Attorney John Keker’s Blistering Critique of Judge Lewis A. Kaplan

In case you missed it, prominent California Attorney John Keker has unleashed a fusillade of criticism at New York Judge Lewis A. Kaplan for trying to help Chevron conduct a “show trial” as part of its campaign to evade payment of a $19 billion judgment for polluting the rainforest in the South American nation.

An Ecuador court found Chevron guilty in 2011 of deliberately dumping billions of gallons of toxic waste into the rainforest from 1964 to 1992, when it operated under the Texaco brand.  Evidence demonstrates Chevron’s dumping decimated indigenous groups and caused an outbreak of cancer and other oil-related diseases which persist to this day. A summary of the evidence can be viewed here; a video about the case can be viewed here.

Keker, who represents a New York attorney who is the main target of Chevron’s retaliation campaign, already told a federal appellate court that he felt “like a goat tethered to a stake” in Kaplan’s courtroom.  After hearing that comment, the appellate court unanimously overturned Kaplan’s illegal 2011 injunction that purported to block the affected rainforest communities from enforcing their winning judgment against Chevron assets in other countries.

To retaliate against the indigenous communities who won the Ecuador judgment – handed down in the Ecuador court where Chevron fought to have the trial held – the oil giant in 2011 sued New York attorney Steven Donziger and some of his Ecuadorians colleagues before Judge Kaplan.

Keker represents Donziger in the case, but is now seeking to withdraw due to Kaplan’s “implacable hostility” toward Donziger and the Ecuadorians. Donziger also has been unable to keep up with Keker’s fees.

Some highlights from Keker’s motion:

• Kaker asserted that Judge Kaplan has let Chevron’s 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.”
• Another excerpt:  “Encouraged by this Court’s implacable hostility toward Donziger, Chevron will file any motion, however meritless, in the hope that the Court will use it to hurt Donziger.”
• Judge Kaplan forced Donziger to sit for an unheard-of 16 days of deposition testimony and allowed Chevron to serve him 1,228 requests for admissions prior to trial.  He recently ordered Donziger to sit for a further three days of depositions, when the federal rules normally allow only one day.
• Judge Kaplan forced Keker to spend “hundreds of thousands of dollars” of attorney time to respond to Chevron’s Motion for Summary Judgment which was filed before discovery in the case was taken -- a highly unusual step designed to exhaust the resources of the Ecuadorians.  Kaplan then denied the motion, but said Chevron could renew it after the close of discovery, which is what Keker had “begged” the court to do at the outset.

For further evidence of Kaplan’s bias, read these extraordinary petitions to get Kaplan off the case filed by the Patton Boggs law firm. They can be seen here and here. The latter petition is now pending before the Second Circuit Court of Appeals, so stay tuned.

For more information about the Keker motion and a similar one filed by the Smyser Kaplan & Veselka law firm in Houston, see this press release from the Ecuadorian communities and this release put out by Donziger’s law firm.

It is well-known that Judge Kaplan takes a dim view of the intelligence of the Ecuadorian people.  The good judge also has mocked Ecuador’s judiciary from the bench, causing a firestorm of international criticism.

The Ecuadorian citizen Pablo Fajardo, the lead lawyer on the case on behalf of the rainforest communities and the winner of the Goldman Environmental Award, has called Judge Kaplan “arrogant, racist, and xenophobic”. See this press release for more detail about Kaplan’s insulting comments directed to Ecuador from the bench.


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A Race For Time? Chevron Desperate to Extort Its Way Out of Paying $19 Billion Ecuador Judgment

An Argentine newspaper La Nacion reported that Chevron is in a "race for time" to convince a court in Argentina to lift a freeze of its assets as payment of the $19 billion judgment for oil contamination in the Ecuador rainforest. Chevron is trying to scare Argentina government officials by saying its subsidiaries there will go bankrupt and, as a result, have to close down its operations unless, of course, the government pressures the courts to unfreeze their assets. Or, in other words, extortion: If you don't tell your courts how to rule, we'll shut down our investments.

Meanwhile, back in the United States, Chevron has filed an ethics complaint against New York State Comptroller Tom DiNapoli, who has had the courage to stand up to Chevron and question its misconduct in Ecuador and its use of shareholder funds in regard to the historic, long-running lawsuit. 

Interestingly, Chevron is filing the complaint more than two years after obtaining emails that the oil giant falsely bases its complaint on. Why did Chevron wait so long? If it's so concerned about ethics, why not two years ago? Or one year ago? Do you think it might have anything to do with Argentina, Brazil and Canada, where lawsuits have recently been filed to seize company assets as payment for the judgment?

