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What Else Will Footage from ‘Crude’ Show?

By | Briefly Legal, Energy | 3 Comments

One of the reasons that Chevron filed the memorandum with U.S. District Court, Southern District of New York, we blogged about below is that the company has only started reviewing footage from the documentary-style film, “Crude.” Given how damning the early outtakes are, and the apparent games being played over the footage, what else might be out there? Better make sure the footage is preserved.

We especially liked the following passage from Chevron’s court filing, demonstrating once again that there’s no real distinction among the U.S. trial lawyers — Steven Donziger and the Philadelphia law firm funding the litigation, Kohn, Swift & Graf — the Ecuadorian lawyer/activists like Luis Yanza and Pablo Fajarda, and the supposed grassroots activists of the Amazon Defense Coalition, which turns out mostly to be PR person Karen Hinton.

It would strain the Second Circuit’s Order to include only footage of counsel and not footage of those working on behalf of or in concert with Plaintiffs’ counsel. There is little question that groups such as Soltani’s Amazon Watch and Amazon Defense Front have been working on behalf of or in concert with Plaintiffs’ counsel in connection with the Lago Agrio Litigation, and thus footage of personnel from those groups should be produced pursuant to the Second Circuit’s Order. Indeed, recognizing the role that personnel from such organizations have played on behalf of Plaintiffs’ counsel, Berlinger has treated Luis Yanza and other members of Amazon Defense Front as part of Plaintiffs’ litigation team, and has already produced footage including Luis Yanza. See Ex. U. Nonetheless, during the meet and confer, Berlinger’s counsel stated that Mr. Berlinger has taken the position that communications with or film involving Amazon Watch and the Frente are privileged, even though they stand effectively in the same position as Yanza. But Plaintiffs have asserted in the District Court in Colorado that the Frente, Amazon Watch, and Karen Hinton are so closely aligned that they fall within the circle of attorney-client privilege. Ex. QQ. They cannot possible contend here that communications with “Plaintiffs’ counsel” do not include Karen Hinton, the Frente, and Amazon Watch.

It’s the combine — trial lawyers, activists and the supposedly disinterested media — working to wring billions out of Chevron’s shareholders.

Chevron asks the court to order the plaintiffs and their team to preserve evidence, to allow further discovery, and to require director Joe Berlinger to produce the original footage log.

Updates: Chevron, Trial Lawyer Tax Break

By | Briefly Legal, Energy, Taxation | No Comments

Developments on two issues we wrote about last week.

Ecuador-related litigation against Chevron: The Second Circuit Court of Appeals has rejected a motion by trial lawyers suing Chevron who wanted to limit even further the release of footage from the movie, “Crude.” Chevron originally wanted to see all footage not shown in the movie, but the court had ordered the director, Joe Berlinger, to turn over only footage that documented actions of the plaintiffs’ legal team,  and court and government officials in Ecuador. It was a victory for Chevron: The company has access to information necessary to defend itself and for its employees in Ecuador to defend themselves from ginned-up criminal charges. At the same time, Berlinger described the outcome as a limited victory for his side.

As we wrote last week, the lawyers for the Amazon Defense Coalition, the PR front of the U.S. trial lawyers campaign, responded with alacrity and alarm, asking for an emergency stay and further restrictions on the footage. Huh. Wonder what event they wanted to keep under wraps.  The Second Circuit quickly responded, rejecting the motion. Here’s the court’s ruling.

Trial lawyer tax break: The American Association for Justice has been keeping its head down on the stories about the trial lawyers going to the U.S. Treasury to get a tax break for speculative, contigency-fee litigation, circumventing Congress in the process.The Hill now has a response blog post, “Change in trial lawyer deduction would put firms on equal footing, advocate says.”  The AAJ feels so strongly about it, its “spokesperson” is not identified by name.

We’re confident that trial lawyers deserve this $1.6 billion tax break, just don’t quote us on it!

