Paul Barrett & Business Week agree: Chevron's lawyers may not even believe their own arguments

Below is a short, must-read piece from Marco Simons, Legal Director of Washington DC-based EarthRights International (ERI), a "nonprofit organization that combines the power of law and the power of people in defense of human rights and the environment," as ERI's mission states. For nearly twenty years, ERI has provided legal support for oppressed and marginalized communities, often fighting exploitation by multinational corporations and their allies intent on plundering their natural environments for profit. From Burma to Nigeria to the Amazon, ERI's lawyers, activists, and advocacy trainers have done inspiring work—inspired itself by a deep and abiding commitment to fairness, justice, and equity. That's what Marco is talking about in his conclusion. Read for yourself.
Re-posted from Marco's blog at EarthRights International:

Yesterday, BusinessWeek picked up on Michelle's blog post from last week highlighting the inconsistent positions taken by Gibson Dunn, the law firm that represents Chevron, on an issue that is central to Chevron's case against attorney Steven Donziger. Paul Barrett's article confirms that Gibson Dunn is arguing both sides of the issue, but says that this isn't a problem because "That, for better or worse, is what lawyers do." Perhaps unintentionally, Barrett makes a pretty strong case for why you want lawyers who believe in your case.

Barrett has done us a service in confirming that, according to Gibson Dunn, Chevron allowed their lawyers to argue against them in another case. So Gibson Dunn may not be unethical, but Chevron might be a little stupid. Barrett also conveniently overlooks the fact that Gibson Dunn is not simply taking different positions in different cases – it's arguing against Chevron's position in another case that, because it is at the Second Circuit Court of Appeals, will be binding on the lower court deciding the Chevron case.

Barrett is right that the rules allow Gibson Dunn to take a position in one case that could harm or even destroy their legal position in the Chevron v. Donziger lawsuit, as long as Chevron agrees. Doing so, however, doesn't bolster their credibility. It's generally more effective to convince a judge that you actually believe in the position you're taking, not that you'll simply "argue either way, depending on the interests of whoever is paying [your] bill," as Barrett describes it.

As lawyers who take cases that we believe in, arguing positions that we believe are correct, I and my co-counsel don't have to face the dilemma that Gibson Dunn faces – and we don't face judges who are skeptical of our positions because they think we're simply hired guns. Sure the rules allow us to argue any position supported by the law, but if it were your case, wouldn't you want lawyers who actually believed what they were saying?

For more background, read last week's piece here on the Chevron Pit: How Chevron Might Have A Lawsuit Against Its Own Law Firm for Blowing the RICO Case

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Chevron: "Let Them Eat Pizza!"

Originally posted on Amazon Watch's Eye on the Amazon blog. By Paul Paz y Miño.

Would people really offer a coupon for a free pizza and soda to families who just had a gas well blow up in their community, killing a worker and burning for days? People did.

In a move that would make Montgomery Burns proud, Chevron "apologized" to the community for the massive explosion of their fracking well in rural Pennsylvania by offering each affected family a coupon for free pizza from a local pizza joint.

This is one of those rare glimpses into a corporation's ethos, or lack thereof. Somewhere inside Chevron the decision was made that a $12 large pizza and a two-liter soda was proper compensation, or at least sufficient to pacify people for the "inconvenience" of having a huge explosion and toxic fire in their neighborhood. We called Bobtown Pizza this morning (with a story like this, you really gotta hear it for yourself to believe it) and at this point they are just wishing this whole thing would "blow over" (no pun intended).

Chevron's attitude in the US in 2014 has barely evolved from their attitude in 1964 in Ecuador's Amazon rainforest. Back then Chevron told villagers that oil was good for them, to rub it on their joints for arthritis! They sprayed it on the roads to keep down the dust and people walked on it for years, shoeless. All the while they were dumping billions of gallons of toxic waste into pits that drained directly into waterways used for drinking and bathing. Could they get away with that in Pennsylvania today? If it turns out that communities can no longer drink their tap water due to Chevron's fracking, will the company send them coupons for a case of Diet Mountain Dew?

We're not easily surprised by Chevron spokespeople saying horrific and ludicrous things anymore, but this was so tone-deaf that even we were impressed. We haven't been so in awe of Chevron's insensitive hubris since Sylvia Garrigo dismissed Ecuadorians' cancer and other severe oil-related health issues on 60 Minutes by saying, "I have makeup on, and there's naturally occurring oil on my face. Doesn't mean that I'm going to get sick from it." Check out this video, Great Moments In Stupid Chevron PR, for similar outrageous statements.

The friendly, unsuspecting people at Bobtown Pizza are bearing the brunt of complaints and crank calls due to community outrage. We'd suggest that unhappy citizens instead contact Chevron toll-free. Bobtown Pizza never expected a national backlash and coverage from CNN, Newsweek, and others, but they also weren't aware that Chevron is the largest corporate criminal on the run and on the hook for $9.5 billion in Ecuador. They didn't know that Chevron's Richmond refinery blew up not long ago and that they violated 62 EPA regulations there. They didn't know that over 40 environmental and human rights NGOs recently condemned Chevron's actions and over 100,000 people have sent messages to the US Senate to complain about their abusive legal tactics.
And Chevron, just in case you were wondering, the 30,000 Ecuadorians who sued you for polluting their homes and fouling their future will not be appeased by an order of empanadas and a six-pack of Inca Kola.

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How Chevron Might Have A Lawsuit Against Its Own Law Firm for Blowing the RICO Case

Chevron's "Dream Team" at the Gibson Dunn law firm has yet to come up with an explanation for its monumental mistake last week in undermining the company's RICO case against Ecuadorian villagers and their lawyers.  Chevron's team leader at Gibson Dunn, partner Randy Mastro, usually loves spinning to the media.  But even he has gone radio silent.

Last Friday, another partner at Gibson Dunn—Harvard Law School graduate Miguel Estrada—argued before a panel of judges from the 2nd Circuit Court of Appeals in Manhattan. The case being heard that day had nothing to do with the plight of Ecuadorians living with the toxic legacy of Chevron's pump-and-dump oil operations in their rainforest lands.

But the hearing itself—or at least one of the key arguments made—may have an enormous impact on the Chevron-Ecuador case.

From the blog of DC-based EarthRights International yesterday:

Chevron probably isn’t too happy with Randy Mastro and the rest of its dream team at Gibson Dunn & Crutcher right now. Gibson Dunn represents Chevron in its “sue the victims” case against a group of Ecuadorian villagers and their attorneys. The Ecuadorians won a $9.5 billion judgment in Ecuador against the company for massive pollution, and Chevron retaliated by filing a law suit under the Racketeering and Corrupt Organizations Act (RICO), claiming the Ecuadorian judgment was obtained through fraud.

Last week, however, in a completely separate case, Gibson Dunn may have shot the Chevron case in the foot, arguing to the Second Circuit Court of Appeals that a private party can’t seek an injunction under RICO. This is the opposite of the argument they’ve made in Chevron’s RICO lawsuit in the district court in New York.

Of course, in its retaliatory RICO lawsuit against the Ecuadorians and their longtime legal advocate Steven Donziger, Chevron is in fact seeking an injunction.

As Donziger told Law360 last week:

Chevron made three strategic decisions that together strip it of standing: refusing to challenge its liability for the pollution in Ecuador, dropping its damages claim in order to escape a jury trial and asking for a tailored injunction that only blocks Donziger and his Ecuadorean co-defendants from a cut of the multibillion-dollar judgment, rather than a worldwide anti-enforcement injunction.

Donziger and the Ecuadorians have argued all along that the RICO statute does not permit private parties to seek injunctive relief. Of course, Chevron—or more accurately, Gibson Dunn's Mastro —has repeatedly argued the opposite. Meanwhile, Judge Lewis A. Kaplan, who has brazenly promoted the Chevron RICO lawsuit, seems to think it's an open question. 

Back to EarthRights International's recent post:

If it is indeed an open question, it may not be open for much longer.

Last Friday, in Sykes v. Mel Harris, Gibson Dunn urged the Second Circuit to “confirm that private RICO claims for injunctive relief fail as a matter of law” – in other words, private plaintiffs cannot seek injunctions under RICO. If Gibson Dunn wins that argument, the decision will control Chevron’s case against Donziger and will doom Chevron in the lower court.

