Tag: Texaco

No Surprise: Ecuador Judge Rules Against Chevron

Chevron broke the news today that a judge in Ecuador has ruled against the company in the multiyear, multibillion-dollar litigation shakedown by U.S. trial lawyers claiming environmental damage in the Amazon. There has been so much wrongdoing and dishonesty by the plaintiffs in Ecuador and the United States that the ruling comes as no surprise.

From the Chevron news release, “Illegitimate Judgment Against Chevron in Ecuador Lawsuit“:

The Ecuadorian court’s judgment is illegitimate and unenforceable.  It is the product of fraud and is contrary to the legitimate scientific evidence.  Chevron will appeal this decision in Ecuador and intends to see that justice prevails.

United States and international tribunals already have taken steps to bar enforcement of the Ecuadorian ruling.  Chevron does not believe that today’s judgment is enforceable in any court that observes the rule of law.

Chevron intends to see that the perpetrators of this fraud are held accountable for their misconduct.

Reuters quotes Pablo Fajardo, a lawyer for the plaintiffs in Ecuador, that the judge’s award was $8 billion.

The amount of damages sought by the plaintiffs fluctuates according to various manipulated reports and political considerations, rising from $6 billion at one point to $26.7 billion to the most recent $113 billion. Lest one conclude, “Oh, Chevron actually came out OK,” it’s worth remembering that the plaintiffs’ team that organized the shakedown always sought a high damage figure as part of its strategy.

Outtakes from the documentary-style film “Crude” on the litigation revealed as much. Steven Donziger, the New York trial lawyer who has masterminded the suit, is seen discussing possible damages against Texaco (later acquired by Chevron). Donziger says:

  • “If we have a legitimate fifty billion dollar damages claim, and they end up—the judge says, well, I can’t give them less than five billion . . . . And, say, Tex had a huge victory.  They knocked out ninety percent of the damages claim.”  And …
  • “But as a concept, I ask, do we ask for much more than we really want as a strategy?  Do we ask for eight and expect three, so that [the judge] says, ‘Look, Texaco, I cut down the largest part.’”

In any case, the amount has no relation to reality – or justice. A $1 million, $1,000 or $100 finding of damages would be just as wrong because the lawsuit itself is corrupt. Chevron has filed a RICO suit against the U.S. and Ecuadorian lawyers and activists, detailing the multifacted conspiracy against the company.

Chevron’s point of view and numerous legal claims have also been recognized by legitimate judicial bodies of the United States and the Permanent Court of Arbitration in The Hague.

On February 8, U.S. District Court Judge Lewis Kaplan cited the record of widespread wrongdoing to block the plaintiffs from going after any of Chevron’s assets anywhere in the world. (New York Law Journal, Shopfloor)

Last week, the international arbitration panel ruled that Ecuador should not pursue any awards from the litigation pending Chevron’s arbitration vis a vis the country over violations of the Bilateral Investment Treaty. (Reuters: ”Arbitrators find for Chevron in Ecuador dispute.”)

The lawsuit against Chevron was always extortionate, an operation meant to damage the company’s reputation enough so it would feel compelled to settle. The judge’s ruling  in Ecuador was supposed to provide the final bit of pressure necessary to force the settlement.

Fortunately, now that U.S. court proceedings have revealed the cynical conspiracy at the heart of the litigation, the ruling in Ecuador provides nothing more than additional evidence of corruption.

UPDATE (4:15 p.m.): In this Spanish-language report, the judge is identified as Nicolás Zambrano.

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Judge Lends Weight to Chevron’s RICO Suit over Shakedown

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

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.

Excerpts:

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

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]

Excerpts:

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Fraud, Shakedowns and a Discredited Case against Chevron

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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‘Crude’ Outtakes Made Public; What an Opportunity for ’60 Minutes’

U.S. District Judge Lewis Kaplan of the Southern District of New York has just issued an order (.pdf file) making outtakes from the documentary-style film, “Crude,” available to the public. 

Footage from Joe Berlinger’s movie has been available to the attorneys involved in the contingency-fee litigation against Chevron for environmental damage in Ecuador. Transcripts from the outtakes have also been entered into the court record, documenting the  manipulation of the judicial process by Steven Donziger, the lead U.S. trial lawyer, and the U.S. and Ecuadorian legal team/activists. (Shopfloor, “‘Crude’ Footage Reveals Lies Behind Trial Lawyers’ Suit Against Chevron.”)

However explosive, the transcripts still fail to capture the full disdain for the truth shown by the players behind the litigation and PR campaign against Chevron.  Thanks to Judge Kaplan’s Oct. 7 order, now everyone can see the video that shows the plaintiff’s team scheming and swearing and orchestrating the shakedown against the company. From the order:

Reporters with Thomson Reuters and with The American Lawyer magazine and ALM Media have requested copies to a total of approximately ten compact disks filed as Exhibit A to a declaration of Kristen Hendricks [DI 14 -10 MC 0002]; Exhibits A and D to another declaration of Ms. Hendricks [DI41 – 10 MC 0002]; and Exhibits 1 and 2 to the declaration of Paul E. Dans [DI 40-10 MC 0002]. The parties have no objection to the requests.

Accordingly, the Clerk shall provide copies of these disks to the requesters and any member of the public who requests copies of the same disks upon payment of the reasonable cost of duplication and blank media.

60 Minutes' segment on Chevron in Ecuador failed to report full story.We were disappointed to see that “60 Minutes” was not one of the requesters asking for copies of the videos. The CBS news-entertainment magazine delivered a miserably one-sided report on the litigation in May 2009, “Amazon Crude,” that accepted as fact the trial lawyers’ thesis: Chevron is a corporate monster that does not care that its predecessor, Texaco, polluted Ecuador’s Amazon with no regard for the native people, so damn right they should pay up.

Along with “Crude” and William Langewiesche’s evocative story-telling in Vanity Fair, “Jungle Law,” the “60 Minutes” piece represented one of the most powerful PR weapons in the U.S. trial lawyers’ litigation war against Chevron. Of course, as this Columbia Journalism Review analysis concluded, ”How 60 Minutes Missed on Chevron,” the report fell short on facts and relied instead of innuendo.

Judge Kaplan’s order provides “60 Minutes”  a great opportunity for more serious journalism in the form of a powerful follow-up segment, recounting how their producers and reporter Scott Pelley gave too much credence to the trial lawyers’ claims, failed to appreciate the legitimacy of Chevron’s arguments, and ultimately produced an unfair and inaccurate account of the litigation.

It’s a heck of story: Foul-mouthed New York trial lawyer and supposedly heroic activists work with left-wing Ecuadorian government to corrupt the courts and shake down a U.S. company for billions of dollars.

“60 Minutes,” you already have all the earlier footage shot in Ecuador. Now the damning, explosive outtakes from “Crude” are available just for the price of copying the files onto DVDs.

What a great opportunity for serious journalism.

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Note to Activists: Petroecuador, Petroecuador, Petroecuador

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.

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‘Crude’ Footage Reveals Lies Behind Trial Lawyers’ Suit Against Chevron

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.

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

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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When the Rule of Law Applies, Chevron Wins

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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