After ‘Crude’ Ruling, Trial Lawyers Suing Chevron Get Nervous

By | Briefly Legal, Energy, First Amendment and Lobbying | 2 Comments

Our question of the day inspired by the latest twist in the continuing trial lawyer/activist campaign against Chevron for environmental damage in Ecuador: What’s in the footage from “Crude” that the U.S. trial lawyers don’t want the public to see?

The question is prompted by a motion for an emergency order filed today, in which the attorney for the Amazon Defense Coalition tries again to block Chevron’s access to footage from the movie.

We write often about this litigation because it captures so well the forces that can align against a U.S.-based company, in this case Chevron. Trial lawyers put up the money for a lawsuit claiming exploitation or environmental harm, solicit support from celebrities and activists, attempt to create a PR storm, and rely on favorable coverage from the media. The goal is to threaten the company with enough reputational damage that it settles out of court.

Increasingly common weapons in these campaigns are “documentary” films that are really advocacy pieces for the plaintiffs. One such movie was “Crude, a well-done film by director Joe Berlinger.

The Second Circuit Court of Appeals last Thursday ruled that Berlinger had to turn over film outtakes to Chevron so the company could adequately defend itself. Chevron suspects the footage will document the plaintiffs’ team working with government officials and supposedly neutral, court-appointed experts in Ecuador to rig the $27 billion suit against the company for environmental damage in the Amazon.

The the order from the three-judge panel limited the impact to relevant material, that is, footage that does not appear in publicly released versions of Crude showing: (a) counsel for the plaintiffs in the case of Maria Aguinda y Otros v. Chevron Corp.; (b) private or court-appointed experts in that proceeding; or (c) current or former officials of the Government of Ecuador.

Berlinger had originally claimed journalistic privilege as a principle upon which he would stand, but he toned down the rhetoric after a District Court’s ruling in May and then the Circuit Court’s order that required the footage’s release. Following the appeals’ court ruling Thursday, he told The New York Times: “We have to be intellectually honest about the merits of laws that allow certain footage or certain reporters’ material, under certain conditions, to be turned over. I believe there are times when it’s appropriate to turn it over.” Now it’s a victory that Chevron can’t see ALL the footage and the company can only use the shots in judicial or arbitration proceedings. (The media corporations that sided with Berlinger must be disappointed, but they’ve been quiet.)

The more fervent rhetoric now comes from the lawyer for the plaintiffs, the Amazon Defense Coalition, which claims to represent 30,000 Amazonian residents. Ilann M. Maazel told the Wall Street Journal: “This case is not about outtakes. The case is about Chevron attempting to intimidate journalists from covering their destruction of the Amazon.” If so, then why did the Maazel today file an emergency motion trying to limit the release of the outtakes? To defend a journalist’s privilege? But Berlinger, while not happy, can live with the court’s ruling on privilege.

The motion (available here) claims the court’s order is much too broad, and the footage should be limited to scenes depicting certain contacts between the plaintiffs’ attorneys and court and/or government officials. If the court chooses not to impose those limits, the attorneys argue, then it should appoint a special master to review the footage. (The latter would be a time-consuming process that would deny due process to the Chevron employees facing criminal charges in Ecuador.)

There are two conclusions one can reasonably infer from the motion:

  • The outtakes will reveal improper contact between the plaintiffs’ attorneys and government or court officials that demonstrates how Ecuador’s government is helping to orchestrate the suit.
  • Delay actually plays into the hands of the U.S. trial lawyers, who want the Ecuadorian court to hurry up and rule against Chevron, creating a judicial fait accompli that provides a publicity boost to their cause.

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Trial Lawyers on Trade Policy

By | Briefly Legal, Energy, General, Trade | One Comment

The U.S. Trade Representative’s press schedule today lists a meeting:

Deputy United States Trade Representative Miriam Sapiro will meet with former Congressman Tom Downey and the Amazon Defense Coalition (ADC) to discuss renewal of the Andean Trade Preference Act.
Washington, DC
1:30pm EDT
Closed Press

The issue is whether Ecuador has lived up to the requirements — such things as protection for investment, an adherence to the rule of law — to receive U.S. trade preferences under the Andean Trade Preferences Act. Of course it hasn’t. The National Association of Manufacturers supplied a statement last November to the House Ways and Means Committee detailing the predations of President Rafael Correa’s government against foreign investors.