This, of course is a major Catch-22 for Chevron, as reporter Adam Klasfeld at Courthouse News wrote last week.  Klasfeld concluded that Gibson Dunn's Estrada could "scuttle [Chevron's] efforts" to fight off its $9.5 billion liability in the Ecuador case.

Klasfeld's article concludes with a quote from Christopher Gowen, a professor of ethics at the Washington College of Law at The American University in Washington, D.C.  a member of Donziger’s legal team, Gowen said:

"Gibson Dunn is correct to argue that there is no injunctive relief for a private party under the RICO statute," said Gowen, who serves as a legal ethics professor at American University. "The problem for the firm is that by doing so they acknowledge that their prosecution of the Chevron v. Donziger case has been a complete waste of their client's time and money and an abuse of the civil justice system. While I was troubled by the ethical conduct of Gibson Dunn on behalf of Chevron throughout the trial, I never imagined a day where their unethical conduct would destroy their own client's case."

The EarthRights blog points out that Gibson Dunn has a conflict of interest. And the party with standing to complain is none other than Chevron, the oil company that reportedly has paid the firm in excess of $1 billion for its work on the Ecuador case. EarthRights points out that Chevron might have a whopper of a legal claim against none other than Mastro and his partners.

That would be the ultimate poetic justice: Mastro himself might have to pay part of Chevron's obligations to its victims in Ecuador, should the villagers succeed in recovering their judgment.

For additional analysis on this shocking development, read this press release from Donziger's law firm:

Chevron Law Firm Gibson Dunn Concedes that Legal Basis for RICO Case Against Ecuadorians Is Invalid

And this legal motion filed recently by Donziger and his counsel in the RICO case:

Reply Motion in Support of Donziger’s Motion to Dismiss

In the above Reply Motion, Deepak Gupta, Steven Donziger’s appellate lawyer, attached Gibson Dunn’s Merits Brief in the Sykes v. Mel Harris case in which Gibson Dunn's Estrada spells out exactly why private parties cannot seek injunctive relief under RICO.

Advice to Gibson Dunn: Mr. Estrada and Mr. Mastro need to be re-educated about their ethical obligations.

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Christie Defense Lawyer Randy Mastro Has Ethical Problems of His Own

Who Ordered Christie's Attack Memo On Wildstein—Straight from the Randy Mastro Playbook?

New Jersey Governor Chris Christie’s choice of a defense lawyer to lead him through his various scandals is becoming more and more curious. After all, that lawyer – Randy Mastro of the law firm Gibson Dunn & Crutcher – has his own rather extraordinary history of controversy and ethical problems. 

We say this from watching him over the last four years try to guide Chevron through one of the worst pollution scandals in world history. 

In the Chevron scandal – which has led to a record-breaking $9.5 billion court judgment against Mastro’s client – the former deputy mayor to Rudy Giuliani has left a trail of improper and unscrupulous behavior in his wake.

Consider:

**For years Mastro has orchestrated a vicious campaign of character assassination against New York human rights attorney Steven Donziger, who for two decades has advised the indigenous groups that held Chevron accountable. Mastro convinced Chevron to retaliate for the Ecuador lawsuit (which took place in that nation at Chevron’s request) by suing the attorney and his indigenous clients for $60 billion in New York federal court. Mastro, who does not even speak Spanish, claimed the entire two-decade litigation in Ecuador was a “sham” and that Donziger – a Harvard classmate of President Obama – is nothing more than a greedy “criminal mastermind.” (For background on Chevron’s horrendous conduct in Ecuador, see Donziger’s website; this 60 Minutes segment on the case where a Chevron lawyer brazenly states the company should not be forced to go to court; and this summary of the evidence to find the company liable.)

**Mastro is a political fixer, not a trial lawyer. Since Mastro took over Chevron’s defense in 2009, the oil company has experienced a devastating series of courtroom setbacks. It lost the underlying case in Ecuador; lost unanimously before a three-judge intermediate appellate court; and lost before Ecuador’s Supreme Court, which affirmed the judgment unanimously in late 2013. Mastro’s team has lost several appellate court decisions on the Ecuador matter in the U.S. – including one just last week in the Ninth Circuit Court of Appeals. (The team also lost appellate court arguments on various aspects of the Chevron matter in the D.C. Circuit, the Second Circuit, the Third Circuit, and the Fifth Circuit.) Even the U.S. Supreme Court rejected Mastro’s effort to obtain an unprecedented injunction to block enforcement of the Ecuador judgment worldwide.

**Mastro’s strategy has led to all kind of problems for Chevron’s management around the world. Just weeks ago, a Canadian appellate court excoriated Chevron for trying to evade jurisdiction in three countries. It also ordered Chevron to stand trial in Toronto on whether the villagers can seize the Canadian assets of two subsidiaries to pay for their judgment. (Chevron stripped its assets from Ecuador in anticipation of losing the case). The villagers are also pursuing Chevron assets in the courts of Brazil and Argentina; leaders throughout Latin America are being asked by Ecuador’s President to block the company from new business opportunities in the region until it cleans up its mess.

**Many of Chevron’s largest shareholders are infuriated with how Mastro’s hyper-aggressive strategy is causing reputational harm to the company. In 2012, several shareholder resolutions stemming from the Ecuador problem garnered surprising levels of support. In fact, a whopping 38% of shareholders (representing $73 billion in assets) voted to strip Chevron CEO John Watson of his Chairman title, alleging a conflict of interest over the Ecuador matter. Several shareholders and a member of Congress have asked the SEC to investigate Watson for failing to disclose the Ecuador risk to shareholders. Read this take from Amazon Watch’s Ecuador-based human rights campaigner on Watson’s growing problems with the Ecuador matter.

**Mastro and members of his team have been found by multiple courts to have committed ethical violations on behalf of Chevron. In Ecuador, the trial court imposed a punitive penalty after finding company lawyers threatened trial judges with jail time if they did not rule in its favor. A federal judge in Oregon fined Chevron and imposed sanctions after finding members of Mastro’s team used the pre-trial discovery process to “harass” a small legal non-profit that was assisting the villagers. For the Oregon judge’s decision read here; for the devastating details from the lawyer who asked for the sanctions, see this affidavit.

**Mastro also hired Kroll, the private investigation company populated with former FBI and CIA agents, and paid them at least $15 million to set up a surveillance operation that targeted opponents of Chevron. We know this operation involved spying on Donziger and U.S. lawyer Craig Smyser when they were in Ecuador. Kroll also deployed six private agents to spy on Donziger and his family in Manhattan. Kroll CEO Daniel Karsen admitted under oath that the company had prepared “20 to 30” confidential reports on Donziger for Chevron’s use. This harks back to the infamous harassment that Ralph Nader suffered at the hands of General Motors when he wrote his famous critique of auto safety, Unsafe at Any Speed.

**Mastro also deployed another member of the Chevron team, the Miami-based lawyer Andres Rivero, to offer a suitcase full of cash to a former Ecuadorian judge to coax him to testify in favor of Chevron. Mastro then traveled to Chicago to personally negotiate Chevron’s deal with the former judge. Chevron paid Guerra hundreds of thousands of dollars, a clear ethical violation as found by none other than Erwin Chemerinsky, a leading ethicist and the dean of the law school at the University of California, Irvine. That’s after another Chevron agent at Kroll was caught offering $20,000 to an American journalist, Mary Cuddehe, to pose as a reporter so she could spy on the plaintiffs in Ecuador. Cuddehe outed the entire scandal in The Atlantic.

The memo created by Christie’s team trying to discredit his former ally David Wildstein is a classic example of Mastro’s handiwork. The approach is simple: when the facts are not on your side, try to assassinate the character of the witnesses who threaten to disclose information that might hurt your client. Mastro is sending a message to any other witness who might come forward to testify against Christie: if you proceed, we will find all the dirt we can and publicize it far and wide. This type of personal attack might be effective in politics, but it gets agonizingly close to obstruction of justice when there’s a federal investigation pending. Mastro’s problem is that he doesn’t know the difference between Christie’s political survival and Christie’s legal defense, where he faces potential criminal jeopardy.

Ultimately, aggressive lawyering based on real facts is completely acceptable. Scorched-earth lawyering based on intimidation of adversaries and potential witnesses is not. When a powerful corporate entity or political figure becomes so desperate that it tries to win on might what it knows it cannot win on merit, the line can be crossed. Gibson Dunn writes in its marketing materials that when the law gets in the way of the interests of its clients, the firm will endeavor to change the law or maneuver around it. (Or, as in the case with Wildstein, try to pound its adversaries into submission.)

