In filing civil a RICO suit on Feb. 1 against the Ecuadorian plaintiffs, U.S. trial lawyer Steven Donziger, his numerous Ecuadorian associates — lawyers and activists — the Amazon Defense Front and a Colorado consulting firm, Stratus, Chevron is seeking several major forms of relief. (Chevron complaint, news release.)
First, it seeks damages, including treble damages allowed under civil RICO, caused by the organized scheme to damage the company’ reputation, defraud the justice system, and extort billions of dollars from Chevron for supposed environmental damage from oil operations in the Ecuadorian Amazon.
Second, the company seeks to prevent the defendants and their allies (co-conspirators according to Chevron) from aiding Ecuador in any way from enforcing a court order claiming any of Chevron’s assets. A judge in Ecuador could hand down a multi-billion judgment against Chevron based on fraud and conspiracy, and then the U.S. trial lawyers and their partners in the shakedown suit would try to get their piece of the prize by going after Chevron’s asset around the world. (For specific language from the suit, see the extended entry of this post*.)
U.S. District Judge Lewis Kaplan of the Southern District of New York is taking the issues raised by Chevron very seriously. In an order issued Thursday, the judge scheduled a “show cause” hearing next Tuesday in Manhattan over the granting of a preliminary injunction as requested by Chevron. The defendants are to:
show cause before this Court… why an order should not be issued, pursuant to Rule 65(b) of the Federal Rules of Civil Procedure, temporarily enjoining and restraining, until after thee Court has had an opportunty to rule on Chevron’s application for a preliminary injunction “defendants and any persons acting in concert with them from funding, commencing, prosecuting, advancing in any way, or receiving benefit from, directly or indirectly, any action or proceeding for recognition or enforcement of any judgment entered against Chevron in Maria Aguidan y Otros v. Chevron Corporation, No. 002-2003 (“Lago Agrio Litigation”) currently pending in the Provincial Court of Justice of Sucumbios in Ecuador, or for prejudgment seizure or attachment of assets based on any such judgment.
A central strategy of the U.S. trial lawyers behind this shakedown lawsuit has been to corrupt the courts in Ecuador to gain a judgment and then to immediately use the courts around the world to seize or otherwise tie up Chevron’s assets, thereby increasing the pressure on the company to settle out of court.
Throughout the process, Judge Kaplan has been saying, “Not so fast.” Pretty soon, he may just say, “No.”
News coverage …
- Wall Street Journal (blog),”Chevron Turns Tables on Ecuador Plaintiffs; Sues Them“
- Financial Times, ” Chevron sues defendants in Ecuador case“
- San Francisco Chronicle, “
- New York Times, Chevron’s RICO Lawsuit in Pollution Case Part of Wider Legal Strategy
The Times story is one of those annoying examples of going straight to the “analysis” before reporting the facts. Maybe Chevron’s suit isn’t part of a strategy. Maybe it’s just a lawsuit that says what it has to say: The defendants are guilty of civil RICO violations.
From the lawsuit:
*For equitable relief as appropriate pursuant to applicable law, including but not limited to issuing a temporary restraining order, a preliminary injunction and a permanent injunction that bars Defendants, their assignees and anyone else acting in concert with them – including the law firms of Emergy Celis, Motley Rice and Patton Boggs, and financial backers such as Burford Group and its related entities and Russell DeLeon – from commencing, prosecuting, or advancing in any way – directly or indirectly – any attempt to recognize or enforce any Lago Agrio judgment in any court, tribunal, or administrative agency in any jurisdiction, in the United States or abroad, including any attempt to attach or seize any Chevron or Chevron subsidiary’s or coventurer’s assets, whether pre-judgment or otherwise, until this Court determines the merits and enters judgment on Chevron’s claim against the Defendants in this action.
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