Wednesday, January 16, 2013

Telling The Truth About Chevron in Ecuador

It's no conspiracy, says Paul Paz y Miño of Amazon Watch in his blog about the subpoena Chevron served on Amazon Watch, one of the most effective environmental advocacy organizations in the country.

It's truth telling, and, last time we checked, that wasn't against the law.

Chevron, though, could care less, writes Paz y Miño.

"Not only is this invasive subpoena request a flagrant attack on our first-amendment rights, it is also an attempt at miring our organization in a protected and tangential lawsuit, designed to burden our resources and distract us from our goal: justice in the Amazon."

Amazon Watch, dedicated to helping communities in the Amazon region protect their lands, has been an outspoken defender of the Ecuadorians who recently won a $19 billion judgment against Chevron for massive contamination in the rainforest. Because Chevron has refused to pay the judgment, the Ecuadorians have filed lawsuits in Canada, Brazil and Argentina to freeze and seize Chevron's assets there. See here. (Chevron has few assets in Ecuador.)

In turn, Chevron has filed lawsuits in the United States to stop enforcement of the judgment. The Second Circuit Court of Appeals and the U.S. Supreme Court put a stop to that, but another lawsuit seeks to show that the Ecuadorians, their lawyers and supporters "conspired" through a "racketeering" campaign to force Chevron to pay a settlement.

In that effort, Chevron has intimidated and harassed hundreds of people, including its own shareholders, who favor Chevron being held accountable for its misconduct in Ecuador.
Subpoenaed for documents or depositions include environmentalist advocates, like the people who work for Amazon Watch, law students who spent a summer in Ecuador working on the case, others who had little to do with the litigation and even shareholders, an action that drew criticism recently from a New York Times business columnist.

Paz y Miño, though, hits the nail on the head when he calls Chevron's "conspiracy" theories nothing more than what other environmental groups did when Exxon spilled oil in Alaska and BP on the U.S. Gulf Coast; what consumer groups and advocates for homeowners did when banks ripped off home buyers with predatory loans and then ripped them off again with illegal foreclosures; what gun control advocates are doing now to stop the killing of innocent people:  they are exercising their First Amendment rights, telling the truth about how Chevron's intentional contamination destroyed what was once a pristine rainforest.

"What we are witnessing now is the last chapter of a 50-year campaign of human rights abuses by Chevron. And if they are successful in their desperate subpoena of hundreds of thousands of Amazon Watch documents, what they will find, ironically, is not that AW has been part of any alleged conspiracy, but rather nothing more than the spirit, the resolve, the compassion, and the intellect that we have brought to telling the truth about what Chevron did in Ecuador, and that in turn has helped bring the company to its knees."

Click here for the entire blog.

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Saturday, January 12, 2013

For U.S. Judge Lewis Kaplan, The Show Trial Must Go On

For a real stinker in the federal judiciary, look no further than how New York federal judge Lewis A. Kaplan is desperately trying to protect Chevron from having to pay its $19 billion environmental liability in Ecuador.  Once again, Kaplan is trying to act as the world’s judicial police from his Manhattan courtroom.

You might remember that Kaplan shocked the legal community in 2011 when he issued an unprecedented “global injunction” that purported to bar Ecuadorian villagers from enforcing an Ecuadorian judgment obtained under Ecuadorian law in any country in the world.

A few months later, the Second Circuit Court of Appeals in New York sharply rebuked Kaplan, vacated his injunction as utterly contrary to the law, and told him in no uncertain terms that he has no business trying to dictate to judges in other countries whether they should or should not enforce a judgment from another country.

After a short pause, Kaplan apparently is now open again for Chevron’s business.

Kaplan recently issued a series of orders designed to bolster Chevron’s ailing legal positions in the case as he readies a slightly different version of the “show trial” that the Second Circuit told him he couldn’t have.  But like any show trial, a peek under the covers reveals the intellectual dishonesty and zealotry behind a process clearly designed to help Chevron evade accountability for its sordid record of toxic dumping.

While the Ecuadorians have struggled mightily for two decades to hold Chevron accountable for the discharge of more than 16billion gallons of cancer-causing oil sludge into rainforest waterways, Kaplan has openly mocked the indigenous villagers in court.  He called their case a “giant game” and asserted that their lawyers were trying to make enough money to be the “next big thing in fixing the balance of payments deficit” of the United States. 

For a summary of the shocking extent of Kaplan’s smears and attacks in the case up to the summer of 2011, read this petition.

What has happened since is even more alarming to those who care about the integrity of our judicial system, particularly in cases where giant corporations try to steamroll their way to victory not on the merits but through procedural gamesmanship and intimidation. Kaplan’s conduct is an embarrassing demonstration of how our courts can be used as a "safe harbor" by entities that want to drown the opposition in paper and “gotcha” maneuvers.  We note this is happening when judges in other countries – including Canada, Brazil, and Argentina -- are starting to preside over enforcement proceedings related to the Ecuador judgment necessitated by Chevron’s refusal to pay what it owes.

