Chevron Ecuador Case | The Chevron Ecuador Lawsuit Trial & Chevron's Views & Opinions | The Amazon Post

Another significant development in the Chevron Ecuador case:

A federal judge in Washington, D.C. has tossed a lawsuit by the prominent law firm Patton Boggs that accuses lawyers for Chevron of somehow conspiring to keep plaintiffs in a massive pollution case from paying their bills. Patton Boggs joined the lawsuit by Ecuadorean villagers suing Chevron over toxic drilling waste  in the Amazonian jungle last year, but has been stymied in efforts to drag the global oil giant to the bargaining table to settle.

Amid a welter of lawsuits, discovery actions and international arbitration proceedings, Patton Boggs sued Chevron’s lawyers, Gibson Dunn, accusing them of tortiously interfering in its relationship with the Ecuadoreans by trying to have Patton Boggs disqualified because a lobbying affiliate of the firm once represented Chevron. After a judge dismissed the case on April 19, Patton Boggs refiled with new allegations that largely mirrored the first.

Judge Henry H. Kennedy Jr. dismissed the second action today, saying Patton Boggs cited incorrect laws and failed to provide any explanation of how Gibson Dunn had conspired to get the Ecuadoreans to stop paying their bills.

In fact, Patton Boggs concedes that it does not know “the exact manner and facts” of defendants’ “efforts,” admitting that it is “privy mainly to the result of Defendants’ misconduct” (although it attributes this ignorance to defendants’ successful efforts to conceal their alleged wrongdoing). …But the fact that Patton Boggs is no longer being paid does not establish that Chevron and Gibson Dunn are responsible for that outcome, let alone that they intentionally caused it. …If Patton Boggs has any factual basis for that conclusion, it does not appear in the complaint.

Based on the facts alone, the lawsuit seems to have the potential for a $500 million to $1 billion settlement. The plaintiffs won an $18 billion judgment in Ecuador in February but has no assets there to seize. Meanwhile Chevron has sued to prevent the plaintiffs from enforcing the judgment in the U.S., alleging fraud, and won an injunction from a federal court in New York halting Patton Boggs’ planned  effort to enforce it in other courts around the world. Chevron has vowed never to settle.

The plaintiffs won funding from London-based Burford Group last year, and that firm, which invests in corporate litigation, demanded that Patton Boggs join the case. So it is surprising to read allegations the plaintiffs are no longer paying their bills.

The dismissal isn’t the only bad news for the Ecuadorean plaintiffs hiding in court rulings recently. In an order last week, a federal judge in New York ordered lawyers associated with the plaintiffs, including the Philadelphia firm Kohn Swift & Graf, to turn over documents to Chevron that may support allegations the Ecuador judgment was obtained through fraud. In that ruling was this tidbit: Kohn Swift, which sank more than $6 million into the case over the years before breaking with onetime lead attorney Steven Donziger, has hired outside counsel, possibly to sue Donziger. The outside firm is none other than Susman Godfrey, a Houston boutique with a well-founded reputation for tough litigation tactics.

Read More »

This blogger writes about Judge Francis’ order for Steven Donziger associates and co-counsel to produce documents under a discovery request related to Chevron’s RICO (Racketeer Influenced and Corrupt Organizations) claim:

Chevron has sued both Steven Donziger and the Lago Agrio plaintiffs in the New York Southern District for racketeering for allegedly skirting the Ecuadoran judicial process to win the $18 billion judgment and to extort a final settlement from the American oil giant. This is a major step in proving that Donziger’s whole case was a sham.

Read More »

Federal judge orders Ecuador plaintiffs’ legal team to release additional documents that are part of a broad authorized discovery:

U.S. District Judge Lewis Kaplan signed the order on Tuesday, indicating that the Ecuadoreans may be held in contempt if they do not comply and turn over all responsive documents within one week. …

“The court would be well-justified in imposing harsh sanctions,” the brief states. “At this stage, however, Chevron only requests that this court enter an order that gives Defendants one final opportunity, within one week, to produce all documents and information responsive to Chevron’s requests and interrogatories and to face severe sanctions should they fail to comply.”

Read More »

More coverage of Magistrate Judge Francis’ order for Steven Donziger associates and co-counsel to produce documents under a discovery request related to Chevron’s RICO (Racketeer Influenced and Corrupt Organizations) claim:

Attorneys who worked with lead plaintiff’s lawyer Steven Donziger to secure a multi-billion-dollar environmental damage judgment against Chevron in Ecuador have been ordered to turn over documents to Chevron as the oil company pursues its racketeering claim that the judgment was obtained by fraud.

…

Citing concerns that the judgment would be secured by fraud and without procedures compatible with due process, Southern District Judge Lewis A. Kaplan in February issued a temporary restraining order forbidding the plaintiffs from seeking enforcement of the judgment anywhere in the world (NYLJ, Feb. 9), and he followed that order with a preliminary injunction.

