Back to Basics in Ecuador (Part 1): What’s the Damage?

When a legal case becomes complicated, it’s important to stick to the basic issues.  In the case of the Ecuadoran Amazon communities versus Chevron, the questions boil down to the following.

  1. What is the extent of the oil pollution?
  2. What damage has the oil pollution had on the health and livelihoods of the people?
  3. To what extent is Chevron responsible and liable for that oil pollution?

These are the key questions that shareholders have continually posed to the management of Chevron.  For part one of this piece, let’s focus on the first two basic questions.

Despite two decades of litigation, there are still no clear answers.  In his ruling in the RICO against the Ecuadoran plaintiffs and their lawyers, U.S. District Court Judge Lewis Kaplan did not dispute the existence of the oil pollution.  According to Kaplan’s judgment:

The Court assumes that there is pollution in the Orienté. On that assumption, Texaco and perhaps even Chevron – though it never drilled for oil in Ecuador – might bear some responsibility.  In any case, improvement of conditions for the residents of the Orienté appears to be both desirable and overdue.

A recent research report backs up the contention that the oil pollution in Ecuador remains extensive and damaging to the health and livelihood of the Amazon rainforest communities.  According to a recent press release by Hinton Communications, a PR firm for the Ecuadoran communities:

A new report prepared by a team of prominent American scientists after the end of the Lago Agrio trial found that Chevron caused “widespread” toxic contamination to indigenous ancestral lands in Ecuador’s rainforest that persists to this day, directly contradicting the company’s defense in the Ecuador environmental litigation and providing a new boost to efforts by villagers to seize Chevron’s assets abroad.

The report – published by the Louis Berger Group (LBG), a consultancy that has worked for several U.S. government agencies – also found that Chevron engaged in an elaborate cover-up to hide the information from the Ecuador court during the Lago Agrio trial, which lasted from 2003 to 2011. The report has the potential to shake up the long-running case in favor of the rainforest villagers as they pursue Chevron’s assets in Canada, Brazil and Argentina to pay for a clean-up.

The LBG scientists who wrote the report spent several weeks in Ecuador in 2013 to inspect 18 of Chevron’s former well sites, which are spread out over a 1,500 sq. mile area of rainforest just south of the Columbia border. The report was prepared at the request of the American law firm Winston & Strawn for a private international arbitration where Chevron is seeking – thus far without success – to shift the clean-up liability to Ecuador’s government.

It is reports of this kind that reinforce the fact that Chevron’s lingering liability in Ecuador is still far from being resolved.  As such, it underscores risks to shareholders that Chevron’s management has downplayed but has still not effectively disclosed or managed.

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35 thoughts on “Back to Basics in Ecuador (Part 1): What’s the Damage?

  1. Simon…it is through your unrelenting hold on this very real tragedy and injustice that the Ecuadorian’s might have a chance to have their day in court finally supported. Speaking truth to power when there is this much money thrown at ignoring their liability is not easy. Keep pushing.

  2. This post asks key questions and rightly notes that they have not been fully put to rest. However, the study done for Ecuador, referenced in the post, appears to be flawed. Chevron has published a rebuttal. Chevron contends, for example, that the adverse findings in the study are based on five pre-selected sites, out of hundreds at issue, and that all five sites continued to be operated by Ecuador’s State oil company (Petroecuador) long after Texaco ceased operating them over two decades ago. So if there is indeed harmful pollution remaining at these sites, who is responsible?

    I am traveling with limited computer capability to post Chevron’s reply here, but I will email it separately to the author of the post.

    • Thank you for noting – and agreeing – that the question remains open as to the extent of the oil pollution damages and Chevron’s liability for those damages. It is the uncertainly of that risk to the company that is of particular concern to Chevron’s shareholders.

      Thank also for sending me in a separate email the letter from Chevron Vice President Maria Pica Karp to Congresswoman Renee Ellmers outlining Chevron’s concerns about the Louis Berger report. I could not find that letter on Chevron’s website. However, I did find a link on Reuters to Chevron’s fuller rebuttal to the Louis Berger study.

      Those who wish to read Chevron’s position will find it at:

  3. To clarify, here is the state of play as I see it:

    1. Chevron never operated or polluted in Ecuador. However, Chevron effectively took over Texaco in 2001.
    2. The controversy in Lago Agrio concerns whether there any continuing environmental and health effects from (a) operations by Texaco that ended over two decades ago, and (b) operations by the State oil company (Petroecuador) that continue to the present.
    3. Although Petroecuador is responsible for hundreds of oil spills, I am not aware of any study of the extent of continuing environmental or health effects caused by Petroecuador in Lago Agrio. The plaintiffs in the Lago Agrio suit never sued Petroecuador.
    4. The environmental and health evidence presented by the plaintiffs in their Lago Agrio suit is pervasively tainted by fraud and unreliable.
    5. At least five of plaintiffs’ environmental experts have recanted and repudiated their testimony, stating under oath that it was based on unsupported assumptions fed to them by Steven Donziger, or was outright fraudulent, or is otherwise unreliable.
    6. Even before their public recantations, at least three of plaintiffs’ experts were caught on outtakes of Donziger’s video admitting privately to him that there was no evidence that pollution had spread beyond the drilling pits into the general environment.
    7. Chevron has presented testimony by numerous academic experts to the effect that Texaco adequately remediated its agreed share of the pollution before it left Ecuador, and that there are no continuing environmental and health effects attributable to Texaco.
    8. Ecuador recently attempted to rebut Chevron’s experts, through the study referred to in Mr. Billenness’ post.
    9. Chevron has, in turn, rebutted that study.

    In this state of affairs, the litigation appears to go on endlessly, with no end in sight or relief for anyone in Lago Agrio who may deserve it. I have repeatedly called on all three major parties – the plaintiffs, the company and the government – to settle the litigation by agreeing among themselves on an independent assessment of the environmental and health evidence. So far, there are no takers.

    • Anything posted here as “evidence” taken from Chevron’s sham RICO trial – and especially “testimony from witnesses” is absurd. It’s common knowledge that Chevron and Gibson Dunn pressured, threatened or openly paid for testimony for this trial.

      The evidence against Chevron is overwhelming and complete. That’s why they lost in Ecuador and lost their appeals as well. Just recently this has been re-confirmed and no amount of pointing fingers at Petroecuador is going to absolve Chevron of the crimes it admitted to committing when it operated as Texaco.

    • For anyone who wanders into this discussion off the internet, we ought to make clear that Doug Cassell has admitted elsewhere (after being pressed) that he maintains a paid “consulting” relationship with Chevron. Hence the recital of Chevron’s talking points. For a detailed earlier response to Cassell’s distortion of facts, see

      But the main point is that Cassell’s (and Chevron’s) facts are just wrong.

      (1) First, Chevron and Texaco merged in 2001. The constituent companies’ sprawling international resources were fully consolidated vertically and horizontally, as were their executive management teams and boards of directors. Chevron today contains the Texaco of the 1970s—including, for example, Ricardo Reis Veiga, the life-long Texaco employee who managed the dispute first for Texaco, then for Chevron. Moreover, as a completely dominant corporate parent (“Texaco Inc.” exists only as a shell company registered at Chevron’s California headquarters) Chevron also bears the full extent of any liability. Companies have always tried to extinguish liability through shell games, and while courts sometimes play along when there is a legitimate underlying business rationale and respect for nature and purpose of the corporate form, the best ones do not respect formalities designed to extinguish existing liability and leave victims holding the bag. Chevron lost on this issue in Ecuador and can expect to lose on it in enforcement courts.

      (2) Facilities built by Petroecuador since Texaco’s departure were not at issue in the trial. Facilities that continued to be operated by Petroecuador were, of course, at issue – Chevron did not get a get-of-of-jail-free card for its own pollution just because Petroecuador continued to use the facility. Joint and several and continuing liability theories about liability for the continued use of the facility were duly presented to the Lago Agrio Court.

