Chevron Blames Lawyer's "Racketeering Enterprise" for Massive Ecuardorean Judgment Against It

Last month (September 26), I blogged about a recent decision of Justice D.M. Brown of the Ontario Superior Court of Justice, who granted Chevron Corp.'s  stay of an action  commenced by Ecuadorean plaintiffs to enforce what was at that time a $17.2 billion judgment rendered against Chevron's predecessor, Texaco, for allegedly polluting Ecuador's Amazon Basin.  In his reasons for dismissing the motion, Justice Brown mused about why the plaintiffs had chosen to attempt to enforce the judgment in Ontario, where Chevron had no assets, "As I stated during the hearing, the jurisdiction in which the judgment debtor owns assets is only a short distance from this courthouse - in less than an hour's drive one can cross a bridge which takes you into the very state in which Chevron initiated its anti-enforcement injunction proceedings".  

Well, it looks like Chevron, at least, was listening to the judge's admonition.  In a trial commencing this week in Manhattan, Chevron is asking a federal court in New York to prevent the plaintiffs and their lawyer from using the US courts to enforce the Ecuadorean judgment.  The trial is being heard before US District Judge Lewis Kaplan, the very judge that first tossed out the plaintiffs' action saying that "the case had nothing to do with the United States".   The twist in this trial is that Chevron, the huge multi-national company, is accusing the plaintiffs and their lawyer, Steven Donziger, of fraud.  In a bit of hyperbole, worthy of any trial attorney, a lawyer for Chevron said the proceedings in Ecuador were "one of the most egregious litigation frauds in history".  Chevron is accusing Donziger and his associates of running a racketeering enterprise by bribing the judge who wrote the Ecuadorean judgment and of even writing part of the judgment themselves.  Observers have said that this case "exemplifies a new pattern of corporations seeking to crush personally plaintiffs' lawyers who bring sizable liability claims".  

In their defence, Donziger and the plaintiffs are accusing Justice Kaplan of bias.  Kaplan recently issued a 104 page pre-trial ruling warning that he has already determined "there was probable cause to suspect a crime or fraud" by Donziger in connection with the fabrication of scientific evidence, through the coercion of one Ecuadorean judge, the bribing of other Ecuadorean judges, and the ghost writing of a critical report supposedly composed by independent court-appointed official.  Kaplan also added that he suspected that Donziger's legal team in Ecuador secretly wrote some or all of the February 2011 court judgment.     

Chevron and its lawyers are seeking a ruling barring Donziger and the other plaintiffs' lawyers from trying to enforce the judgment in courts around the world wherever Chevron may have assets.  One of the reasons that Justice Brown stayed the action in Ontario was that it was shown by the evidence that Chevron had no assets in Ontario.  Justice Brown held, "Ontario courts should be reluctant to dedicate their resources to disputes where, in dollar and cents terms, there is nothing to fight over.  In my view, the parties should take their fight elsewhere to some jurisdiction where any ultimate recognition of the Ecuadorian judgment will have a practical effect."  

There is an incentive for Donziger to do so.  He and the other plaintiffs' lawyers could collect as much as $1.2 billion in fees as their portion of the judgment.

(with reports from Bloomberg.com and the National Post)

Regards,

Blair