Ecuador [has] continued to abuse foreign and domestic investors, including using the judiciary and police as harassment arms for the political leadership, rather than independent bastions of and protectors of democracy and rule of law. Over the past five months we have also seen the President of Ecuador issue decrees to revoke patent protections for international pharmaceutical and agricultural chemical manufacturers and threaten to annul many of Ecuador’s long-standing investment treaties including the Ecuador-U.S. Bilateral Investment Treaty (BIT) which has been in force and benefiting both parties since 1997.

Investor’s Business Daily added a tough editorial earlier this month after Secretary of State Hillary Clinton’s gave Correa a warm personal and policy embrace in Quito:

Correa is one of the most anti-American leaders in the hemisphere. He has trashed democracy in his own country, taking over the National Assembly by ousting elected lawmakers on spurious legal grounds. His rubber-stamp legislature now structurally resembles that of communist Cuba.

He’s also corrupted the judicial system, taking over the Supreme Court and making every judge a crony. Small wonder recent tapes show rulings-for-sale by an Ecuadorean judge in a $26 billion lawsuit against Chevron. Now Correa’s going after the press, jailing even leftist reporters and shuttering 95% of the private media.

The Chevron dispute is one important issue, as Ecuador’s government lines up with U.S. trial lawyers and activists to rig their $27 billion lawsuit against the company. The anti-Chevron activists at the Amazon Defense Coalition — El Frente de Defensa de la Amazonía* —express outrage when Chevron objects to trade preferences for Ecuador. Rep. Linda Sanchez (D-CA) has excoriated the company’s lobbying, calling it extortion. (Chevron makes no apology for pointing out Ecuador’s corruption, nor should it.)

It is amusing to see the Amazon Defense Coalition so overtly engaged in the lobbying game. The ADC’s flacks are always claiming the moral high ground, wrapping their causes in the alpaca cloak of global environmental justice and throwing around ridiculous terms like “Amazonian Chernobyl.” Yet now the group is down in the D.C. dirt, appealing to the U.S. Trade Representative for the extension of U.S. trade preferences to Ecuador. Shall we call that extortion or just hypocrisy?

Call it revealing hypocrisy. According to the USTR schedule cited above, the Amazon Defense Coalition is being accompanied by Tom Downey, the former Congressman from New York and well-known lobbyist. But Downey is not a lobbyist for the Amazon Defense Coalition. According to House lobbying disclosures, Downey represents the Law Offices of Steven R. Donziger, the New York trial lawyer driving the contingency fee litigation against Chevron. (The Philadelphia firm of Kohn, Swift and Graf is financing the lawsuit; Downey represents them as well.)

So U.S. trial lawyers are lobbying to preserve the trade preferences for the anti-American, anti-business, anti-rule-of-law government of Ecuador, where a corrupted judicial system could reward those same U.S. trial lawyers with billions of dollars.

Outrageous? Of course. But to anyone watching this theater piece play out, it’s hardly a surprise.

* Frente recently associated itself with the lobbyists of Sharp & Barnes.

Where Did Those Reports Come From, Anyway?

By | Briefly Legal, Energy, General | No Comments

Guess today is Dia del Ecuador at Shopfloor. The Wall Street Journal reports that the scientist who studied alleged oil contamination in Ecuador blamed on Texaco — later bought by Chevron — says he did not write the reports the plaintiffs submitted to the judiciary. From “Chevron Suit Data Questioned“:

An American scientist who provided key evidence against Chevron Corp. in a multibillion-dollar environmental lawsuit now says he didn’t write reports attributed to him that found high levels of pollution in the Ecuadorean rain forest.

In fact, the scientist, Charles Calmbacher, said that although he found some contamination at the sites he examined, it was not as serious as the reports indicated.

