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Judge Blocks U.S./Ecuador Trial Lawyers from Going After Chevron’s Assets

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

U.S. District Court Judge Lewis Kaplan of the Southern District of New York has delivered another body blow to the shakedown lawsuit against Chevron by the U.S. trial lawyers and their Ecuadorian allies. On Tuesday, the federal judge ordered a temporary injunction preventing the plaintiffs in the so-called Lago Agrio litigation from trying to seize any of Chevron’s assets if an Ecuadorian court rules against the company.

In his order (available here), Kaplan wrote:

The Court is satisfied, for the present purpose, that Chevron is faced with a serious threat of immediate and irreparable injury. This is most assuredly true if the anticipated judgment were rendered and influenced by corruption or undue influence. It would be true in any case, however, as the threatened multiplicity of enforcement actions around the world invokes the traditional equitable ground for relief against a multiplicity of suits, particularly where, as here, there appears to be evidence that the purpose and effect of the multiplicity of actions may be to create so much disruption to Chevron’s operations as to coerce a settlement without regard to the merits of the case for enforcement of any Ecuadorian judgment.

The Court is satisfied also, on the existing record, that the balance of hardships tips decidedly in favor of Chevron. The Lago Agrio plaintiffs would not be injured in any material way by a delay in judgment enforcement proceedings of sufficient length to permit determination of the preliminary injunction motion whereas Chevron likely would be seriously injured in the interim in the absence of a temporary restraining order.

Finally, there appear to be at least sufficiently serious questions going to the merits of Chevron’s claims that the anticipated judgment cannot properly be enforced to make them a fair ground for litigation.

A hearing is scheduled for next Tuesday, Feb. 18, for further action on the restraining order. Chevron has filed a RICO suit against the plaintiffs and is seeking to prevent them from having any access to Chevron’s global assets if, as expected, the Ecuadorian court hands down some unjustified award drawn from an extortionate lawsuit and judicial corruption.

Meanwhile, one of the plaintiffs’ legal representatives, the law firm of Emery Celli, has moved to withdraw from the case. Sauve qui peut! (Or the Spanish equivalent.)

Coverage …

Judge Lends Weight to Chevron’s RICO Suit over Shakedown

By | Briefly Legal, Energy, General, Trade | No Comments

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.”
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In Chevron Shakedown, Ecuador’s Government Plays a Part

By | Briefly Legal, Energy, General | 2 Comments

Steven Donziger is clearly the “star” in the documentary-style film, “Crude,” about the $113 billion shakedown lawsuit against Chevron claiming environmental damage in Ecuador. The New York trial lawyer is profane, arrogant, and in numerous outtakes obtained by Chevron, repeatedly reveals the corruption at the heart of the litigation. Donziger’s admissions against interest have done so much damage to the suit that he has reduced his public role with the plaintiffs’ team, which has turned to the prestigious law firm and lobbying outfit, Patton Boggs, to salvage its case.

But there’s another great performance in the film, a cameo appearance that bears close attention. In segments never shown to the public, Alexis Mera, Ecuador’s Secretary of Judicial Affairs and a legal advisor to President Rafael Correa, strategizes with the plaintiffs’ legal team about how best to apply political pressure to a public prosecutor and even revoke an Ecuadorian law so the lawsuit gains a modicum of legitimacy.

Mera’s comments — and other revelations from the outtakes — demonstrate that the government of Ecuador has been actively aiding the U.S. trial lawyers’ plans to extort billions out of a U.S.-based company. The scheming by top government officials, as well as comments by Correa himself, reinforce the Ecuadorian government’s anti-American policies and contempt for international law.

On March 29, 2007, Mera met in his offices with the legal team of the so-called Lago Agrio plaintiffs, including Pablo Fajardo, Alejandro Ponce Villacis, and Julio Prietro, as well as the activist and public face of the anti-Chevron awsuit, Luis Yanza. In one outtake, Mera says, “The problem, I see, is what to do and how we can help each other.”

