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August 13, 2010 12:30 PM

The Global Lawyer: Plaintiffs Counsel Suing Chevron in Ecuador Engaged in Some Crude Lawyering

Posted by Michael D. Goldhaber

From The Am Law Litigation Daily

The story of Chevron in Ecuador already bears a remarkable resemblance to that of Dole in Nicaragua. A U.S. company persuades a U.S. judge to toss out an alien tort claim on forum non conveniens grounds. U.S. plaintiffs lawyers then seek jackpot damages in a Latin American court (while being lionized in a controversial documentary). The corporation discredits the Latin American court by returning to the U.S. courts and alleging fraud.

In Dole's case, a judge in California state court found that some of the plaintiffs lawyers had misled the court. In the Chevron case, it appeared that the actor most clearly discredited was the Ecuadorian judge caught on film discussing damages with an outside party. But last week, as the Litigation Daily previously reported, Chevron's lawyers at Gibson, Dunn & Crutcher filed a brief asserting that outtakes from the documentary Crude, turned over by the filmmaker in response to a Second Circuit discovery ruling, suggest that the plaintiffs lawyers themselves choreographed an "independent" expert's report recommending up to $27 billion in damages. (Transcripts are available here and here.)

Last year plaintiffs countered coverage of the judicial bias videotapes by attacking the motives and background of the American who secretly filmed the judge. Explaining the newly released footage will be more difficult. Based on what is known so far about the Crude outtakes, outrage seems appropriate. While the footage raises interesting questions of filmmaking ethics, what matters for the litigation is the apparent evidence of collusion between plaintiffs and court-appointed expert Richard Cabrera.

The footage shows that two weeks before his appointment as the global expert on damages, Cabrera was present at a March 3, 2007, meeting at which plaintiffs lawyers and consultants planned extensive coordination with him. According to a transcript of the tape, in the course of discussing the plan, plaintiffs lawyer Steven Donziger says to Cabrera: "Richard, of course you really have to be comfortable with all that." Pablo Fajardo, the local plaintiffs lawyer, exhorts everyone present to "make certain that the expert constantly coordinates with the plaintiffs' technical and legal team." He also notes: "Chevron's main problem right now is that it doesn't know what the hell is going to happen in the global expert examination."

"I hope none of you tell them, please," Fajardo adds. After the laughter fades, he sums up: "What the expert is going to do is [unintelligible] and sign the report and review it. But all of us [unintelligible] have to contribute to that report."

Cabrera's presence in the video is disturbing because Cabrera and the plaintiffs have repeatedly affirmed to the Ecuadorian court in Lago Agrio--and plaintiffs lawyers have affirmed to multiple U.S. courts--that Cabrera acted as an independent arbiter. Thus, Cabrera, to the Lago Agrio court: "Your honor, being the professional that I am and in compliance with the orders issued by you regarding my designation...I have performed my work with absolute impartiality, honesty, transparency, and professionalism." On another occasion, Cabrera told the court that he had decided to "not allow any person associated with the parties to participate in my work." Fajardo stated in one press release: "Chevron's claim that Professor Cabrera is cooperating with the plaintiffs is completely false." In another public statement, he called Chevron's allegations of collusion false and defamatory.

Chevron says that its forensic studies show extensive use of material by plaintiffs' environmental consultants in Cabrera's 4,000-page report, and that this has been confirmed in Chevron's initial discovery efforts under 28 U.S.C. section 1782. Chevron asserts that Cabrera's whole report was initially written in English, probably by the plaintiffs or their contractors--and only translated into Spanish for show.

In response to the newly discovered footage, the plaintiffs respond that Chevron omitted important context. Plaintiffs say that the filmmaker has shared with them another seven hours of footage, which they aim to submit to federal court on Thursday. This footage will be scrutinized closely by all who follow the case. But it is hard to imagine what can mitigate apparent evidence of collusion--unless that was Cabrera's body double present at the meeting.

The second argument offered by plaintiffs is that Cabrera's report is only one of more than 100 expert reports submitted to the court in Ecuador. However, Cabrera's report is the only global damages report, and for years it has been the centerpiece of plaintiffs' strategy. After Cabrera's report came out, plaintiffs hailed it as a major and historic victory and touted it at every opportunity.

But the main argument offered by plaintiffs' spokesperson Karen Hinton is that Cabrera's ex parte meeting with the plaintiffs, and their sharing of materials with him, is permissible under Ecuadorian law; that Chevron met ex parte with other experts and had an opportunity to share materials with Cabrera (though it chose not to); and that there was nothing secret about any of this because each side knew or assumed that the other side was doing so. In Hinton's view, undisclosed ex parte meetings and undisclosed sharing of materials does not impugn an expert's independence in Ecuador.

Yet Cabrera's statements to the Lago Agrio court suggest that secret collaboration was recognized as problematic. Why did he and the plaintiffs deny that they were cooperating? Ex parte meetings and sharing of materials with an expert may be acceptable even in the United States under some circumstances. But for an expert to consult secretly with one party on matters of substance appears to violate due process. To wave the flag of cultural relativism here is an insult to Ecuador, just as it was when plaintiffs cited "legal culture" in defense of Judge Juan Nunez's apparent improprieties.

"Collusion to me is when you get together, and I tell you what to say, and you go write it," plaintiffs' spokesperson Hinton told me. But, arguably, that's what seems to be happening in the Crude transcripts that have so far been released.

The first lesson of the Chevron and Dole cases is that U.S. courts should not offshore justice to corrupt judicial systems. The second lesson is that if U.S. plaintiffs lawyers are set loose in corrupt judicial systems, they may still need to be held in check by U.S. courts.

 

This article originally appeared on The Am Law Litigation Daily.

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