Tuesday, October 9, 2012

U.S. Supreme Court Squelches Chevron Appeal On Ecuador Case


The U.S. Supreme Court today rejected Chevron’s latest attempt to block global enforcement of a historic $19 billion environmental judgment from Ecuador’s courts, removing another hurdle for rainforest indigenous groups as they continue their efforts to seize billions of dollars of Chevron assets around the world.

Chevron's losing petition was prepared and signed by Ted Olson, one of the top Supreme Court litigators in the country and the former Solicitor General of the United States under the last Bush Administration.  Olson works at Gibson Dunn & Crutcher, Chevron's lead outside law firm on the Ecuador matter and itself the subject of judicial rulings that it has committed ethical violations on behalf of the oil giant.

Jim Tyrrell of Patton Boggs and John Keker of Keker & Van Nest signed papers for the Ecuadorian rainforest communities and their counsel.

The Supreme Court decision represents the latest of numerous courtroom setbacks for Chevron as the company tries to evade paying the Ecuador judgment, which was issued in early 2011 after an eight-year trial found that the oil giant deliberately dumped more than 16 billion gallons of toxic waste into the Amazon.  A three-judge appellate panel in Ecuador later affirmed the decision, criticizing Chevron harshly for threatening judges and filing frivolous motions to delay the proceedings.

Several pro-business groups who are funded in part by Chevron, including the U.S. Chamber of Commerce and National Association of Manufacturers, had weighed in on the oil giant’s behalf before the Supreme Court.

When Chevron refused to pay the Ecuador judgment, lawyers for the 30,000 affected villagers this summer hired prominent law firms to file seizure actions targeting billions of dollars of Chevron assets in Canada and Brazil.  They have promised to file more seizure actions soon in other countries, potentially creating significant operational problems for the oil giant, according to Chevron’s own court filings. See here

Chevron’s use of substandard operational practices in Ecuador – it operated there from 1964 to 1992 under the Texaco brand -- decimated indigenous groups and caused an outbreak of cancer that has killed or threatens to kill thousands of people, according to findings of the court.  A summary of the evidence against Chevron can be found here, a video about the case can be seen here, while a summary of the cancer deaths can be found here.

Independent journalists, such as 60 Minutes and a prominent Australian news show, also have confirmed Chevron’s extensive pollution in Ecuador.

Chevron had asked the Supreme Court to salvage an unprecedented injunction imposed in March 2011 by New York federal judge Lewis A. Kaplan purporting to bar worldwide enforcement of the Ecuador judgment.  That injunction provoked outrage in much of the legal community and was overturned unanimously in September 2011 by the Second Circuit Court of Appeals, the ruling the Supreme Court declined to review.

Over the last two years, federal courts at every level in the United States – trial courts, intermediate appellate courts, and now the Supreme Court – have now rejected Chevron’s attempts to block or undermine the Ecuador judgment.  The oil giant claims the judgment was procured by fraud, a charge the villagers and their lawyers say is a smokescreen invented by Chevron to cover-up its own criminal behavior in Ecuador as found by various courts.

“Chevron's latest loss before the Supreme Court is an example of the company's increasingly futile battle to avoid paying its legal obligations in Ecuador," said Aaron Marr Page, a lawyer for the Ecuadorians.

"Chevron is running from justice while its toxic dumping continues to create an imminent danger of death to indigenous peoples in Ecuador,” said Page.

Chevron’s losses in U.S. courts on the Ecuador case are mounting fast.

In the last two years, 18 U.S. trial courts and four appellate courts have either rejected or declined to consider Chevron’s campaign to paint the Ecuador judgment as a product of “fraud”, according to an analysis of court data by representatives of the rainforest communities.  That analysis can be read here.


Even Judge Kaplan, who has been subject to withering criticism for his biases against the Ecuadorians, further gutted Chevron’s strategy when he dismissed or stayed three of Chevron’s fraud claims and its unjust enrichment claim against the rainforest communities in a racketeering case pending against them in New York.

In its public relations materials, Chevron continually tried to claim U.S. courts have found “fraud” in the Ecuador proceedings.  In reality, three different Ecuadorian courts have heard Chevron’s allegations and rejected them, while no U.S. court has found fraud on the merits after an evidentiary hearing or trial.

In the handful of courts where judges made such a preliminary finding, it was done in the context of simple discovery proceedings and later was overturned by federal appellate courts.