That strategy might be tempting to a bad-acting corporation when fighting impoverished indigenous communities in Ecuador. But it is not working. And it certainly won’t work when the adversary is the U.S. Attorney’s office and the leader of that office is a man of great integrity.

Word on the street is that Mastro has been bragging that the “racketeering” case he brought against the Ecuadorians and their lawyers in New York has been a success. But that case is nothing more than a show trial helped along by a U.S. judge who clearly dislikes plaintiff’s lawyers, has made disparaging comments about the plaintiffs, and who thinks he can rule on questions of Ecuadorian law from Manhattan better than Ecuador’s Supreme Court can from Quito. 

Significantly, Mastro convinced Chevron to drop all damages claims against Donziger and the Ecuadorians on the eve of trial to avoid a jury. This is a telling fact that illustrates why Chevron has little confidence in its own case or in Mastro’s trial skills. (See this post-trial brief and motion to dismiss filed by Donziger to understand just how legally and factually weak Chevron’s fraud case is, and why it will not survive appeal.)

While Chevron continues to lose ground in courts around the world, it has paid Mastro and his partners an estimated $400 million per year in fees for their (dis)services. It really doesn’t matter to a lawyer whether you or win or lose when you can rake in that kind of big money. More important to Mastro is being able to convince a client – in this case CEO Watson and his General Counsel R. Hewitt Pate – that progress is just around the corner. The worst result would be for the litigation to end. If it did, numerous lawyers at Gibson Dunn might find themselves without work.

The lesson for Christie when it comes to Mastro: remember the caveat, buyer beware.

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Donziger's New Appellate Team Comes Out Firing; Asks for Nullification of RICO Case

It was only last week that lawyers for Steven Donziger as well as the Ecuadorian victims of Chevron's pollution in the rainforest—sued alongside their longtime legal advocate—filed their final reply briefs in the oil giant's retaliatory RICO case. Judge Lewis Kaplan is expecting to deliver a ruling in the coming weeks or months.

But long expecting an adverse ruling from a judge who his former lawyer John Keker says has shown “implacable hostility” towards him, Donziger didn't wait for a ruling in the case before securing  appellate counsel.

And that appellate team, lead by a lawyer that the Wall Street Journal calls a "heavy" came out firing, filing a motion asking for the RICO case to be dismissed altogether.

As noted in a press release issued yesterday by Donziger:

The move to dismiss the RICO case – which comes after the close of evidence but before decision – is based largely on Chevron's surprise admission in its final post-trial brief that it cannot block foreign enforcement proceedings that rainforest villagers are using to collect on their $9.5 billion environmental judgment.

“In the end, Chevron all but admits that is it not asking this Court to resolve any concrete case or controversy,” said the motion, filed by Deepak Gupta of Gupta Beck in Washington, D.C. “This unseemly spectacle of a case must come to an end.”

Deepak Gupta is, of course, the "heavy" referred to by the WSJ. He is a principal at Gupta Beck, a firm he founded in 2012, and formerly held a high-level post at the Consumer Financial Protection Bureau. Before working at the CFPB, he worked as a litigator with Public Citizen for seven years, where he argued some high-profile cases before the Supreme Court.

The press release continues:

“Motions to dismiss usually happen at the beginning of a trial, not after three years of litigation,” said Gupta. “But when Chevron dropped all of its damages claims to avoid a jury trial, it painted itself into a corner and deprived the court of jurisdiction.”

“After analyzing the case for the last several weeks, we have come to the conclusion that Chevron has not identified a single injury that would give it standing,” said Gupta. “That’s because none exists.”

The motion itself was heralded by respected lawyer and legal analyst Ted Folkman. In a post on his Letters Blogatory site, headlined Lago Agrio: Deepak Gupta In The House, he writes:

If you spend your days reading and writing memoranda of law, you know a good one when you see it. And so when I read Steven Donziger’s latest brief in the RICO case last week, my first thought was that his lawyers had finally found their groove. But then I looked at the cover and saw that Donziger had actually gotten a new legal team! I assume (but I do not know) that the new member of the team, Deepak Gupta of Gupta/Beck, had a big hand in the new brief that’s both legally compelling and a pleasure to read.

Back to yesterday's press release:

What Chevron really wants from Judge Kaplan is an advisory opinion that it can use for public relations purposes in the U.S. and around the world, a judicial function prohibited by the Constitution, said Gupta. “Courts exist to decide actual cases,” said Gupta. “They are not debating societies. Nor do they exist to write advisory opinions for foreign courts.”

Gupta said Chevron faces two other intractable problems – first, that the injunction it seeks from Judge Kaplan to block the Ecuador judgment is not authorized by the RICO statute; and, second, that the injunction is functionally equivalent to one declared illegal by the Second Circuit Court of Appeals in an earlier phase of the case.

To get around the latter problem, Chevron is now claiming that its proposed injunction would only stop the Ecuadorians from “collecting” on their judgment, but would not stop the enforcement actions themselves.

“Chevron is now seeking an anti-collection injunction rather than an anti-enforcement injunction,” said Gupta.

“Although Chevron never has had standing to bring this lawsuit, whatever argument it might have had for standing (before dropping its damages claim) is now gone – and, with it, so too is this Court’s authority over the dispute,” said the motion.

Read the rest of the press release here, and the motion to dismiss here.

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Since When Did Lobbying and PR Become Extortion?

Today, Politico Magazine published a powerful op-ed from Karen Hinton, who has long served as a tenacious spokesperson and advocate for the Ecuadorian communities fighting to hold Chevron accountable for its abuses in the Amazon. It's aimed at an audience of people, who like herself, advocate for the interests of others. In it, she asks whether some basic, constitutionally-protected activities could be in jeopardy because of Chevron's scorched earth legal tactics to evade accountability for its crimes in Ecuador.

Posted in its entirety below, it's a must-read.

Since When Did Lobbying and PR Become Extortion?

I do advocacy work. So why am I accused of being part of a criminal conspiracy?

By KAREN HINTON
January 28, 2014

Within the next two months, a New York federal judge is expected to rule in an environmental case that goes to the core of how lobbyists, publicists and other advocates up and down K Street make their living.

If you are one of them and you know nothing about Chevron’s racketeering lawsuit against a group of Ecuadorian indigenous peoples, farmers and their attorneys (Chevron Corp. vs. Donziger), it’s time to tune into this 20-year battle over who should pay to clean up one of the world’s worst oil contamination disasters.

The U.S. Chamber of Commerce and other business groups are backing Chevron. They hope a favorable ruling from U.S. Federal Judge Lewis A. Kaplan will help put trial lawyers out of business and weaken the ability of human rights advocates to hold corporations accountable for their misconduct. Billions of dollars are at stake. But the business groups should be careful what they ask for. The result could yield a double-edged sword that strikes not just at contingency-fee lawyers and environmental activists but encourages internecine corporate warfare as well.

Chevron is likely to win its lawsuit in the lower court—a retaliatory fight to try and avoid a $9.5 billion Ecuador judgment. Kaplan, who’s hearing the case, made numerous prejudicial statements against the Ecuadorians even before he read or heard one statement in their defense. Tellingly, Kaplan suggested the oil giant file the racketeering and extortion (RICO) charges against the Ecuadorians and their attorneys. In turn, the defendants have argued that Kaplan is biased and should be recused. As proof, they cite comments Kaplan has made that disparage Ecuador’s courts and government and question whether the Ecuadorian villagers harmed by Chevron’s pollution actually exist. He appears to be utterly unbothered by the fact Ecuador’s Supreme Court affirmed the judgment against Chevron after knocking about $10 billion off the company’s liability.

Meanwhile, Chevron maintains it’s a victim of a conspiracy campaign that works something like this:

The attorneys, who head up this “criminal enterprise” and are to be paid on a contingency basis, filed a fraudulent lawsuit with the sole purpose of enriching themselves. Publicists for the Ecuadorians (I’m one), lobbyists and unpaid environmental advocates, recruited by the attorneys, colluded with them and the Ecuadorians to pressure Chevron to pay a judgment or settle – a violation of the RICO statute, according to Chevron and Kaplan.

In other words, Chevron’s theory is that hard-hitting press releases and lobbying before Congress and government agencies to draw attention to the U.S.-based company’s actions in Ecuador equal economic extortion and are part of a grand conspiracy to pressure them to pay.

