The Chevron Ecuador Lawsuit Trial | Chevron's Views & Opinions

Chevron today released a series of seven videos that provide a never-seen-before look at the case in Ecuador. From the history of oil production in the region to the pervasive fraud plaguing the litigation, the videos detail all aspects of the situation including the legal and scientific deceptions committed by the plaintiffs’ team in pursuit of a misguided and meritless lawsuit.

Please click on the video below: An Introduction to Aguinda v. Chevron

Company Remains Resolute in Efforts to Hold Perpetrators of Fraud Accountable

The Southern District of New York today issued an order upholding Chevron’s CVX -0.73%  complaint for racketeering, fraud, conspiracy and New York Judiciary Law 487, which provides for civil damages against an attorney who engages in deceit or collusion with intent to deceive a court, against U.S. plaintiffs’ lawyer and RICO defendant Steven Donziger, related to the long-running environmental case against the Company in Ecuador.

As the Court noted in its opinion, Chevron “alleges that the RICO defendants are executing a multi-faceted, extortionate scheme that included not only bringing the Lago Agrio case, but also intimidating of Ecuadorian judges, fabricating evidence, making false statements to U.S. courts, Congress, the SEC, and the media, and bringing false criminal charges, all for the purpose of coercing Chevron ‘into paying to stop the campaign against it.’” Judge Kaplan, in his order, also ruled that “Chevron’s extortion allegations are more than sufficient.”

Furthermore, the order rejected all of Donziger’s challenges to Chevron’s allegations under the federal RICO statute, finding that Chevron had adequately stated claims for mail and wire fraud, money laundering, obstruction of justice, and witness tampering. The Court also held that Chevron had stated valid claims under common law fraud and the New York Judiciary Act, which creates civil liability for lawyers who attempt to deceive courts.

“Chevron is pleased with the Court’s order, which upholds the core of Chevron’s RICO claim on every predicate criminal act asserted by the company,” said Hewitt Pate, Vice president and General Counsel. “We are eager to move forward with our racketeering case to hold the perpetrators of this unprecedented fraud and misconduct accountable.”

In a separate order also issued today, the court declined to grant Chevron’s motion to attach the defendants’ assets. In response to this order Pate continued, “Chevron will continue to use all means at its disposal to defend against the fraud being perpetrated by the plaintiffs’ lawyers.”

Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

Chevron’s Ecuador Morass

The U.S. oil company charges that the $18 billion judgment against it was secured by fraud.

To play the video content associated with this story please click here.

Chevron Corporation went to U.S. federal court in Miami on May 4 seeking the records of eight accounts at Banco Pichincha in Ecuador. The oil company maintains that these records could prove that an Ecuadorean geological engineer, who was hired by the court to be an independent expert in the case of Maria Aguinda y Otros vs. Chevron, was bribed by plaintiffs lawyers. Both the expert and the plaintiffs lawyers deny the charge.

Chevron bought Texaco in 2001. In 2003, 48 Ecuadoreans sued the company in Ecuadorean court, alleging that Texaco, which operated in Ecuador from 1972 through 1992, damaged public lands in the Amazon jungle. In February 2011, the court ruled in favor of the plaintiffs and assigned damages and penalties totaling a whopping $18.2 billion, including $8.6 billion in punitive damages because Chevron failed to apologize.

Of course it is possible that the $40 million that Texaco spent in a cleanup when it left Ecuador was inadequate, even though the government inspected it and in 1998 signed off on the remediation. But state-owned, environmentally challenged PetroEcuador, the company that assumed Texaco’s Ecuador assets 20 years ago, now puts the cost of cleaning up its operations at $70 million. So naturally the sheer magnitude of the judgment invites scrutiny.

Chevron charges that the case was fraught with fraud, both on the part of plaintiffs lawyers and the Ecuadorean court. It has filed a RICO (racketeering) suit in the New York Southern District Court against the Amazon Defense Coalition (ADC)—a nongovernmental organization that advocates on behalf of the lawsuit—as well as the plaintiffs and some of the plaintiffs lawyers and consultants.

One of Chevron’s allegations is that geological engineer Richard Cabrera, the court-appointed “independent” expert who would assess the rain forest damage, was working secretly for the plaintiffs lawyers. It cites outtakes from the ADC film “Crude” that show the two sides meeting together before his appointment and documents secured through discovery in U.S. courts to support that allegation. Chevron also claims that documents prepared by the plaintiffs lawyers became part of the Ecuadorean court’s judgment, which it says casts doubt on the court’s neutrality.