Kaplan recently quashed 24 of the 27 third-party subpoenas issued by the Ecuadorians to gather additional evidence proving that the judgment in Ecuador was based on overwhelming scientific evidence, not “fraud” as the oil giant alleges in its trumped-up counter-attacks.   Kaplan quashed these subpoenas without as much as a hearing only six days after Chevron filed a perfunctory four-page motion.  In the meantime, he has done nothing to stop Chevron from serving 102 subpoenas on almost everybody connected to the Ecuadorians -- including their own lawyers, shareholders, journalists, law students, college interns and environmentalists who have had little to do with the litigation. See here.

Kaplan recently allowed Chevron to proceed with 31 additional subpoenas against third parties all but identical to the ones issued by the Ecuadorians that he quashed.  This happened despite a New York Times columnist and report questioning whether Chevron is using Kaplan’s court to abuse the discovery process to intimidate its own shareholders into silence.  (Canadian securities lawyer Graham Erion recently issued a chilling report documenting the company’s many misleading statements about the Ecuador case, which has created a furor in the shareholder community.)

What was Kaplan’s stated reason to allow Chevron massive unfettered discovery while denying all but the most limited discovery to the Ecuadorians?  He ruled it would be “oppressive” for Chevron, the world’s third-largest oil company with annual revenues of roughly $250 billion, to have to litigate each of the subpoenas in different federal courts consistent with normal litigation practice.  Kaplan could cite no legal support for this wildly unbalanced approach.  He ignored the fact that in addition to its subpoenas, Chevron has of its own accord chosen to initiate dozens of highly burdensome lawsuits seeking discovery in at least 18 different federal courts, without doubt one of the most oppressive legal strategies ever undertaken.

Some of Kaplan's decisions of late reflect his deep-seated bias and often make a mockery of the authority of the Second Circuit Court of Appeals, New York’s highest court. Consider:

**Chevron claims it is using the civil RICO and fraud case to seek “emergency relief” to block enforcement of the Ecuador judgment in countries outside the U.S. – precisely the relief the Second Circuit ruled that Chevron was barred from seeking.  Kaplan recently issued a stunning 17-page ruling where he insisted that the fraud case allows him to make findings in the context of pre-trial motions to help Chevron block the enforcement actions overseas.

**For almost two years now, Chevron has vociferously championed the notion that the Ecuador lawsuit is nothing more than “sham litigation” from beginning to end.  Just days ago, Chevron suddenly dropped that allegation at the request of Kaplan.  Why?  Because Kaplan decided he didn’t want the Ecuadorians to take discovery from Chevron’s own scientists that would prove the company itself knew the litigation was based on scientific evidence. Kaplan then barred the Ecuadorians from presenting a defense based on Chevron’s contamination in Ecuador.

** In a move straight out of Kafka, Kaplan is forcing the Ecuadorians to mount defenses they don’t want to use just so he can rule against them and advance Chevron’s case in the process. The denial of these technical defenses (such as res judicata) will afford Kaplan the opportunity to further disparage Ecuador’s judicial system in the context of pre-trial motions, again without so much as an evidentiary hearing.  Chevron in foreign courts to try to convince judges there that the issues were already “decided”. Read this brief for details.

** Kaplan openly disobeys higher courts when it suits his objectives.  In refusing to grant a motion that the “racketeering” case be dismissed against the Ecuadorians, Kaplan chose to disregard the binding authority of the Second Circuit.  He suggested that the appellate judges were wrong to decide as they did in light of an older case from an intermediate level New York state court. He must be the only trial judge in the country who openly seeks to “overrule” the appellate court that supervises him.

**Kaplan also takes great pains to avoid appellate scrutiny of his obvious insubordination.  Since being reversed on the global injunction, Kaplan has carefully crafted his orders to try to make them immune to appeal.  Just last week, the Ecuadorians asked Kaplan to certify for appeal his denial of their motion to dismiss the case for lack of a valid legal claim.  Kaplan refused even though such an appeal could definitively end the case for the Ecuadorians (who own the judgment), leaving only small damages claims against their U.S. counsel.  Since such an appeal would potentially eliminate the raison d’etre of the entire show trial exercise, Kaplan denied it.

**Kaplan regularly suggests that he has issued “factual findings” even though: (1) he has never held so much as an evidentiary hearing; (2) he has only ruled on pre-trial motions disposed as “matters of law,” for which facts are not supposed to be weighed or determined; and (3) he has only reached his findings using procedural tricks which allow him to falsely assert that Chevron’s evidence is “uncontested”.  Of course, the Ecuadorians have vigorously disputed every aspect of Chevron’s make-believe case.  Kaplan justifies his “uncontested” claim by way of finding that the Ecuadorians have “waived” this and that defense, often using unreasonably short deadlines or other tricks.   Chevron, too, uses these so-called “uncontested findings” in foreign courts to argue the issues are settled. 

