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November 8, 2010 9:53 PM

Chevron in Ecuador: More Tapes the Plaintiffs Don't Want You to See

Posted by Michael D. Goldhaber

Federal district judge Lewis Kaplan in Manhattan has another word or two to say about Chevron in Ecuador. In a new ruling with the volume dial turned up to 11, Judge Kaplan concluded that the need to depose lead U.S. plaintiffs lawyer Steven Donziger is "extremely great." In the process, he fleshed out the evidence he perceives of fraud on the Ecuadorian courts--drawing on the outtakes from the film Crude that are excerpted below.

Asked for additional comment, plaintiffs asked readers to view their own collection of outtakes, and offered a statement responding to the first six outtakes that were posted by The American Lawyer and Corporate Counsel. Donziger did not respond to additional requests for comment. In past interviews he has stressed the preliminary and weak standard of evidence applicable in discovery rulings. Both plaintiffs and Donziger have denied any misconduct.

Judge Kaplan offered a close reading of a scene already posted by Corporate Counsel. In this clip, plaintiffs hold a meeting on March 3, 2007, with their own team and the soon-to-be court-appointed expert, Richard Cabrera. The judge sees it as evidence that plaintiffs secretly orchestrated the expert's damages assessment, known as the Cabrera report.

Kaplan also made three less obvious points about the Cabrera report. He cited evidence that Cabrera was handpicked by plaintiffs. He noted that Cabrera himself vowed to "perform his duties...with complete impartiality and independence vis-à-vis the parties." And he concluded that a translation discrepancy identified by the plaintiffs is immaterial.

Kaplan questioned many other aspects of the plaintiffs' conduct.

In concluding that Donziger is generally not protected by attorneys' privileges, Judge Kaplan stressed that Donziger was acting less as a lawyer than as the "field general in this political battle." His political acts, Judge Kaplan suggested, may have included "intimidation of the Ecuadorian courts, [and] attempts to procure criminal prosecutions for the purpose of extracting a settlement." Judge Kaplan's November 5 opinion cited all of the outtakes posted below.

Most of the clips deal with the evidence perceived by Judge Kaplan to suggest that plaintiffs engaged in the "intimidation of Ecuadorian courts." Although the plaintiffs now argue that Ecuador's courts are fine and dandy, in the outtakes Donziger repeatedly calls them weak and corrupt. (Back in 2003, Texaco was praising Ecuador's courts. An article in the April issue of Corporate Counsel has argued that federal district judge Jed Rakoff was wrong and naïve to believe them.)

The last clip concerns what Judge Kaplan saw as evidence of attempts by plaintiffs "to procure criminal prosecutions" of nine lawyers. When Texaco ended its operations in Ecuador, it conducted a limited cleanup (which plaintiffs call a sham). Ecuador ostensibly released the oil company from liability.

That release was signed by seven state attorneys and two lawyers for Texaco: Ecuadorian counsel Rodrigo Peres Pallares; and Chevron in-house counsel Ricardo Reis Veiga. Judge Kaplan cited evidence that plaintiffs lobbied Ecuador to prosecute them.

Judge Kaplan's opinion also cited an e-mail from 2004, touted by Chevron as a smoking gun. In it, Ecuador's deputy attorney general wrote to plaintiffs that such prosecutions might be a "way to nullify or undermine the value of" Texaco's release from liability, despite the fact that evidence of criminal liability had already been rejected by prosecutors.

In Judge Kaplan's account, the criminal cases arising out of Texaco's cleanup may also be tainted because the controversial Cabrera damages report was used by current Ecuadorian officials to help justify bringing prosecutions against the nine lawyers, whom their predecessors had declined to prosecute for lack of evidence. Thus, Judge Kaplan suggested that the deposition of Donziger may be needed to exonerate the criminal defendants.

Sooner or later, the Ecuadorian courts will have an opportunity to respond to Judge Kaplan's account of the evidence. A hearing on whether the criminal prosecutions will proceed is scheduled for January 5.

As for the trial in the environmental litigation against Chevron, being held in the Amazon oil town of Lago Agrio, Judge Kaplan expressed concern that Chevron "stands in jeopardy of a huge judgment that, if ultimately rendered, could be the result of a fraud."

Plaintiffs strongly deny all fraud. They have also argued that, to the extent any fraud is established, it will not taint any judgment to emerge from the Ecuadorian court. Their new damages recommendation of up to $113 billion, they say, is unconnected to the Cabrera report.

For its part, Chevron has continued to file section 1782 motions in U.S. courts for discovery in aid of foreign proceedings. By plaintiffs' count, there are now motions in 15 district courts against 30 of their lawyers and consultants. In recent weeks, Chevron has asked for discovery of the six experts undergirding plaintiffs' new recommendation of up to $113 billion in damages. Presumably, Chevron would like to demonstrate that the new experts are tainted by Cabrera—and to keep fleshing out the allegations of fraud rehearsed at length by Judge Kaplan.

Judge Kaplan suggests that the discovery of Donziger that he has authorized fulfills the purpose of section 1782 by supporting the delivery of justice in three foreign tribunals. Aside from the criminal hearing in Quito, Kaplan has in mind the main event in Lago Agrio--and the investment treaty claim filed by Chevron at the Permanent Court of Arbitration. If the judge in the Amazon court fails to respond to Judge Kaplan, Chevron has asked the arbitrators to declare that Chevron is not liable at trial.

The ball is now in the foreign tribunals in Quito, Lago Agrio, and The Hague.

VIDEO I: 'Killing the Judge?'

VIDEO II: 'It's Dirty ... It's Necessary'

VIDEO III: 'Brute Force'

VIDEO IV: Calling for Heads to Roll

 

EARLIER CHEVRON TAPES:

VIDEO I: Planning for the Expert's Report

VIDEO II: The Morning After

VIDEO III: A Message to the Court: Don't F--- with Us

VIDEO IV: 'A Political Force' to Protect Against Corruption

VIDEO V: 'Smoke and Mirrors and Bulls---'

VIDEO VI: A Vision of the Future

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