From Daniel Fisher’s “Full Disclosure” blog at Forbes.com, “Judge To “Crude” Filmmaker: You’re Part Of The Story“:

Judge Lewis Kaplan’s Sept. 7 order requiring filmmaker Joe Berlinger to undergo a deposition over what he saw and heard while filming the documentary “Crude” is more than a refutation of Berlinger’s argument of journalistic privilege. It’s a warning to future plaintiff lawyers not to let sympathetic filmmakers follow them around, camera in hand. And it offers a glimpse into how Kaplan or another federal judge might view any attempt by attorney Steven Donziger to enforce any judgement he obtains in Ecuador. Kaplan drops enough hints about his concerns over unethical and possibly illegal goings-on down in Ecuador that Donziger’s team should be on notice they will face fierce scrutiny if they ask a U.S. court to enforce their judgment here.

Fisher’s blog quotes a federal judge’s separate ruling in New Mexico, which we also cited in a post at the Manhattan Institute’s legal blog, Point of Law, “Damning revelations in outtakes from anti-Chevron movie, ‘Crude’.” District Judge Lorenzo F. Garcia summarized the revelations originally concealed in Berlinger’s footage:

The release of many hours of the outtakes has sent shockwaves through the nation’s legal communities, primarily because the footage shows, with unflattering frankness, inappropriate, unethical and perhaps illegal conduct. In the film itself, Attorney Donziger brags of his ex parte contacts with the Ecuadorian judge, confessing that he would never be allowed to do such things in the United States, but, in Ecuador, everyone plays dirty. The outtakes support, in large part, Applicants’ contentions of corruption in the judicial process. They show how nongovernmental organizations, labor organizations, community groups and others were organized by the Lago Agrio attorneys to place pressure on the new Ecuadorian government to push for a specific outcome in the litigation, and how the Ecuadorian government intervened in ongoing litigation.

Shopfloor.org, the blog of the National Association of Manufacturers, makes a brief appearance, as well. Judge Kaplan recognized that  bloggers and members of the public know how to download public documents from the federal courts’ electronic filing system.

In a Financial Post blog entry, “Turning the tables,” Silvia Santacruz, an Ecuadorian economist based in New York and the publisher of Ecuador Mining News.com, provides knowledgeable perspective about the trial lawyer/activist litigation against Chevron.  She also critiques the one-sided and misleading documentary-style film about the dispute, “Crude.” Companies usually try to buy peace in circumstances like these, Santacruz observes, funding NGOs in order to avoid a PR beating to their market capitalization. But…

[One] American firm — Chevron — is not only fearless of green campaigners’ tactics, it is giving them a taste of their own medicine. In the process, it may also highlight the problems with government ownership of natural resources, including eco-disasters, that environmentalist activists blithely ignore.

In this case, the government-owned operator is Petroecuador, which has continued to develop the Amazon region’s oil resources after ending its consortium with Texaco — later bought by Chevron — in 1992.  Santacruz, who recently traveled to the Lago Agrio region in Ecuador, reports the reality ignored by the activists, U.S. trial lawyers and, too often, the U.S. media who report on the litigation.

During my visit to the oil spills, I found some reforested sites, others being cleaned up, and just a few crude spills collected in pools. At one site, known as the “Presidential Well” after Correa gave a press conference there, I noticed that the pipelines were warm. Petroleum was being pumped, and the spill was recent — I threw a stone that sank instantly. I had no doubt: Petroecuador is currently operating there. So, how can Correa and environmentalists accuse Texaco of a “pollution 30 times greater than the Exxon-Mobil,” when the company left 20 years ago?

Recent data reveal that state-owned Petroecuador has caused 1,415 crude spills between 2000 and 2008, an average of one incident every other day. But environmentalists in Ecuador do not care about Petroecuador and continue to point fingers at Chevron instead. Astonishingly, my country’s ecological disaster does not make the green campaigners blink. State-owned companies’ pollution is simply not on their radar screen. They seem to care not so much about my country’s indigenous people as they do about Chevron’s pockets.

So that was actually Petroecuador oil that the actress Daryl Hannah stuck her hand into for all those anti-Chevron publicity photos. She seemed not to care so much about the country’s indigenous people as she did about her own self-promotion, but that’s Hollywood environmentalism for you.

Santacruz is an Ecuadorian, an economist, and a person with first-hand knowledge of the energy industry in developing countries. Her insights merit serious attention. Instead, we predict, the Amazon Defense Coalition will attack her motives and dream up some sort of nefarious connection. That’s SOP for the activists, who seem to care not so much about truth as they do about Chevron’s pockets.

As we blog about frequently here at Shopfloor.org, Chevron is defending itself in the U.S. and Ecuador courts against litigation by U.S. trial lawyers and their activist allies who want the company to pay $27.4 billion for environmental damage in Ecuador allegedly committed by its predecessor company, Texaco.

Now Shopfloor is being mentioned in court filings in the case, but the claims made about blog posts here are just not true.