And …

[In] a sworn deposition last week, Mr. Calmbacher said he didn’t write the reports submitted over his signature, which said the sites were highly polluted and needed remediation.

While he did find some evidence of contamination, Mr. Calmbacher said, he didn’t determine more remediation was necessary and didn’t calculate clean-up costs.

“I concluded that I did not see significant contamination that posed immediate threat to the environment or to humans or wildlife around it,” Mr. Calmbacher said, according to a transcript provided by Chevron.

Reached for comment, Karen Hinton of the Amazon Defense Coalition, the front group for the U.S. trial lawyers, said, “Uh, um.” Or words to that effect.

UPDATE (10:05 a.m.): Here’s Chevron’s news release on the Calmbacher documents.

For purposes of repeated disclosure, this blogger went to Ecuador in June 2009 on Chevron’s dime for briefings on issues related to the litigation. Our interest preceded the trip: The Ecuador suit is representative of the kind of anti-investment litigation shakedowns promoted by a combine of U.S. trial lawyers, environmental or “consumer” activists, and uncritical media cheerleaders. The Wall Street Journal does not fall into that last category, thankfully.

When the Rule of Law Applies, Chevron Wins

By | Briefly Legal, Energy, General | No Comments

Chevron has recorded several significant victories in recent weeks in resisting the outlandish and orchestrated claims made against it for environmental damages in Ecuador. U.S. trial lawyers and perpetually outraged activists have fomented a $27 billion lawsuit against the company, ostensibly filed on behalf of the Amazonian natives who were harmed by Texaco’s oil operations in past decades; Chevron acquired Texaco in 2001.

The truth of the matter is that Texaco remediated the sites it was responsible for and the Ecuadorian government released it of legal liability after the clean-up. PetroEcuador, the government-owned oil company, has in the meantime continued its environmentally suspect operations. Nevertheless, the combine of trial lawyers, activists and media continue to promote the litigation, and their biggest ally is Ecuador’s leftist government headed by Rafael Correa.

But in undermining the rule of law in Ecuador, Correa is actually helping Chevron: In venues where the rule of law still applies, Chevron succeeds.

The latest example does not involve the trial lawyer/activist litigation, but it certainly makes the case that Ecuador’s government ignores contracts and legal obligations. From Chevron, a news release, “Chevron Wins Arbitration Claim Against the Government of Ecuador.”

SAN RAMON, Calif. – Mar. 30, 2010 – An international arbitration tribunal has ruled in favor of Chevron in a claim against Ecuador related to past oil operations by Chevron’s subsidiary, Texaco Petroleum Company. The tribunal, administered by the Permanent Court of Arbitration in The Hague, found that Ecuador’s courts violated international law through their delays in ruling on certain commercial disputes between Texaco Petroleum Company and the Ecuadorian government…

In its decision, the tribunal found that Ecuador had violated the United States-Ecuador Bilateral Investment Treaty by failing to provide effective means of asserting claims and enforcing rights. As a result, the tribunal awarded Chevron and Texaco Petroleum Company approximately US$700 million in principal damages and interest as of December 22, 2006, pending further proceedings to determine applicable taxes, compound interest, and costs.

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Never Letting the Facts Get in the Way

By | Briefly Legal, Energy | One Comment

On Tuesday, Chevron issued a news release that detailed yet another fundamental corruption at the heart of the trial lawyer/activist/government’s legal campaign against the company in Ecuador: The court-appointed “expert” — a mining engineer — who recommended $27 billion in damages against the company for environmental clean-up is also the majority owner of an oilfield remediation company that stands to gain financially from a judgment against Chevron. Richard Cabrera never reported this disqualifying conflict of interest from the Ecuadorian court.

The response from the Amazon Defense Coalition, the front group for U.S.-based activists and contingency fee attorneys driving the litigation, reads like a news release from a political campaign: Our opponents are “desperate.” The argument, such as it is, follows: Cabrera has no conflict of interest! He already revealed the conflict of interest! His conflict of interest precludes him from being involved in future remediation! Chevron’s lying!