The video, available here, continues with Mera and the team discussing the Public Prosecutor’s office, which the plaintiffs’ lawyers are demanding should bring criminal charges against two Chevron attorneys in Ecuador. The plaintiffs want the charges brought to introduce personal risk into the portfolio of pressure tactics; Chevron might be more inclined to settle if its employees could be sent to jail.

The top justice official advises, “You have to take the people from the Orient [province] there, hold a demonstration. The people — that’s how this country works. Close Republica Street.”

Then there’s this, Mera’s clear recognition that his discussions with the plaintiffs are improper.

Mera and the plaintiffs’ team are talking about a “nullity suit” to revoke the Ecuadorian government’s previous sign-off on Texaco’s clean-up of its Ecuadorian oil operations. (Chevron acquired Texaco in 2001.) As they’re discussing these legal issues, Mera seems to realize the camera is on.

MERA: Why are they filming? Why are they filming? That seems to me to be completely improper. Forgive me for the way I’m saying it.

Camerman: Let’s see. Forgive me. Excuse me. (Cut off)

When you’re a government official scheming with a private party in a lawsuit, you tend not to want to be caught on camera. Read More

After Fraud and Conspiring, the Logical Next Step: RICO

By | Briefly Legal | 3 Comments

What do you call an operation in which the lead lawyer in a multi-billion dollar lawsuit talks about threatening judges, an environmental activist worries about a cameraman recording plans to subvert justice, a supposed independent court expert submits a report written for him by plaintiffs, documents are forged, ex parte meetings engaged in with government officials, and the skullduggery emerges only because a documentary filmaker let the lawyers dictate his “art?” Well, it’s a racket, sure. Corrupt? Claro.

Since Chevron was the subject of this corrupt scheme under the guise of a lawsuit claiming environmental damage in Ecuador, it’s comes as no surprise that the company has now filed a RICO lawsuit against the lawyers, activists and various hangers-on involved in the shakedown. (UPDATE: Here’s Chevron’s filing in the Southern District of New York.)

Courthouse News Service reports the news, “Chevron Levels RICO Charges Over $113B Trial in Ecuador,” with the suit naming Steven Donziger, the New York trial lawyer who masterminded the scheme, as the lead defendant in the 214-page suit.

Other defendants include the Amazon Defense Front and Stratus Consulting. Alleged co-conspirators who are not named as defendants include Joseph Kohn and his firm Kohn, Swift & Graf; the law firm Emery Celli Brinckerhoff & Abady; the firm Motley Rice; the firm Patton Boggs; and spokeswoman Karen Hinton.

Courthouse News Service quotes from Chevron’s complaint:

Over the course of several years, defendants Steven Donziger and his co-defendants and co-conspirators have sought to extort, defraud, and otherwise tortiously injure plaintiff Chevron by means of a plan they conceived and substantially executed in the United States. The enterprise’s ultimate aim is to create enough pressure on Chevron in the United States to extort it into paying to stop the campaign against it. Read More

The Business of Plaintiffs’ Law: To Make [Expletive] Money

By | Briefly Legal, Energy, Trade | 3 Comments

Thank goodness for “Crude,” the documentary-style film that followed the litigation and PR campaign against Chevron. Thanks to the cameramen and their cameras, we learn that the $27 billion — and then $113 billion — lawsuit orchestrated by U.S. trial lawyers isn’t about cleaning up the environment in Ecuador, justice for Amazonians, or punishing rapacious corporations. No, it’s all about “the business of the plaintiffs’ law, to make f****** money.”

That’s the revealing quote from Steven Donziger, the trial lawyer whose frank admissions on outtakes from “Crude” have shown the litigation to be a naked shakedown of a deep-pockets U.S. company. You can watch Donziger utter the uncensored remarks in the clip below, shot after a plaintiffs’ group exited the offices of The San Francisco Chronicle in April 2007.


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Videos Reveal Anti-Chevron Strategy: Politics, Pressure and Lies

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

Ever since Shopfloor began blogging about the Ecuador-based litigation against Chevron in May 2007, we’ve argued that the lawsuit was a blatant shakedown by U.S. trial lawyers. In claiming Chevron owed $27 billlion — and then $113 billion — for environmental damage from Texaco’s oil drilling in the Amazon, the U.S. attorneys and Lago Agrio plaintiffs in Ecuador were really trying to pressure Chevron (which had bought Texaco in 2001) into a huge settlement. The bigger the settlement, the bigger the check for the U.S. lawyers being paid on a contingency basis.

