We’ve often described high-profile litigation against U.S. businesses as being pushed by a combine of trial lawyers, activists, a complicit (or lazy) media and government officials. (See the anti-Chevron litigation in Ecuador.) It’s a strategy that litigation industry often uses but rarely acknowledges.

However, John Coale, the well-known plaintiffs’ attorney who made millions from suing tobacco companies, revealed the strategy in a 2000 panel discussion sponsored by the Federalist Society. From “Firearms Litigation, Tort Liability, and the Second Amendment - A Symposium,” Coale’s frank description:

MR. COALE: What I want to do is take you through our strategy. I am going to give you an honest assessment of what we (”we” being the lawyers who have attacked the tobacco industry, and who are now attacking the gun industry) are attempting to accomplish. My group represents five cities in coordination with the other 25 to 30 cities suing the gun industry and is working with several state Attorneys General.

Now, I would preface my remarks with the observation that the other side does the same thing, they just don’t admit it. We take these cases, such as tobacco-back in 1994, and then put together a threepronged attack, legal, media, and political. We attacked on these three fronts for five years until they folded and settled. Whether we would have won the cases in court, we will never know, but the bottom line is that we won the war.

We vilified the industry in the media, which wasn’t hard to do. We leaked damning documents. We worked with our political friends against the tobacco industry in Congress and elsewhere. And then we went into court and we used this three-prong attack against the tobacco industry very effectively. I am sure very few in the audience agree with this strategy, but tobacco was an issue we wanted to win, and we did.

To see examples of the three-pronged attack in action, just read the news releases from the American Association for Justice, the trial lawyer lobby.

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.

A news release from Chevron today provides more compelling evidence that the activist/trial lawyer/Ecuadorian government’s legal shakedown of the company is based on falsehoods and naked self-interest and can only succeed where the rule of law is absent. From “Court Appointee in Chevron Ecuador Lawsuit Tied to Ecuador State-Owned Oil Company“:

SAN RAMON, Calif., Feb. 9, 2010 - In a court filing today in Lago Agrio, Ecuador, Chevron Corp. (NYSE:CVX) provided newly discovered information showing that the author of a report recommending that Chevron be ordered to pay $27 billion in damages is the majority owner of an oilfield remediation company that stands to gain financially from a judgment against Chevron. Due to the remediation company’s relationship with Ecuador’s state-owned oil company, Petroecuador, Chevron called upon the court to immediately reject the work of Richard Cabrera on the grounds that he knowingly hid his relationship and that he stands to gain from what was supposed to be unbiased work for the court.

“For three years, Mr. Cabrera has concealed clear financial conflicts of interest that disqualify him from acting as an independent and objective evaluator of the evidence in the case,” Chevron Vice President and General Counsel Hewitt Pate said. “While Mr. Cabrera’s financial interests alone are sufficient grounds for his report to be rejected, his intentional concealment of those interests further demonstrates that the entirety of his work lacks honesty, integrity, or credibility.”

Recently uncovered records, from 2003 through 2008, show Cabrera is co-founder, general manager, majority stockholder, and legal representative of an oilfield remediation company, Compañía Ambiental Minera-Petrolera S.A. (”CAMPET”), which is registered to perform oilfield remediation and other services for Petroecuador. Cabrera failed to disclose these business interests as required by law.

That’s just the start of a very detailed dissection of Cabrera’s self-interest, explaining how he could reach the fantastical figure of $27 billion in damages against Chevron for previous operations of Texaco in Ecuador. The bigger the pot, the bigger the payout for Sr. Cabrera.

And for the Amazon Defense Front, which also happens to be guiding and rewarding Cabrera. Chevron had previously documented that:

• The Amazon Defense Front, the named financial beneficiary of the lawsuit, directly and improperly paid Cabrera more than $200,000 for his work;
• Sections of Cabrera’s $27 billion claim are copied word-for-word from documents written by Amazon Defense Front lawyers;
• Photographs and video show representatives of the Amazon Defense Front conducting Cabrera’s field work as well as preparing soil and water samples for Cabrera, who had promised to carry out his work independently;

The Amazon Defense Front and its PR flacks — doing the work of the U.S. trial lawyers — like to accuse the critics of their shakedown of conducting “dirty tricks.” But the facts keep showing that the dirty tricks of the trade are really the tools of the anti-Chevron campaigners.

