Monday, October 31, 2011

Chevron Fights Like Mad to Block Release of Documents

Court Begins to Question Oil Giant's Double Standard When It Comes to Disclosure of Case Files

If you want an example of how a large oil company can mock court orders and get away with it, look no further than Chevron's behavior in the Ecuador environmental case where the company faces an $18 billion liability and allegations that it engaged in criminal misconduct to undermine a trial.See here and here.

The bottom line: due to a series of discovery decisions by a U.S. federal judge, who is clearly biased against the Ecuadorians, Chevron has almost the entire case file of the Ecuadorian's legal team while the Ecuadorians and their lawyers have almost none of Chevron's documents. There is simply no level playing field in the case.

Reporters covering the matter have completely missed the story of Chevron's gamesmanship before U.S. Judges. This gamesmanship makes it clear that Chevron will do anything to evade what is the largest court judgment in history for environmental damage. (See here)

One example vividly illustrates Chevron's maneuvering. For more than a year, the Ecuadorians have been fighting to obtain thousands of documents related to Diego Borja, the Chevron operative who secretly videotaped himself and his colleague Wayne Hansen offering a bribe to be given to the presiding judge in Ecuador as a way to sabotage the proceedings. Borja's own lawyer has admitted publicly that his client faces criminal liability in the U.S. and Ecuador for his actions. Borja has admitted Chevron has paid him vast sums of money -- including covering his U.S. income taxes -- for not working while living in the U.S. out of reach of journalists and investigative authorities.

When it comes to seeking Chevron's documents, the Ecuadorians have been met with nothing but obstructionism from Chevron's army of lawyers at Gibson Dunn & Crutcher, King & Spalding, Jones Day, Boies Schiller & Flexner, and Arguedes Cassman & Headley. (Yes, you read that correctly -- Chevron has hired five of the most powerful corporate and criminal defense firms in America to defend its environmental dumping in Ecuador. The Gibson Dunn firm recently disclosed it has at least 75 lawyers working on the case, meaning it is probably is billing the oil giant well over $100 million annually to get it off the hook for human rights violations in Ecuador.)

Consider the radically different ways U.S. courts have treated Chevron's requests for discovery, as compared to those made by the Ecuadorians.

In federal court in New York, the battle was fast and furious for release of privileged documents belonging to the Ecuadorians when Chevron wanted them. Thanks to a "technicality" ginned up by federal judge Lewis A. Kaplan, who insulted the Ecuadorians from the bench by claiming their lawsuit was imaginary, Chevron collected practically every document and email written about the 18-year-old case from their longtime lawyer Steven Donziger.

Kaplan prevented Donziger from arguing why particular documents were protected by privilege. Instead, he ordered Donziger to truck over his entire stash of tens of thousands of emails and internal memos to Chevron's law offices on the grounds his privilege log was turned in “late”. In fact, his log was prepared by numerous lawyers working furiously for weeks to list each of his thousands of documents, and it was clearly prepared in a reasonable amount of time (about four weeks after Kaplan denied Donziger's motion to quash the subpoena).

Using Judge Kaplan as its ally, Chevron also obtained documents from case interns, other lawyers for the Ecuadorians, consultants, financial advisors, and financial supporters -- over 1 million documents in all, according to legal briefs.

Chevron's discovery orgy was abruptly shut down in September by the federal appeals court in New York, which stayed the underlying legal proceeding before Kaplan where Chevron was seeking an unprecedented (and probably illegal) worldwide injunction barring enforcement of the Ecuadorian judgment. Without that case, Chevron lost the legal mechanism it was using to continue its U.S. discovery odyssey. Without the injunction, Chevron also now finds itself in a bigger jam now than when Kaplan was allowed to run wild on its behalf.

Interestingly, a few days before that appellate ruling staying Kaplan's proceeding, Chevron's double standard was revealed in a little-noticed decision by New York Magistrate Judge James Francis IV. Francis had this to say about Chevron's privilege logs (which lists Chevron's documents related to the litigation that the company is trying to prevent from being turned over to the Ecuadorians):
“(The review) reveals the categorization process engaged in by Chevron obscures rather than illuminates (emphasis added) the nature of the materials withheld….”
“Distressingly, Chevron has taken a view of its own discovery responsibilities sharply different from the obligations it seeks to impose on the (Ecuadorians) …. Chevron was highly critical of (the Ecuadorians’) privilege log descriptions that turn out to have been far more detailed (emphasis added) than Chevron's own.”
In the meantime, the wheels of justice have turned much more slowly in legal proceedings initiated by the Ecuadorians in California seeking Chevron's documents related to the Borja corruption scandal. See here.

Despite more than a year’s worth of motions filed by the Ecuadorians and granted by the court to compel Chevron and Borja to hand over documents, only a handful of largely irrelevant documents have actually been produced. With the legal action in New York dormant, Chevron is fighting even harder in California to stop anyone from discovering the depths to which the company sank with Borja in Ecuador. If Borja has potential criminal liability for trying to sabotage the proceedings in Ecuador, what does that say about Chevron's liability given that Borja was working for Chevron at the time and is now a “kept man” by the oil company in the U.S.? That's the question Chevron does not want answered.

Chevron has been trying ever since to cover up its involvement, even lying to the public about key facts in a press release -- such as characterizing Borja as a "Good Samaritan", failing to disclose that his sidekick Wayne Hansen (who helped him shoot the videos) was a convicted drug felon, or hiding the fact the pair met with Chevron lawyers as the scheme was unfolding.

Arguing for a balanced playing field for the Ecuadorians, attorney Jim Tyrrell of Patton Boggs recently asked a California magistrate judge to force Chevron, Borja and a private investigative firm paid by Chevron to stop hiding behind their privilege logs.

“… Respectfully, what we get back from Chevron and their allies is garbage. We can't tell what those privilege logs mean,” argued Tyrrell before Magistrate Judge Nathanial Cousins, who is expected to rule soon.
“Chevron has every one of my lead lawyers' documents for 18 years," Tyrell said. "We're quibbling over one here or there. That's not a level playing field, and that's not what justice is about.
“If anybody deserves a press account as to their conduct with respect to fraud, it isn't my side. It's the folks, respectfully, at Chevron.”

We are waiting to see if Magistrate Judge Cousins stands up to Chevron and its army of lawyers. He should allow a full airing of the facts related to this scandal.