      (3) The Lago Agrio case is about Chevron, not about Petroecuador. The case is a private lawsuit by private plaintiffs. Like in the U.S., the plaintiffs are entitled to sue who they wish – they have no obligation to ensure that every responsible party is held to account. If Chevron thinks Petroecuador is responsible for some of the damage, it can sue them separately for contribution – something that is done all the time in the U.S. As a judge of the Second Circuit somewhat recently pointed out, there are plenty of good reasons the Ecuadorians might opt to sue a private party like Chevron and not sue (or hold off on suing) a state-owned enterprise like Petroecuador, the knotty issue of sovereign immunity being one of them. There is nothing illegitimate about this and Cassell’s persistent attempt to make it look nefarious betrays his desire to demonize the Ecuadorians regardless of the facts.

      Moreover, as a practical matter, Texaco was overwhelmingly the wrong-doer and deserves every ounce of liability it gets. It was the exclusive operator of the oil fields from 1964 to 1992, designing, constructing, and operating each of the 376 wells and 22 production stations at issue. Evidence was submitted in the Lago Agrio trial that Petroecuador had no practical authority at the time, and that even Texaco’s own Ecuador-based employees had to get U.S. headquarters approval to incur expenses for things like filing cabinets and staplers.

      (4) Cassell trots out the Chevron canard that the case in Ecuador was tainted by “fraud” and therefore the result is unreliable. But two separate appellate courts in Ecuador – including Ecuador’s Supreme Court – unanimously affirmed the trial court judgment. Even if there had been “fraud” – and there wasn’t – the courts of Ecuador are just as entitled to address it and cure it with additional proceedings and appellate review, just as the U.S. court system would. Chevron’s “fraud” claims are based on alleged violations of Ecuadorian law and procedure, but the multiple Ecuadorians courts that actually know this law and procedure intimately – unlike a court in New York – unanimously rejected Chevron’s claims as based on a complete misreading of how civil law systems operate when it comes to independent experts and generally “going nowhere without a good dose of imagination.” The Ecuadorian courts also found that Chevron engaged in extensive efforts to sabotage the trial, including threatening judges with jail time and filing frivolous motions. It is worth mentioning that these are the same courts that Chevron had praised as “independent” and “transparent” in the 1990s when it insisted the litigation take place in Ecuador — and before it realized it could not engineer a political dismissal in a country where it had polluted with impunity for decades.

      (5) The “five” consultants for the Ecuadorians who Cassell claims withdrew from the case did so only after a vicious pressure campaign by Chevron that forced them to the verge of bankruptcy. Prior to the pressure campaign, when acting on the facts and their true impressions, two of them (Douglas Beltman and Ann Maest) testified extensively under oath about how Chevron was responsible for massive pollution in Ecuador, and another, David Russell, compared Chevron’s pollution in Ecuador to the Chernobyl disaster. Another independently confirmed illegal levels of toxins at the two former Chevron sites that he inspected.

      (6) The “three” experts Cassell claims “admitted” there was no contamination beyond the drilling pits did no such thing. This is a wild distortion of one of the Crude outtakes – one that has been fully exposed as false, yet Cassell continues to tout it. The outtake shows a discussion about the extent the plaintiffs’ groundwater sampling program, which, the participants to the discussion all frankly admitted, was somewhat limited due to cost reasons. The groundwater samples at the time focused on proximity to the pits because tracking the full extent of the contamination would have been prohibitively expensive. Chevron’s groundwater samples were unreliable for numerous reasons relating to their thorough and well-documented corruption of their sampling program. The damage estimates submitted to the Lago Agrio Court focused on soil and sediment contamination, and the groundwater damages figure was built directly from the (limited) sampling data available. None of this is nefarious – Cassell is again just slinging mud here.

      (7) Of course Chevron presented testimony from experts that it remediated some of the pits, but that paid testimony (not “academic” in the slightest) has been criticized to the point of ridicule and is belied by the company’s own environmental audit reports, the data of its own experts from secret pre-inspections during the trial, independent investigations by the Ecuadorian comptroller’s office, and more recently the latest round of scientific sampling from the Louis Berger Group, a prominent scientific consultancy that in 2013 inspected former Chevron well sites in five separate oilfields and found extensive and illegal levels of toxins that pose a grave risk to human health.

      The Louis Berger Group documents are provided here:

      Chevron’s claim to have remediated is also contradicted, of course, by the conclusions of the Ecuadorian courts based on the 64,000 chemical sampling results in 105 expert technical reports submitted by the parties in the Lago Agrio trial – conclusions that were carefully examined and confirmed by the Louis Berger Group with careful cross-reference to the record evidence.

      Tellingly, Chevron refused to contest the facts of its own pollution in its recent retaliatory RICO trial in New York. Based on this tactic, Judge Kaplan refused to hear any evidence of the contamination throughout the seven-week show trial – a bench trial because Chevron dropped potentially billions of dollars in money damages claims at the last minute in order to avoid having to present its trumped-up case to an impartial jury.

      For analysis of Judge Kaplan’s show trial, see

      (9) Interestingly, Cassell is even incorrect in his last point, because multiple Chevron experts, such as Bjorn Borkman, Gino Bianchi, and Doug Mackay, have repeatedly confirmed the company’s contamination (even though company lawyers try to hide that fact from courts). As noted, several Chevron scientists conducted secret pre-inspections of the company’s well sites before the official judicial inspections. Evidence from these pre-inspections – which recently emerged in parallel litigation in U.S. courts and was reviewed by the LBG scientists – confirms yet again Chevron’s liability. Predictably, Chevron’s scientists hid this secret evidence from the Ecuador court and then engaged in an elaborate hoax to only find “clean” soil samples during the trial by testing only outside a supposed perimeter that was established beforehand. The fact Chevron still found extensive contamination in its own official sampling data submitted to the court despite its efforts at subterfuge only reinforces how saturated the area is with oil waste. The secret evidence was confirmed by the LBG report and by Chevron’s internal documents, which the company has asked courts to seal so it can hide its obviously corrupt conduct from the public and its own shareholders.

      Pages 33-85 of the Republic of Ecuador’s most recent arbitration brief explain the full extent of Chevron’s efforts to use junk science to corrupt the Ecuador trial:

      Cassell says the parties should talk among themselves to settle the case but that there are “no takers” to his suggestion. With all due respect, the parties do not need Cassell to help them settle the case. Nor do they need more studies beyond what’s in the 220,000-page trial record courtesy of Chevron itself, which alone proves the pollution. Chevron’s lawyers and the representatives of the affected communities have met on multiple occasions to discuss a settlement. During a series of meetings in 2012 that are now public, Chevron’s management team refused to put a number on the table that would be sufficient to conduct an adequate clean-up of the ecological disaster caused by the company. As a result, the communities have no choice but to force Chevron to comply with the law by seizing company assets in various jurisdictions around the world, including Canada. The communities are open to any reasonable discussion of a fair resolution, as they always have been.

  4. …and every single one of Chevron’s points you mentioned was examined, considered and rejected by the Ecuador court — as well as by Ecuador’s highest court.

  5. This exchange proves the main point of my blog that Chevron’s management has failed even to reach a consensus with the plaintiffs and the Ecuadoran government on the extent of the oil pollution and its impact on the health and livelihoods of the people in the affected communities. (The latter of question of Chevron’s responsibility and liability hangs on the assessment of that damage.)

    From the perspective of Chevron’s shareholders, this represents a costly mismanagement by Chevron of its legal and environmental liabilities. It also represents an additional risk to shareholders of potential disruption to the company’s business and operations from the plaintiffs efforts to seek recognition of the $9.5 billion judgment by sizing Chevron’s assets in Argentina, Brazil, and Canada.