Put another way, hard-hitting press releases and lobbying before Congress and government agencies by (insert you and your client) against (insert your client’s competitors or opponents) about (insert issue that financially benefits your client) could equal extortion and be a violation of the RICO statute. Plaintiffs who win civil RICO cases are entitled to treble damages, which could bankrupt many companies or trade associations if they were to be so targeted.

U.S. case law establishes that if you lie about others to pressure them for a monetary advantage or payment, then you could be guilty of economic extortion. Chevron has charged that the Ecuadorian “conspirators” and their “co-conspirators,” like me, lied, manufactured evidence about the contamination, and committed fraud. I find this utterly preposterous and assumed we would be allowed to aggressively refute and defend against these charges in court. We were not.

During the six-week trial, which took place in October and November, Kaplan refused to allow any testimony into the record that would prove we did not lie about the contamination – our reason for demanding Chevron pay to clean up the contamination. He struck page after page of witness statements and witness testimony on the stand alleging that Texaco, now owned by Chevron, dumped more than 16 billion gallons of untreated toxic production water into the rainforest waterways and built hundreds of huge, unlined pits to store permanently pure crude and toxic water left over from oil exploration at well sites. This was the evidence relied on by the Ecuador court, an appellate court and the country’s Supreme Court to find Chevron liable.

A ruling in favor of Chevron will mean that corporations unhappy about attacks, possibly from competitors, will be empowered to file RICO lawsuits without having to prove whether the underlying attacks are, in fact, substantially true. Truth is no longer a defense, and that should trouble not only anti-corporate activists but corporations as well – and their lobbyists and publicists.

While Kaplan did allow a limited defense of a fraud charge involving an alleged bribe of the judge who ruled in the Ecuadorians’ favor and the alleged “ghost-writing” of the judge’s final ruling, the only solid evidence of fraud Chevron presented was the testimony of an admittedly corrupt former Ecuador judge – a man who Chevron is paying at least $350,000 during the next two years in exchange for his testimony, which we argue is tainted. Chevron also has arranged for the man and his entire family to live in the United States and apply for political asylum.

No one knows exactly how Kaplan will craft his opinion or if it will survive on appeal.

But, if Chevron gets what it wants, K Street and its corporate clients could easily find themselves on the wrong end of a RICO case. Free speech, especially in Washington, D.C., and New York City, will suddenly cost a whole lot more than the cars and drivers delivering the endless line of talking heads for the political punditry that feeds the cable news beast.

Of course, advocating for what you believe is right and just would be in jeopardy. There’s that, too.

See the original at Politico Magazine.

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Biting Satire Video from Pulitzer-winning Animator Blasts Chevron over Retaliation Tactics

According to a press release from Amazon Watch, long-time staunch allies of the Ecuadorian communities demanding justice from Chevron:

Today Amazon Watch released an edgy satire created by Pulitzer-winning animator Mark Fiore blasting Chevron's unprecedented tactics to avoid responsibility for its admitted acts of environmental destruction in the Ecuadorian Amazon. Despite losing a 20-year legal battle and receiving a $9.5 billion judgment, Chevron maintains that it will never pay for its damage. The company launched an extraordinary racketeering and extortion (RICO) lawsuit against the Ecuadorian plaintiffs, U.S. attorneys and various consultants alleging that the original case was “sham litigation." Fiore's piece comes on the heels of a campaign supported by a diverse coalition including Amazon Watch and the Sierra Club calling on members of the Senate to investigate and put a stop to Chevron's vilification of the environmental and human rights community.

And here's the animated video, a funny and biting satire of Chevron's gangster-like ways:



As Amazon Watch writes in their press release:

Chevron's actions set a dangerous precedent and represent a growing and serious threat to the ability of civil society to hold corporations accountable for their misdeeds around the world. Now a wide cross-section of U.S.-based environmental and corporate governance groups have condemned Chevron's most recent retaliatory attacks to intimidate the Ecuadorian indigenous peoples and farmers who have been harmed by the oil giant's massive contamination of their ancestral lands.

Amazon Watch has also posted an article on its Eye on the Amazon blog in the voice of Donny Rico, the animated star of its new video:

Donny Rico here to deliver a message to all you long-haired hippie activist types complaining about the environment and human rights. Be warned: things have changed in America and you need to keep your mouths shut. Corporations are the top of the food chain and you need to keep your place or you'll be what's for dinner. Got it?

See, me and Chevron are paving the way for corporate freedom in America. Freedom from accountability, freedom from watchdog punks and freedom from caring about how our actions affect the rest of yous. When those pesky Ecuadorians spouted off about the fact that Chevron did a piece of work and chose to dump billions of gallons of toxic waste in their rainforest, we decided to turn the tables and it worked like a real charm. Chevron's tired of being the victim just because over a thousand people died of cancer in Ecuador and we wrecked the Amazon rainforest. 

Visit the Amazon Watch website to read the rest of Donny RICO's diatribe, and to share the video with friends, colleagues, and any of those long-haired hippie activist types you may know

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HuffPost: New Christie Attack Dog Attorney Randy Mastro No Friend to Ecuador's Indigenous Peoples

New York City-based writer Nikolas Kozloff has written a powerful indictment of the lawyer that embattled New Jersey Governor Chris Christie has hired to help him handle a scandal that threatens to engulf the Governor's administration and destroy any chance he may have at a White House run.

Governor Christie has hired none other than Gibson Dunn's Randy Mastro to try and fend off the scandal over the administration's recent abuses.

The Governor's bullying ways were brought into stark relief after inquiries into what turned out to be punitive traffic gridlock for Fort Lee residents, who were unlucky enough to find themselves in the Governor's cross-hairs for having the temerity to elect a Mayor who refused to endorse Mr. Christie during his successful re-election bid.

If you want a preview of the way in which Randy Mastro will try and rescue Christie, you need look no further than the cynical, deceptive, and abusive legal counter-attack Mastro has led for Chevron in the company's efforts to evade accountability for its Ecuador disaster.

Kozloff writes:

Realizing that the company probably could not win its case on the merits, Mastro decided to change the nature of the debate entirely. In a rapidly unraveling kangaroo process, Mastro took advantage of a bizarre legal tactic which states that U.S. courts may force testimony to assist foreign courts. If Chevron prevailed, the U.S. would probably assist Chevron in defending against the Ecuadoran judgment in other countries where the plantiffs might seek to pursue the case.

Taking his cue from the earlier Nicaraguan Dole case, Mastro shifted the focus from pollution to attorney ethics. Through a calculated campaign of obfuscation, denial, personal attacks and claims of bias by the Ecuadoran legal system, Mastro sought to divert attention away from the suffering plaintiffs.

It makes sense, in a perverse kind of way: bully Governor hires bully lawyer to defend himself against charges of bullying.

An expert in Latin American history (with a Ph.D from Oxford University), Nikolas Kozloff has explored the impact of oil companies in the Amazon, authoring the recent landmark book, No Rain in the Amazon: How South America's Climate Change Affects the Entire Planet. He has explored Chevron's toxic legacy in the Amazon. In his latest piece on Huffington Post, he provides a brief history of Chevron's toxic legacy in Ecuador:

In order to put Chevron's problems in context, we must go back in time some twenty years. According to Ecuadoran Indians, from 1964 to 1990 Texaco caused serious damage to human health and the environment by employing obsolete technology in drilling operations at hundreds of wells spread throughout the jungle. Indigenous peoples claim that contamination created a virtual "death zone" in an area the same size of the state of Rhode Island. Within the area, they say, local people have suffered from increased rates of cancer, leukemia, birth defects, and a variety of other medical problems.

And finally, Kozloff concludes:

In light of Mastro's tactics in the Ecuador affair, perhaps we should expect the unexpected when it comes to the unfolding investigation into Chris Christie's affairs. If history is any indication, Mastro will probably try to wear out investigators or to turn the tables. A master of the counter-suit, Mastro might seek to question the credibility of Christie opponents or to underhandedly change the "narrative." From Nicaragua to Ecuador, these are strategies that have worked for Gibson & Dunn over the years, and the firm may well be tempted to employ such an approach once more.

Read the entire article at Huffington Post, and stay tuned for more on Randy Mastro and the Gibson Dunn, and Crutcher law firm.

