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July 30, 2008 7:17 PM

Ecuadorian Plaintiffs' Wildcard Against Chevron: Obama

Posted by Brian Baxter

Twenty miles south of the jungle territory patrolled by Colombian leftist guerrillas and paramilitaries lies the ramshackle Ecuadorian city of Lago Agrio. It is there, in a dilapidated courthouse, that corporate lawyers employed by Chevron are engaged in a similar war of attrition with a group of determined plaintiffs lawyers.

The plaintiffs--some 30,000 residents of Ecuador's Amazon Basin known as the Amazon Defense Coalition and backed by Philadelphia plaintiffs firm Kohn Swift & Graf--hope to hold the second-largest oil company in the U.S. accountable for alleged environmental abuses committed by White Plains, N.Y.-based Texaco, which Chevron bought for $35 billion in 2001. Texaco spent 30 years in the region, pumping billions of gallons of oil hundreds of miles west over the Andes to Ecuador's port cities for shipment to the U.S.

The American Lawyer examined the case--Aguinda v. Texaco--in its Fall 2006 Litigation Supplement [registration required for link; PDF below]. Jones Day, led by partner Thomas Cullen, Jr., replaced King & Spalding as lead U.S. counsel for Texaco after its acquisition by Chevron. Quito-based lawyers Adolfo Callejas and Rodrigo Perez are serving as local counsel and Chevron's associate general counsel for Latin American litigation, Ricardo Reis Veiga, is handling matters in-house.

Now Newsweek reports that Chevron received some unwelcome news this spring when a court-appointed expert stated that the company should pay $8-16 billion to clean up the jungle and any waterways ravaged by oil pollution. Chevron has since turned to a "powerhouse team" of lobbyists, including former Senate majority leader Trent Lott, former Democratic senator and Patton Boggs senior counsel John Breaux, and Wayne Berman, a top fund-raiser for presidential hopeful John McCain. San Ramon, Calif.-based Chevron is seeking to have the Bush administration revoke special trade preferences for Ecuador if the country doesn't put the kibosh on the Lago Agrio proceedings--now in their fourth year.

"The ultimate issue here is Ecuador has mistreated a U.S. company," Newsweek quotes one unidentified Chevron lobbyist as saying. (The company claims that it's the victim of a corrupt Ecuadorian judicial system.) "We can't let little countries screw around with big companies like this--companies that have made big investments around the world."

But plaintiffs aren't letting Chevron get the upper hand. Newsweek reports that after lead plaintiffs attorney Steven Donziger, of counsel at New York's Perlmutter & Gimpel, made a presentation to Barack Obama several years ago, the senator cowrote a letter with Democratic senator Patrick Leahy to U.S. Trade Representative Rob Portman, urging Portman to allow plaintiffs to have "their day in court."

An Obama spokesperson confirmed to Newsweek last week that his position on the matter remains the same. The prospect of an Obama presidency figures to sustain local plaintiffs counsel--led by Lago Agrio-based solo practitioner Pablo Fajardo, profiled in a May 2007 feature in Vanity Fair--in their fight against the oil giant.

Download "Jungle Warfare" from The American Lawyer's Fall 2006 Litigation Supplement.

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