  6. Dear Readers all,

    My modest comments have stimulated a barrage of replies, to which my detailed response will have to await my return next month from my current travels in New Zealand. Here is the short version:

    1. Aaron Page’s claims that the Ecuadorian courts’ judgments on fraud and the environment are reliable only reveal the extent of the plaintiff’s inability to find credible support for their claims. For an insight into the Ecuadorian judiciary, readers may wish to consult, for example, the case of El Universo, in which Ecuadorian courts entered a $20 million libel verdict against a newspaper at the behest of Ecuadorian President Rafael Correa, only to double it on appeal when he pronounced himself unsatisfied with the $20 million. President Correa has also shown a strong interest in the Chevron case, which he publicly pronounced the most important in Ecuador’s history. The Ecuadorian court judgments in this case have zero credibility.
    2. The evidence of fraud in this case is massive and overwhelming. Any readers in doubt need merely read the 500-page judgment by the US federal court in March of this year, documenting the fraud. Not only the testimony, but the documentary and forensic evidence is compelling. For example, two questions for Mr. Page:
    a. Does he deny that plaintiffs’ paid consultants in the US secretly wrote nearly all of the Ecuadorian court’s supposedly independent damages expert’s report?
    b. Doe he deny that checks from the plaintiffs’ office in Ecuador were deposited into the bank account of one of the Ecuadorian judges in the case?
    3. The claim that all plaintiffs’ experts repudiated their testimony, only because Chevron understandably took legal action or filed discovery against them, is offered only because plaintiffs can find no better explanation. Do the plaintiffs maintain that the only consultants they could fund were all people willing to lie under oath (either in their original testimony, or later, in repudiating their testimony) and unwilling to stand up for principle? I invite readers to read the recantations by these experts before writing them all off as merely spineless.
    4. Aaron Page is correct that plaintiffs can choose their defendants. Here plaintiffs chose to sue Chevron, and not Petroecuador. That litigation choice, however, says nothing about who is responsible for any pollution in Lago Agrio. Page also omits to mention that plaintiffs not only chose not to sue the State oil company (Petroecuador), but committed in writing not to sue it, in return for the State’s support of their suit against Texaco (and later Chevron).
    5. Aaron Page and his colleagues typically argue by ad hominem. They attempt to write off the federal judge in New York as prejudiced against them. They attempt to disqualify the arbitrators in the international arbitration as biased (including the arbitrator chosen by Ecuador, a distinguished international lawyer with a long record of support for human rights). They write off their own recanting consultants as willing to say anything under pressure. They attempt to dismiss me as a Chevron consultant. (Anyone who is not familiar with my decades of work as a human rights advocate is welcome to read my c.v. on the faculty web page of Notre Dame Law School.) Yet Mr. Page does not even mention that he was a member of the plaintiffs’ legal team, working directly with plaintiffs’ chief lawyer, Steven Donziger, whose trail of fraud is documented beyond reasonable dispute in the US federal court judgment.
    6. Mr. Billenness appropriately asks whether my positions are the same as those of Chevron, for whom I have been an independent consultant. On some points, I agree with the company; on others, no.
    Specifically, in my view the evidence that members of Mr. Page’s legal team committed fraud in the Ecuador litigation, and did so with the connivance of Ecuadorian judges, is undeniable. I also agree with the company that no credible evidence of continuing environmental or health harm was presented in the Lago Agrio litigation.

    So where is the daylight between my position, as an independent consultant, and the position of Chevron? The following are examples:

    a. I have long advocated the sort of settlement that Mr. Page rebuffs, calling for new, credible assessments by experts agreed to by the parties. Neither Chevron (nor the plaintiffs nor Ecuador) have agreed to my proposal. (I have not given up.)
    b. This reflects a more fundamental difference, perhaps. In Chevron’s view, no further environmental evidence is needed, because the existing evidence settles the matter. In my view, further evidence would be helpful, precisely for the reasons stated in Mr. Billenness’ original post in this chain.
    c. A principal legal argument by Chevron in the international arbitration and elsewhere is that Ecuador waived all environmental claims against the company when the State signed off on Texaco’s remediation in the 1990’s. I have never taken a position on that claim, which involves complicated questions of Ecuadorian law (although the international arbitrators have largely resolved it in Chevron’s favor).
    d. I never agreed with the US federal court’s worldwide injunction against enforcement of the original Lago Agrio judgment. In my view it was inappropriate, for all the reasons stated in the amicus brief filed in the Second Circuit by international law experts. (I would have signed the amicus brief, had I known of it before it was filed.) The Second Circuit later reversed that injunction — but without disturbing the district court’s findings at that stage of probable fraud, later confirmed after trial by its March 2014 judgment.
    e. I disapproved of Chevron’s opposition to an amicus brief proffered by Earth Rights International in the international arbitration. At my urging, the company reversed its position, and publicly agreed to consent to amicus briefs by the plaintiffs and other appropriate intervenors.

    I could extent this illustrative list. The point is that I have my views, and Chevron has its views. Where we fundamentally coincide is on two points: first, the Lago Agrio litigation and judgment are hopelessly tainted by fraud, and, second, no credible evidence of continuing environmental or health harm was presented in the Lago Agrio litigation.

  7. In response to Doug Cassels suggestion that anyone in doubt need simply read Kaplans 485 page opinion, I would say that having already done so, as I’m sure many others have, that it really contains nothing that would change anyones mind either way. Those who believe Chevrons propaganda will feel vilified, whilst those of us who are a little skeptical will remain so, as it steers so close to the Chevron position, it could almost have been written by their lawyers. That is what I expected from a judge who suggested to Chevron that they bring the case to court then assigned it to himself, and throughout the trial gave them everything they asked for and more.
    A couple of suprises for me. Firstly I was shocked at the off hand way in which he dismissed the entire Ecuadorian judicial system (the venue of Chevrons choosing) as corrupt and incompetent, and thereby gave himself permission to overrule them. That is real arrogance. Secondly, I was amazed at the speed with which he put together this long winded opinion with near on 2000 citations. Either he worked like mad day and night, or he started pre (show) trial, or he had help.

  8. Based on nothing more than his skepticism about the content of a fully documented judicial ruling, Mr. Lynn darkly implies that Judge Kaplan should be suspected of misconduct for having “had help” in writing his opinion. Mr. Lynn also blithely assumes that the rulings of Ecuador’s judiciary are worthy of respect — in a highly politicized case of direct interest to President Correa. Neither proposition deserves to be taken seriously.

    No human rights lawyer familiar with Ecuador’s judiciary would trust its rulings in cases of importance to President Correa. Even the Lago Agrio plaintiffs’ lawyers regularly lampooned the integrity of the Ecuadorian courts in their case – until they managed to bribe, extort and defraud their way to an unexpected win. Then, suddenly, the Ecuadorian judicial process they once dismissed as “smoke and mirrors” became a paragon of integrity. They and Mr. Lynn are now indignant that a US federal judge would have the temerity to say publicly what the plaintiffs’ counsel themselves used to say privately.

    Judge Kaplan had plenty of evidence on the political corruption of the Ecuadorian judicial system in high profile cases generally, and on the sordid embarrassment of the Ecuadorian judicial misconduct in the Lago Agrio case. Again, I invite readers who, unlike Mr. Lynn, have not waded through the lengthy opinion, to read the pertinent portions (or the entire judgment) on their own and to reach their own conclusions.

    Judge Kaplan’s views on the unreliability of Ecuador’s judiciary in a case like this are hardly remarkable. Just ask any human rights organization knowledgeable about Ecuador (other than the Lago Agrio lawyers, who are now enthusiasts for their new-found friends on the bench).

    The assessments of Human Rights Watch are illustrative. In its 2013 World Report, HRW reported:

    “Corruption, inefficiency, and political influence have plagued Ecuador’s judiciary for years. Despite a judicial reform program that the Correa administration initiated in 2011, political influence in the appointment and conduct of judges remains a serious problem.”

    This January the Americas Director of Human Rights Watch added: “The government’s reform of Ecuador’s judiciary should have resulted in a stronger and more independent judicial system. So far, the reform is doing precisely the opposite.”

    In contrast to Mr. Lynn’s deference to Ecuador’s judiciary, Mr. Lynn is “amazed” at the speed with which Judge Kaplan prepared his opinion. Mr. Lynn concludes, “Either he worked like mad day and night, or he started pre (show) trial, or he had help.”

    I have never met Judge Kaplan and have no knowledge of his working habits. But he certainly “had help” in writing his opinion. The difference from the Ecuadorian trial is that the help Judge Kaplan received was legitimate and on the record. He received the direct evidence in writing, months before the trial began. He had transcripts of the cross examinations at trial. He had post-trial briefs from the parties, summarizing their views of the evidence. He was assisted by at least one highly qualified law clerk (and perhaps more) in researching and drafting his opinion. He had presided over the case for years, and had issued prior opinions in the case, finding sufficient evidence of probable fraud by plaintiffs’ lead attorney Steven Donziger to invoke the “crime fraud” exception to the attorney-client privilege.