A panel of federal appellate judges in Philadelphia, for example, blasted Chevron for attacking Ecuador’s courts – calling its comments “disparaging”.  Another federal judge in New Orleans accused the oil giant of using “hyperbole” and trying to make “a mountain out of a molehill.” See here.

This was the second time in the long history of the Ecuador lawsuit that the Supreme Court declined to hear a Chevron petition for review.  In 2009, the court declined to review a decision that denied Chevron’s attempt to force Ecuador’s government into a private arbitration over who should pay for the clean-up in Ecuador.

For that petition, Chevron used high-profile lawyer Paul Clement, another former U.S. Solicitor General.  Clement argued the losing side in the famous case last year over the Obama Administration’s health care law.

Just last week, the Gibson Dunn law firm was criticized for overbilling Chevron by sending 11 lawyers to a relatively minor court hearing.


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Friday, October 5, 2012

Chevron Scared To Return ACLU's Calls Over Private Emails

Lawyers from the ACLU called Chevron to complain about trying to get personal data from the Google gmail account of their client, a writer and law professor who blogs about legal issues, including the $19 billion judgment out of Ecuador holding Chevron accountable for the massive contamination of the Amazon rainforest. 

Chevron apparently got spooked. The big, bad lawyers from Chevron didn't return the ACLU's phone call and then "mysteriously" withdrew their subpoena for the blogger's information. Chevron has subpoenaed another 100 people for their emails, too. The status of those subpoenas is unclear. Read about it below:

Chevron Asks Email Providers to Hand Over Users' Private Information

Brian Hauss, Legal Fellow, ACLU 

As our online activities become increasingly integrated into our daily lives, we leave ever expanding trails of information about ourselves in the hands of internet companies. The ACLU has fought and continues to fight the aggressive attempts of government law enforcement agencies to subpoena this private data. Now, corporations are getting in on the act. In a civil lawsuit related to its sprawling legal battle against a $19 billion Ecuadorian judgment and the plaintiffs’ lawyer who won it, it was recently revealed that Chevron issued subpoenas to Google, Yahoo, and Microsoft for information on 101 separate email accounts.
The oil giant’s subpoenas instruct the companies to turn over nine years’ worth of identifying and usage information related to the accounts at issue—including the account holders’ names, addresses, phone numbers, billing information, and IP logs (which can show geographic location). Although seemingly innocuous, this information has the potential to reveal all sorts of insights into a person’s private life. Knowing that an e-mail was sent from a church, an abortion clinic, or the headquarters of a gay rights organization can reveal something important about the person who sent it.
One of the account holders targeted by Chevron was Dr. Kevin Jon Heller, a senior lecturer at the Melbourne Law School and international law blogger for Opinio Juris. Although he is a prominent critic of Chevron’s activities in the Ecuador case, he has no substantive connection to the actual litigation. As he describes here, he first learned of the subpoena when Google’s legal department sent him an email notifying him of the demand, informing him that he would have to provide a formal legal objection within a few weeks 5 if he wanted to stop his information from being released.
The ACLU agreed to represent Dr. Heller in connection with the subpoena, and contacted Chevron’s lawyers to find out why they were seeking his private information. Despite several phone calls with Chevron’s attorneys, we never got an answer. Instead, Chevron withdrew its demand for Dr. Heller’s information entirely. And so his adventure ended as abruptly – and as mysteriously – as it began.
Chevron’s spokesman, Kent Robertson, now says that the company’s lawyers issued the subpoenas to figure out whether the designated accounts belong to key participants in the dispute. But that neither explains nor justifies Chevron’s demand for nine years’ worth of private account information on dozens of people, some of whom lack any apparent connection to the litigation. At best, Chevron’s lawyers went on a fishing expedition – at worst, they engaged in a calculated effort to intimidate the company’s adversaries. Either way, this case illustrates the need for clear rules to protect our digital privacy.



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Why is Chevron trying to intimidate journalists? And why is Google helping them?


The FAIR radio program (Fairness & Accuracy In Reporting) reported this today:

"Chevron is going to great lengths to silence journalists reporting on its dealings in Ecuador. The latest maneuver is subpoenaing private email accounts. Is that even legal? And what's the story Chevron doesn't want told? We'll hear it from Graham Erion, legal counsel to the Rainforest Communities in Ecuador." To listen to the program, click here

Also, Blogger Jeremy Bloom of Red Green & Blue writes about Google's cooperation with Chevron's "fishing expedition" into people's personal emails to intimidate and harass them for supporting and, in many instances, just inquiring about the $19 billion judgment against the oil giant for massive oil contamination in the Ecuadorian rainforest.