In any legitimate legal proceeding , a court-appointed “expert” who concealed his financial self-interest from the judge would be disqualified and sanctioned. But the litigation against Chevron in Ecuador is not a legitimate proceeding, it’s a public relations campaign designed to create enough reputational risk that the company settles out of court. That strategy has been disrupted by Chevron deciding to argue its case not just judicially but also in the court of public opinion, that is, to fight back. You can almost hear the cries of outrage from the Amazon Defense Coalition and New York attorney Steven Donziger: “How dare they defend themselves!”

Chevron’s blog, The Amazon Post, refutes point-by-point the claims by the activist group.

What 30,000?

By | Briefly Legal, Energy, General, Trade | 4 Comments

In catching up on the reviews, previews and interviews on the anti-Chevron movie, “Crude,” we see this interview with the director, Joe Berlinger, from Express, the free commuter tabloid from The Washington Post, “‘Crude’ Art: Documentarian Joe Berlinger Discusses His Latest Film“:

FILMMAKER JOE BERLINGER’S latest film, “Crude,” is about the case filed against U.S. oil company Chevron by 30,000 rain forest dwellers in the Amazon jungle of Ecuador.

No. That’s wrong. Thirty-thousand people did not file a suit against Chevron.

Here’s an English translation of the lawsuit. You see that the plaintiffs are about 48 Ecuadorians and the proceeds of a successful suit would go the Amazon Defense Coalition.

Yet the claim of there being 30,000 plaintiffs is everywhere. Here’s Grist referring to “a lawsuit brought by 30,000 rural Ecuadorians,” and Politico, “Since 1993, some 30,000 of those people have taken on Chevron in a landmark lawsuit seeking damages.” Even Washington Post energy writer Steven Mufson, who strives for balance in his Thursday Style piece, “Big oil stains the Amazon in the documentary film ‘Crude’” writes, “On one side of the lawsuit are tens of thousands of indigenous people, represented by an appealing Ecuadoran, Pablo Fajardo, and the American Steven Donziger, who says he has moral as well as financial interests in the case.”

But there aren’t tens of thousands of indigenous people involved in the lawsuit, except as props to be used for public relations purposes.

This isn’t some minor side issue or interpretation. It matters who files a suit, just as it matters who gets the cash.

So, the Amazon Defense Coalition, who’s that? At a website in Ecuador, the Frente de Defense de la Amazonia claims to be a “corporación de derecho privado sin fines de lucro” incorporated in Ecuador in 1994. But in a September 2, 2009, lobbyist disclosure form from the Sharp & Barnes lobbying shop in D.C., Frente is listed as the client and Frente’s address is 245 West 104th Street, Suite 7D, NYC. That’s the office address of Steven Donziger, the trial lawyer who has directed the litigation against Chevron.

And why is an NGO using the Ecuadorian courts to sue a U.S.-based company lobbying Congress in the first place? Just to get Rep. Jim McGovern (D-MA) to attend tonight’s showing and write angry letters to the President?

Curious. We find it curious. Haven’t really seen any mainstream journalist address the issues, though.


The Merits of ‘Crude’: Trial Lawyer Excesses on Display

By | Briefly Legal, Culture and Entertainment, Energy, General, Global Warming, Labor Unions, Taxation, Trade | One Comment

The publicity machine has geared up for the umpteenth premiere of the anti-Chevron movie, “Crude,” this time at the E Street Cinema Friday just a few blocks down from NAM-HQ. Joe Berlinger, the director, will be at the premiere, perhaps proclaiming his objective distance as he did in this San Francisco Chronicle interview:

I have maintained throughout the entire production period and release an arms-length relationship with everybody involved, so that the film is treated as a piece of objective journalism—because it is.

Berlinger will be appearing at the DC showing with Luis Yanza, an Ecuadorian activist, and Steven Donziger, the American trial lawyer who is directing the lawsuit.

Now that’s objective distance!