They have tried and failed to get U.S. courts to stop enforcement of the judgment.

They have tired and failed to get negative press coverage in these three countries to pressure their governments and courts to stop enforcement.

Maybe the Albany, NY press corps will come to Chevron's defense.

But, wait, this article basically says the complaint against DiNapoli is a lot of nothing.

Read the press release below for more details about Argentina:

Chevron Threatens to Shut Down Argentina Operations Over Ecuador Lawsuit

Buenos Aires, Argentina – In a clear effort to apply political pressure to judges, Chevron is threatening to bankrupt the company’s subsidiaries in Argentina unless an asset freeze order issued against $2 billion of the oil giant’s assets is lifted, according to news reports. 

The order was imposed last week because Chevron refuses to pay a $19 billion judgment in Ecuador for systematically dumping toxic waste into the streams and rivers of the rainforest, decimating indigenous groups and causing an outbreak of cancer. 

For background on the overwhelming evidence against Chevron in Ecuador, see HERE; a video on the case can be seen HERE.

La Nacion, a leading newspaper in Argentina, is reporting  that desperate Chevron executives are giving Argentina’s national government until December to force a court to reverse the freeze order before facing “operational problems” that could shut down two subsidiaries that produce an estimated $600 million in revenue annually for the parent company.

The newspaper reported that “a host of Chevron lawyers and executives in Miami were analyzing alternatives in a race against time” given that they expect funds to run out in several weeks – a prospect that the plaintiffs in the case call a “manufactured scare tactic” designed to apply pressure to Argentina’s courts.

Representatives of indigenous rainforest villagers in Ecuador had little sympathy for the company, calling Chevron’s threats another example of “improper political pressure” used to avoid being held accountable under the law.

“Chevron has been running from the law for years in Ecuador, where out of pure greed it deliberately created what is probably the world’s worst oil contamination,” said Graham Erion, a Canadian lawyer advising the rainforest communities.  “It is not surprising that the company’s illegal behavior is finally catching up to it.

“The pollution Chevron intentionally caused in Ecuador is an assault on all of Latin America,” he added. “Chevron would never commit such atrocities in its own country.”

The Argentina embargo prohibits Chevron from disposing of any interests in concessions, pipelines, or other projects without the court’s consent and diverts 40 per cent of the company’s annual revenue to an escrow account controlled by the court.  The court chose to garnish less than half of the revenue to allow Chevron’s subsidiaries to operate with flexibility, said Erion.

Chevron also was planning to invest $1.8 billion over the next three years in Argentina to build 120 new oil wells, and was exploring an investment in a huge oil shale project called Vaca Muerta.

“The threat by Chevron CEO John Watson to pull out of Argentina endangers the company’s interests in a country that should be a key driver of future growth in the region,” said Karen Hinton, U.S. spokesperson for the rainforest communities in Ecuador. “This is not in the interests of Chevron shareholders.”

Chevron’s woes in Argentina were compounded this week when Spain’s Repsol oil company sued the oil giant in Spain on the grounds that  it was trying to profit from operations that had been expropriated by Argentina’s government.

Reports out of Argentina were quick to show that Chevron has already begun to lobby furiously for an extra-judicial solution. 

La Nacion reported that the governor of the oil rich province of Neuquén publicly stated that he hopes Chevron succeeds in fighting the embargo, which was imposed pursuant to an international treaty in Latin America that allows for the reciprocal recognition of foreign judgments. 

Chevron’s attempts to enlist political allies in Argentina are directly out of the oil giant’s playbook, with documented  attempts to bribe Ecuadorian government officials, use the U.S. embassy in Quito to undermine the case, and lobby the U.S. government to cut Ecuador’s trade preferences for refusing to intervene in the case.  

Pablo Fajardo, the lead Ecuadorian lawyer for the affected communities, told La Nacion that Chevron is trying to “extort” Argentina.

“Chevron has options,” he said. “You can pay the judgment or offer bail in Argentina bail to replace the embargo. It seems that Chevron intends to act outside the law and is choosing to attempt to extort Argentina. If the company suspended its operation, it is demonstrating that it is only interested in working when it has impunity."

One of the consequences of the freeze order is that any future investments Chevron makes in Argentina will also be subject to seizure, up to the full amount of the $19 billion Ecuador judgment.

Chevron also faces asset seizure actions over the Ecuador judgment in Brazil , Canada, and Ecuador. 

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Chevron Can't Stop The Lies

In a recent letter to the Canadian newspaper, The National Post, Chevron repeats its lies to distract attention from its own misconduct in the world's largest oil-related environmental disaster in the Ecuadorian rainforest. 