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Desperation: Chevron CEO Asked Venezuela President for Help On Ecuador

In 2014, Watson Faces Host of  Challenges As Company Tries to Evade Accountability for Toxic Dumping

With shareholder discontent over its Ecuador liability on the rise yet again, Chevron CEO John Watson is facing a new series of challenges in 2014 as the company continues its two-decade campaign to evade accountability for the toxic contamination it left in the Amazon rainforest.   One example of the company's desperation: news reports from Latin America recently disclosed that Watson pleaded in person with Venezuela’s new President, Nicolas Maduro, for help in blocking enforcement of the Ecuador judgment.

This is what the oil giant does.  It uses its political muscle to interfere in court systems around the world.  As a Chevron lobbyist told Newsweek, "We can't let little countries like Ecuador screw around with large companies."  Ecuador's Supreme Court has affirmed the judgment against Chevron.  But Watson simply ignores court decisions from Ecuador that he doesn't like while his lawyers continue their  scorched-earth campaign to avoid paying what the company owes.  For background, see this 60 Minutes segment and this video from Steven Donziger, one of the lawyers who has fought for years to hold the oil company accountable.

These are some of the colossal challenges Watson faces in 2014 because of the company's failure to pay the Ecuador judgement:

**Legal actions to enforce the Ecuador judgment against Chevron are proceeding in Canada, Argentina, Brazil, and Ecuador.  These actions can no longer can be pushed under the rug by the company. Just last month, a Canadian appellate court green-lighted an enforcement proceeding that puts an estimated $15 in Chevron assets in play; Chevron’s defense brief is due later this month.  The Canadian court also openly derided Chevron’s two-decade effort to challenge jurisdiction in three different countries. 

** Canada is now considered one of the most strategically important oil producers in the world, with the third largest proven reserves.  If the Ecuadorian villagers prevail in what is widely seen as one of the world’s most reputable judicial systems – one that, unlike the U.S., is not the product of constant political warring -- they can collect the entirety of their $9.5 billion judgment and begin a long-awaited clean-up.

**On the shareholder front, Watson is likely to face a firestorm over Chevron's Ecuador quagmire.  Displeasure over his $32 million compensation package is at an all-time high.   Prominent shareholders – including the New York state comptroller – are backing resolutions related to the Ecuador case that directly challenge Watson’s stewardship.  One calls for the separation of the CEO and Chairman positions; another calls for the appointment of a Board member with environmental expertise.  In 2011, these resolutions garnered a whopping 38% of shareholder support.

Copies of the three resolutions related to Chevron that will be voted on at the 2014 annual meeting in May are here, here and here.   Background on Chevron’s shareholder dissent can be read here. 

**Watson has become so nervous about the fallout from the Ecuador judgment in Latin American that he personally asked Venezuela President Maduro for help during a recent visit to that country, according to media reports.   Watson must shudder at the thought of an enforcement action against Chevron in the oil-rich country, which has the largest proven reserves in the world.  Any action against Chevron by Venezuela’s courts could have a massive impact on the company’s prospects.  It also could lead to huge problems for Watson and R. Hewitt Pate, Chevron's General Counsel and the mastermind behind the company's exorbitantly expensive ($400 million per year) legal strategy.

**Another way to understand why Watson visited Venezuela is that Ecuador President Rafael Correa is waging diplomatic war against Chevron in Latin America.  Chevron's lobbying effort in Washington to cut off U.S. trade preferences to Ecuador could cost the small country 300,000 jobs.  Correa has called Chevron’s campaign against Ecuador “criminal” and has vowed to defend his country's sovereignty.  Chevron's bullying tactics hardly endear itself to the people of the region.  Correa, who polls show is South America’s most admired leader, has launched the anti-Chevron offensive through ALBA, a regional body that includes Venezuela, Brazil, Bolivia and Argentina.   

**Citizen committees in solidarity with the Ecuadorian villagers have sprouted up in several countries (like Venezuela and France) in response to Chevron’s abominable behavior.   A recent report by famed Argentina journalist Jorge Lanata has spread firsthand proof through Latin America of Chevron’s environmental crimes in Ecuador.   A huge new Chevron investment in Argentina’s gas fields is being hampered by grass roots support for efforts to enforce the Ecuador liability in that country, according to local news reports and 
 The New York Times.  

**In Ecuador, the country’s Supreme Court in November issued a 222-page decision that unanimously affirmed an intermediate appellate court decision in favor of the villagers.  The judgment is now final and ironclad, which opens up the possibility of enforcement actions being filed in yet more jurisdictions.  The court rejected each element of Chevron’s fake narrative that it was the victim of an “extortion” plot by the villagers, who suffer from high cancer rates and other diseases due to Chevron’s sub-standard operational practices.    See these photos on the Huffington Post to get a sense of the human impact on the people Chevron claims are trying to extort money from the company.

**Chevron is now openly conceding in legal papers that it faces enormous risk to its operations from the Ecuador case.   In a recent filing in New York, Chevron admitted that the seizure of the company’s trademarks in Ecuador is “causing millions of dollars of harm to Chevron” and that the Ecuadorian villagers have “injured Chevron is both calculable and incalculable ways” by winning their case. Yet the company has continually failed to disclose these monumental risks to shareholders in its public filings, prompting calls by a group of shareholders and a U.S. Congresswoman for an SEC investigation of the company.

**Aside from Venezuela, another game changer for Chevron is that an Ecuador court recently froze $96 million in cash owed the company from Ecuador’s government from an international arbitration decision.  If these funds are recovered by the villagers, one of Chevron’s main tactical advantages – superior resources – will be significantly mitigated. The villagers will then be able to expand and redouble their legal efforts to force Chevron to clean up its toxic waste.

**The backlash against Chevron for its fugitive-like behavior and aggressive counterattack strategy has begun to take shape.  Just last week numerous environmental and human rights organizations, including Amazon Watch and the Sierra Club, slammed the company in an open letter for using the legal system to try to intimidate and silence its critics.  An announcement that several more prominent civil society organizations have signed is expected soon.

**Chevron’s retaliatory RICO case in New York remains a trial to nowhere, while outraging civil society organizations and public interest groups.  (For a great summary of the trial, see this recent blog  from the Huffington Post.)  After being helped along by an activist judge who seems to despise the concept of tribal leaders suing an American company in their own courts, Chevron lost credibility when it suddenly dropped all damages claims on the eve of trial to avoid a jury.  On the legal front, Chevron's case faces enormous obstacles and is highly unlikely to survive appeal.  The remedy sought by Chevron – an injunction from a U.S. court preventing enforcement of a foreign court judgment – already has been declared illegal by a federal appeals court and produced scorn from legal scholars worldwide.

Chevron has a track record of bribing witnesses for favorable testimony , trying to pay off Ecuadorian government officials to quash the case, trying to entrap a judge in a video scandal, spiriting its own employees out of Ecuador to avoid criminal prosecution, trying to threaten Ecuadorian judges with jail time if they did not rule in the company’s favor , trying to pay journalists to spy on the villagers, using 180 agents from Kroll to spy on adversary counsel, breaking promises to U.S. courts that it would pay the Ecuador judgment, and having top officials like Sylvia Garrigo claim on camera that the company does not believe it should be in court at all over the Ecuador contamination.

The Ecuador-related problems faced by Watson are largely of his own making.  The company has invested an estimated $2 billion to beat back the Ecuador judgment.  It has used 60 law firms, 12 investigative firms, and dozens of lobbyists and public relations firms to try to intimidate its critics.  And it has done so for years and years.

Only two weeks into 2014, Chevron’s grand strategy to avoid paying for a cleanup of its contamination in Ecuador is fraying at the edges.  Its “lifetime of litigation” strategy is sputtering.  Days after the closing arguments in the RICO trial— with no remedy even if the company wins — a court in Ontario gave the Ecuadorians an early Christmas present.

Ontario Court of Appeal Justice James C. MacPherson wrote:

Even before the Ecuadorian judgment was released, Chevron, speaking through a spokesman, stated that Chevron intended to contest the judgment if Chevron lost.  He said: ‘We’re going to fight this until hell freezes over.  And then we’ll fight it out on the ice.’

Chevron’s wish is granted.  After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard on the merits in an appropriate jurisdiction.  At this juncture, Ontario is that jurisdiction.

This is shaping up to be a perilous year indeed for Watson and his management team.   The deep freeze and long winter north of the border does not bode well for Chevron's fight on the ice to block enforcement.  The odds favor the villagers.

For background on Chevron’s contamination, see this video, this summary of the evidence against the company, and this video from Steven Donziger, a longtime lawyer for the Ecuadorians and the principal target of Chevron’s retaliation campaign.