ADC spokeswoman Karen Hinton says that Mr. Cabrera’s report contains identical language as a report prepared by the plaintiffs lawyers because their findings were the same, and that plaintiffs lawyers met with Mr. Cabrera “consistent with court rules.” As to the plaintiff documents found in the court’s judgment, Ms. Hinton argues that they were there legitimately because they “were submitted into the record.”

Chevron has gone to U.S. federal court more than 20 times trying to show that fraud was committed by certain plaintiffs lawyers and their consultants and thereby obtain documents that it believes will demonstrate that the case was rigged. In nine instances U.S. courts have sharply criticized the Ecuadorean court proceedings.

In one instance, addressing Chevron’s claim that the plaintiffs’ representatives “ghostwrote” Mr. Cabrera’s report, the U.S. District Court for the Western District of North Carolina observed that “While this court is unfamiliar with the practices of the Ecuadorian judicial system, the court must believe that the concept of fraud is universal, and that what has blatantly occurred in this matter would in fact be considered fraud by any court. If such conduct does not amount to fraud in a particular country, then that country has larger problems than an oil spill.” Patton Boggs, which is acting on behalf of the plaintiffs, says the various courts’ statements about fraud were “made in the narrow context of determining whether there was a basis for waiver of the attorney-client privilege based upon the crime-fraud exception”—in other words, to justify Chevron’s getting access to the documents.

Chevron has also raised questions about who benefits from the huge judgment. The Ecuadorean court ordered that an ADC-established trust handle roughly $8.7 billion of the payout for environmental remediation, clean water, public health and community projects. It also ordered a 10% award for the ADC. But individual plaintiffs seem to get nothing, and the court’s supervisory role over the trust in a country not famous for judicial integrity is hardly reassuring.

This leaves an amount roughly equal to the punitive damages of $8.6 billion unassigned. Chevron says that documents it has secured in discovery indicate that at the time of the judgment more than $5.7 billion of the payout was spoken for by interests outside the Indian community. They included Patton Boggs and the U.K.-based investor Burford Group, which does “litigation financing.” Burford has admitted that it had invested $4 million in the case but sold its interest to a third party. It now only has a “residual interest in the outcome.” Patton Boggs says it does not comment on fee arrangements with clients.

ADC spokeswoman Karen Hinton denies that outsiders are big winners. “The lion’s share of the payment will go back into the rainforest and for the people,” she insists. Perhaps a U.S. court can get to the bottom of it all.

-Mary Anastasia O’Grady-Wall Street Journal

State fails to comply with international arbitral award alleging human rights concerns

The Republic of Ecuador has refused to enforce an interim arbitral award issued by an international arbitral tribunal. The tribunal had directed Ecuador to halt an ongoing judicial proceeding between a group of Ecuadorian citizens and a multinational corporation until it rules on the merits of the dispute. The court ruled that it would not abide by the arbitral award because the interim award conflicted with human rights treaties of which Ecuador is a signatory. Facts In 2003 a group of Ecuadorian citizens from the Amazonian region of the country filed a lawsuit against Texaco Petroleum Company, a US oil multinational which merged with Chevron Corp in 2001. The plaintiffs alleged in their complaint that Texaco had caused environmental damage during the years when the US company and Petroecuador, the Ecuadorian state oil company, operated fields in the province of Sucumbíos. The plaintiffs sought to recover approximately US$29 billion in damages. The plaintiffs filed their complaint with the Sucumbíos Provincial Court after they had tried unsuccessfully for almost a decade to have their case heard by the New York courts.(1) One of the defences raised by Chevron before the Ecuadorian court was that Petroecuador was bound to appear as co-defendant in the proceeding by virtue of two agreements that it had signed in 1995 and 1998. In those agreements, Petroecuador had released the US company of any environmental liability once the foreign investor had conducted extensive remediation operations in the fields. The proceedings in Ecuador have been marred with controversy. The defendant argued that Petroecuador had colluded with the plaintiffs in order to evade its legal responsibilities and to obtain a financial windfall from Chevron. According to Chevron, the Ecuadorian courts did not guarantee it due process. Furthermore, the defendant claimed that the plaintiffs, experts and judges had committed acts of corruption. The plaintiffs and the Ecuadorian authorities denied any wrongdoing.

In September 2009 Chevron submitted a request for an international investment arbitration under the terms of the US-Ecuador Bilateral Investment Treaty.(2) Chevron argued that Ecuador breached its obligations under the treaty, including the fair and equitable clause.