For example, Chevron representatives are fond of claiming that a number of U.S. courts have “found” that there was “fraud” in the litigation in Ecuador. This is completely false. When Chevron made this assertion to one journalist who included it in his story, his publication, Courthouse News, was forced to run a retraction once it realized the reporter had been misled, stating that while “[a]n earlier version of this article quoted a Chevron spokesman as saying that eight federal courts had found the Ecuadorean plaintiffs had committed fraud. In fact, the courts issued crime-fraud exception findings during discovery. Chevron’s fraud allegations against the Ecuadorean plaintiffs remain unproven.” See here.

No U.S. court has made any final determination with respect to Chevron’s fraud allegations. In fact, 13 U.S. courts rejected or otherwise declined Chevron’s invitation to apply what is known as the crime/fraud exception. Such an exception requires a court to make only a prima facie showing that a fraud might have occurred if proven to be true. But no actual factual findings have been made. As one court succinctly put it: “The circumstances supporting [Chevron’s] claim of fraud largely are allegations and allegations are not factual findings."  Another wrote that Chevron was making a "mountain out of a molehill."  See here.

Chevron tries to distract attention from these facts with statements replete with falsehoods; meanwhile, independent journalists have long confirmed the company’s hand in creating this unprecedented catastrophe.  See these recent news reports from the Australia program Sunday Night; the American show 60 Minutes and this extraordinary video from the plaintiffs summarizing the evidence and Chevron’s corrupt attempts to derail the trial.   A story in Vanity Fair on the courageous Ecuadorian lawyer Pablo Fajardo, who was raised in abject poverty and who has been targeted with death threats, can be seen here.

Chevron takes emails and other correspondence out of context and cleverly edits video to make it appear that our own experts do not believe there is contamination. Yet one of the most respected experts in the world on how contaminants travel in groundwater – Dr. Ann Maest -- testified under oath recently that there is massive contamination of water in Chevron’s concession area. See here and here. In a blatant act of deceit, in a blog Chevron leaves the false impression that Dr. Maest agrees with the company that there is no water contamination.  See here.

Chevron’s assertion that the plaintiffs wrote the judgment is a both a fabrication and a final act of desperation. For this argument, Chevron relies on more paid experts who analyze what they call “word strings” from an internal memo from the plaintiffs that appeared in a handful of paragraphs in the 188-page judgment.  Yet arguments from the memo using the same language were submitted to court in numerous motions throughout the eight-year trial.  It is completely plausible for a court to adopt arguments and language from briefs or other materials submitted to the court.

The real and only fraud is Chevron's environmental crimes, its phony remediation, its manipulation of evidence during the Ecuador trial and its abuse of the rule of law by delaying and attempting to derail the trial during the eight-year-long proceeding. See here, here and  here.

These facts, as confirmed by Ecuador’s courts and independent journalists, are bad for Chevron.  More to the point, they explain why the company tried to sabotage the proceedings in Ecuador, and how it will now try to convince courts it Canada that somehow it was the victim of a shakedown by indigenous groups in Ecuador.

Don’t believe it.

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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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Chevron's Tinker, Tailor, Soldier, Spy Thriller -- Even Better Than The Movie

Chevron is spying on the two lead attorneys for the Ecuadorians to intimidate and harass them,reports the Amazon Defense Coalition. The lawyers, Pablo Fajardo and Steven Donziger, helped the Ecuadorians win an $18 billion judgment against the company for massive oil contamination. See press release here.

During an eight-year trial in Ecuador, Chevron has operated a corporate espionage campaign out of its San Ramon, California and Quito offices, hiring no less than four private investigative firms to carry out various plots in an effort to derail the lawsuit, but with no success.

In January, an Ecuador appellate court upheld the lower court's $18 billion judgment for what is considered to be the world's largest oil-related environmental disaster. Under Ecuador law, the Ecuadorians may enforce the judgment now, but they will have to do so in other countries' court systems because Chevron has refused to pay and has sold its major assets in Ecuador.

A private investigator hired by the Ecuadorians told the two lawyers he has seen tapes of Donziger under surveillance, and another said he watched individuals in cars follow Donziger and his family in New York City, where they live. The license plates indicated the cars had been rented.

In Ecuador, Fajardo was physically assaulted by two individuals who said they were serving legal papers on him on Chevron's behalf, even though Ecuador does not "serve" papers, as in the United States. Other Ecuadorian lawyers and staff have reported that they are being followed and have had backpacks and other items stolen.

This is not the first time this has happened. The United Nations directed Ecuador to provide security for the Ecuadorians and their lawyers in 2005, when similar incidents took place. See here.