    In this context, to imply that Judge Kaplan may have had some sort of improper help to draft his opinion is neither persuasive nor responsible.

    Mr. Lynn is of course entitled to criticize Judge Kaplan’s rulings. I myself have criticized Judge Kaplan’s worldwide injunction (subsequently reversed on appeal) against enforcement of the Lago Agrio judgment. But to suggest misconduct by Judge Kaplan – as Mr. Lynn implies – requires significantly more evidence than rulings with which Mr. Lynn might disagree.

    Mr. Lynn’s innuendoes against Judge Kaplan would be more convincing if he had the sort of evidence – checks deposited into the judge’s bank account, or extensive language in the judge’s ruling, tracking plaintiffs’ internal legal memos verbatim – that pervade the record of the Ecuadorian proceedings in the Lago Agrio case.

    There is no such evidence against Judge Kaplan. But there are mounds of it against the purported author of the Ecuadorian judgment – Judge Nicolás Zambrano – who was later removed from the bench for apparent corruption in a drug trafficking case, and who thereafter testified for Mr. Donziger in the fraud trial in return for being rescued from unemployment by an Ecuadorian State enterprise. If Mr. Lynn is inclined to suspect that any judge in this case “had help” in writing his opinion, he might take a closer look at the compelling evidence that Judge Zambrano did not write the judgment he signed, and which plaintiffs’ lawyers now seek to enforce.

    Finally, Mr. Lynn characterizes the fraud trial against plaintiffs’ lead attorney Steven Donziger as a “show trial.” In making the same assertion, Donziger complains that Judge Kaplan did not convert the fraud trial into an environmental trial. Yet the environment was simply not at issue in a suit accusing a lawyer of misconduct. As Judge Kaplan noted, even assuming for the sake of argument that Donziger’s clients had legitimate environmental claims, that would in no way constitute a defense to their attorney’s committing fraud, bribery, extortion, money laundering, witness tampering and obstruction of justice.

    And on the merits of the fraud issues, does Mr. Lynn seriously contend that Mr. Donziger conducted the Lago Agrio trial in an honest and ethical manner? Would Mr. Lynn conduct a lawsuit by, for example, covertly paying the court’s “independent” damages expert to put his name on a report secretly written by the plaintiff’s own consultants and lawyers?

    The plaintiffs indeed had an opportunity to put on their environmental case – in Ecuador. It is no fault of the impoverished residents of Lago Agrio that their lawyers chose to conduct the trial by unlawful means – and got caught.

    But now, unfortunately, the plaintiffs are the ones paying the price for their attorneys’ misdeeds. The plaintiffs have yet to collect a penny. Nor do they yet have an honest adjudication of whether they are entitled to collect damages. Further litigation (now underway in Argentina, Brazil, and Canada, and before an international arbitral tribunal) appears at best lengthy and at worst unpromising. If the plaintiffs are to be shielded from the fall-out of their attorney’s corruption of their lawsuit, the Lago Agrio case should be settled. The sooner, the better — for all concerned.

  9. Thanks Doug, I’m going to try to address your comments. Your opening paragraph:-
    Based on nothing more than his skepticism about the content of a fully documented judicial ruling, Mr. Lynn darkly implies that Judge Kaplan should be suspected of misconduct for having “had help” in writing his opinion. Mr. Lynn also blithely assumes that the rulings of Ecuador’s judiciary are worthy of respect — in a highly politicized case of direct interest to President Correa. Neither proposition deserves to be taken seriously.

    It seems an odd position to take, that not only is the Ecuadorian ruling unworthy of respect, but that the very idea that it be respected is one that cannot be taken seriously. Of course, you have no need to take me seriously, but it may be advisable to be prepared that other enforcement jurisdictions may well respect the Ecuadrian ruling for a number of reasons: –

    !) Chevron were found guilty on the back of substantial eveidence gathered over a number of years.
    2) The ruling has been validated by Ecuadors highest court – I might even start to respect Kaplans ruling if it ever survives that level of scrutiny!
    3) Ecuador was the venue of Chevrons choosing. For ten years they argued that Ecuador was the correct venue. Now you could argue that the political situation changed in Ecuador, but in the ten years that Chevron spent arguing for the change of venue, Ecuador went through six different presidents, which possibly suggests the political situation was not stable. So why argue for a change of venue? Surely an innocent accused would more likely opt for the highly regarded American judicial system, prove their innocence quickly and draw a line under the whole affair. We can only speculate, but if Chevron were not innocent, then having the case dismissed under forum non conveniens will often make it disappear, as the problems in restarting in a developing country, with a different legal system under which the lawyer is not licensed to practice can prove insurmountable. Whatever the reason, the bottom line is that Chevron chose the venue and lost there. They cannot now complain that the system they chose was at fault.

    Compare this to Kaplans ruling:-
    1) He uses the RICO statute to appoints himself superior to Ecuadors highest court – is there any precedent for this, and if so what was the outcome?
    2) He invited Chevron to file RICO charges. Surely this is not a judges place. With my admittedly limited understanding of the law, I thought judges were supposed to be impartial. I thought that at the start of a trial a judge should really not have an opinion, and that this should be formed as the evidence is presented. It is a lawyers place to advise their clients on what legal action they should take, and Kaplan is not Chevrons lawyer. This is far from the only example of his bias.
    3) The discovery Chevron were allowed was absolutely unprecedented. They had access to Donzigers laptops, diaries and more – not to mention hundreds of hours of film footage to slice and splice. You asked ‘does Mr. Lynn seriously contend that Mr. Donziger conducted the Lago Agrio trial in an honest and ethical manner?’ Well I could ask you the same – Do you seriously believe Chevron conducted their side in an honest and ethical manner? Supposing the LAPs had been allowed similar discovery – but they were not.
    4) For all of this discovery, the Chevron case remains weak. It consisted of little more than former allies lining up to say they had been duped and a crooked judge saying whatever he was told to say. Now post trial we have seen Patton Boggs pressured into abandoning their client, issuing a statement of regret and offering to assist Chevron in discovery. If Chevron are able to exert that sort of pressure on a major law firm, a couple of backers, a consultancy and a crook must have been childs play.

    Your next point: –
    ‘to suggest misconduct by Judge Kaplan – as Mr. Lynn implies – requires significantly more evidence than rulings with which Mr. Lynn might disagree. ‘

    Well of course you are right. I don’t know how Kaplan got that ruling out so quickly, and speculation is probably not helpful. But the fact remains that this was a long and detailed document with careful wording and extensive research. I know that putting together such a document is not easy. In fact on one point we can agree – it is worth a read – I might even read it again. The only point on this in which we differ takes me back to my original post and it is your statement – ‘Any readers in doubt need merely read the 500-page judgment by the US federal court in March of this year, documenting the fraud’. I’m sorry, but no one is likely to read it, see the light and start screaming ‘fraud’! Unless that is what they already thought.

    One last point. You state – ‘I myself have criticized Judge Kaplan’s worldwide injunction (subsequently reversed on appeal) against enforcement of the Lago Agrio judgment.’
    Now on this I am genuinely interested in what you have to say. Is there a real difference between the injunction you speak of and the injunction in his latest ruling. To me they both seem to be trying to achieve the same result but with slightly different wording. Is there a reason why this one should survive the second circuit when the first did not?

    • Dear Peter,

      Thanks for your courteous reply. My meanderings in New Zealand will keep me off email for a couple of days, but I will reply by week’s end – doug

      • Dear Mr. Lynn,

        Thank you for your patience. In response to your points:

        You protest that Chevron was found liable based on substantial evidence gathered over years. I am not aware of any significant evidence in the trial against Chevron that was not tainted by fraud or distortion.

        You think it odd that the ruling of Ecuador’s highest court should not be taken seriously. In general, of course, rulings of foreign courts are entitled to due respect. Judges and diplomats refer to such respect as “comity.” Many Latin American high courts merit comity. For example, a judgment rendered by the high courts of Brazil, Chile, Colombia, Costa Rica, Mexico, Peru or Uruguay would presumptively merit respect. Those high courts are characterized by competence and integrity.