Read more »

Chevron Loosed From $22M Bond In Ecuador Pollution Fight

A New York federal judge freed Chevron Corp. on Monday from a $21.8 million bond linked to a now-overturned injunction on an $18 billion Ecuadorean pollution judgment against Chevron, slamming Patton Boggs LLP’s attempts to collect on the bond.

U.S. District Judge Lewis Kaplan ordered Chevron to post the bond to compensate the Ecuadorean defendants in case the preliminary injunction, issued in March 2011, was later overturned. The Second Circuit vacated the preliminary injunction in September.

In Monday’s ruling, Judge Kaplan pointed out the $18 billion judgment against Chevron was unenforceable anyway throughout the entire period the preliminary injunction was in effect because an appeals court in Ecuador did not uphold the judgment until Jan. 3.

“The defendants do not claim any injury flowing from the fact that they were enjoined from seeking to enforce the judgment because, by their own admission, they were not free to have done so at any time during which the injunction was in effect,” Judge Kaplan said.

Judge Kaplan also blasted Patton Boggs, which represents some Ecuadoreans in the fight over the $18 billion judgment, for trying to collect on the bond through a New Jersey lawsuit brought on behalf of the law firm.

“The plaintiff law firm in the New Jersey action has no legally sufficient claim on the bond — either there or here — because the bond runs in favor only of the defendants in this action,” Judge Kaplan said, adding that attorneys’ fees are not recoverable on a preliminary injunction bond even if it is overturned on appeal.

With the New Jersey suit, Patton Boggs sought to collect fees incurred fighting the injunction and additional damages for what it called Chevron’s malicious prosecution. The firm argued that Judge Kaplan’s order had left the Ecuadoreans holding a judgment with inadequate resources to enforce it and left counsel like Patton Boggs with unpaid bills.

Chevron has accused Patton Boggs of engaging in forum-shopping to avoid Judge Kaplan.

The New York judge essentially agreed, saying none of the defendants in the lawsuit nor Patton Boggs had submitted claims for damages in his court even though it had the most familiarity with the dispute.

“They must live with the consequences of their tactical decision to forgo that opportunity,” Judge Kaplan said.

Randy Mastro, a Gibson Dunn & Crutcher LLP attorney representing Chevron, said Judge Kaplan called it “exactly right.”

“Once again, Patton Boggs has engaged in blatant forum-shopping and gotten called on it by courts,” Mastro said. “That lawsuit never should have been brought in New Jersey, and Chevron has moved to transfer it.”

The high-profile dispute centers around a judgment in a suit brought by a group of indigenous Ecuadoreans called the Lago Agrio plaintiffs, who claimed a Chevron predecessor dumped crude oil in the Amazon decades ago, causing residents to develop cancer and destroying natural resources.

Judge Kaplan’s injunction stopped the Ecuadoreans from collecting their judgment — not just in New York, but in any court in the world — after the oil giant raised concerns that a class of Ecuadorean citizens might have won a verdict against the company through fraud and judicial corruption.

However, the Second Circuit overturned the injunction, remarking that New York’s law on the recognition of foreign judgments was meant to help litigants collect on judgments, not make New York into a one-stop forum for blocking foreign rulings.

Attorneys for the Ecuadorean defendants and Patton Boggs were not immediately available for comment on Tuesday.

Chevron is represented by Randy Mastro, Andrea Neuman, Kristen Hendricks, Scott Edelman and William Thomson of Gibson Dunn & Crutcher LLP.

The defendants in the New York suit are represented by John Keker, Elliot Peters, Christopher Young, Jan Nielsen Little, Matthew Werdeger, Nikki Vo, Paula Blizzard and William Hicks of Keker & Van Nest LLP, by Ty Doyle, Craig Smyser and Larry Veselka of Smyser Kaplan & Veselka LLP, and by Julio Gomez of Gomez LLC.

The case is Chevron Corp. v. Steven Donziger et al., case number 1:11-cv-00691, in the U.S. District Court for the Southern District of New York.

The New Jersey case is Patton Boggs LLP v. Chevron Corp., case number 2:12-cv-00901, in the U.S. District Court for the District of New Jersey.

-Law360, April 3, 2012

Suing Chevron in Ecuador: Do the Ends Justify the Means?