The most recent turn of legal events has involved outtakes from the documentary-style movie “Crude,” which covers the litigation against the company from a perspective sympathetic to the Ecuadorian victims of Western civilization. Chevron sought outtakes from the movie in federal court, and once acquiring them, identified clear incidents of the trial lawyer team scheming to maximize damages against the company, even to the extent of meeting with the supposedly “independent” court-appointed expert who later recommended the $27.4 billion award. Also damning were the claims from Steven Donziger, the U.S. trial lawyer leading the litigation, who said among other outrageous things:  “Hold on a second, you know, this is Ecuador. . . . You can say whatever you want and at the end of the day, there’s a thousand people around the courthouse, you’re going to get what you want. Sorry, but it’s true.”

The above information is available in Chevron’s Aug. 3 filing in U.S. District Court, Southern District Court of New York, “Chevron Corporation’s Memorandum of Law in support of a motion for a preservation order, and to supplement and enforce the subpoenas.” We wrote about the filing here, an Aug. 3 Shopfloor post, “‘Crude’ Footage Reveals Lies Behind Trial Lawyers’ Suit Against Chevron.”

Chevron obtained the footage after the legal process went from the District Court to the Second Circuit Court of Appeals. On July 15, the Second Circuit ordered Joe Berlinger, the director of the film, to make relevant footage available to Chevron. That order, which we wrote about here, includes a court instruction to Chevron: “2) Material produced under this order shall be used by the petitioners solely for litigation, arbitration, or submission to official bodies, either local or international.”

Lawyers for both Berlinger and the plaintiffs are now claiming that Shopfloor.org’s blogging about the court proceedings somehow represents a violation by Chevron of the Second Circuit Court of Appeals order which required Berlinger to turn over footage to the company.

Well, of course, Shopfloor is not Chevron and Chevron is not Shopfloor. Included in these most recent filings are misstatements of fact, which we will now correct.

(continue reading…)

The New York Times ArtsBeat blog this afternoon became the first mainstream media outlet to report on Chevron’s court filing based on footage from the documentary-style film, “Crude,” about a lawsuit claiming the company is responsible for environmental damage in Ecuador’s Amazon jungle.

As we reported yesterday, the outtakes clearly show U.S. trial lawyers and activists instructing the supposedly independent, court-appointed expert — Richard Cabrera — on how to rig his report to maximize damage claims against the company. At one point, New York lawyer Steven Donziger declares, “We could jack this thing up to $30 billion …in one day.” Close! Cabrera recommended $27.4 billion in damages.

In his ArtsBeat piece, “Chevron Cites Documentary Footage in Its Fight Against Ecuadorean Plaintiffs,” reporter David Itzkoff elicits just an amazing quote from Ilann M. Maazel, a lawyer whose firm represents the Ecuadorean plaintiffs.

“They cherrypick a couple of minutes and share it with the court, but they’re not willing to release all the tapes,” Mr. Maazel said in a telephone interview. “I think it’s very revealing of their strategy of diversion and misleading people.”

That is an hilarious comment, reflecting either audacious spin or short-term memory damage. Chevron went to federal district court seeking all the outtakes from “Crude,” arguing — correctly, as it turned out — that the footage would show the plaintiffs conspiring with government experts. The director, Joe Berlinger, fought the attempt but eventually accepted as a “limited victory” the Second Circuit Court of Appeals’ ruling that required he make available only relevant footage depicting certain events or people.

After the Second Circuit’s ruling, Maazel went to court, filing an emergency motion seeking even further restrictions on the release of outtakes. (Shopfloor post, “After ‘Crude’ Ruling, Trial Lawyers Suing Chevron Get Nervous.“) In other words, the last thing Maazel wanted was for Berlinger to release all the tapes. Please, please, please cherrypick, he pleaded with the court.

Elsewhere … (continue reading…)

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.

Now, THIS is a blockbuster. Footage from the documentary-style film, “Crude,” reveals that U.S. trial lawyers strategized with a supposedly independent court-appointed expert in Ecuador who went on to recommmend penalizing Chevron $27.4 billion for environmental damage in the Amazon.

In a court filing today in U.S. District Court, Southern District of New York, attorneys for Chevron detailed the collusion among Steven Donziger, the U.S. trial lawyer who has masterminded the suit, the Ecuadorian lawyers who serve as the public face of the anti-Chevron campaign, and Richard Cabrera, an engineer later appointed as the court’s “special master” charged with assessing the pollution and damages. It is Cabrera who recommended the $27.4 billion damage figure, earning him praise from anti-Chevron activists who hailed his findings as proof of the company’s greed and criminality.

The damning revelations are the result of Chevron’s successful legal efforts to gain access to outtakes from the movie, “Crude,” which the director, Joe Berlinger, claimed to be a fair and balanced effort to show both sides in the litigation over Texaco’s operations in Ecuador between 1964 and 1990. Chevron purchased Texaco in 2001.  Berlinger claimed journalistic privilege and fought to keep control of the footage, but was ordered by the Second Circuit Court of Appeals on July 15 to turn over relevant material.  The review by Chevron’s lawyers of the first batch of outtakes shows that not only that the legal case against Chevron is built on lies, but that Berlinger’s reputation as a serious, fair-minded documentarian is hollow.