        Unfortunately, not all Latin American courts meet standards of comity. The Supreme Court of Ecuador, for example, is packed with partisans of President Correa. They were placed on the Court after Correa revised the selection process to give his followers complete control of the process. Even Correa’s hand-picked international evaluators – led by Judge Baltasar Garzón of Spain, an ideological sympathizer whom Correa expected to bless his “reforms” — issued a report sharply critical of the new selection process. Garzón noted that Correa’s judge-pickers used subjective criteria to leapfrog their friends over more objectively qualified candidates.

        I am not aware of a single case in which Correa’s Court has ruled against him in a case he cared about. The ruling against Chevron is no exception. It does not deserve comity.

        You contend that Chevron, having chosen Ecuador as a venue, cannot now complain about the result. That view is understandable, but ill-informed. When Texaco (later Chevron) asked for Ecuador as a venue, the company agreed to respect the resulting Ecuadorian judgment so long as it was not procured by fraud. But in fact, fraud permeates the judgment. Texaco agreed only to be tried, not defrauded. The plaintiffs’ lawyers knew this. It is too late for them now to complain that Chevron wrote them a blank check, by agreeing in advance to be defrauded.

        You assert that Judge Kaplan used the RICO statute to appoint himself superior to Ecuador’s highest court. He did no such thing. It is commonplace for courts in one country to determine whether or not to enforce or respect judgments from foreign courts. It is equally commonplace for laws permitting enforcement of foreign judgments to bar enforcement of judgments procured by fraud or rendered by courts or court systems that lack independence.

        The Ecuadorian courts in the Chevron case fit both exceptions: the judgment was fraudulent, and the high courts that confirmed it lack political independence. Judge Kaplan would have been remiss if he had disregarded the extensive evidence of fraud and lack of independence of the Ecuadorian courts that sat in the case against Chevron.

        You say that Judge Kaplan “invited” Chevron to file the RICO case. Donziger and friends repeatedly claim that the Judge “encouraged” the filing. To what ruling or statement by Judge Kaplan do you refer? If you can be more specific, I will be happy to comment.

        You object that Chevron was granted extensive discovery of Donziger’s laptops, diaries, and more, and of the outtakes of the documentary he commissioned. Yet that discovery was granted on the basis of the “crime fraud” exception to privileged communications. It was based on serious evidence of fraud — evidence later confirmed by the documents disclosed. It was affirmed by the Court of Appeals for the Second Circuit – the same court that reversed Judge Kaplan’s ill-advised worldwide injunction against enforcement of the Ecuadorian judgment.

        Donziger tries to dismiss Judge Kaplan’s ruling as the product of a biased judge. Yet discovery of normally privileged documents or information was granted, not only by Judge Kaplan, but also by at least seven other federal courts in other districts of the country. After reviewing the evidence of fraud against Donziger, here is what these other courts had to say:

        • New Jersey: “… [T]he concept of an employee of a party covertly functioning as a consultant to a court appointed expert in the same proceeding can only be viewed as a fraud upon that tribunal . . . .”

        • North Carolina: “… [W]hat has blatantly occurred in this matter would in fact be considered fraud by any court.”

        • New Mexico: The “footage [from outtakes of a documentary on the case] shows, with unflattering frankness, inappropriate, unethical and perhaps illegal conduct.”

        • California: “There is ample evidence… that the Ecuadorian Plaintiffs secretly provided information to … [the] supposedly … neutral court-appointed expert, and colluded with [him] to make it look like the opinions were his own. . .”

        • New York: “[T]here is more than a little evidence that Donziger’s activities – as several courts already have held … come within the crime-fraud exception to … the privilege …”

        • US Court of Appeals: “… [T]his showing of [plaintiffs’ consultant] Villao’s dual employment is sufficient to make a prima facie showing of a fraud… .”

        • Maryland: “[T]here is ample evidence of the existence of a fraudulent scheme in that these [plaintiffs’ lawyers’] documents bear close relationship to [the Ecuadorian judgment]. And Chevron has shown to anyone with common sense that this [judgment] is a blatant cut and paste exercise. . . . [T]here is substantial extrinsic evidence of wrongdoing . . . ”

        • Florida: “Here, the matter pertains to a large scale fraud … and a related multibillion dollar judgment … ” “Chevron has obtained mounds of evidence … that suggests that the judgment itself was also ghostwritten. . . .”

        You next ask whether I believe that Chevron did not also engage in improper conduct. Even if it had, that would be no defense, either for Donziger or for the legitimacy of the judgment he procured by fraud.

        In any case, in March 2012, I reviewed various allegations of misconduct made by plaintiffs’ supporters against Chevron and found no credible evidence to support them. (See Plaintiffs have had every opportunity to submit any evidence of fraud by Chevron to US courts. Yet not one US court has invoked the crime fraud exception against Chevron. Do you mean to assert that every US court that has heard claims in this case is somehow biased in favor of Chevron and against Donziger (himself a US lawyer and Harvard Law graduate)?

        Recently, at least one serious, albeit debatable, ethical issue arose. Professor Erwin Chemerinsky, the founding Dean of the University of California Irvine School of Law, argues that it was improper for Chevron to pay its Ecuadorian witness judge substantial sums to collect his records and to relocate himself and his family to the US. I have great respect for Dean Chemerinsky. However, it seems to me that Chevron’s actions may have been justified in order to bring the judge’s testimony before the US courts hearing the case. It is clear that if the judge had remained in Ecuador, he would not have dared to give his testimony, and if he had done so, he would have been prosecuted. (In fact, Ecuadorian prosecutors opened a case against him after he testified in the US.)

        Whether those exigencies justify what might otherwise be improper payments, I leave to the courts to resolve. In any event, what Chevron did was “on the record.” The company’s conduct thus contrasts starkly with the secret bank accounts previously used by plaintiffs to make covert payments to the very same Ecuadorian judge, and to the Ecuadorian court’s appointed damages expert. There is not even an arguable justification in legal ethics for covert bribery of judicial officers.

        And the evidence of these bribes is not only testimonial, but includes copies of bank records. Although plaintiffs challenge the authenticity of some of the records, they have never been able to explain them away.

        More broadly, you claim that Chevron has a “weak” case, consisting of “little more than former allies lining up to say they had been duped and a crooked judge saying whatever he was told to say.”

        To be clear, the “former allies” who testified under oath against Donziger are two of his own former co-counsel, five of his own former principal consultants, and two of his former multi-million dollar funders – all of whom say he lied to them and fed them false information. Each of their testimonies is detailed and unrefuted on any specifics by Donziger. Rare is the fraud case where such extensive, consistent and compelling insider testimony is presented against a defendant. If there were only one or two such witnesses, one might try to dismiss their evidence as weak. But collectively and cumulatively, on any objective view, they present powerful evidence of fraud.

        As for the crooked judge who testified for Chevron, you omit two key facts. First, there were two crooked judges who testified in this case: one for Chevron, and one for Donziger. Judge Kaplan was rightly skeptical of both, but ultimately decided that Chevron’s judge told the truth when he said the body of the Ecuadorian judgment came from the computer of one of plaintiffs’ lawyers, before being edited for style by that judge, in order to make it look more like a judicial opinion.

        Donziger’s judge produced no objective evidence to back his incredible story: that he alone (assisted only by an 18-year-old typist) wrote a judgment relying on cases from the US, Australia and France — when he can read neither English nor French. In contrast, Chevron’s judge produced bank records, shipping records and computer hard drives in support of his version.

        Moreover, there was entirely independent evidence, not at all dependent on the testimony of Chevron’s judge, that the judgment was the product of improper collusion with the plaintiffs’ lawyers. That evidence included lengthy, verbatim repetitions in the judgment of passages which otherwise appear only in plaintiffs’ internal legal memos — complete with identical typos.

        You view such evidence as weak. Most objective observers, after reviewing it, would more likely view the cumulative testimonial and documentary evidence as strong.

        Finally, you ask what is the difference between the earlier worldwide injunction that was reversed, and the new order entered by Judge Kaplan. In jurisdictional terms, the difference is night and day. The original injunction – to which I have always objected – purported to order the plaintiffs not to enforce their judgment anywhere in the world. That was a vast overreach of judicial authority.

