Judge Kaplan Lays In to Plaintiffs in Ecuador Suit Against Chevron

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November 5, 2010 6:56 PM

Judge Kaplan Lays In to Plaintiffs in Ecuador Suit Against Chevron

Posted by Michael D. Goldhaber

In a strongly worded opinion released Friday, federal district judge Lewis Kaplan in Manhattan elaborated on his reasons for allowing Chevron Corporation to depose Steven Donziger, the U.S. plaintiffs attorney in the massive environmental tort litigation against Chevron in Ecuador. Earlier this fall, Chevron had moved to depose Donziger, claiming that the trial in Ecuador had been tainted by fraud by the plaintiffs; in an October 20 order, Kaplan allowed additional discovery from Donziger.

In Friday's opinion, Kaplan concluded that "the need is extremely great" to depose Donziger. He based his decision on outtakes from a documentary on the litigation, Crude--footage that Chevron had subpoenaed and submitted in support of its fraud allegations.

Kaplan found "substantial reason to believe that [Richard] Cabrera, the supposedly neutral expert [appointed by the Ecuadorian court in Lago Agrio], worked in collusion with the plaintiffs." Breaking it down further, he points to "substantial evidence that (1) Cabrera was appointed as a result of Lago Agrio plaintiffs' ex parte contacts with and pressure on the Ecuadorian courts, (2) at least part of his report was written by consultants retained by the Lago Agrio plaintiffs, and (3) the report was passed off as Cabrera's independent work."

There was more bad news for Donziger. Chevron had been joined in its discovery motion by two lawyers who worked for Chevron's predecessor Texaco. They are currently being prosecuted by Ecuador, along with seven government attorneys, for signing off on Texaco's cleanup of oil sites when it left the country. The criminal case against them in Ecuador, Kaplan wrote, "appears to have been instigated by Donziger and others working with him for the base purposes of coercing Chevron to settle and undermining a significant element of its defense in Ecuador."

In Kaplan's view, these and other episodes raise "substantial questions as to [Donziger's] possible criminal liability and amenability to professional discipline."

Donziger did not respond to a request for comment. In past interviews, Donziger has denied improper conduct, and emphasized that all discovery rulings are based on a weak and preliminary standard of proof.

Plaintiffs spokesperson Karen Hinton issued a statement: "The outtakes Chevron edited and submitted to the court represent less than one-tenth of the 600 hours shot over three years. Chevron has taken them out of context, provided inaccurate translations and in the words of one U.S. judge made 'a mountain out of a molehill.' They show longtime colleagues making jokes, exaggerating for effect and offering stray personal opinions in free-wheeling, brainstorming sessions that are of no legal significance.

"The real legal significance can be found in the overwhelming scientific evidence against Chevron before the court in Ecuador, including a damages assessment of $113 billion recently put forth by six prominent American experts. The evidence includes more than 64,000 chemical sampling results at trial that point to Chevron's culpability. It includes proof that the waste pits that Chevron claimed it had remediated have levels of toxic contaminants dozens of times higher than the maximum allowed in the U.S. and Ecuador. The evidence wholly exposes the fraud in Chevron's claim that the contamination it caused was 'remediated' and poses no risk to human health. The evidence means that Chevron faces a substantial risk of an enormous adverse judgment in Ecuador and is desperate to evade justice."

The force of Judge Kaplan's new ruling raises two intriguing questions, with the potential to affect the trajectory of this epic dispute. Does there come a point where evidence of fraud is so overwhelming that it must be acknowledged by the Ecuadorian courts? More immediately, will the embarrassment be too great for The Am Law 100 firm that plaintiffs have said is on the verge of joining their team?

"Anyone jumping into bed with plaintiffs at this point needs to understand what they're signing on to," says Chevron spokesperson Kent Robertson. "They will be funding a fraudulent lawsuit."