Thursday, November 9, 2017

21-0: Ecuadorian Communities Are Dominating Chevron In Canada's Appellate Courts

Chevron's strategy to block enforcement of its $9.5 billion environmental liability in Canada is on the rocks. The company now has lost three straight decisions (see here, here, and here) in Canada's appellate courts to Ecuadorian indigenous peoples and farmer communities. To cover up this debacle, Chevron General Counsel R. Hewitt Pate continues to bullsh*t -- sorry, mislead  -- company shareholders about the growing risk faced by his company.

Chevron's string of losses in Canada comes after Mr. Pate hired several large Canadian law firms -- who send mostly older white men in suits to court -- to try to block indigenous peoples from collecting a judgment the oil giant was ordered to pay to remediate the extensive damage to the rainforest caused by its systematic dumping of oil waste from 1964 to 1992. As journalist Alexander Zaitchik wrote in his latest article on the case: "Ecuadorian Villagers Are Fighting Chevron In Canada -- And Winning."

The affected communities in Ecuador are not just winning, but dominating.

Thirteen appellate judges in Canada have ruled in their favor since the enforcement action was filed. In Ecuador, eight appellate judges have ruled in favor of the villagers. None have ruled for Chevron in either country. For those keeping score, that's 21-0 in favor of the villagers in appellate courts in Ecuador and Canada. (Here is a summary of the overwhelming evidence against Chevron.)

Chevron's latest reversal in Canada came last week when a three-judge panel on the Ontario Court of Appeal strongly criticized the company for trying to end the Ecuador litigation by imposing a $1 million costs order on the indigenous groups. The decision was a stunning setback for Chevron.

Chevron's courtroom carnage in Canada dates to 2013 when Ecuador's Supreme Court ruled unanimously in favor of the indigenous groups after an eight-year trial in the forum where the company insisted the trial be held. Chevron refused to pay the judgment and sold its assets in Ecuador, threatening the indigenous groups with a "lifetime of litigation" if they persisted.

To force compliance with the law, the affected communities then filed suit in Canada to seize some of Chevron's extensive holdings in the country. Chevron predictably tried to block that action on jurisdictional grounds as part of its campaign to obtain impunity.

Chevron lost the jurisdictional issue in spectacular fashion not only at the Ontario Court of Appeal but also in a stunning 92-page decision issued by all seven justices on the country's Supreme Court. Both decisions were unanimous.

Stuck with an impending trial where it would have to put on the same fabricated evidence of "fraud" that it concocted in the United States to try to evade the Ecuador judgment, Chevron launched a new strategy to try to kill off the case by imposing the costs order.

It would be hard to imagine a greater travesty of justice than a costs order given that Chevron owes its victims $12 billion and refuses to pay. Further, the company surely spent more on legal fees to get the costs order than any amount it would have received from the costs order had it been allowed to stand. Again, that subterfuge was blocked in a third unanimous appellate opinion issued last week.

A score of 21-0 in favor of the communities among appellate judges sounds more like a lopsided football score. In the annals of courtroom battles, it's virtually unprecedented -- not too far from Georgia Tech's infamous 222-0 thrashing of Cumberland College in 1916. That was the most lopsided score in college football history.

The only decision that Chevron has won in the long-running case is one based on clearly fraudulent evidence issued by a compromised U.S. judge Lewis A. Kaplan. (See this report for full documentation of Chevron's fraud in Kaplan's courtroom.) Chevron tries to cite the Kaplan findings in its favor but that decision is now clearly backfiring against the company.

In Canada, the Ontario Court of Appeal made it clear that it would have nothing to do with Kaplan's ruling despite tenacious efforts by Chevron lawyer Larry Lowenstein to act as if trumps the extensive findings of Ecuador's courts -- the only courts to actually hear the voluminous evidence of Chevron's toxic dumping and wrongdoing in the Amazon.

Chevron's next manuever in Canada is to try to eliminate its wholly-owned Canadian subsidiary (Chevron Canada) as a defendant in the enforcement action. The Ontario Court of Appeals will hear argument on that issue soon. If the past is prologue, the appellate tally will look even worse for Chevron after that matter gets resolved.

If all of this appears to have produced a little too much stress for Pate, that certainly would be understandable. Chevron's top lawyer has spent an estimated $2 billion of shareholder funds on the company's defense. Just days ago, he hastily issued a misleading press release claiming the Ecuador judgment was obtained "fraudulently". Chevron then backpedaled and re-issued the same release later in the day with softer (but still misleading) language.

Pate's idea is to try to leave the impression that Chevron is "winning" the case around the world. But an 0-21 record in appellate courts in the two most important jurisdictions is sort of hard to wash away no matter how aromatic the Chevron propaganda. Most companies would have fired their General Counsel long ago for such an atrocious track record when the stakes are so high.

Worse for Pate is that major Canadian citizens, such as national indigenous leaders Phil Fontaine and Ed John along with Greenpeace co-founder Rex Weyler, recently have lined up behind the Ecuadorian indigenous groups. British rock musician Roger Waters of Pink Floyd is also speaking out publicly against Chevron for its refusal to remediate its toxic pollution in Ecuador.