        The new order is far more limited in at least two key respects. First, it bars enforcement of the Ecuadorian judgment only in the United States – thereby avoiding interference in the sovereignty of other nations. Second, it bars receipt of proceeds from the judgment only by Donziger and the other individual defendants over whom Judge Kaplan had personal jurisdiction. Other plaintiffs’ lawyers, such as lead Ecuadorian lawyer Pablo Fajardo, for example, remain perfectly free to try to enforce their judgment anywhere outside the United States, and to benefit from the proceeds.

        • Ok thanks Doug.
          You give opinions as to why the Ecuadorian judgement does not warrant respect, and whilst I may disagree, it becomes academic what our interpretations are if a jurisdiction in which the LAPs seek enforcement differ. Canadas court appears to not only respect the Ecuadorians, but also to be unimpressed with Chevrons conduct. The court of appeals in allowing enforcement procedings to take place in Ontario has noted several instances of bad faith by Chevron: –
          1) Having recapped Chevrons promise to abide by the Ecuadorian ruling, they noted that ‘Once the Ecuadorian courts made their decision, Chevron chose not to abide by them.’
          2) After further recounting the history of litigation they state ‘The picture from the above history is an obvious one. For 20 years, Chevron has contested the legal proceedings of every court involved in this litigation – in the United States, Ecuador and now Canada.’
          3) Further on ‘In these circumstances the Ecuadorian plaintiffs should have an opportunity to attempt to enforce the Ecuadorian judgement in a court where Chevron will have to respond on its merits’.
          4) There is more, but I will finish with the courts reference to Chevrons famous statement about fighting on ice and states ‘Chevrons wish is granted. After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgement heard in an appropriate jurisdiction.’

          This does not sound to me like the language of a court that buys into the allegations of fraud. This is the language of a court that is quite unimpressed by a corporation that decides for itself which judgements to abide by. To compound Chevrons problems, the Canadian justice system is above repproach. If they should find the Ecuadorian judgement to be valid (and I acknowledge we are still some way from that point), but where would that leave Kaplans RICO ruling?

          Judge Kaplan encouraged Chevron to file RICO charges during a hearing on Chevron’s motion to depose Donziger in September, 2010. These were his words:-

          “The object of the whole game, according to Donziger, is to make this so uncomfortable and so unpleasant for Chevron that they’ll write a check and be done with it. . . . So the name of the game is, arguably, to put a lot of pressure on the courts to feed them a record in part false for the purpose of getting a big judgment or threatening a big judgment, which conceivably might be enforceable in the U.S. or in Britain or some other such place, in order to persuade Chevron to come up with some money. Now, do the phrases Hobbs Act, extortion, RICO, have any bearing here?”

          Does this sound like an impartial judge to you? This is what he said in 2010, so his mind was made up long before trial in 2013. Little wonder Donziger claims bias.

          I will attempt to address your further comments in the coming days. However, doing so is quite time consuming, and I also have a day job!

          • Dear Peter,

            The Canadian decision, as you correctly note, was given by an appellate court. However, three points bear mentioning.

            First, despite the language you cite, that decision was solely on the issue of whether Canadian courts have jurisdiction over the Ecuadorian plaintiffs’ efforts to enforce their judgment in Canada. It does not reach the merits of the fraud or any other aspect of the dispute in Ecuador.

            Second, that appellate court decision was given in late 2013, and thus did not have the benefit of Judge Kaplan’s March 2014 ruling in the New York case that Donziger et al. committed fraud and other misconduct. One month after Judge Kaplan’s ruling, the Supreme Court of Canada in April 2014 agreed to hear Chevron’s appeal from the Canadian appellate court ruling. Once the case is fully briefed and argued on the jurisdictional issues, we shall see whether the Supreme Court sustains Canadian jurisdiction.

            If the Court rules that there is no jurisdiction, the case will be over in Canada. If, on the other hand, the Supreme Court finds jurisdiction, then presumably the case will go back to the first level court, where Chevron will be able to present its arguments and evidence on fraud. The first level court will then be able to take account as well of Judge Kaplan’s rulings (which are also currently being appealed by Donziger).

            Third, the reason the plaintiffs are forced to seek debatable jurisdiction in countries like Canada is that they have not dared to seek enforcement against Chevron in the logical and obvious jurisdiction — the United States, where Chevron is headquartered. I do not know why they have refrained from suing Chevron in the US, but in view of the rulings by multiple US court rulings quoted in my earlier comments on this page, confirming that Donziger’s conduct in the Ecuador case would amount to fraud anywhere, I can understand why the Ecuadorian plaintiffs have not tried to enforce their judgment in the one country where jurisdiction is obvious.

            In other words, this is another example of how the impoverished residents of the Amazon have been seriously prejudiced, through no fault of their own, by the fraudulent conduct of some of their lawyers.

            In regard to the September 2010 hearing transcript from which you quote a brief portion, I will have to check the context and get back to you.

          • Dear Peter,

            I have now researched the context of the September 23, 2010 hearing in which you mistakenly assert that Judge Kaplan improperly “invited” Chevron to file a RICO case against Donziger. Judge Kaplan made no invitation. He merely responded – entirely properly — to arguments made by Chevron and Donziger.

            The following is the statement by Judge Kaplan which you quote out of context. It was made after Judge Kaplan had reviewed documentary film “out takes” of Donziger’s own statements over a period of years:

            “The object of the whole game, according to Donziger, is to make this so uncomfortable and so unpleasant for Chevron that they’ll write a check and be done with it. . . . So the name of the game is, arguably, to put a lot of pressure on the courts to feed them a record in part false for the purpose of getting a big judgment or threatening a big judgment, which conceivably might be enforceable in the U.S. or in Britain or some other such place, in order to persuade Chevron to come up with some money. Now, do the phrases Hobbs Act, extortion, RICO, have any bearing here?”

            Judge Kaplan thus ended his statement with a query about the Hobbs Act, extortion and RICO. That was a question, not an invitation. It was addressed to Donziger’s lawyer. It inquired about the “bearing here” of certain crimes. Those crimes were relevant because the hearing was (in part) on whether the “crime-fraud exception” applied to Chevron’s request, then pending, to obtain discovery of Donziger’s documents.

            Judge Kaplan did not initiate the discussion of these crimes. Chevron did. Three weeks before the hearing, Chevron filed a brief alleging that the evidence showed “at least ‘probable cause’” that Donziger had committed criminal violations of the Hobbs Act, extortion and RICO violations.
            Therefore, Chevron argued, the “crime-fraud exception” applied to permit discovery.

            At the hearing, Judge Kaplan made clear that one issue was “has there been an adequate showing to overcome the privilege under the crime fraud exception.” (Hearing Transcript, p. 17.) Donziger’s attorney argued that no crimes had been committed. In response, Judge Kaplan made the statement you quote and, in light of Chevron’s brief, asked Donziger’s lawyer, “Now, do the phrases Hobbs Act, extortion, RICO, have any bearing here?”

            Judge Kaplan’s question was thus a proper and relevant judicial response to Chevron’s brief and Donziger’s denial. It was not an “invitation” to file a RICO case. Chevron – which had already initiated the RICO allegations — needed no invitation.

            You also object:

            “With my admittedly limited understanding of the law, I thought judges were supposed to be impartial. I thought that at the start of a trial a judge should really not have an opinion, and that this should be formed as the evidence is presented.”

            In fact, the probable cause hearing you quote was not at the “start of a trial.” Judge Kaplan formed his opinion on probable cause only after reading lengthy briefs, viewing extensive evidence, and holding a hearing in which Donziger’s own video-taped words were screened. Judge Kaplan was required to form an opinion on probable cause, in order to decide whether the “crime-fraud exception” applied.

            In other words, Judge Kaplan did what he was tasked to do by the law, the evidence and the arguments before him. His remarks about Donziger’s scheme — to pressure the courts with false information in order to obtain or threaten a big judgment — summarized the factual predicate for his later ruling that there was indeed probable cause that Donziger had committed crimes.