Their preposterous claims relied not on facts or the law, but rather a multifaceted and ugly public relations and political campaign. At work was a combine of U.S. trial lawyers, environmental activists and anti-corporate bloggers, magnifying their accusations through a sympathetic mainstream media. The shakedown campaign recorded several PR victories, including a  “60 Minutes” hit piece against Chevron and most notably a full-length, overwhelmingly pro-plaintiffs’ film, “Crude,” by well-known documentarian Joe Berlinger.

In Ecuador the plaintiffs’ team manipulated the court system and made common cause with the leftist, anti-American regime of President Rafael Correa. (More on that in a later post.)

The response to our arguments? Chevron lies, America exploits the Third World, Ecuadorians are dying and you’re an inhumane corporate shill.

Now, thanks to outtakes from “Crude” that Chevron successfully obtained through the U.S. courts,  the trial lawyer/activist/media combine can no longer pretend any sort of moral high ground. Footage reveals Steven Donziger, the lead U.S. attorney who has directed the anti-Chevron campaign in Ecuador and the United States,  to be a cynical, arrogant and foul-mouthed commentator. And, unfortunately for the plaintiffs’ case, Donziger is remarkably frank.

Take for example, this video below. At a June 6, 2007, meeting Donziger outlined the plaintiffs’ strategy to intimidate the Ecuadorian courts through the show of brute force. [Warning: Language]


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Hype and Bogus Studies Driven by Lawyers and Celebrities

By | Briefly Legal | 2 Comments

Mark Hemingway, Washington Examiner, “Trial lawyer at the center of fake autism study,” covers the bogus study linking autism and vaccines, now refuted by the British Medical Journal as “deliberate fraud.”

In 1998, the respected medical journal Lancet published a study by Andrew Wakefield that suggested a link between autism and childhood vaccination. The study got a great deal of mainstream attention, and touched off a popular backlash against vaccination. Celebrities Jim Carrey and Jenny McCarthy even secured a good deal of money and attention for the cause.

The problem is that the study was bunk. No other study has ever reproduced Wakefield’s findings, and many more contradicted it. But once the idea that vaccines caused autism took hold in the popular culture, it couldn’t be eradicated.

The U.S. Department of Health and Human Services now reports a resurgence of whooping cough, measles, mumps and other deadly childhood afflictions.

Last week the British Medical Journal detailed the fraud committed in Lancet, which originated in a British trial lawyer’s search for a test case he could exploit for profit. A BMJ editorial concludes, “Wakefield’s article linking MMR vaccine and autism was fraudulent.”

That this sort of fraud takes place in the fever swamps of trial lawyerdom should come as no surprise. We reported extensively on the litigation against Chevron for environmental damage in Ecuador, a lawsuit built around fraudulent “expert” analyses and reports.

That said, it’s probably true that exaggeration, fear-mongering and disregard for the facts are more common than pure fraud of the Wakefield type. As Hemingway notes:

Julia Roberts won an Oscar for her portrayal of Erin Brockovich, the tale of how a brassy attitude and some legal petitions saved a small town poisoned by a faceless corporation.

But the truth is more inconvenient than fiction. The California Cancer Registry has completed three studies showing that cancer rates in Hinckley, Calif., were completely normal, irrespective of Brockovich’s multimillion-dollar lawsuit.

Unfortunately, these obvious fictions are rarely corrected by the media, and the public continue to believe the hype. Consider the latest alarmist report from the alarmist Environmental Working Group, hyping the minutest of amounts of chromium-6 found in some California water systems.

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Fraud, Shakedowns and a Discredited Case against Chevron

By | Briefly Legal, General, Trade | One Comment

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 Chevron.com, “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: http://scr.bi/faTsoS.