By Doug Cassel, Professor of Law at Notre Dame Law School

In an environmental suit brought by lawyers for some residents of the Amazon, an Ecuadorian court last year issued an $18.2 billion judgment against Chevron. Readers who follow the case only casually may have the impression that this is a classic case of David vs. Goliath, and that Ecuadorian courts gave Goliath his come-uppance.

That impression is understandable. The plaintiffs’ lawyers and associated NGO’s wield an impressive PR operation.

The banner headline of their web site tells readers:

Over three decades of oil drilling in Ecuador’s Amazon, Chevron dumped billions of gallons of toxic waste into waterways relied on by local inhabitants. The result: A humanitarian and public health crisis affecting thousands, which Chevron refuses to put right.

There are at least five problems with that headline:

Chevron never drilled a drop of oil in Ecuador. Its only connection is its purchase in 2001 of a Texaco subsidiary, TexPet, whose oil operations ended a decade earlier;

The only company drilling – and spilling – oil since 1992 has been the Ecuadorian State company, which plaintiffs promised not to sue;

The $18.2 billion was awarded, not as damages for past harm to health, but mainly to fund environmental remediation. Yet plaintiffs’ experts admitted to their lawyers that contamination is “just at the pits and stations and nothing has spread anywhere at all;”

The oil pits and stations have been or are being remediated. Whatever work remains to be done could not remotely approach even $1 billion, let alone $18 billion; and

Chevron has repeatedly stated that it is open to constructive dialogue to resolve the legal controversy and to benefit Amazonian residents, but it is not open to judicial extortion.

I learned all this only after the plaintiffs’ lawyers asked the Inter-American Commission on Human Rights this year to issue precautionary measures requesting Ecuador to fend off a “serious and urgent” threat to health and other human rights. The threat supposedly emanated from an award by an international arbitral tribunal, convened under the Ecuador-US Bilateral Investment Treaty, directing Ecuador to suspend enforcement of the $18.2 billion judgment, pending the tribunal’s review of Chevron’s contention (among others) that the judgment is “fraudulent.”

Chevron asked me to assist the company in filing an amicus brief before the Commission opposing the plaintiffs’ request. At first I was skeptical. A fraudulent judgment? Really?

But as I dug deeper, a troubling picture emerged. First, plaintiffs’ evidence for their claim of a “serious and urgent” threat to health looked pretty thin: they began by citing two reports issued by the Inter-American Commission in the mid-1990s — before TexPet completed remediation of its agreed share of the oil pits. (Until it ceased operations in 1992, TexPet had been a minority participant in a consortium with Ecuador’s State oil company.)

Plaintiffs similarly failed to persuade the Commission. The OAS body asked them to submit evidence, including medical certificates, of any current health impacts. Without such evidence, the Commission advised, it would close the case.

The plaintiffs responded by withdrawing their request. They explained that two more appellate rulings in support of their judgment (including one entered before the Commission’s request) now made the matter less urgent.

Meanwhile, together with James Crawford and lawyers who represent Chevron before the arbitral tribunal, I co-signed an amicus brief, and later a supplement, before the Commission. These submissions presented evidence – from plaintiffs’ lawyers’ emails and depositions, and from outtakes of a documentary film they commissioned (all obtained by Chevron under court order) — that some (not all) of plaintiffs’ lawyers had indeed perpetrated a fraud upon justice.

They met clandestinely with the judge on the case no fewer than seven times, in venues such as an abandoned warehouse. Their purpose was to persuade him to select their handpicked expert as the court’s own “independent” expert on damages. They and their consultants then secretly wrote the expert’s report (in English, a language he does not speak, and from which “his” report had to be translated). To buy his silence, they secretly paid him thousands of dollars from “our secret account.” They then publicly defended his “independent” report – until they were caught.

Plaintiffs’ lawyers now excuse their meetings on the ground that there are no rules on ex parte communications in Ecuador. But they knew their actions were wrong. They even developed a code language to conceal their misconduct:

Today the cook [the Judge] met with the waiter [the supposedly independent expert] to coordinate the menu [the plan for the allegedly neutral expert’s report] at the restaurant [the Court].

As their scheme began to unravel, one of them emailed:

Today Pablo and Luis [two of the lawyers] [told us] … that certainly ALL will be made public, … the effects are potentially devastating in Ecuador (apart from destroying the proceeding, all of us, your attorneys, might go to jail) …

Not satisfied with cooking the expert’s report, plaintiffs’ lawyers then cooked the judgment, too. As forensic experts have testified, significant passages in the “judgment” came verbatim from plaintiffs’ internal documents, never filed in the proceeding, and cite plaintiffs’ data, also not in the record. The judgment even incorporates plaintiffs’ errors, idiosyncratic reference citations, and distinctive punctuation styles.