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Chevron Became Terrified of Its Own Witnesses During Retaliatory RICO Trial

Looking back on Chevron’s retaliatory RICO trial, it is clear that the oil company’s lawyers were so terrified of some of their own witnesses that they literally ordered them to stay away from court.

Remember Douglas Beltman and Ann Maest, the scientific consultants for the rainforest indigenous and farmer communities in Ecuador that were devastated by Chevron’s toxic dumping?  Beltman and Maest helped the communities win their historic judgment against Chevron in Ecuador’s courts.  The judgment recently was affirmed by Ecuador's Supreme Court.  

Several months ago, desperate to evade a court order that it clean up its toxic mess, Chevron launched a public relations offensive in the U.S. that claimed Beltman and Maest had “disavowed” their work for the communities harmed by Chevron's pollution.  In opening arguments in the RICO case in October, Chevron lawyer Randy Mastro touted Beltman and Maest as key witnesses against New York human rights lawyer Steven Donziger, the company’s principal target.

So why did Mastro and his team of 114 lawyers at Gibson Dunn decide to bail on Beltman and Maest?  And what does the sudden disappearance of these witnesses tell us about the validity of Chevron’s RICO case? 

Mastro knew that under cross-examination Beltman and Maest almost certainly would have delivered damning testimony against Chevron.   As far as the case is concerned, Chevron’s failure to call these witnesses underscores yet again how weak the company’s evidence is -- which is why Chevron dropped damages claims on the eve of trial to avoid a jury of impartial fact finders. 

The most important of Chevron’s witness desaparecidos is Beltman, a nationally-acclaimed scientist who in 2009 appeared in a 60 Minutes segment condemning the company’s decades-long record of toxic dumping in Ecuador.

Last Spring, Chevron secured an affidavit from Beltman which the oil giant claimed shows he had “disavowed” his work for the communities and recanted his comments to 60 Minutes. In April 2012, with much fanfare, Chevron issued a corporate press release trumpeting Beltman’s supposed retreat.   As usual, the company failed to disclose key facts.

One of those facts is that Chevron had aimed a veritable bazooka at Beltman’s head to get him to sign the affidavit.  The company had named Beltman as a RICO defendant and threatened to bankrupt Stratus if Beltman didn’t capitulate.  Chevron sent a series of shakedown letters to clients of Stratus, falsely claiming that Beltman had been found to have committed fraud. 

The reality is that Beltman never changed his opinion that Chevron is responsible for massive and life-threatening toxic contamination in Ecuador.  Read this blog for more on the back story of Chevron's campaign of economic extortion to silence witnesses.  Citing this evidence, 60 Minutes flat out refused Chevron's bogus demand that it issue a "correction" to the original story.

In exchange for Beltman’s affidavit -- clearly written by Chevron lawyers -- Chevron dropped Beltman and Stratus as defendants in the RICO action. At the same time, Stratus agreed to drop a lawsuit against Chevron where the consultancy had accused the oil giant of engaging in a “an extrajudicial campaign of malicious defamation.”  Read the Stratus lawsuit to get a sense of how vicious Chevron’s strategy had become.

The reason Mastro chickened out with his key witnesses is pretty simple.  Beltman (and Maest) only “disavowed” their work on a single technical report that the Ecuador court excluded as evidence.  Neither were involved in the more than 100 other technical reports that the Ecuador court relied on to find Chevron liable.  In other words, the affidavits were a big non-event in terms of the trial.

They were a  nice illustration of Chevron's venal tactics.  Chevron did not want the court nor journalists to hear Beltman’s truthful testimony, so Mastro squelched it.  Beltman’s real view of Chevron’s bad acts can be seen in this power point presentation he prepared in 2010. Or read his sworn deposition testimony from 2011. 

Nearly the exact same thing happened with another of Chevron’s favorite witnesses, the American technical expert Dr. Charles Calmbacher. On the first day of the RICO trial, Mastro said Calmbacher was going to testify.  But he also was a big no-show.

The reason: Calmbacher lied in a pre-trial deposition about disavowing his own court-ordered technical reports prepared for the communities.  In fact, the evidence shows that Calmbacher found extensive toxic contamination at the former Chevron sites he inspected and he turned on the communities out of spite over a fee dispute.  See pp. 53-55 of Donziger’s sworn witness statement for the documentation.

Another of Chevron's disappearing witnesses, the Ecuadorian technical expert Fernando Reyes, signed a sworn affidavit earlier this year that was trumpeted by the company's PR flaks.  But in his pre-trial deposition, Reyes undermined a key plank of Chevron’s fake narrative by saying that it was normal in Ecuador for court-appointed experts to work closely with the parties.  So Mastro, who ran the case like a public relations campaign, silenced him too.

Other Chevron witnesses who were never called to court also include two of Donziger’s former associates, Laura Garr and Andrew Woods.  What happened?

Chevron stood nothing to gain once it got the public relations hit in opening arguments of falsely claiming the pair had turned on Donziger.  You can bet that if called to the witness stand, both would have lauded Donziger for his commitment to his clients even if they griped on occasion about his demanding management style.  So they were told to stay away.

Chevron always has used the RICO case to pre-package witness affidavits drafted by its own lawyers and then peddle them to Judge Kaplan and the media. In fact, these ghostwritten affidavits were central only to Chevron’s public relations strategy to distract attention from its environmental crimes in Ecuador by “demonizing” Donziger and his clients.

Once the trial was on and the rubber had to meet the road, Mastro shuddered at the thought that any of the pre-packaged testimony might veer off-script.   It's also why he abruptly aborted his cross-examination of Donziger, who was making the self-annointed former "mob prosecutor" look a bumbling fool who was lost in the weeds and could not frame a question properly.

Several months ago, a reporter at American Lawyer (Michael Goldhaber) declared the entire Ecuador case over after former Ecuador Judge Alberto Guerra signed a sworn affidavit claiming that the plaintiffs had bribed a sitting judge.  Almost overnight, based on a Chevron-drafted affidavit, Guerra became Godhaber’s new media sensation. 

Unlike Beltman and Maest, Chevron had no choice but to call Guerra to the stand.  His claims were just too important.

Under cross-examination, Guerra wilted.  He admitted he was a criminal who had fixed dozens of cases and that Chevron was paying him (in violation of federal law) vast sums of money for favorable testimony.  Guerra’s show trial performance was a hilarious illustration of just how weak Chevron’s case really is.  Read pp. 31-41 of this post-trial brief to understand how Guerra’s testimony is riddled with lies, inconsistencies, and constantly changing stories. 

Guerra played Chevron for a fool, and Chevron played Goldhaber for a fool.  And Mastro, a leader of a practice group that has been consistently nailed by courts for engaging in unethical litigation practices, keeps Chevron’s false hope alive while billing CEO John Watson an estimated $400 million annually for services that have caused nothing but more and more risk for the company’s shareholders.

Chevron is now left with precious little of long-term value for its huge investment in the RICO case.  It still has trial judge Lewis A. Kaplan as the sole “Decider” of the case (at least before the appellate courts weigh in).  But Kaplan is seriously lacking in credibility due to his xenophobic comments toward the Ecuadorians, his biased promotion of Chevron’s cause, and his grandiose desire to serve as a de facto appellate panel for the Ecuadorian judiciary.   Kaplan's expected decision in favor of Chevron will be laughed at by enforcement courts around the world and has little chance of surviving appeal in the United States.

Kaplan’s hyperactive efforts to jump through tighter and tighter hoops to favor Chevron has been nothing short of astonishing to the world legal community.  See this brief from international legal scholars, this brief from New York University law professor Bert Neuborne, and this post-trial brief in the RICO case to get a sense of the man’s intellectual dishonesty and sheer arrogance.

John Keker, known as one of the most formidable trial lawyers in the nation who counts Google among his many clients, said in his recent motion to withdraw that Kaplan had allowed the RICO case to degenerate into a “Dickensian farce” due to his mismanagement of the docket and his “implacable hostility” toward Donziger, who has battled on behalf of the rainforest communities for two decades.

Chevron has played a cynical game of carrot & stick, manipulating witnesses with exorbitant payments (Guerra) or ferocious personal and economic pressure (Beltman and Maest).  Team Mastro and the Lords running Chevron would never get away with it if the case were before a judge who wasn’t clearly biased against the Ecuadorians and Donziger.

