Fraud, Shakedowns and a Discredited Case against Chevron

By December 21, 2010Briefly Legal, General, Trade

Since we last wrote about the $113 billion shakedown lawsuit against Chevron for environmental damage in Ecuador’s Amazon, momentous developments have occurred. Via court filings and media reports we have learned:

  • Kohn, Swift and Graf, the Philadelphia law firm that bankrolled the lawsuit has pulled the plug on its financial support, largely because of the hubris and unethical behavior of the lead lawyer orchestrating the anti-Chevron campaign, Steven Donziger.
  • Donziger has declared he is lowering his profile in the case, and Patton Boggs has signed on to represent the Ecuadorian plaintiffs, apparently believing it can patch up a sinking ship. (Wall Street Journal, “Chevron Forces Legal Change.”)
  • Some of the Ecuadorian plaintiffs may be fictional. No, not just their claims, their actual existence may be an invention.

From, “Forensic Expert Discovers Elaborate Forgery of Plaintiffs’ Signatures Authorizing 2003 Complaint Against Chevron in Ecuador“:

SAN RAMON, Calif., Dec 20, 2010 (BUSINESS WIRE) — Chevron Corporation (NYSE: CVX) today submitted expert analysis from a leading forensic specialist demonstrating that many of the signatures on the document purporting to authorize the lawsuit against Chevron in Lago Agrio, Ecuador, were forged. According to Chevron’s filing, this newly uncovered evidence of forgery and fraud makes clear that the lawsuit has been tainted with corruption from the very beginning and must be terminated….

“The Ecuadorian authorities cannot continue to ignore the mounting evidence of fraud in the Lago Agrio litigation without violating their duties under the Ecuadorian constitution and international law,” stated R. Hewitt Pate, Chevron vice president and general counsel. “We intend to seek full redress against the harm that has been done in the name of the Ecuadorian plaintiffs and to hold accountable all of those who have knowingly participated in this unlawful scheme.”

The forensic expert’s analysis and Chevron’s motion to nullify the Ecuadorian lawsuit are available at:

In 'Crude' movie, Joe Kohn (left) looks askance at Steven Donziger

Daniel Fisher at has done the best job of reporting on recent developments gleaned from court documents, including the Philadelphia law firm’s renunciation of Donziger. Joe Kohn, the partner most associated with the suit, wrote the plaintiffs in August about the manipulation of a supposedly independent court expert’s report claiming $27 billion in damages. As Fisher reports in his column, “Chevron Ecuador Case A Shambles, Former Backer Says,” Kohn fumed:

We now find out that there may have been extensive, systematic contacts, orchestrated by Donziger, and with your participation and agreement, which have threatened the entire case. And, of course, we find out about it in part as a result of the utter stupidity, arrogance and conceit of inviting a film to be made documenting this improper conduct.

Hubris, in other words.

The damning materials — which affirm everything we’ve blogged about the case here at — have become available through Chevron’s effective (and smart) use of what are called 1782 motions used to acquire evidence in U.S. courts about legal proceedings overseas. By building on outtakes obtained from the documentary-style movie about the litigation, “Crude,” Chevron’s attorneys at Gibson, Dunn and Crutcher have been able to obtain records demonstrating fraud at the heart of the lawsuit.

Donziger and the plaintiffs fought hard to keep those records under wraps, but U.S. District Judge Lewis Kaplan and the Second U.S. Court of Appeals have, with increasing impatience, ruled against the stalling tactics. The most recent appellate order, Dec. 15, noted that defendants are operating under extreme time pressure, facing a decision by an Ecuadorian court on the litigation as well as the criminal prosecution of two Chevron attorneys in Ecuador. The Second Circuit also sent what we read as a message to Donziger and the plaintiffs not to demonize Judge Kaplan as part of its litigation strategy:

[In] light of the complexity of this case and the urgency of its adjudication, we wish to note the exemplary manner in which the able District Judge has discharged his duties. There is no question but that all concerned, not least this Court, are well served by the careful and comprehensive analysis which is evident repeatedly throughout the many memoranda and orders of the District Court, many of which were produced with rapidity in the context of the District Court’s daunting schedule in this and other important cases.

The court appears to recognized that the plaintiffs’ team, through its PR agitator Karen Hinton, have made personal attacks the heart of their public relations strategy.

Joe Berlinger, the award-winning director of the award-winning “Crude,” has fallen silent since he lost his claims to keep his outtakes confidential because of his supposed journalistic privilege — claims vigorously supported by major news companies and organizations. If they had suceeded the fraud might well have remained hidden.

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