Bloom writes:  "It’s been more than a year since Chevron lost a landmark lawsuit saying they had to compensate Amazon rainforest natives they poisoned. But instead of doing the right thing and paying to clean up their mess, Chevron is acting like a six-year-old, stomping its feet and saying “I won’t, it’s not my fault, it’s YOUR fault!”. Now, they’re trying to intimidate journalists who report on their tantrum. Red Green & Blue  

"The latest: Going on a fishing expedition against 44 assorted enemies via subpoenas to Google, Yahoo and Microsoft demanding vague personal information. And Google, at least, is cooperating."

Read more of his blog here


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Thursday, October 4, 2012

Richmond Residents Stand Up To Chevron


The Richmond, CA City Council voted for a resolution pushing Chevron to become a better corporate citizen in the city that Chevron has neglected for decades, even as its refinery pollutes and harms the health of people who live there. Take it from the Ecuadorians who have suffered at Chevron's hands for five decades in the rainforest, it will take much more than a resolution, but at least it's a start.

“Chevron must invest in good jobs and economic development for Richmond residents,” said community leader Lipo Chanthanasack, “like a good person, take full responsibility for the explosion and assure us this type of thing will never happen again.”

We're not holding our breath.

Read about it here.


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Tuesday, October 2, 2012

No Love for Chevron In U.S. Courts

Chevron’s courtroom setbacks in the U.S. related to its $19 billion Ecuador liability are piling up as CEO John Watson faces increased shareholder pressure around the world to settle the case, according to an analysis of all legal actions filed by the oil giant in U.S. federal courts.

The new analysis follows reports that Watson’s plan to evade paying the Ecuador judgment is faltering as U.S. courts are showing increasing hostility to Chevron’s claims that it is the victim of fraud in Ecuador, an allegation that the plaintiffs say is nothing more than a smokescreen for Chevron to hide evidence of its criminal activity in the South American nation.

Separately, shareholders representing more than $580 billion in assets have called on Watson to settle the case while shareholders and a U.S. Congresswoman have asked the Securities and Exchange Commission to determine if Watson and General Counsel R. Hewitt Pate are lying to company shareholders about the Ecuador risk.

Last year, after an eight-year trial, an Ecuador court found the company liable for dumping billions of gallons of toxic waste into the Amazon and imposed a $19 billion liability.  Evidence showed indigenous groups were decimated by the pollution and that thousands of people have either died or are at risk of contracting cancer.

The analysis of Chevron’s court results, prepared after tracking the results of 23 separate legal actions filed by Chevron and its lead outside counsel Gibson Dunn & Crutcher in trial courts around the country, produced the following findings:

**Not a single U.S. court at any level – trial, appellate, or even the U.S. Supreme Court – has accepted Chevron’s fake fraud narrative in any kind of definitive finding, and the vast majority of courts to hear Chevron arguments have flatly rejected them.

**In all, 18 different U.S. federal trial courts and all four federal appellate courts have either rejected Chevron’s claims outright, or refused to adopt them.  The U.S. Supreme Court also denied a Chevron petition to review a decision denying it the right to arbitrate the issue of liability.

**Separately, two courts in Ecuador have flatly rejected Chevron’s fraud claims in the most definitive rulings yet on Chevron’s arguments.  In Ecuador, unlike the U.S., both parties had the opportunity to fully present evidence and brief the issues.

**The Second Circuit Court of Appeals in New York, considered one of the most influential appellate courts in the country, has vacated or stayed three trial court rulings favoring Chevron and also nullified the crown jewel of Chevron’s legal strategy -- an unprecedented and illegal “global injunction” against enforcement of the Ecuador judgment issued by Judge Lewis A. Kaplan.

 **A federal appellate court in Philadelphia reversed a discovery order stating “[t]he circumstances supporting [Chevron’s] claim of fraud largely are allegations and allegations are not factual findings.” The appeals court further chastised Chevron’s attacks on the Ecuador courts as “disparaging”.

A number of other U.S. trial and appellate courts have specifically rejected Chevron’s fraud allegations, as follows: 

**In the District of Vermont, Judge William Sessions conducted a review of Chevron’s so-called “fraud” evidence as it related to an expert report on damages and concluded “the Court is satisfied that no evidence of fraud, false pretenses or undue influence appears.”