All of Chevron’s testigos desaparecidos were people that the oil giant could not manipulate enough, compensate enough, or intimidate enough to be sufficiently complicit with its vicious intimidation campaign against the rainforest communities.  And while the oil giant can apparently make witnesses lie, flip, or simply vanish, nothing can make the company’s responsibility for suffering in Ecuador disappear.

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Prominent Organizations Release Open Letter Condemning Chevron's Tactics in Ecuador Case

Today, Amazon Watch—longtime advocates for the Ecuadorian indigenous and farmer communities affected by Chevron's toxic legacy—released a letter from a dozen prominent human rights and environmental organizations condemning Chevron's abusive tactics related to the Lago Agrio litigation.

In addition to decrying the abusive nature of Chevron's scorched earth legal, political, and media strategy in the case, it warns of the significant negative implications of Chevron's efforts to evade accountability for its devastation in the Amazon:

In a press release announcement Amazon Watch excerpts the sign-on letter:

"Chevron's actions set a dangerous precedent and represent a growing and serious threat to the ability of civil society to hold corporations accountable for their misdeeds around the world."

Besides Amazon Watch, signatories to the letter include such high-profile organizations as frontline human rights and environmental legal advocates EarthRights International, global climate change activist powerhouse 350.org,  and eminent environmental movement stalwart Sierra Club.

Sierra Club Executive Director Michael Brune had this to say today:

"The people of Ecuador have a right to defend their families from oil industry pollution. Journalists have a right to expose the reckless practices that are destroying Amazon communities and ecosystems. Chevron's bullying tactics undermine those rights, and the Sierra Club supports the individuals and organizations that are standing up to Chevron's irresponsible corporate behavior."

Under headers highlighting some of the tactics Chevron has employed in an effort to evade accountability for its crimes in Ecuador, the letter outlines the way Chevron 'Attacks Free Speech,' 'Vilifies Critics,' and 'Undermines the System of Justice and Judicial Sovereignty.'

Under this last header, the letter explains:

In a threat to the nature of national sovereignty and an independent judiciary, Chevron took the unprecedented step of attempting to use an obscure arbitration procedure under the mantle of the U.S.-Ecuador Bilateral Investment Treaty to nullify the ruling of a sovereign domestic court even though Ecuador was Chevron’s chosen forum. This despite the fact that Ecuador was not even party to the 19-year court case as the plaintiffs were the 30,000 affected indigenous and campesino people, and the case itself began before the Investment Treaty was even signed. The affected peoples have no right to participate in the arbitration, which will be decided by three private lawyers, who purport to have the authority to overrule the Ecuadorian courts – raising threats to the sovereignty of justice systems around the world, which could be rendered powerless in the face of truly unlimited corporate power.

The dozen current signatories to the letter are currently circulating the letter, soliciting additional signatories, and conducting outreach to educate allies and colleagues working on human rights, environmental sustainability, and corporate accountability, among other key issues for which Chevron's tactics have profound implications.

Click on the letter below to read and/or download:

Institutions, Organizations and Individuals Advocating for Corporate Accountability Condemn Chevron’s Retaliatory Attacks on Human Rights and Corporate Accountability Advocates and See it as a Serious Threat to Open Society and Due Process of Law

And click here to read Amazon Watch's press release announcing the letter.

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After the Smoke Clears: What Chevron’s RICO Trial Means, With Hindsight

Now that the evidentiary phase of Chevron’s retaliatory RICO bench trial against New York human rights lawyer Steven Donziger and his Ecuadorian clients is over, we can take a deep breath and analyze what really happened before the controversial Judge Lewis A. Kaplan.  The answer is not much, other than one of the greatest abuses of the American civil justice system ever. 

First, let’s take a step back and look at what is undisputed.  As Paul Paz y Mino of Amazon Watch wrote in his recent post at Eye on the Amazon blog, Chevron admits to dumping billions of gallons of toxic waste into Ecuador’s Amazon when it operated in the country from 1964 to 1992 under the Texaco brand.  A trial court decision finding Chevron liable for this dumping has been affirmed unanimously by Ecuador’s Supreme Court.  Since Chevron refuses to pay, judgment enforcement actions filed by the villagers continue to target billions of dollars of Chevron assets in Canada, Argentina, and Brazil.  Chevron is also hamstrung by its longstanding promise to U.S. courts to pay the $9.5 billion Ecuador judgment as a condition of the dispute being moved to the South American nation in 2002.

For these and other reasons, we always have maintained that the RICO trial was more an expensive therapy session for Chevron’s management team than a bona fide legal case.  None of the key Ecuadorians named by Chevron as “defendants” even showed up.  Given the bias of Judge Kaplan and the utter arrogance in the idea that a U.S. judge could rule on issues in the case already decided by Ecuador’s Supreme Court, Chevron is likely to face a ferocious backlash from foreign judges if it tries to peddle Kaplan’s ruling abroad.  



Chevron’s fundamental allegation was that it was treated unfairly during the trial.   That’s typical public relations blah-blah carted out after an oil company loses a trial fair and square.  Chevron fought for ten years to move the underlying environmental case from the U.S. (where it was filed in 1993) to Ecuador.  The company submitted 14 sworn affidavits to a U.S. federal court praising the fairness of Ecuador’s courts.  (It started attacking those courts only when the evidence at the trial pointed to its guilt.) Chevron recently won two significant legal cases in Ecuador against the state-owned oil company, PetroEcuador. The Ecuador Supreme Court just last month lowered the company’s liability by approximately $10 billion, a draconian result for the long-suffering rainforest communities who have been waiting almost 50 years for a clean-up.  That hardly sounds like the fix was in.



The RICO case is the most recent installment of Chevron’s global forum shopping to evade accountability for its toxic dumping. The company has filed thousands of motions in more than 30 U.S. courts to try to undermine the Ecuador judgment.  It also filed two claims against Ecuador’s government in a futile attempt to shift its own clean-up responsibility to Ecuadorian taxpayers.  It has attacked more than 100 supporters of the Ecuadorians, including bloggers and activists, with subpoenas seeking their private communications.  It has dispatched powerful lobbyists, including former Clinton Administration officials Mack McLarty and Mickey Kantor, to pressure the U.S. government to cancel trade benefits for Ecuador.  It also has hired six public relations firms to promote the fake narrative that the nation’s third largest oil company is being victimized by indigenous groups who lived mired in its oil contamination.  An internal Chevron memo from 2009 acknowledged the company’s long-term strategy for Ecuador was to “demonize Donziger” and turn the tables on the villagers rather than litigate the case on the merits.   That’s the context for the RICO case.

Chevron wanted the underlying claims to be heard in Ecuador as long it felt it could engineer its desired outcome.  In October 2003, company lawyer Ricardo Reis Veiga desperately tried to torpedo the litigation on the first day of trial by persuading the country’s Attorney General to do something entirely unethical and illegal – call the trial judge to urge him to throw out the case that Chevron said it would litigate in Ecuador.  Once judges in Ecuador began to resist Chevron’s pressure campaign, the company high-tailed it back to the friendly confines of Judge Kaplan’s courtroom where the activist judge was more than happy to grant a do-over.  

Almost everybody expects Judge Kaplan, who does not even speak Spanish, to rule in favor of Chevron based on his interpretation of Ecuadorian laws already decided by that country’s highest court. 

The RICO case remains a sideshow that Chevron is using to try to distract its shareholders and employees from evidence of its crimes, fraud, and human rights abuses in Ecuador – as documented in this stunning affidavit by Ecuadorian lawyer Juan Pablo Saenz or in this video or in this interview with Donziger on his website.
 But it is a stretch to think that any Kaplan ruling in favor of the oil giant will matter to the foreign enforcement courts who will decide under their own laws whether Chevron pays up.   (By the way, Chevron can raise as a defense all of its so-called “fraud” evidence that it is using during the RICO trial in the enforcement courts.)

Chevron’s trial of mass distraction before Kaplan also poses a different kind of threat to our body politic in the U.S.  As Paz eloquently wrote in his blog:

Unfortunately, there's even more going on here than a Chevron-friendly judge misusing his power to the detriment of 30,000 long-suffering people in Ecuador. This is the furthering of a strategy that corporations will continue to develop to crush the free speech of critics and limit our chances to fight back on anything resembling a level playing field. This RICO suit and everything Kaplan has allowed Chevron to get away with in its wake is a serious threat to open society and due process of law.

In our recent analysis, Chevron’s RICO Trial to Nowhere, we noted eight specific reasons why Chevron’s case has little or no chance of holding up on appeal in the U.S.