            You conclude that Judge Kaplan’s “mind was made up long before trial in 2013. Little wonder Donziger claims bias.” In fact, Judge Kaplan had made only a determination of probable cause. Not until after an extensive trial, did he elevate his finding of probable cause to a finding of liability. Donziger may not like the result, but merely losing a case – either at the probable cause stage, or later on the merits – is hardly evidence of bias by the judge.

  10. Ok, I look forward to reading you reply. In the meantime there is one more point which has occurred to me which I would like to put to you, regarding your statement: –
    ‘No human rights lawyer familiar with Ecuador’s judiciary would trust its rulings in cases of importance to President Correa. Even the Lago Agrio plaintiffs’ lawyers regularly lampooned the integrity of the Ecuadorian courts in their case – until they managed to bribe, extort and defraud their way to an unexpected win’
    But, unless I have missed something, which is possible, these views are incompatable with one another. If Donziger is guaranteed victory because the case is important to President Correa, why would he need to bribe, extort and defraud his way to victory?


  11. Dear Mr. Lynn,

    You indeed missed something, namely chronology. The interaction between financial corruption and political corruption of the Ecuadorian courts in this case is complex. I do not have all the facts and cannot fully explain it. However, at least part of the explanation can be attributed to timing.

    For these purposes the case breaks down into three separate time periods: pre-2007 (before President Correa took office), 2007 to 2010 (when the case remained before the trial court), and 2010 to date (during appeals and attempts to enforce the judgment).

    In the first period, Correa was not yet President. He could not intervene on plaintiffs’ behalf. With no political guarantees, Donziger and some members of his team committed fraud, forgery and blackmail in hopes of winning their case.
    For example:

    Rigged studies: Donziger’s expert David Russell found in 2004 that “[t]he sampling data did not show any groundwater contamination, or surface water contamination, or the kinds of soil contamination I expected to find based on Donziger’s stories about Texaco practices.” In response, Donziger designed and carried out a rigged study. Where there appeared to be no contamination, plaintiffs would simply exclude those sites from the samples they presented to the court. On the other hand, Russell explains, where contamination was found, scientific testing techniques indicated that “the oil contamination being found was Petroecuador’s rather than Texaco’s.” So Donziger and team decided to simply stop using those testing techniques.

    Forgery: In 2005 plaintiffs’ lawyers submitted to the court a report for two sites, over the supposed signature of their expert Charles Calmbacher. Each purported to show extensive environmental damage. Dr. Calmbacher later testified: “I did not reach these conclusions and I did not write this report.” On the contrary, he testified, he never found that any site he inspected required further remediation or that Texaco failed adequately to remediate the sites.

    Blackmail: Because inspections of the oil sites were not going well for the plaintiffs, Donziger and Fajardo blackmailed a judge into changing his ruling on whether to halt the inspections. Internal emails and Donziger’s diary reveal that plaintiffs’ lawyers drafted a complaint against the judge who was “on his heels from . . . charges of trading jobs for sex in the court.” Before filing the complaint, however, Fajardo, in consultation with Donziger, met ex parte with the judge. Later the judge, who had previously rejected their request to halt inspections on the ground that it “entirely lacks legal logic,” reversed himself. Donziger noted that plaintiffs were “reaping the benefits” of “saving” the judge’s job. Plaintiffs’ legal team never filed their complaint against the judge.

    The second period, beginning in 2007, is more complex. Correa was now President, but it appears that Donziger was unsure whether the newly elected President Correa, despite his supportive public rhetoric and private offers of assistance, would actually deliver the judgment for plaintiffs. Donziger and some on his team continued their fraudulent practices before the trial court – and ultimately succeeded in winning an $18 billion judgment.

    The corrupt trial judges, it appears, were also not yet sufficiently persuaded of Correa’s commitment to the case to forego what they deemed their rightful share of the loot from the lawsuit. Donziger admits that one judge demanded a $500,000 bribe on behalf of another judge. Donziger says he refused the request, but bank records show that plaintiffs in fact paid bribes to at least one judge, albeit in far smaller amounts. This was the period when most of the fraud by plaintiffs’ lawyers, and the collusion by some Ecuadorian judges, were committed.

    The situation changed dramatically after the publication of the trial court judgment in early 2010. This was the period when the Ecuadorian judiciary’s lack of political independence came prominently into play. When the judgment was released, President Correa publicly proclaimed it the most important in the nation’s history. The trial judge was publicly lauded as a judicial hero. (He was later removed from the bench for apparent corruption in an unrelated case.)

    The message to the appeals court judges was clear: this judgment had to stand. Given the climate of fear which Correa had by then imposed on the judiciary, Chevron’s appeal had no chance.

    In addition, Correa’s government now found itself on the receiving end of an international arbitration initiated against Ecuador by Chevron in late 2009. Correa’s government, now actively litigating the case, was attempting to defend the legitimacy of the trial court judgment before the arbitrators.

    In this climate, no further bribes by plaintiffs were needed. The judges of both the appeals court and the National Court (Ecuador’s highest court, by now stacked with Correa partisans) knew what the boss wanted. They also knew the consequences for their careers were they to disappoint him in this “most important” case. Only the punitive damages award – which Ecuador’s National Court judges knew stood no chance before the international arbitrators – was cut out on the final appeal.

    There is more, I suspect, that we do not yet know in answer to your question. Perhaps we will learn more as time passes. Meanwhile, the foregoing chronology supplies at least an important part of the answer.

  12. I am honored that lawyers for both sides feel compelled to try to re-litigate the case in the comments of my blog. (This is now my most visited blog piece.)

    This ongoing debate reinforces my key point. After twenty years of litigation at great cost to the company, Chevron’s management has failed to manage this environmental liability. As shareholders, we remain concerned that Chevron’s liability and cost of to shareholders of the oil pollution has still neither been quantified or settled. A good part of the blame for that lack of resolution of this liability has to lie with Chevron management.

  13. Thanks Simon. However, if you are referring to me in that statement I would need to make you aware that I am not a lawyer and am not connected to either side. I’m just a bloke with an opinion who is stupid and stubborn enough to try and fight it out with a lawyer! If you feel that this is not really the place to do so, please let me know.
    Best regards,

    • The two lawyers arguing their case in the comments are Aaron Marr Page for the Ecuadoran community members and Doug Cassel for Chevron. I understand that you, Peter, are just an interested bystander.

      • Dear Simon and Peter,

        Many thanks to Simon for hosting this discussion (and other valuable discussions). And thanks to Peter for intervening. This is a serious matter of public policy, of legitimate concern to all who are concerned for human rights. It would denigrate its importance and leave out relevant perspectives if the discussion were confined to lawyers. I am delighted by Simon’s earlier comment that this series of exchanges has been his most widely viewed.

        While I have represented Chevron in the past, I do not represent the company now. As I indicated in an earlier comment on this page, I share the company’s views on some issues, but differ with it on others. I do not know whether Mr. Page, who like me is a lawyer, continues to represent the plaintiffs in the Ecuador litigation against Chevron.

        • Yes I do represent the Ecuadorians, and typically would have said as much at the outset of my prior post, but that I wrote it quickly and perceived that it was for a small audience who knew who I was. But it would have been appropriate to state it more clearly.

          However, Professor Cassel’s assertion that he only has “represented Chevron in the past” is crafted and deliberate sleight of hand. He has played this one in the past, including as part of a 2012 “open letter” to the human rights community that he insisted spoke only his conscience because he was not being paid by Chevron to write it and had only “represented Chevron in the past.” He kept that line for while, until more recently revealing that in fact he has an ongoing paid “consulting” relationship with Chevron. Perhaps he will claim that his “consulting” is separate from and “independent” of his work flogging Chevron’s deeply distorted talking points on blogs and elsewhere. Perhaps he will claim that the consulting gig is over — at least until he can convince Chevron to renew it by proving his bona fides with stuff like we see here. In any event, it is all too clever by half — so long as readers have the real facts.

          Cassel will surely take this as another opportunity to cast himself as the victim of ad hominem attack. But he is the one who puts the hominem in play by constantly appealing to his reputation as a human rights advocate who is speaking his conscience and only “formerly” represented Chevron. Indeed, this is really the only relevant thing about Cassel, given that the content of his attacks are pure Chevron rhetoric. (His attempt to draw some daylight between himself and Chevron by pointing to some minor elements of the overall dispute that he has disagreed with in private or “taken no position on” is comical.) For Chevron, the opportunity to dress up its same old attacks in the seemingly legitimate garb of an impassioned academic is what makes Cassel valuable.