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

Daniel Fisher at Forbes.com 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.
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Federal Judge Concludes Ecuador in Bed with U.S. Trial Lawyer

By | Briefly Legal, Energy, Trade | 2 Comments

U.S. District Court Judge Lewis Kaplan of the Southern District of New York has just ruled that U.S. trial lawyer Steven Donziger had to respond fully by supplying documents sought by Chevron so it can defend itself from the $113 billion lawsuit/shakedown over environmental damage in Ecuador. In his memorandum order, available here, Judge Kaplan describes the documents Donziger has so far resisted producing:

At this point, Donziger has produced some of the documents demanded by the subpoena. Instead of producing the balance, however, he submitted, on November 15, 2010, a purported privilege log – which is over 2,000 pages long and claims privilege as to 8,652 documents – and contends that he now should be permitted to litigate those privilege claims. The log includes claims of privilege as to approximately 2,500 or more documents sent or disclosed to a public relations person, the founder of the Amazon Defense Front or La Frente, Amazon Watch, the Wall Street Journal, Bloomberg News, Conde Nast, The New York Times, and the Los Angeles Times. Moreover, the 8,652-item privilege log lists not even one document that was written by or addressed to any of the Lago Agrio plaintiffs – the clients whose privilege supposedly is being asserted.

That’s big, but probably to be expected. Where Kaplan breaks new ground is his forceful rebuke to the Government of Ecuador for (GOE) trying to intervene so late in the process:

The eleventh-hour attempt by the GOE to intervene – after the Court ruled that Donziger and his clients were obliged to produce the documents and the Court of Appeals had denied a stay pending appeal to assert a supposed common interest in the Lago Agrio plaintiffs’ privilege – supports that view. The GOE has been working closely with Donziger for years and stands to gain billions for Ecuador if the Lago Agrio plaintiffs prevail against Chevron. Its belated attempt to get into this case has all the hallmarks of an attempt to pull Donziger’s chestnuts out of the fire.

Our emphasis. So the leftist government of Rafael Correa is in bed with U.S. trial lawyers attacking a U.S. company. This strong statement, background and arguments by a federal judge should destroy Ecuador’s attempt to maintain its advantages under the Andean Trade Preferences Act.

Judge’s Message to Anti-Chevron Lawyer: No Excuses

By | Briefly Legal, Energy, General | 2 Comments

Steven Donziger, the U.S. trial lawyer who has directed the infamous $113 billion litigation shakedown against Chevron, is scheduled to appear in court in the Southern District of New York.  Donziger, who could make millions in a successful lawsuit against Chevron, is being held accountable by the U.S. judicial system.

Last week Judge Lewis Kaplan ordered Donziger to appear today with all the documents sought by Chevron so the company can defend itself from the accusations that its predecessor company, Texaco, left environmental damage behind after operations in Ecuador. (Updated and revised: The court hearing is at 2 p.m.)

Do we detect a level of judicial frustration in Kaplan’s order? Consider the judge’s hand-written note, which reads:

“ORDERED that this order shall not be construed* to imply that Donziger is not already in violation of a previous order that required the production forthwith of all documents responsive to the subpoena.”

Revelations from outtakes from the documentary-style film about the litigation, “Crude,” have already revealed Donziger and his team of activists to be manipulating the Ecuadorian judicial system, orchestrating bogus expert reports, and mounting a cynical, arrogant and dishonest public relations campaign to bludgeon Chevron into a settlement.

Kaplan has rebuffed Donziger’s claims that the New York trial lawyer’s actions in Ecuador are protected by attorney-client privilege  — he’s really running a political/PR operation   — and so must answer Chevron’s questions and provide documents sought by the company.

Chevron’s memorandum of law in support of its motion to require Donziger to produce documents does an excellent job of summarizing the games the U.S. trial attorney has played to avoid accountability, including appeals to the Second Circuit. After numerous delays, Donziger submitted a “privilege log” more than 2,000 pages long to claim he did not have to produce 8,562 documents.

Everything’s off limits! As Chevron’s attorneys from Gibson Dunn note: “Donziger even claims that communications with rock musician Sting’s wife, Trudie Styler, who appears with Donziger in the movie, Crude, as a celebrity touring the Rainforest, are somehow privileged.” Read More