**In the District of Massachusetts, Judge Joseph Tauro rejected Chevron’s claims, finding that the oil giant “has not shown Respondent engaged in or intended any criminal or fraudulent activity.”

**In Ohio, federal Judge Karen Litkovitz threw out “fraud” allegations against one of the plaintiff’s experts, concluding Chevron had “no factual basis” for its claim.

**In Tennessee, federal Judge Joe Brown concluded that Chevron’s allegations were “quickly spiraling out of control” and rejected the attempt to obtain discovery via the “fraud” claims.

**During oral argument before the Fifth Circuit Court of Appeals (based in New Orleans), Federal Judge Fortunato Benavides scolded Chevron for throwing “these words about massive fraud and, uh, all this hyperbole… you're making a mountain out of a molehill”.

In addition to the various legal setbacks, Chevron recently was charged with trying to intimidate people who worked on the legal case by trying to subpoena their private email accounts from Google, Yahoo, and Hotmail.

A video on the case can be seen here ; a written summary here; and a 60 Minutes segment here.



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Friday, September 28, 2012

How Chevron Squanders Big Bucks on Ecuador Case

Want a good example of how the lawyers at Gibson Dunn & Crutcher rip off their wealthy client Chevron?

It is becoming increasingly obvious that Chevron CEO John Watson and General Counsel R. Hewitt Pate are unable to stop the Gibson Dunn "rescue team" from squandering shareholder money to flout the company’s $19 billion environmental liability in Ecuador.

In a sickening example of overkill that might explain why people hate the legal profession, Chevron recently reported that it has employed 41 different law firms and almost 500 lawyers and legal assistants to fight the indigenous groups in Ecuador. These groups -- including the Cofan, Secoya, and Siona -- have been victimized by Chevron's deliberate dumping of billions of gallons of toxic waste into the precious Amazon ecoysystem that the tribes depend on for their survival.

See this video for background on the case and this summary of the evidence against the oil giant.

In New York federal court this week, Gibson Dunn sent 11 lawyers to a relatively inconsequential hearing on a subpoena given to a non-party in its far-fetched “RICO” conspiracy case against the indigenous groups and their lawyers who are fighting to hold Chevron accountable. 

The firm dispatched five high-billing partners from various offices around the country – Randy Mastro (New York), Lauren Elliott (New York), Peter Selig (Washington, D.C.), William Thomson (Los Angeles), and Richard Mark (New York) – along with six other associates.

It was only Mastro, however, who stood up and argued to Judge Lewis A. Kaplan while the others seemed to sit around churning their billable hours while occasionally giving Mastro a cite to the record, a task any secretary could do.

Gibson Dunn obviously has some underutilized senior partners trying to jack up their billable hours at the expense of Chevron shareholders.

Let’s run the numbers.

Five partners, billing an average rate of $800 per hour, amounts to $4000 per hour. The hearing took several hours over two days, not to mention significant preparation time, travel time, and the writing of the subpoena itself. The six associates probably billed an average of $400 an hour to sit in the gallery and essentially do little but fetch coffee while watching the proceedings.

That’s roughly $6,400 per hour billed to Chevron shareholders for doing a whole lot of nothing. The entire proceeding easily could have been handled by Mastro and one associate. This reminds us of how 10-20 Chevron lawyers and technical staff would show up to watch American lawyer Steven Donziger be deposed for 15 days in 2010 and 2011. One person would ask questions, while the rest would watch. Various other Chevron lawyers around the country would bill for watching a live internet stream of Donziger’s testimony. 

The total bill for that exercise in overkill was at least $100,000 per day.

Chevron admitted it polluted Ecuador, but it claims it spent $40 million on a “remediation” that was nothing more than a fraudulent cover-up of its toxic waste pits. In the meantime, Chevron has spent an estimated $1 billion on its defense in the case, with Gibson Dunn’s per-partner profits in 2010 jumping 20% during a sharp downturn in the legal profession -- largely because of the wasteful billing practices that we saw this week in New York.

Chevron shareholders should not expect CEO Watson and top lawyer Pate to do much about safeguarding the company's assets when it comes to the Ecuador gamble. They double down on the company's increasingly futile defense almost weekly, so it means little to squander another $100,000 of shareholder money on a day in court so Mastro can renovate his house in the Hamptons over the winter.

Watson almost lost part of his job over his mishandling of the Ecuador litigation at the company's last annual meeting.

With waste like this and the increasing risk that billions of dollars worth of Chevron assets around the world will be seized, expect an even more forceful push by shareholders against Watson next year.


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