Chevron has long relied on corporate spies to try and undermine the Ecuadorians' lawsuit.

Remember Diego Borja and Wayne Hansen?

A Chevron contractor, Diego Borja, admitted to a childhood friend he was Chevron's "dirty tricks" operative in Ecuador. The company said it paid him to lift soil and water samples from oil sites during the trial. In a recorded conversation, though, Borja said, his real job was to undermine the trial, something he said Chevron's lawyers had never been able to do in court.

On audio tapes, Borja said that he tried to spy on the Ecuadorians' testing lab by pretending to be someone else; that he switched dirty samples for clean samples; and that could prove Chevron had "cooked" evidence in the case. See here.

Borja partnered with an American named Wayne Hansen, to secretly videotape one of the judges who heard the case. Hansen and Borja used a spy pen and spy watch to tape the judge. They tried to offer him a bribe on camera. When the judge prepared to leave the room, Hansen badgered him to admit Chevron was guilty. The judge never discussed much less accepted a bribe and repeatedly told the two that he could not comment on Chevron's guilt. See here and here.

Nonetheless, Chevron has paraded the tapes in front of the news media and U.S. courts to argue fraud.

The online legal publication, Courthouse News, obtained emails written by Hansen to two of Chevron's private investigative firms hired to "handle" the California man after the Ecuadorians revealed Hansen was a convicted drug felon, not a legitimate businessman looking for contracts in Ecuador, as Chevron claimed.

Hansen wrote to Chevron's private investigator Oliver Beard of Investigative Research Services, Inc., that he wanted a "deal" similar to what Borja had received for the secret videotapes of the judge. Hansen wrote: "I need to hear from a real player with a plan for Wayne Hansen."

Not long after, Chevron hired another private investigative firm, The Mason Investigative Group, to deal with Hansen who vanished from the U.S. after being subpoenaed in 2011 under federal court order. According to the Courthouse News emails, Hansen thanked Eric Mason, the firm's president, for helping him move to Peru where he was "living like a king."

Eric Mason, Chevron's Spy

Currently Chevron, Borja and The Mason Group are fighting the release of discovery documents to the Ecuadorians and the Government of Ecuador in a California federal court. Out of 700 documents, only 13 largely irrelevant documents have been turned over by Chevron, Borja and The Mason Group. The Ecuadorians and the Government of Ecuador have been trying for over a year to obtain the documents in the face of repeated obstruction by Chevron and lawyers for The Mason Group and Borja, all of whom are paid by Chevron.

Legal papers filed in the discovery action accuse all three of trying to hide Chevron's "involvement in concocting and executing a plan to undermine the environmental litigation in Ecuador by tainting the presiding judge with a manufactured scandal."

Remember Mary Cuddehe and Sam Anson?

Sam Anson, Chevron's Spy

In 2010, the Atlantic Monthly exposed yet another clandestine effort by Chevron to throw the case.

Mary Cuddehe, an Iowa-born graduate of Columbia University with a Masters degree in Journalism, published an article documenting that the investigative firm Kroll has been running an espionage operation in Ecuador on behalf of Chevron.

Sam Anson, an investigator for Kroll, offered Cuddehe $20,000 for six weeks of work to appear as an independent journalist while working as an undercover spy in Ecuador. Her job was to spy on sick Ecuadorians to determine if they really had an illness. Anson paid for Cuddehe to travel to Bogota where the case was explained and she was offered the money in the suite of a luxury hotel. She later declined the job and instead wrote an article for the Atlantic Monthly.

Chevron refused to comment on Cuddehe, but the company remains associated with Anson who spies for the oil giant full time.

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After 18 Years Of Waiting, Justice Is Served!

After 18 years of litigation in both the U.S. and in Ecuador, a court of law has found Chevron accountable for the massive contamination of the Ecuadorian rainforest. Below is a statement from the Ecuadorians who have lived with Chevron’s pollution for five decades. Also below is the front page article that appeared today in the Wall Street Journal.

Amazon Defense Coalition
14 February, 2011 – FOR IMMEDIATE RELEASE
Contact: Karen Hinton at 703-798-3109 or Karen@hintoncommunications.com

Pablo Fajardo, the lead Ecuadorian attorneys representing the indigenous tribes suing Chevron for oil contamination, released this statement today about the judgment against Chevron, issued by the Provincial Court of Justice of Sucumbíos in Lago Agrio, Ecuador:

“We believe today’s judgment affirms what the plaintiffs have contended for the past 18 years about Chevron’s intentional and unlawful contamination of Ecuador’s rainforest. Until we have had a chance to review the lengthy decision, we will not be able to comment in detail.