To be fair to Berlinger and the movie, you learn a lot about the trial lawyer/activist/media combine that drives the litigation. He shows Donziger in full trial-lawyer mode, coaching Ecuadorian Indians to be more emotional when speaking to company stockholders, successfully selling Vanity Fair on doing a piece he can use to market the lawsuit (“Jungle Law“), and begging for more money from the Philadelphia law firm that’s subsidizing the litigation in the hopes of a big payout.

And there’s a scene in the movie where Donziger berates an old, shaky judge in Quito and then verbally attacks an attorney out in the hallway for the sake of the cameras. (See our earlier Shopfloor.org post.) It’s ugly bullying from Donziger, but you don’t really learn how cynical the abuse is until you read Peter Maass’ description of the encounter.

Maass is author of “Crude World,” a global maligning of the oil industry, with a chapter devoted to Donziger and the litigation. (Maass is also a sympathetic promoter of the movie.) In the book, Maass reports:

Donziger had known for months that Chevron had built a villa at the [army] base and agreed to give it to the military once the case ended. Donziger hadn’t opposed the deal because Chevron was not popular in Lago Agrio; he’d realized that the company’s lawyers would be safer with military protections. But with more than a dozen news-hungry journalists recording the moment, Donziger suspected that the time was right to accuse the military of being on the payroll of gringo oilmen. He was correct. The accusation made national headlines, and a little more than a month later the Ecuadorian military canceled all military contracts with oil firms and ordered Chevron off the base.

In other words, Donziger originally didn’t make an issue of legitimate security precautions because the opposing legal team faced potential harm. But when it served his purposes — when the cameras were there to record the mock outrage — he’d gladly renege on any understanding and put those lawyers in danger.

A truth-teller. Sure.

More …

What Photo Do You Use to Illustrate Misleading Journalism?

By | Briefly Legal, Energy, Global Warming, Media Relations, Taxation, Trade | 15 Comments

The New York Times features a longish piece today about the litigation brought by a New York trial lawyer and the Amazon Defense Coalition against Chevron over claims of environmental damage in Ecuador, “Ecuador Oil Pollution Case Only Grows Murkier.”

Well, maybe it’s murky because the paper doesn’t bother to report basic facts, like who actually brought the lawsuit. It’s as if the $27 billion in legal claims just appeared.

The lawsuit is being financed by the Philadelphia law firm of Kohn, Swift and Graf, directed by New York trial lawyer Steven Donziger, and marketed by the Amazon Defense Coalition, which would receive the money from any settlement. And the legal/activist lawsuit is indeed a shakedown intended to force a settlement from Chevron for pollution supposedly left by Texaco, which Chevron purchased in 2001. Texaco operated in Ecuador as Texpet in a joint exploration and production venture with the government-owned oil company, Petroecuador, up until 1992. (See this Texaco history, “Chevron in Ecuador.”)

1992. 1992. 1992. 1992. We stress the year because any oil now appearing as liquid in Ecuador is the responsibility of Petroecuador. First, TexPet remediated all the sites assigned to it for clean-up by the government of Ecuador, which released the company from future claims. Second, oil doesn’t stay liquid on the surface for 17 years!

Those facts notwithstanding, here are the photo and caption the Times used to illustrate today’s story. (In the paper, it’s a five-column black-and-white photo, 6-1/2 inches deep, i.e., big.)

A pool of oil in Lago Agrio, an Ecuadorean town in the Amazon where Texaco left contamination. Chevron, which acquired Texaco, has inherited its legal troubles.
A pool of oil in Lago Agrio, an Ecuadorean town in the Amazon where Texaco left contamination. Chevron, which acquired Texaco, has inherited its legal troubles.

So the Times has illustrated a story about charges of pollution against Chevron with a photo of an oil pit (and flare-offs) created by Petroecuador. And doesn’t bother to tell the readers what they are seeing in the paper has nothing to do with Chevron.

The activists use the trick all the time, pointing to unrelated pollution and claiming Chevron is to blame, but shouldn’t the Times have higher standards? The truth isn’t THAT murky.