The resulting concoction lacks credibility. For example, even after plaintiffs’ public health expert admitted that he “did not reach the conclusion that the healthcare needs of the population in the Oriente can be tied to any particular environmental damage,” the judgment ordered Chevron to pay $1.4 billion to fund public health programs – with not a word of budgetary justification.

As for the judge whose signature graces the judgment, Ecuador’s judicial council recently removed him from the bench for “inexcusable judicial error” in another case – in circumstances suggesting corruption.

In an open letter to the human rights community, I set forth these concerns at greater length. Plaintiffs’ lawyers now accuse me (and previously the arbitral tribunal members) of abandoning principle for lucre — without mentioning the millions in fees they stand to gain if the “judgment” stands (or the several-hundred-million dollar bonus the judgment awards to their NGO).

Most important, the credibility of the human rights movement is at stake. We cannot vindicate human rights by violating them. The ends — securing reparations — do not justify the means: sham judicial proceedings.

Judge who issued $18.2 billion Ruling against Chevron Removed from Bench

Ecuador’s Judicial Council determines Judge Zambrano complicit in drug trafficking scandal

Chevron Corp. today renewed its request of authorities in Ecuador to investigate the overwhelming evidence of fraud tainting the Lago Agrio lawsuit after the Associated Press and Ecuador’s El Universo newspaper revealed that Nicolás Zambrano, the judge who issued the $18.2 billion judgment against Chevron, has been dismissed from the bench due to his complicity in an emerging story of court corruption and drug trafficking in Ecuador.

The media outlets reported that the Judicial Council, the body that governs the Ecuadorian judiciary, has determined that Judge Zambrano, and Judge Leonardo Ordóñez, who previously presided over the Lago Agrio lawsuit, should be dismissed from their positions on the Court of Justice of Sucumbíos in Lago Agrio following an investigation into allegations of lenient treatment of drug dealers in cases before them. The investigation and subsequent dismissals followed a complaint filed by Ecuador’s Organized Crime Prevention Unit.

“Chevron has already shown through the plaintiffs’ lawyers’ own documents and film outtakes that Judge Zambrano’s ruling against Chevron was ghostwritten by the plaintiffs’ lawyers. Evidence also shows that the plaintiffs’ representatives paid bribes to at least one court official through a secret bank account. Now it appears the Sucumbíos court was plagued by even broader corruption,” said Hewitt Pate, Chevron vice president and general counsel. “Hopefully now that these judges have been removed from their positions of power, others will come forward with evidence of the wrongdoing that has occurred in the courtrooms.”

Through court-ordered discovery, Chevron has obtained evidence that the Lago Agrio plaintiffs’ lawyers and consultants, at a minimum, provided clandestine assistance to the Lago Agrio court in drafting the judgment against Chevron. Much of the judgment tracks the plaintiffs’ lawyers’ own internal, unfiled documents word-for-word, citing figures from the plaintiffs’ lawyers’ internal database that did not form part of the record, as well as copying errors and idiosyncratic reference citations.

The ghostwriting of judgments in Ecuador is not unique to the Lago Agrio case. As has been widely reported, the El Universo newspaper suffered similar treatment in an equally-politicized trial featuring evidence that the ultimate judgment was written by lawyers working for the plaintiff, in this instance President Rafael Correa. The handling of the El Universo case was, in the words of the Washington Post, “alas, worthy of a banana republic. After four changes of judge, a ‘temporary’ magistrate took over the case, held one hearing, and—33 hours after his appointment—issued the 156-page ruling. A subsequent independent investigation determined that he did not write it, and that the author was probably Mr. Correa’s attorney.”

Other independent organizations have noted the steep decline in the capability of the Ecuadorian judiciary to administer impartial justice. Since Correa’s election, the U.S. State Department has reported on “the susceptibility of the judiciary to bribes for favorable decisions and resolution of legal cases and on judges parceling out cases to outside lawyers, who wrote the judicial sentences and sent them back to the presiding judge for signature.” Other organizations have reached similar conclusions, finding that Ecuador ranks near the bottom of all nations for “rule of law” and similar measures.

Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

The Chevron Ecuador lawsuit and Correa’s libel suit discussed by Theodore J. Boutrous, Jr. in Forbes.