Journal of Commerce, “House Votes to Extend Trade Programs”

The House on Monday voted to extend two widely-supported trade programs, but for only one year.

The General System of Preferences and the Andean Trade Preference Act were to expire on Dec. 31. The GSP, now in its 35th year, allows developing nations to export selected goods to the United States duty-free. There are currently 132 countries in the program, shipping some 3,400 products.

ATPA, started in 1991, gives similar benefits for exporters in Ecuador, Colombia, and Peru in exchange for cooperation in counter-narcotics efforts. President Obama suspended Bolivia’s ATPA privileges for failing to commit to an anti-drug program.

Latin Business Chronicle, “Business Concern Over Ecuador Benefits,” citing rising objections to the deterioration of the rule of law in Ecuador under President Rafael Correa.

“We are disappointed that the Congress did not include a message specifically putting Ecuador on notice that its behavior puts its continued receipt of preferences benefits at serious risk,” Franklin J. Vargo, NAM’s international vice president, said in a letter Monday to the chairman and ranking member of the U.S. House Committee on Ways & Means. “In light of the deteriorating investment climate in Ecuador, as well as Ecuador’s repudiation of its Bilateral Investment Treaty (BIT) with the United States and President Correa’s announcement on sweeping aside fundamental patent protections for pharmaceutical and agricultural chemical products, the NAM believes that language specific to Ecuador should have been maintained in the extension language of [the bill passed].”

NAM is concerned that without continuing language aimed at challenging Ecuador’s actions, other nations receiving preference programs will be tempted to follow suit, leading to worsening investment conditions and undermining a central tenant of preference programs that participants uphold their commitments to the United States on investment and rule of law, it said.

In any case, the House has now gone on record in support of lowering U.S. trade barriers to imports from foreign countries. It’s time to now lower foreign barriers to U.S. exports by approving the U.S.-Colombia, U.S.-Panama and U.S.-Korea free trade agreements.

From The Boston Globe, with a reviewer who strikes a tone we hadn’t see in the other reviews of the anti-Chevron movie, a world-weary cynicism. The inaccuracies are still the same, though.

From “An ecological disaster meets a media circus“:

In “Crude,’’ the anger onscreen spreads as slowly and inexorably as toxic sludge. The documentary follows a pending class-action lawsuit filed by 30,000 Amazon tribespeople against the US petro-giant Chevron for contaminating an area of land the size of Rhode Island.

But it’s not a class-action suit and it wasn’t filed by 30,000 Amazon tribespeople.

Even the Amazon Defense Coalition’s PR person, Karen Hinton, eventually admitted this basic fact — a basic fact that the Globe gets wrong.

Gee, if the reviewer starts off with a glaring error, wonder what else in wrong in the piece?

P.S. Today is the movie’s last day in Washington, D.C. It had a two-week run at the E Street Cinema, which the producers must regard as a success.

In a response to our post (”What 30,000?“) debunking the claim that 30,000 Amazonian Indians have sued Chevron, the Amazon Defense Coalition’s PR person, Karen Hinton, writes:

Most of the time I don’t bother to read this blog, much less respond. But like so many others, this post is way over the top. The lawsuit is a class-action lawsuit. That means it covers any and all people living in the Texaco concession area who have been harmed by the contamination. As with class-action lawsuits filed in this country, names of specific individuals are included in the lawsuit but that does not mean the lawsuit is limited to those individuals.

We’ve read the lawsuit. The plaintiffs are 48 Ecuadorians. There’s no mention of a “class” or a citation of the Ecuadorian law that defines class-action litigation. No judge has certified the class, that is, recognized anyone’s standing to sue for damages on behalf of the supposed 30,000 Amazonians.

Just because you call it a class action, does not make it one. Indeed, Ecuador law does not even acknowledge class-action lawsuits.

It’s true a precursor lawsuit filed against Texaco in 1993 in U.S. District Court in the Southern District of New York was filed as a class action, and Steven Donziger — now running the litigation against Chevron — was one of the lawyers. But that’s the law in the United States, one of the few unfortunate countries that statutorily provide for class-action litigation. (A federal judge eventually dismissed that suit based on forum non conveniens, i.e., the suit did not belong in the United States.)

So the legal team suing Chevron in Ecuador knows the litigation not a class action lawsuit, and yet Hinton and her fellow angry bloggers call people names who point out the fact. Typical, but not very effective as PR strategy goes unless you’re only trying to keep your base in a state of constant outrage (and generosity). Really, it’s not that hard to figure out the falsehoods: All you have to do is read the lawsuit.