“As a general matter, the plaintiffs provided the court with a great quantum of scientific and documentary evidence that Chevron deliberately and in violation of all industry norms discharged billions of gallons of toxic waste into the rainforest and into the water supply relied on by thousands of Ecuadorian citizens.

“Rather than accept that responsibility, Chevron has launched a campaign of warfare against the Ecuadorian courts and the impoverished victims of its unfortunate practices. We call on the company to end its polemical attacks and search jointly with the plaintiffs for common solutions. We believe the evidence before the court deserves international respect and the plaintiffs will take whatever actions are appropriate consistent with the law to press the claims to a final conclusion.”

Chevron Hit With Record Judgment
By BEN CASSELMAN, ISABEL ORDONEZ and ANGEL GONZALEZ

An Ecuadorian judge on Monday ordered Chevron Corp. to pay $8.6 billion to clean up oil pollution in the country's rain forest in what is believed to be the largest-ever judgment in an environmental case.

And if the U.S. oil giant doesn't publicly apologize in the next 15 days, the judge ordered the company to pay twice that amount.

The ruling brings to an end one chapter of a legal drama that has played out in courtrooms in Ecuador and the U.S. for nearly two decades.

The case has been bitterly fought by both sides, with each accusing the other of improprieties. In recent months, Chevron uncovered a secret memo revealing the plaintiffs' strategy for enforcing any favorable Ecuadorian ruling around the world. That means that Chevron could be forced to defend itself in any of the dozens of countries where it does business.

The oil company, which denies responsibility for the pollution, has no assets in Ecuador and has vowed to fight any efforts to seize its property overseas. Other multinational corporations are closely watching the case.

The plaintiffs, residents of Ecuador's oil-rich Amazon rain forest, are seeking to hold Chevron accountable for environmental damage they say was caused by Texaco Inc., which operated in the country from 1965 to 1992. Chevron inherited the case when it acquired Texaco in 2001.

Chevron has said for more than a year that it expected to lose the case in Ecuador, where it says collusion between the government and the plaintiffs have made a fair ruling impossible. On Monday, the company vowed to appeal and said it won't pay the fine or apologize as the judge demanded.

"We believe it to be illegitimate and unenforceable," Chevron spokesman Kent Robertson said. "It's the product of fraud, and it's contrary to the legitimate scientific evidence."

The plaintiffs deny Chevron's fraud allegations and say scientific evidence backs up their claims of environmental damage.

The ruling was a rare piece of good news for the plaintiffs after months of setbacks in U.S. courts that left their team divided and scrambling for cash.

But the victory could be short-lived. Last week a panel of international arbitrators in The Hague granted Chevron a preliminary injunction that could block the plaintiffs' efforts to enforce the judgment.

Steven Donziger, a New York lawyer who led the case for years until Chevron's continued attacks caused him to step down as lead plaintiffs' attorney, declined to comment. Instead, the plaintiffs released a statement from their Ecuador-based attorney Pablo Fajardo.

"We believe today's judgment affirms what the plaintiffs have contended for the past 18 years about Chevron's intentional and unlawful contamination of Ecuador's rain forest," he said.

Under Ecuadorian law, Chevron doesn't have to pay any judgment until after an initial appeal, which could take months.

Meanwhile, Chevron is using the U.S. courts, in hopes of never paying anything at all. The company sued the plaintiffs and their lawyers in the U.S., where a federal judge recently issued a temporary stay blocking the plaintiffs' American lawyers from seeking to enforce any judgment.

Chevron has also sued the country of Ecuador under the terms of a trade agreement between it and the U.S. Last week, a panel of arbitrators in The Hague ordered Ecuador to take "all measures at its disposal" to block enforcement of any ruling, both in Ecuador and overseas, until the panel rules on the case. That could make it much more difficult for the plaintiffs to convince a foreign court to seize Chevron's assets.

Ecuador has asked a U.S. court to block Chevron's trade suit and has challenged the panel's jurisdiction.

Even if Chevron never has to pay, the ruling could worsen what has already been a public relations nightmare for the oil giant when all oil companies are under added scrutiny in the wake of last year's oil spill in the Gulf of Mexico.

Investors, however, shrugged off the ruling Monday. Chevron's shares rose 1.3% to $96.95 in 4 p.m. composite trading on the New York Stock Exchange.

The judge ruled Chevron must pay $5.4 billion to restore polluted soil and $1.4 billion to create a health system for the community, among other penalties. The court also ruled that Chevron should pay the Amazon Defense Front, a coalition formed by the plaintiffs, an additional 10% in damages, or about $860 million. That could bring the total judgment to $9.5 billion.