** Kaplan delights in Chevron’s vexatious litigation practices.  It is estimated that the company has spent well over $1 billion defending the case, or about 20 times more than the paltry $40 million it spent on its woefully inadequate and fraudulent remediation in Ecuador. In addition to allowing the company to issue a massive number of subpoenas, Kaplan allowed Chevron to seek 58 broad categories of documents encompassing millions of pages of material from active litigation counsel at the Patton Boggs law firm. 

Targeting law firms with broadly worded subpoenas is part of the Chevron strategy to scare away professionals from helping the victims of the company’s human rights abuses.

That’s the “service” the oil giant is spending hundreds of millions of dollars to buy from Gibson Dunn & Crutcher, which has at least 60 lawyers working on the case.  In blatant violation of the First Amendment, GDC has dispatched a legal goon squad to sue and subpoena anybody sympathetic to the Ecuadorians – including Google and Yahoo.

Kaplan also has a shameful history of denying due process to Steven Donziger, a long-time human rights lawyer for the Ecuadorians who lives in Manhattan.  Kaplan’s personal vendetta against Donziger, a fellow Harvard Law alum who has worked for almost two decades on the case, is palpable. The great judge seems to regard Donziger’s decision to forego a career in corporate law and work out of his home as some sort of personal affront.  He has called Donziger a “field general” and other nice names, and is certain to deny Donziger’s counterclaims against Chevron which document its history in Ecuador of using lies, bribery, intimidation, and espionage to sabotage the legal case.

In early 2011, Kaplan gave Donziger only eight days to hire a lawyer, read and digest Chevron’s 148-page “fraud” complaint (with 589 exhibits), and file an opposition before he declared the record “closed” and three weeks later entered his illegal injunction purporting to block enforcement of the Ecuador judgment.   Donziger filed a powerful opposition to Chevron within days and submitted it two weeks before Kaplan ruled.  Kaplan refused to consider the opposition.  Waving a magic wand like this is how Kaplan ensures inconvenient facts do not infect the script.

(See here for an earlier brief Donziger filed to successfully appeal Kaplan’s violation of his due process rights and here for a summary of the overwhelming scientific evidence relied on by the Ecuador court to find Chevron liable.)

As noted, Kaplan suffered a humiliating rebuke last year when the Second Circuit unanimously overturned his unprecedented injunction.  Kaplan’s injunction had prompted harsh criticism from international jurists and numerous U.S. scholars who concluded his bizarre notion of U.S. judicial policing would create chaos in the world’s courts and undermine our system of international law. See here and here.  In 2012, Chevron hired the dean of the U.S. Supreme Court bar, Ted Olson, to convince the U.S. Supreme Court to rescue the Kaplan proceeding. The highest court took one look at Chevron’s tale and sent Olson packing.   Its reaction is similar to that from the highest appellate court in Ecuador, which explicitly dismissed Chevron’s “fraud” claims with the note that they “go nowhere without a good dose of imagination.”

At oral argument over the illegal injunction, John Keker (who represents Donziger) asserted that Kaplan was creating a show trial where the Ecuadorian villagers and Donziger would be “tethered to a stake like a goat.”   Chevron’s lawyer, self-described “mob prosecutor” Randy Mastro, was laughed at by most of the gallery when he couldn’t answer the most basic questions about the absence of legal authority for Kaplan’s maneuver.   Mastro then got slammed by an Oregon federal judge for committing ethical violations on Chevron's behalf.

Before the Second Circuit intervened, Kaplan had scheduled an unusual court proceeding for November 2011 where he alone was going to judge whether Ecuador’s entire judicial system was up to international standards.

 (This is the same system where, by the way, Chevron has won many civil cases against Ecuador's state-owned oil company through the years)

After that plan got deep-sixed, Kaplan came up with a different way to try to do the same thing.  He decreed there would be a trial against the Ecuadorians and their counsel this October on Chevron’s “racketeering” charges.   That is, a trial about the trial that already occurred in the courts in Ecuador where Chevron wanted the entire proceeding to take place after it was shifted there on Chevron’s request from New York’s courts – the same court where Kaplan now sits.

If that gives you a headache, you are not alone.

And in case the Ecuadorians might mount a proper opposition in this short time period, Kaplan is doing just about everything in his power to squelch that possibility.  He quashes subpoenas and requires the Ecuadorians to respond to Chevron’s voluminous “summary judgment” motions that in normal cases should be brought near the end of the discovery process, not at the beginning.

A giant game indeed.

It is painfully obvious that Kaplan intends to give Chevron as many of the rulings and “findings” that it wants while the charade continues.  It is equally obvious that his rulings will be of little use to the company in foreign courts, which to this point have been more than happy to thumb their noses at a U.S. judge who appears to be a shining international example of judging gone awry.

Inside Chevron, hope springs eternal.


To understand more about how the rainforest communities in Ecuador have suffered at Chevron’s hands, see this photo spread and the gripping personal testimonies put together by longtime Reuters photographer Lou Dematteis and journalist Joan Kruckewitt, as published by the Huffington Post; this video prepared by the plaintiffs that explains the case; and this report from 60 Minutes where Chevron lawyer states that no court in the world should hear the claims of the Ecuadorian villagers.

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