel Gheit at Oppenheimer & Co., following a meeting with Chevron's CEO John Watson in 2011, wrote that "a $2-3B settlement [in the Ecuador lawsuit]... could remove uncertainty and reflect positively on the stock.”  Later, in May of this year, after the Ecuador trial judgment was upheld on appeal, Gheit doubled-down on his belief that "a reasonable settlement with the plaintiffs impacted by the oil contamination in Ecuador...could boost the stock.”

Gheit is generally pro-Chevron and he has written about the case in ways that suggest he does not fully understand how the legal process works. His recognition that Chevron now faces real liability is yet another example of the how company is beginning to lose some of its allies on Wall Street.

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