In the ruling, Judge Nicolas Zambrano said that Texaco had the knowledge and technical ability to avoid damages; the damages "were not only foreseeable, but also preventable."

Few legal experts expected the case to get this far. The plaintiffs first sued Texaco in New York in 1993. Texaco, and later Chevron, successfully argued that the case should instead be heard in Ecuador, which was then run by a government seen as friendly to American business interests.

In 2007, however, Ecuador elected as president Rafael Correa, who has publicly supported the plaintiffs' cause. Chevron accuses the left-leaning government of interfering in the case, a charge the government denies.

Many of Chevron's fraud allegations involve a report from a court-appointed expert, Richard Cabrera, who in 2008 estimated Chevron's liability at more than $27 billion. Chevron said the report was actually written by experts hired by the plaintiffs, who then sought to cover up their involvement. In his ruling, however, the judge said he didn't base his opinion on the evidence presented by Mr. Cabrera, because of the fraud allegations.

The plaintiffs have taken steps that may leave them better prepared for the next phase of the case. They have secured millions of dollars in new financing, some of it from a London-based hedge fund that specializes in backing class-action suits. And they have hired new lawyers, led by Washington law firm Patton Boggs.

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Scientific Evidence Will Triumph Over Chevron’s Intimidation Tactics in Ecuador

Oil Giant Seeks To Choke Dissent & Protest of its Sub-standard Practices

With the scientific evidence against Chevron in the historic Ecuador environmental trial fully before the court, the oil giant is now resorting to threats and intimidation to try to derail a final judgment that could cost the company's shareholders tens of billions of dollars.


In recent days, Chevron has threatened the trial judge with criminal liability for refusing to grant the oil giant's motions to dismiss the case; sued each of the 47 impoverished indigenous and farmer plaintiffs in Ecuador's rainforest in New York federal court; sought an unprecedented injunction from a U.S. federal judge to bar any American lawyer from enforcing a judgment out of Ecuador anywhere in the world; and finished its 13th day deposing one of the plaintiff's American lawyer, apparently breaking the record for the longest deposition of a lawyer on a sitting case.


The company also filed a civil RICO suit in New York yesterday, claiming the indigenous groups were trying to extort money from Chevron via the lawsuit.

“Chevron is acting out of pure desperation because we are nearing judgment,” said Karen Hinton, the spokeswoman for the plaintiffs. "The company's new legal actions are designed to intimidate lawyers and funders and to provide a fake cover story for shareholders when the company is hit with an adverse judgment."


A lawyer for the Ecuadorian plaintiffs said the "irrefutable" scientific against Chevron will “triumph” over the company’s desperate attempts to choke protest.


“Irrefutable scientific truth will triumph over Chevron’s intimidation tactics and desperation," said Pablo Fajardo, the lead attorney in Ecuador in the case, which accuses Chevron of poisoning an area the size of Rhode Island by dumping billions of gallons of toxic waste.




"We will not be frightened by corporate bullying,” added Fajardo. “Chevron is trying to turn the victims of its own unlawful misconduct into criminals. We will not stand for it.”


Chevron itself has engaged in a pattern of deceitful behavior in Ecuador to hide its liability from the courts and shareholders. Elements of Chevron's misconduct include:

• Misrepresenting a fraudulent remediation that resulted in more Ecuadorians being exposed to toxins, but which allowed Chevron to obtain a legal "release" from government claims;


• Using field sampling testing methods in the Ecuadorian trial that deliberately undercounted toxins in the soil and water;


• Accusations by a Chevron contractor that Chevron "cooked" evidence in the case and contaminated samples switched out for clean ones before submitting them to a testing laboratory;


• Collaborating with a self-described Chevron “dirty-tricks operative” and a convicted drug felon to entrap an Ecuadorian judge in a video scandal, forcing his recusal from the court.


• Hinton also said Chevron's RICO action is clearly driven by the concern about how Wall Street and its shareholders view the pending judgment.

Diego Borja-Chevron operative who said Chevron “cooked” evidence.

Chevron is cornered by the overwhelming evidence and is desperate to escape the court of its own choosing," added Hinton. "Chevron fought for ten years to move this case from the United States to Ecuador. Now that the evidence is in, Chevron is running away from these very courts."

The Ecuadorians filed their original lawsuit in the Southern District Court of New York in 1993, but Chevron successfully fought to have the case moved to Ecuador in 2002, arguing it could get a fair trial in the South American country.