Besides the fundamental problem that Chevron failed to prove its case, there is also simply no remedy that any U.S. court can conceivably fashion to block a foreign court judgment.  When there’s no conceivable remedy, there’s no “case or controversy” as required by the U.S. Constitution.  And when there’s no case or controversy, there should be no trial. 

You won’t be hearing about the flaws in Chevron’s case from R. Hewitt Pate, the company’s general counsel.  With an air of smugness, Pate sat in Kaplan’s courtroom for six weeks while collecting some of his $7.5 million annual salary. After strong-arming Chevron to invest astonishing sums in the RICO case, he no doubt wanted to be the man to spin the daily results to Chevron’s Board of Directors and CEO John Watson.  (Watson, who oversaw Chevron’s purchase of Texaco without adequately vetting Texaco’s pending Ecuador liability, has long been the target of shareholder ire over his mishandling of the litigation.)

Pate’s effort to control the narrative before Chevron’s Board and shareholders has to be pure jiu-jitsu.  Here is a thumbnail sketch of Chevron’s legal problems with the RICO case:

Kaplan has no remedy to help Chevron:  Having denied a jury trial and excluded key relevant evidence that contradicts Chevron’s narrative, Kaplan will no doubt “find” in favor of the company.  But once that happens, there is no place to go.  Under RICO, a private party like Chevron has no right to injunctive relief – a position the U.S. Department of Justice under the Bush Administration repeatedly asserted. Few judges would have the temerity to even think they could allow a law passed by Congress to bring down the Mafia to be twisted by a corporation to attack indigenous groups and human rights lawyers who held it accountable for its crimes.  That’s a rather scary assault on the very nature of political advocacy.  The Second Circuit Court of Appeals in New York already ruled in 2012 that the Ecuador rainforest communities “may seek to enforce their judgment in any country in the world where Chevron has assets.”  Nothing that Judge Kaplan does can change that.

Kaplan cannot act as the appellate court for Ecuador’s judiciary:  It is an axiom of international law that judges in one country are not allowed to overrule court decisions of another country.  In Ecuador, three layers of courts – most recently the nation’s highest court – have upheld the trial court decision holding Chevron liable for dumping billions of gallons of toxic waste into the Amazon.   Judge Kaplan knows almost nothing about Ecuador; he cannot even read the trial court decision or the record on which it was based.  Yet Judge Kaplan has suggested that he plans to rule on the validity of Ecuador’s entire judicial system as part of his grand plan.  Doing so will look plain silly to the appeals court and even sillier to foreign judges being asked to enforce the Ecuador judgment. 

Kaplan manipulated evidentiary decisions:  Even after denying him a jury, Judge Kaplan would not let Donziger mount a real defense.  He refused to admit evidence of the extensive contamination relied on by the Ecuador court to find Chevron liable.  He excluded more than 100 technical reports from Chevron and other sources that documented high levels of Total Petroleum Hydrocarbons and other harmful toxins (such as lead, barium, zinc, and Chromium 6) at the company’s 376 former well sites.  This evidence was critical to show the Ecuador judgment was valid and not procured by fraud, as Chevron claims.  Judge Kaplan also refused to hear evidence of Chevron’s “unclean hands” – its crimes, fraud, and threats to judges and court personnel to sabotage the trial.  It is a basic legal principle dating back centuries that the party that arrives in court with “unclean hands” is not entitled to relief.  To deal with this problem, Judge Kaplan whitewashed the official record by excluding the extensive evidence of Chevron’s “unclean hands”.

Kaplan’s temperament is not befitting a federal judge:  We have reported extensively on Kaplan’s displays of bias against Donziger and the Ecuadorians, including his comments from the bench disparaging Ecuador’s judicial system and his preposterous claim that Donziger’s goal is “to fix the balance of payments deficit” of the United States.  See here, here, and here.  During the trial, Judge Kaplan treated several witnesses from Ecuador with a conspicuous rudeness – threatening one with contempt if he did not turn over his computer to Chevron, using trick questions on another, and dismissing complaints about cultural insensitivity.  Letting Chevron get away with its final act of trickery – dropping $60 billion in money damages claims on the eve of trial – was the ultimate betrayal of his oath to administer justice fairly. That allowed Chevron to avoid a jury of impartial fact finders, which very likely would have meant another devastating courtroom setback for the company.  Kaplan then heaped insult upon injury by letting Chevron’s staff use the jury deliberation room as a private office during the trial.  Dropping a jury also means Chevron is going to be hampered by a decision from a judge with little credibility domestically and no legitimacy internationally.

Aside from the many legal problems, on the factual front Chevron’s case is a paper tiger.

Once you strip away the flotsam, the company’s supposed  evidence of “racketeering” boils down to two main allegations: (1) that the Ecuador judge was bribed so that the plaintiffs could “ghostwrite” his decision; and (2) that a particular expert damages report submitted by Richard Cabrera was fraudulent. On both points, Chevron’s allegations fall apart upon even superficial examination.

Testimony from Chevron’s lying judge, Alberto Guerra: Guerra is an admitted liar who testified that he accepted as little as $200 to fix cases.  Chevron paid at least $326,000 in cash and other benefits for his testimony, in violation of U.S. law that prohibits payments to witnesses.   Chevron also hired Ira Kurzban, one of America’s most well-connected immigration attorneys, to help secure political asylum for Guerra and his family even though Guerra faces no threat in Ecuador other than prosecution for his admitted crimes. In exchange for Chevron’s money, Guerra offered a triple hearsay statement that the Ecuadorian lawyers bribed the judge – a charge denied by the judge himself.  (Donziger never even met the judge nor saw him before he testified in Kaplan’s court.)  For more detail, see Donziger’s motion to strike Guerra’s testimony and this blog by Paul Paz.   Bottom line: Guerra is another in a long line of Chevron witnesses bribed by the company to lie.

Ghostwriting:  Chevron’s allegation that the 188-page trial court judgment was not written by Zambrano is a joke.  Chevron’s two main experts on “ghostwriting” – Hofstra professor Robert Leonard and 28-year-old tech whiz kid Spencer Lynch – both failed to undertake the much-vaunted “authorship analysis” that could have compared Zambrano’s judgment with his other publicly available decisions or writings to determine if they matched up.   The fact that Chevron did not produce such a report is telling. Chevron likely did commission the study, but buried it when it did not turn out how the company had hoped.

The Cabrera damages report: One of 106 expert technical reports submitted into evidence, the Cabrera report was prepared in conformity with Ecuadorian law using the same methods Chevron’s lawyers used for the preparation of their expert reports.  (See pp. 46-53 of Donziger’s sworn witness statement for a deconstruction of Chevron’s fraudulent narrative regarding Cabrera.)   In any event, the Ecuador court did not rely on the Cabrera report when finding Chevron liable.  Instead, the court relied largely on scientific evidence of contamination proffered by Chevron’s own experts (such as Ernesto Baca and Gino Bianchi), as Donziger explains in paragraphs 46 and 47 of his witness statement.  The fact that Chevron’s own evidence proved the case against it was reinforced by an independent study conducted by the Louis Berger Group in the United States. 

Other Chevron “evidence” of racketeering is even more absurd.  The fact that Donziger was an aggressive promoter of press releases exposed Chevron’s human rights abuses and corruption in Ecuador is basic political advocacy protected by the First Amendment.  These tools of advocacy have been used by lawyers from Thurgood Marshall to Ralph Nader to Hew Pate himself, who loves to put out press releases that dupe his own shareholders.   Similarly, Donziger’s suggestion that two Chevron lawyers in Ecuador be criminally prosecuted for engaging in a sham remediation was entirely proper.  Click here to read about how Chevron dropped a key plank of its RICO case to avoid the airing of evidence that would have proven the fraudulent nature of its so-called “remediation” in Ecuador.

Chevron of course will try to promote Kaplan’s decision far and wide. The fact Chevron repeatedly tried to corrupt the Ecuador proceedings and manipulate the RICO evidence will not be mentioned by the oil giant.  Meanwhile, it’s business as usual in San Ramon and Lago Agrio.  The indigenous uprising of the "so-called plaintiffs" in Ecuador is gaining ground around the world while the beleaguered Watson-Pate team digs in its heels.

Chevron needs to keep its corporate jets gassed and have its pilots at the ready.  Pate and his entourage should keep their travel bags packed and ice skates sharpened.  This battle is spreading.

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