          I wish I had the time to respond in detail to every mercenary (and Cassel is not the only one) who “independently” takes a crack at the Ecuadorians while on Chevron’s payroll. Obviously I don’t. I stated the basics of our position above, and can assure that
          Cassel’s subsequent attacks range from aggressively distorted to outright false. They come apart at the seams on close examination, and while Judge Kaplan blocked any such examination in his RICO trial (and appellate proceedings will inevitably focus on the plentiful grounds for reversal on issues of law), the truth can and will be demonstrated in any fair forum. Indeed, I have faith it will eventually even break the hold that, thanks in large part to Chevron’s vast network of paid “third-party” validators like Cassel, Chevron’s false narrative now has on segments of public opinion.

          The quickest way to understanding that Chevron’s attacks are a house of cards is to recognize the import of Chevron’s decision on the eve of trial to drop all its money damages claims (foregoing not just damages but putting its entire case in danger on appeal) in order to get a bench trial in front of Judge Kaplan, because it knew Kaplan couldn’t clamp down on the proceedings in a jury trial and that a jury would never buy its claims. Neither will the jury of future courts, future public opinion, or history, but Chevron won’t have a back door to sneak out of.

          • Well, I am certainly pleased that Mr. Page has decided not to rely on ad hominems, and to go to the merits of the issues. I invite readers to do the same.

            I do agree with Mr. Page on at least one point: history will judge. I simply expect that its judgment will be different from the one he says he expects.

          • I provided plenty of facts point-by-point to your initial post. Your response is largely conclusory, e.g. “the evidence of fraud in this case is massive and overwhelming” and “readers in doubt need merely read [Kaplan’s] 500-page judgment.” Please. Informed observers know exactly where Kaplan’s opinion is coming from. On the two specific points you asked, the first appears to reference Cabrera, an issue that Chevron has blown insanely out of proportion in order to fuel its “fraud” attacks but that had no bearing on any live issues in this dispute (and certainly did not void the entire 8-year Ecuador enviromental litigation); the second, yes I certainly deny that Chevron has proven this allegation, which is based on a single piece of Guerra-produced “evidence” that is rife with credibility concerns. I can’t really be bothered to sort through the rest of your ranting about fraud and the like, but if you want to distill it into particularized questions about the record, perhaps I can address them.

            Again, reference to the appeals briefs should help here. A far more credible take on how to assess the adequacy of the Ecuadorian forum both as to this case and generally appears at pages 98-104 of the Donziger brief and 53-63 of the Ecuadorians’ brief (links above). In particular, your/Chevron’s utterly disingenuous reliance on State Department Human Rights Reports is taken apart at pages 105-107 of the Donziger brief. Please reference our rebuttals in existing public materials in any questions you want to ask, I am obviously not going to waste time simply reciting material that is available elsewhere.

      • I understand now Simon – sorry, I had not picked up on posts by Aaron Marr Page when commenting

  14. One response to Doug Cassel above.

    Doug Cassel notes above that, in September 2010, Judge Kaplan stated:

    The object of the whole game, according to Donziger, is to make this so uncomfortable and so unpleasant for Chevron that they’ll write a check and be done with it. . . . So the name of the game is, arguably, to put a lot of pressure on the courts to feed them a record in part false for the purpose of getting a big judgment or threatening a big judgment, which conceivably might be enforceable in the U.S. or in Britain or some other such place, in order to persuade Chevron to come up with some money. Now, do the phrases Hobbs Act, extortion, RICO, have any bearing here?

    I read that clearly as a message from Kaplan to Chevron that he would be favorable to Chevron filing a RICO suit against Donziger. Kaplan is being a bit oblique but his meaning seems clear to me.

    Kaplan made that statement in September, 2010. Chevron filed its RICO suit in February, 2011. So the timeline would support the contention that Kaplan’s suggestion to Chevron to file a RICO was indeed adopted by the company.

    • Dear Simon,

      Although you may have read the statement by Judge Kaplan that way, he had little choice but to pose the question in the circumstances (for the reasons I explained above). If a judge’s comments and findings on probable cause are now to be construed as “invitations” to file lawsuits, then we will have invited lawsuits coming out of the woodworks. Chevron had plenty of smart, aggressive lawyers working on the case. To suggest that they needed a printed invitation from Judge Kaplan to overcome their timidity is a stretch, to put it mildly.

  15. Although it may disappoint Mr. Page to hear it, because he prefers to portray me (and anyone else who dares challenge his legal team’s blatant fraud) as a paid puppet of Chevron, I think Donziger may have a good chance on his appeal. Not on the findings of fact and law as to his fraud and other misconduct; in my view the evidence on those findings is overwhelming. But on a question of law, namely whether RICO permits private civil suits for exclusively equitable relief (as opposed to relief “at law,” such as money damages).

    Chevron sought only equitable relief. It may well lose on this point of law. In the event the company does lose on that point, however, the issue to watch will be what the court of appeals says, if anything, in regard to Judge Kaplan’s findings of fact and of fraud. As long as they remain intact, they will add to plaintiffs’ difficulties in enforcing their judgment (in any jurisdiction). So, again, if the Amazonians are ever to get a fair shake, this multi-party litigation should be settled.

    • The fact that Cassel can read the writing on the wall, recognize that Chevron’s case will soon face a non-Kaplan audience in the form of the Second Circuit, and start covering himself in the event of a reversal does not make him less of a Chevron puppet. Cassel seems to agree that Chevron gravely imperiled the viability of its entire multi-billion dollar RICO case by only seeking equitable relief. As I noted earlier, it did so in order to avoid having to present the facts of its case to an impartial jury and instead leave the whole thing in Kaplan’s hands. Enough said.

      • Mr. Page’s resort to vitriol (“rants,” “puppet,” “utterly disingenuous”) should alert readers to the lack of substance in his vigorously asserted comments. Were I to accept his invitation to specify, item by item, his litigation team’s fraud, bribery, extortion, money laundering, witness tampering and obstruction of justice — not as asserted by me, but as now adjudicated by a federal court — I would be required to repeat large portions of Judge Kaplan’s nearly 500-page judgment. That treat, I suspect, is one to which few readers of this blog page would wish to be subjected.

        Understandably Mr. Page refers readers to the appellate brief filed last week on behalf of his colleague, Mr. Donziger. As I have said, I believe that Donziger may well prevail on appeal on one or more issues of law argued in that brief.

        On issues of fact and fraud, however, the new brief, like Mr. Page, either treats the evidence of Donziger’s culpability one-sidedly or dodges it altogether. For example, argues the brief (like Mr. Page), never mind that Donziger had his consultants secretly write the Ecuadorian court’s expert report, and then lied about it, including to US courts and to his own co-counsel. Any such facts, they argue, need not now be considered, because the report was supposedly later disregarded by the Ecuadorian courts, which found all kinds of reasons not to specifically address the fraud that underlay the report.

        Yet, whether or not that particular display of chicanery eventually infected the final Ecuadorian judgment, it illustrates the sort of unblinking fraud of which Donziger is capable, and to which he resorted repeatedly in the Ecuadorian litigation, as Judge Kaplan ruled.

        One-sided advocacy is of course to be expected from a brief filed by one party in a litigation. No one would expect Donziger’s own appellate brief to be even-handed or objective. I invite any readers who are ambitious enough to read Donziger’s self-serving rewrite of history in his new brief, also to read Chevron’s answering brief when it comes out, and — most important — the appeals court’s eventual ruling, once that court has received full briefing and argument.

  16. Doug
    It has been a busy week, and I intended to address the remainder of your last post today. However, I see that the discussion has largely overtaken me, and that Aaron Marr Page, who is infinitely better qualified than me to make the case for the Ecuadorians, is doing so. For that reason, my contributions I think are redundant, and I shall leave it to the lawyers. I understand that the appeal has now been lodged with the second circuit, following which we will all hopefully have a clearer picture.