Are we wrong? Well, here’s a sincere offer to Ms. Hinton: Point out to us in the suit the “class action.” Tell us where the legal authority is for 48 Ecuadorians to sue on behalf of whomever these 30,000 Amazonians may be.

UPDATE (5:50 p.m.) Ms. Hinton responds, to her credit (see comments):

In Ecuador, it’s called a popular action, which means that any member of a community can bring a lawsuit where they see an act that is destroying or somehow disrupting a community resource (in this case, the water and land). So we are representing 30,000 people because that is the estimate of how large the community is that is impacted by the pollution.

So it’s NOT a class action, after all. And our point that the case has been consistently misrepresented is, in fact, correct.

And, rereading the suit, we still only see 48 plaintiffs, with the money going to the Amazon Defense Coalition. “Popular action” is a sentiment, not a law.

P.S. But we stand to be corrected.

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.

But…well…30,000!

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 …

• Yet another over-the-top release from The Amazon Defense Coalition about “Crude’s” D.C. showing.
• An article by Peter Maass on the litigation, “Slick” from Outside Magazine, which includes another telling of Donziger browbeating the judge in Quito.
• In Spanish, the kind of headlines that Donziger’s cynical stunt produced in Ecuador, “Amazónicos denuncian que Chevron Texaco usa base militar para sabotear juicio.”

From an author who embraces the attack on property rights by the government of Rafael Correa, a news release, “Ecuador president Correa to override drug patents in order to provide affordable medication“:

(NaturalNews) The President of Ecuador, Rafael Correa, announced Sunday that he planned to override a number of pharmaceutical patents in order to provide more affordable medicines to the People of Ecuador. In a statement, Correa explained that access to medicine is a “human right” and that he intends to seek “compulsory licenses” to acquire medications considered indispensible.

Under current World Trade Organization rules, countries have the right to seek such “compulsory licenses” that override traditional patent rights. Current WTO rules require that such countries negotiate with the patent owners to determine fair compensation.

This action by Correa joins Ecuador’s recent declaration that it would not honor the illegitimate debt that had been placed on the country by foreign banks (under previous administrations). This bold move allowed Ecuador to renegotiate its debt for roughly 30 cents on the dollar. Much of that debt was considered “predatory debt” by academics who understand the way the World Bank and other first-world banking interests attempt to place debt burdens on many smaller nations as a tactic for exerting long-term influence over their economies.

Right. And the Barbary Pirates had legitimate grievances against the United States, too.

See also the AP story, “Ecuador pres: National labs to ignore drug patents.”

Also, on September 25, major U.S. business groups sent a letter to the leaders of the Senate Finance Committee and House Ways & Means Committee urging Congress not to reward Ecuador and Bolivia for undermining rule of law by renewing Andean trade preferences for those countries. The letter from Business Roundtable, Emergency Committee for American Trade, National Association of Manufacturer, National Foreign Trade Council, United States Council for International Business, and U.S. Chamber of Commerce is available here.

The activist/trial lawyer combine driving the $27 billion lawsuit against Chevron loves to wield the personal attack, demonizing the company, its employees and anybody else who argues that the litigation is baseless. At first blush the attacks look like an attempt to cow critics, but by now everybody has read Saul Alinsky — pick a target, freeze it, personalize it, and polarize it — and once recognized as tactics, the attacks lose their power to intimidate.

So as the litigation and PR squad now levy personal charges against yours truly (again), we’re left to puzzle over their thinking. “The Chevron Pit” — billed as the blog maintained by the team suing Chevron — mentions my name seven times in its Tuesday post, “Chevron: Don’t believe your eyes…believe our lies!” and adds the usual insults. But if they cannot successfully intimidate, what’s the point? Therapeutic release for the blogging activists?

It’s certainly not truth-telling. The blog goes after our Saturday post, “What Photo Do You Use to Illustrate Misleading Journalism?,” which challenged The New York Times’ use of a photo of a current oil pit in Ecuador to illustrate a story about the lawsuit. Texaco, bought by Chevron in 2001, left Ecuador in 1992. Any photo of a still-liquid oil pit depicts pollution caused by the government-run oil company, PetroEcuador.

How does The Chevron Pit rebut our point? By trotting out more misrepresentation!