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Chevron Lawyers Sanctioned Four Times in Eco-Disaster Case

For the fourth time, Chevron has been sanctioned for improper conduct in both U.S. and Ecuadorian courts. The sanctioned behavior ranges from attempting to overwhelm the Ecuadorian court by filing in a short time frame over a hundred motions -- some of which had been filed and ruled upon already -- to asking abusive questions of one of the plaintiffs' experts in an effort to intimidate him.

Andrea E. Neuman

Questioning by Gibson Dunn Attorney Andrea Neuman Found to Violate Colorado Bar Rule

Denver, Colorado (November 19, 2010) – A U.S. federal court has sanctioned Chevron and its lawyers at Gibson Dunn & Crutcher for abusive questioning during a deposition related to the oil giant’s multi-billion dollar liability in Ecuador for environmental contamination, according to court papers made available today.

The questioning that led to the sanctions was conducted by Andrea Neuman, one of Chevron’s lead lawyers on the Ecuador matter and a partner at Gibson Dunn’s office in Irvine, CA. Neuman is the fourth Chevron lawyer to be sanctioned recently in the Ecuador matter.

Separately, two Chevron employees are under criminal indictment in the South American nation for lying about the results of a purported environmental remediation that Chevron is using as a defense to the civil lawsuit over the contamination, which affects an area the size of Rhode Island.

Dozens of indigenous and farmer communities in Ecuador are suing the oil giant for deliberately dumping billions of gallons of toxic waste into Ecuador’s Amazon region when it operated a large oil concession from 1964 to 1990.

The contamination – which includes more than 900 abandoned toxic waste pits -- has plunged the region into a public health crisis that threatens thousands of people with cancer and other oil-related diseases, according to evidence before the court.

In the brief seeking the sanctions, the Amazon communities accused Neuman of using “blatant intimidation tactics” that “fall below the standards of professional conduct” required by Colorado and Federal rules in Colorado. The questioning occurred when Neuman deposed an American technical expert for the plaintiffs on Oct. 6 in Denver.

In a decision dated November 15, Magistrate Judge Michael E. Hegarty ordered Neuman and her colleagues at Gibson Dunn to refrain from asking questions in depositions involving the witnesses’ knowledge of criminal law statutes. Gibson Dunn is trying to characterize the expert work in Ecuador as fraudulent, a charge the Amazonian communities reject.

“This court in Colorado was willing to stand up to Gibson Dunn’s bullying and abusive tactics,” said Pablo Fajardo, the lead attorney for the plaintiffs in the Ecuador trial. “Chevron is using these tactics as part of its campaign to cover up its own fraud and wrongdoing in Ecuador.”

Just days ago a trial judge in Ecuador increased the fine for two Chevron lawyers found to be obstructing the trial. Alberto Racines and Diego Larrea, both of whom have worked on Chevron's legal team in Ecuador since the trial against Chevron began in 2003, were fined approximately $1,600 by Judge Nicolas Zambrano for repeatedly filing the same motions to delay the seven-year case.

In 2009, a third Chevron lawyer in Ecuador – Patricio Campuzano -- was sanctioned for the same reason. On August 5 – one day after the Ecuador court ordered both parties to submit their own damages assessments – Chevron filed 19 motions to nullify the order or the trial itself in a 30-minute period. Racines and Larrea then cited the failure of the trial judge to quickly rule on each of the motions as a basis to recuse him.

Just last week, Chevron’s Ecuador lawyers filed a long affidavit in court from a U.S. technical expert that was signed in 2004, one year after the trial began in Ecuador. Chevron then asked the judge to appoint a translator though Chevron generally provides its own translations of documents. Chevron, which operated several oil fields in Ecuador from 1964 to 1990, faces damages and clean-up costs of up to $113 billion.

The amount includes compensation for an estimated 10,000 potential deaths from cancer in the coming decades, according to reports submitted to the court by a team of prominent American technical experts. Chevron bought Texaco (which owned the Ecuador operation) in 2001 for $31 billion, apparently without adequately vetting the company for the Ecuador environmental liability, said Fajardo.

The lawsuit against Chevron, originally filed in U.S. federal court in 1993 but moved to Ecuador in 2002 at Chevron's request, accuses the oil giant of poisoning an area of rainforest that is home to five indigenous groups and thousands of farmers. The two Chevron employees under indictment in Ecuador, Rodrigo Perez Pallares and Ricardo Reis Veiga, have a preliminary hearing on their case scheduled for January 5, 2011 in Quito. Both are accused of defrauding Ecuador’s government by signing false documents certifying a sham cleanup in the mid-1990s.