The scandal that engulfed Ecuadorian President Rafael Correa’s $42 million criminal libel judgment against the newspaper El Universo (and the three-year prison sentences for its editors and directors) provides powerful new evidence why courts around the world should reject efforts by U.S. plaintiffs’ lawyers to enforce a fraudulent $18.2 billion Ecuadorian judgment against Chevron. While the two cases involve different types of legal claims, they are products of the same corrupt judiciary and trials marred by remarkably similar violations of the rule of law.

As detailed in a Washington Post editorial, the handling of the case was “alas, worthy of a banana republic. After four changes of judge, a ‘temporary’ magistrate took over the case, held one hearing, and—33 hours after his appointment—issued the 156-page ruling. A subsequent independent investigation determined that he did not write it, and that the author was probably Mr. Correa’s attorney.”

Recently, a judge previously assigned to the case provided further details corroborating that the President’s attorney wrote the judgment against the paper. She also revealed that she had been offered a bribe by Mr. Correa’s attorney to rule in his favor (which she refused). After going public, she immediately fled the country fearing for her safety.

Last week, Nobel laureate Mario Vargas Llosa wrote that these developments show, “how unreliable the Ecuadorian courts are in matters of justice due to their feudal ties to political power.”

In the face of that condemnation and mounting international outrage, Mr. Correa issued “pardons” in the case – but Mr. Correa already got what he wanted out of the El Universo affair. He sent a clear message to the press and everyone else that he controls the courts, and can use them as a weapon whenever and however he wants, including to punish and chill free speech by his critics. It is ironic that, in pursuing a lawsuit he brought to attack a newspaper for calling him a “dictator,” Mr. Correa demolished two key pillars of a democracy: a free press and an independent judiciary.

Meanwhile, American plaintiffs’ lawyers are pursuing fraudulent environmental claims against Chevron in Ecuador. The parallels to the El Universo and Chevron cases are striking.

Court rulings and documents establish that the Chevron case, like El Universo’s, features direct interference by President Correa, a judicial bribery scheme, superhuman judicial speed reading, a judgment ghostwritten by the plaintiffs’ lawyers, bogus criminal charges, irregular selection of temporary judges, and an offer to eliminate part of the judgment in exchange for a coerced “apology.” In both the El Universo and Chevron cases, international bodies have ordered Ecuador to prevent enforcement of these improper judgments.

Seven U.S. federal courts have found that the record shows fraud tainting the Ecuadorian proceedings against Chevron. One court said evidence of “inappropriate, unethical and perhaps illegal conduct” by the Ecuadorian plaintiffs’ representatives has sent “shockwaves through the [United States’] legal communities.” Another judge remarked, “what has blatantly occurred in this matter would in fact be considered fraud by any court.”

These courts were reacting to videotaped evidence obtained through discovery showing that the plaintiffs’ representatives ghostwrote the report of a purportedly “independent” court expert to support their baseless claims for billions of dollars, and evidence of secret payments made to the expert. When details of this scheme emerged, the plaintiffs’ attorneys admitted in internal emails that they could all “go to jail.”

Chevron’s case is now pending before the same Ecuador court that affirmed the judgment against El Universo. Anticipating that the fix is in and they will win, the plaintiffs’ lawyers already are threatening to bring multiple foreign actions to enforce their fraudulent judgment against Chevron, which has no assets in Ecuador. But courts that respect the rule of law should refuse to enforce a judgment procured by fraud in a judicial system lacking due process and impartial judges.

The Chevron case exemplifies a disturbing phenomenon: U.S.-based plaintiffs’ lawyers colluding with corrupt foreign courts to fabricate whopping civil judgments against American companies, and then using the bogus judgments to try to coerce a big settlement. Federal courts in Florida recently refused to enforce a $97 million Nicaraguan judgment against Dole Food and other U.S. companies.

The lawyers suing Chevron are well aware that the Ecuador judiciary is plagued by corruption, as the U.S. State Department and multiple international organizations have recognized. Indeed, the Ecuadorians’ lead U.S. lawyer is caught on tape declaring all the Ecuadorian judges are “corrupt! It’s – it’s their birthright to be corrupt” and admitting that he and his team engaged in “dirty” tactics, which they “would never do . . . in the United States.”

The lessons of the El Universo debacle should help thwart the fraud underway against Chevron and bolster its ongoing international arbitration with the Republic of Ecuador over the case. Hopefully, it will also curb the appetite of U.S. plaintiffs’ lawyers seeking to exploit corrupt and politicized foreign courts for their own personal gain.