In his article about the string of victories by the Ecuadorians in Canada, Zaitchik quoted the lead Ecuadorian lawyer for the indigenous groups, Patricio Salazar:
"Chevron's entire strategy is based on obstruction and delay. Canadian courts need to put an end to this abuse of the civil justice system. It is unfortunate that this Chevron maneuver to impose a court tax on the people it poisoned got as far as it did."
Steven Donziger, Chevron's main U.S. critic who is being personally targeted before Kaplan with a preposterous $33 million costs order, had this to say to Zaitchik:
"We are confident Chevron's scorched-earth strategy of obstruction and delay will soon run its course, and the company will pay the full amount necessary to clean up its awful pollution in Ecuador which continues to decimate indigenous peoples. Chevron has thrown at least $2 billion and 2,000 lawyers at us to try to obstruct court proceedings. That strategy has failed."  
Well said by both lawyers.

Chevron's Board of Directors needs to think about getting rid of Pate so it can address its Ecuador problem before the repercussions start to negatively affect company operations around the globe. Absent action by the Chevron Board, it might be time for Chevron shareholders to take control of this rapidly deteriorating situation.

What is definitely clear is that Chevron's current management team seems utterly clueless when it comes to Ecuador.

Wednesday, November 1, 2017

The Takeaway: Chevron CEO Big Loser in Latest Canada Court Decision Over Ecuador Pollution Judgment

The latest attempt by Chevron CEO John Watson to foist his company's RICO fraud from the United States onto Canadian courts just got slapped down by a three-judge panel from the Ontario Court of Appeal. This suggests the oil giant faces major hurdles in Canada in its campaign to evade enforcement of a $12 billion liability owed to Ecuadorian indigenous peoples and farmer communities.

The latest Canada decision, which can be read in full here, can only be described as a powerful rebuke to Watson, Chevron General Counsel R. Hewitt Pate, and the company's army of Canadian lawyers who are being paid big bucks to obstruct and delay the case. Consider these key takeaways from the decision:

  • Chevron's SLAPP-style harassment attempt to impose a $1 million costs order on the impoverished indigenous groups always was a classic corporate maneuver to evade liability by trying to end the litigation without a resolution on the merits. The Appeals Court vacated the order in its entirety. Chevron General Counsel Pate sent at least 20 high-billing lawyers to court, implicitly disclosing that the company was spending more in legal fees to obtain the costs order than it would have received had it been granted. Worse, almost all of the Chevron lawyers were bland white men in suits whose job apparently is to block aboriginal peoples from collecting money they need to clean up an environmental disaster caused by Chevron. The fundamental disparity in resources – Chevron makes $225 billion annually while the indigenous groups live in poverty due largely to Chevron's pollution – could not have been more stark.
  • Chevron's attempt to leverage U.S. Judge Kaplan's completely flawed civil RICO (or "racketeering") decision against the indigenous groups appears to have backfired yet again. It is becoming more apparent in Canada that the Kaplan decision is a debacle for Chevron and actually favors the aboriginal groups on a variety of levels. It is now seen as a product of Chevron's fraud in presenting false testimony from a disgraced witness paid $2 million who later admitted lying in court. No Canadian court wants to be told by a U.S. oil company that it must defer to a U.S. judge – especially one who conducted a hocus-pocus proceeding in favor of Chevron. Violating his duty of neutrality, Kaplan obviously bent over backwards to help the oil major. He also failed to disclose his own ethically dubious investments in the company when presiding over the RICO trial.
  • The three Canadian judges implicitly rebuked both Judge Kaplan and the Canadian motions judge who relied heavily on Kaplan's erroneous decision to impose the costs order, while ignoring the Ecuadorian trial court decision at the heart of the case. The Ecuador decision, we might add, was issued by the very court where Chevron for years insisted the trial be held. The panel wrote: "There can be no doubt that the environmental devastation to the appellants' lands has severely hampered their ability to earn a livelihood. If we accept the findings that underlie the Ecuadorian judgment – findings that have not yet been undermined in our courts – Texaco Inc. contributed to the appellants' misfortune." You can say that again – cancer rates in the area are skyrocketing, and untold numbers of people already have perished due to Chevron's refusal to abide by the Ecuadorian court order.
  • The Canadian court also found that Chevron obviously doesn't need its costs paid. How obvious is this? The company already has used at least 60 law firms and 2,000 lawyers since the inception of the case. It grosses $225 billion per year. And yet, nary a word was written in all prior decisions on the issue. The Canadian panel confronted it directly: "Chevron Corp. and Chevron Canada have annual gross revenues in the billions of dollars. It is difficult to believe that either of these two corporations... require protection for cost awards that amount or could amount to a miniscule fraction of their annual revenues."
  • The decision was also an implicit rebuke to the duplicitous Larry Lowenstein, Chevron's lead lawyer in Canada and a partner in the prestigious Osler law firm. Lowenstein made a cameo before the appeals panel and tried to peddle the Kaplan decision as being the final word on the case. As said, that decision is a product of Chevron's fraud. Lowenstein used Kaplan to try to dupe Canada's judges, but they would have none of it. Osler cannot be so desperate for business that it would stoop to this level of "service" for a company known in environmental circles as a major polluter.
While the latest decision removes a major roadblock for the Ecuadorian indigenous groups, there is still substantial work to be done even after five years of litigation in Canada's enforcement courts. Chevron no doubt has many tricks up its sleeve, including trying to hide its Canadian assets in wholly-owned subsidiaries. Courts in Canada need keep their door open to human rights victims and resolve the claims in this matter without further indulging the company's dirty tricks campaign.

Five years already is way too long for any enforcement action, much less one where thousands of indigenous lives hang in the balance and where a final judgment has been rendered in the preferred jurisdiction of the debtor.