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Chevron Dumped Toxic Formation Water Directly Into The Rainforest

From 1964 to 1990, Chevron dumped 18 billion gallons of toxic formation water directly into the rainforest instead of re-injecting it deep into the ground, the standard practice during this time in the United States and other countries. Without regard to the impact upon the environment and human health, Chevron designed this practice to save money. When Petroecuador took over the oil sites, the government-owned oil company began re-injecting all formation water, and today that practice continues. The press release below features a former Chevron oilfield worker who describes how the oil giant contaminated the drinking water and soil.

Video: Chevron Oilfield Worker Describes Toxic Dumping in Ecuador

LAGO AGRIO, Ecuador (Nov. 8, 2010) – A former Chevron oilfield worker has described in graphic detail how the company ordered its employees to systematically dump toxic waste into the waterways of the Amazon rainforest, according to representatives of the communities suing the oil giant.

In a video posted on the at website of the environmental group Amazon Watch, a former Chevron oilfield worker Jhinsop Martinez Erraez offers an eyewitness account of his employer’s criminal conduct. Erraez said the company conducted wholesale dumping of toxic waste products and industrial chemicals directly into the Ecuadorian rainforest from 1964 to 1990.

The revelations came in the second video posted by Amazon Watch that confirms Chevron’s oilfield misconduct in Ecuador, where the company faces a multi-billion dollar liability in a case brought by dozens of indigenous and farmer communities. The first video, also available here, documented how the company abandoned hundreds of waste pits that piped toxic waste into rivers and streams relied on by the local inhabitants for their drinking water.

Martinez had been an assistant for oil production operations at Dureno 1, one of the 378 well sites and oil production facilities built and operated by Texaco throughout an area of rainforest roughly the size of Rhode Island.

“The water was released contaminated with chemicals … the water dumped was yellow, totally contaminated because it was injected with two classes of chemicals, one to separate the water and another to separate the sediment” said Martinez. “The [oil] well was on a hill and drained down the mountainside and into a river.”

“And that was the routine we had twenty-four hours a day, taking care of that well,” Martinez said.

According to its own environmental audits, Chevron discharged at least 18 billion gallons of the “produced water” that Martinez describes in his interview. Produced water contains cancer-causing chemicals such as benzene, toluene, xylene and Polynuclear Aromatic Hydrocarbons (PAHs).

Martinez worked for Chevron in the late 1980s, shortly before its contract with Ecuador’s government expired in 1992 and the company left the country. The lawsuit was filed in U.S. federal court in 1993 and moved to Ecuador in 2002 after Chevron agreed to accept jurisdiction there and abide by any judgment.

The top end of Chevron’s damages is estimated to be as high as $113 billion, according to a report submitted by six prominent American technical experts.

While Chevron does not dispute that it dumped the “produced water” as Martinez said, the company has said on multiple occasions that the toxic waste was treated before discharge. This claim is sharply contradicted by Martinez.

“[Texaco] gave the orders for us to drain the water out into nature – the contaminated waters. It didn’t go anywhere to be treated or anything like that,” Martinez told Amazon Watch. “It went directly through a pipe and drained down the mountainside, nowhere else. And, well, there was nothing you could do.”

Martinez’s statements are significant because as early as the 1930s it was standard oil industry practice in the United States to re-inject “produced water” deep underground rather than discharge it directly into the environment, where it could contaminate fresh water sources. Some “produced water” is discharged in the U.S. today, but only under a strict permitting process to guarantee that it does not contaminate water sources.

According to Martinez, neither of these approaches were utilized at Dureno 1 even though Chevron owned the patent on the technology used for underground reinjection.

Evidence before the Ecuador court demonstrates that Chevron’s dumping at Dureno 1 was replicated at all of the company’s production sites in Ecuador, said Pablo Fajardo, the attorney for the plaintiffs.

“It is clear that Chevron is responsible for the destruction of an entire region’s environment on which thousands of people depend for their sustenance,” said Fajardo.

Several peer-reviewed health evaluations have found elevated rates of cancer in the area where Chevron operated. One American expert, formerly associated with the RAND Corporation, authored a report report, concluding that up to 10,000 people faced a significant risk of contracting cancer in the coming decades because of the pollution.

“An entire generation has been forced to live with the reality of elevated risks of cancer, childhood leukemia, spontaneous abortions, and birth defects simply because Chevron didn’t want to spend the money to operate the way it would have in the United States,” said Fajardo.

Several experts believe the damage caused by Chevron in Ecuador dwarfs the harm generated by the BP Gulf spill, and is probably the world's largest oil-related disaster. The contamination will take at least a decade to remediate once funds are in place, according to experts.

A complete video of the Martinez interview, and associated transcripts is available here.

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