The opening of Chevron’s memorandum filed today reads like a good movie, with the added virtue of being true. From the document, “Chevron Corporation’s Memorandum of Law in Support of Motion for a Preservation Order, and to supplement and enforce the subpoenas,” filed by Chevron’s attorney, Randy Mastro, with Gibson Dunn & Crutcher:

“Hold on a second, you know, this is Ecuador. . . . You can say whatever you want and at the end of the day, there’s a thousand people around the courthouse, you’re going to get what you want. Sorry, but it’s true.” “Because at the end of the day, this is all for the Court just a bunch of smoke and mirrors and bullshit. It really is. We have enough, to get money, to win.” Ex. F at 195-05.1 So says Lago Agrio Plaintiffs’ counsel and New York licensed lawyer Steven Donziger in an outtake from Crude produced just days ago pursuant to the orders of this Court and the Second Circuit. Donziger makes these statements during a meeting with Plaintiffs’ U.S. environmental consultants Charles Champ, Ann Maest, and Dick Kamp, after Maest tells him, point blank, that they need evidence of groundwater contamination, because Plaintiffs did not submit any and “right now all the reports are saying it’s just at the pits and the stations and nothing has spread anywhere at all.” Id. When Champ continues to press on the lack of evidence, Donziger looks at the camera and says, “There’s another point I got to make . . . with these guys, but I can’t get this on camera,” and then the camera goes off. Id.

Chevron has thus far been able to review only a small fraction of the outtakes produced, but already it is clear that they contain conclusive evidence that Plaintiffs’ counsel, consultants, and associates have knowingly participated in a fraudulent enterprise to corrupt the legal proceedings pending in Ecuador against Chevron. The express goal of their scheme is to procure a fraudulent, multi-billion dollar damages recommendation from a supposedly independent “Special Master,” and then to use that fraudulent recommendation either to extort a settlement from Chevron or to obtain a fraudulent judgment from the Ecuadorian court.

We’ve uploaded the court filing here. (Scribd here.) The 39-page document provides a wealth of details about the sordid  orchestration of the claims against Chevron, with Steven Donziger being the cynical conductor. The key factual point appears on page five:

The Crude Outtakes Show That Plaintiffs’ Counsel and Consultants Planned and Created the Supposedly Independent $27.4 Billion “Global Expert Assessment”

The outtakes that Chevron has reviewed so far leave no doubt that Plaintiffs arranged for Cabrera’s appointment and decided what Cabrera’s report would say, and that Plaintiffs’ lawyers and their U.S. consultants—not independent experts working for Cabrera—drafted Cabrera’s initial work plan and ultimately his damages assessment in the Lago Agrio Litigation.

We have followed this case because the litigation captures so well the modern shakedown campaigns that trial lawyers and activists carry out against U.S. businesses, often cheered on by a biased media. The evidence was always there, conclusions ready to be drawn. Now there’s no denying it — the corruption behind this litigation is on film.

Earlier posts about Chevron, “Crude,” and Donziger.

Disclosure: As I have disclosed repeatedly, Chevron paid for several bloggers, myself included, to take a trip to Florida and Ecuador in June 2009, during which Chevron presented its side of  the case. No one at Chevron has ever told me what to write on the issue.

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!

The Second Circuit Court of Appeals took just a day to determine that Chevron had the right to view video that was shot for but not used in the final version of the documentary-style film “Crude.” The director, Joe Berlinger, does not have to turn over every second of footage, but he must make available anything that Chevron could possibly use to defend itself from the $27 billion shakedown litigation by U.S. trial lawyers. Chevron’s attorneys decided not to bother with the celebrities, instead argued the law and won the day.

From the order (Scribd here):

Pending further order of this Court, respondent Joseph Berlinger is directed to comply
forthwith with the District Court’s order, to the following extent:

1) Berlinger shall promptly turn over to the petitioners copies of all 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.
2) Material produced under this order shall be used by the petitioners solely for litigation, arbitration, or submission to official bodies, either local or international.
3) Berlinger’s reasonable expenses of sorting and duplication of footage, incurred in complying with this order, are to be reimbursed by Chevron.
4) Any disputes related to the performance of this order shall be directed to the district court for resolution.
Opinion to follow.

Congratulations to Chevron. As we argued in our post Wednesday, Chevron has the right to defend itself, as do its employees who face abusive criminal charges in Ecuador. The subjects in the film signed waivers, had no expectations of privacy, and Berlinger couldn’t seriously claim “confidentiality” even if he served in some quasi-journalistic role.

Let the truth out, the judges decided.

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.

From Reuters, “Ecuador Threatens to Take Over Foreign Oil Firms“:

“Every day that passes there are millions of dollars going to these companies that should be going to the Ecuadorean state,” Correa said during a televised address.

“I’ve run out of patience,” he said. “We are sending a bill to Congress that would allow for the expropriation of oil fields if the companies not want to sign the new contracts.”

AFP, “Ecuador’s Correa to propose oil nationalization bill“