February 3, 2011 8:30 AM

Chevron Files RICO Suit Against Steven Donziger, Ecuadorian Plaintiffs, and Expert Consultants

Posted by Alison Frankel

From The Am Law Litigation Daily

For months, Chevron and its lawyers at Gibson, Dunn & Crutcher have been engaged in an unprecedented effort to obtain discovery in the U.S. courts with the aim of discrediting any potential award against the company in the Lago Agrio environmental contamination case in Ecuador. Now, with the Ecuadorian court poised to deliver a judgment that's expected to be in the tens of billions of dollars, Chevron has produced a 207-page complaint in Manhattan federal district court that pulls together the evidence it has obtained into an assertion of a conspiracy to extort a multibillion-dollar settlement from the oil company.

The civil Racketeer Influenced and Corrupt Organizations Act suit names as defendants (among others) plaintiffs lawyer Steven Donziger; two Ecuadorian plaintiffs lawyers; the 47 plaintiffs who purportedly filed the long-running Lago Agrio action in Ecuador; the nonprofit Amazon Defense Front, and Stratus Consulting, which provided expert scientific services to the plaintiffs. The complaint also identifies as nondefendant coconspirators other law firms that have represented the Ecuadorian plaintiffs--Emery Celli Brinckerhoff & Abady and Patton Boggs--and firms that have provided financing for the Lago Agrio suit, including Kohn Swift & Graf, Motley Rice, and Burford Group.

The allegations in the new suit are familiar to anyone who's been following Gibson Dunn's astonishingly productive 28 U.S.C. section 1782 discovery campaign, in which, as Michael D. Goldhaber has discussed in Global Lawyer posts for the Litigation Daily (here and here), Chevron has prevailed in all nineteen of the discovery motions it has filed against individuals associated with the Ecuadorian plaintiffs. The fruits of Chevron's discovery campaign include hundreds of hours of outtakes from a documentary film about the Lago Agrio litigation, as well as virtually all of Donziger's work product--e-mails, diaries, strategy memos, and more--from the Lago Agrio case.

The new RICO suit claims, among other allegations, that Donziger, with early financing from Kohn Swift, drummed up the Lago Agrio litigation with the goal of reaping hundreds of millions of dollars of legal fees. Chevron asserts that Donziger is an accomplished political operative who established a relationship with the Ecuadorian government in order to further the litigation. The complaint details Donziger's alleged efforts to work with Stratus to produce a ghostwritten report for the purported Ecuadorian court-appointed neutral expert, alleged coconspirator Richard Cabrera. It also contains assertions that Donziger influenced Ecuadorian prosecutors to bring criminal charges against two Chevron lawyers who signed an agreement attesting to the remediation of contamination in the Lago Agrio region; and offers evidence that Donziger and the other conspirators schemed to deceive Congress, the U.S. media, and Chevron shareholders about the merits of the Lago Agrio case.

Chevron seeks, in addition to monetary damages and attorneys fees, an injunction barring anyone identified in the complaint as a conspirator from attempting to enforce any judgment agains the oil company in the Lago Agrio case. It also wants a declaration that any judgment the plaintiffs obtain in the Ecuadorian courts is unenforceable.

Plaintiffs spokesperson Karen Hinton, who is named as a nondefendant coconspirator in the RICO suit, sent us an e-mail statement. "This outrageous action today is corporate bullying at its worst," the statement says, in part. "Chevron is trying to turn the victims of its own misconduct into criminals. Victimized once by the company's intentional contamination of their land, they are being persecuted again by Chevron's unconscionable legal attack. Chevron is cornered by the overwhelming evidence and desperate to escape the court of its own choosing. Chevron fought for ten years to move this case from the United States to Ecuador. Now that the evidence is in, Chevron is running fast and furious away from its misconduct with over-reaching efforts, such as this, to discredit the case. At the end of the day, science will triumph over intimidation." (The plaintiffs press release addressing the Chevron filing is here.)

Hinton also sent a statement from Gerald Lefcourt, who represents Donziger. "There is about to be a verdict in Ecuador finally holding Chevron accountable for the wanton destruction of the health, the homes, the communities, and the livelihoods of indigenous peoples in that country," it says. "Chevron is desperate to distract attention away from the decision we expect, which will require Chevron to clean up the mess it left there. The lawsuit Chevron filed today is a cynical bid to buy cover. Chevron just wants to tell its shareholders, its partners, its bankers, and Wall Street that it has a way to avoid paying the billions of dollars it will take to address the harm it caused."

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