Read More »

Magistrate Judge James Francis IV orders Steven Donziger associates and co-counsel to produce documents under a discovery request related to Chevron’s RICO claim. The ruling is based on Donziger’s prior privilege waiver as well as Crime-Fraud findings:

The tipping point in Chevron’s campaign to block enforcement of an Ecuadorian court’s $9 billion judgment against the oil giant came at the end of 2010, when Manhattan federal judge Lewis Kaplan ruled that plaintiffs lawyer Steven Donziger had to turn over all of his privileged material-e-mails, journals, internal memos -to Chevron defense lawyers. It was an extraordinary ruling, exposing the internal workings of the team representing Ecuadorians who claim to have been harmed by Chevron predecessor Texaco’s contamination of the Lago Agrio region of the rainforest. And Chevron’s lawyers at Gibson, Dunn & Crutcher made the most of it. Based on the privileged materials, Chevron filed a suit accusing Donziger, the Lago Agrio plaintiffs, and many of their experts of racketeering. Under the aegis of the racketeering suit, Judge Kaplan issued a sweeping preliminary injunction in March, barring the plaintiffs from attempting to collect on the judgment an Ecuadorian judge handed down in February.

The injunction will be tested at a hearing before the U.S. Court of Appeals on Sept. 16, and then at a trial before Judge Kaplan that’s set to begin in November. But meanwhile, in the run-up to trial, Chevron’s Gibson Dunn lawyers demanded yet more attorney-client privileged materials, these from two young lawyers who worked with Donziger and from the Philadelphia plaintiffs firm Kohn Swift & Graf. Kohn Swift financed the case for years, until name partner Joseph Kohn and Donziger fell out over case strategy. (Fortune’s Roger Parloff detailed the increasingly byzantine financing of the Lago Agrio case in a fascinating June feature story.)

The Kohn materials had been almost in Chevron’s grasp before, thanks to a court order in a Philadelphia federal court discovery proceeding. But in May, as I’ve reported, the U.S. Court of Appeals for the Third Circuit overturned that order, ruling that Chevron was not entitled to privileged documents because it hadn’t shown evidence that the crime-fraud exception to privilege applies.

On Wednesday, the magistrate judge working with Judge Kaplan ordered the Kohn firm to produce its privileged documents to Chevron. Judge James Francis IV found that all of the materials Kohn claimed as privileged fell under the scope of the waiver imposed previously on Donziger. Chevron counsel Randy Mastro of Gibson Dunn said the order is “very significant.” Mastro said the Kohn privilege logs indicate that the firm has many documents Donziger didn’t previously produce to Chevron. “We’re going to get further insights into what really happened in this case,” Mastro said. Mastro wouldn’t discuss whether the Kohn materials disclose information about settlement talks between Chevron and the plaintiffs lawyers that may have taken place before the case blew up in 2009. Documents that have already come out show Kohn urging other plaintiffs lawyers to settle for $700 million to $1.2 billion.

Mastro noted that Judge Francis analyzed whether the crime-fraud exception applies to a subset of documents belonging to one of Donziger’s former associates (the magistrate had concluded that this category of materials was outside the scope of the Donziger waiver.) Applying the precedent Judge Kaplan set in his injunction ruling, Judge Francis said the exception applies to some of those documents. “Judge Kaplan has already ‘effectively found’ a reasonable basis to suspect that the judgment in the Lago Agrio litigation was procured by fraud,” Judge Francis wrote. “Especially given that the crime-fraud exception requires only a showing of probable cause that a crime or fraud was intended, this determination is sufficient for the crime-fraud exception to apply.”

“It’s extremely significant that the magistrate made express crime-fraud findings,” Mastro said. “That’s two judges now who have found probable cause.”

A spokeswoman for the Ecuadorian plaintiffs said the privilege ruling “is a non-event.” The plaintiffs have previously asserted that Chevron’s unprecedented motions practice is intended to harass the Lago Agrio claimants.

I left messages with Elliot Peters of Keker & Van Nest, who represents the Donziger associates; and James Rohn of Conrad O’Brien, who represents Kohn Swift. Neither got back to me. Seth Ard of Susman Godfrey-who is representing Kohn Swift in potential litigation against Donziger-also didn’t return a phone message.

Read More »

This blogger writes about the Ecuadorian judge’s ruling that sentences the owners and former editor of the country’s largest newspaper to three years in prison and $40 million in fines for libel against President Rafael Correa:

On May 5th, this blogger reported on Ecuador President Rafael Correa’s attack on the country’s own media. While there are a number of examples, the most prominent one has resulted in a development of disasterous proportions for media in Ecuador, and calls that country’s entire political and judicial ethics into question.

Ecuador’s El Universo has lost a lawsuit ordered by Correa, as Judge Juan Paredes has said that three of its editors, including the columnist who wrote what got under Correa’s skin, will be fined $40 million. The newspaper has to pay $10 million, while Carlos Cesar, Nicolas Perez, and former opinion editor Emilio Palacio have to pay $30 million total – unless they can mount a successful appeal.

Read More »

The Chamber of Commerce blog writes about the Chevron Ecuador case and the funding agreement between Burford Capital and the plaintiffs’ trial lawyers:

The massive, long-running litigation against Chevron in Ecuador has long been one of the most prominent transnational tort cases. As was outlined in the U.S. Chamber Institute for Legal Reform’s 2010 report, Think Globally, Sue Locally, these cases are brought against multinational companies for alleged violations of human rights, labor or environmental standards in foreign countries.

ILR’s report outlines many problems with these types of cases, including instances of fraud and abuse by the plaintiffs and their lawyers. The Chevron case is no exception. Evidence submitted to a federal court last year show that attorneys for the Ecuadoran plaintiffs submitted fraudulent evidence and collaborated with a purportedly neutral expert witness to doctor his testimony. Chevron has now filed a racketeering lawsuit against several of the plaintiffs’ lawyers in the case.

Read More »

Support for Chevron in the Ecuador case:

A Washington D.C.-based legal foundation is urging a U.S. appeals court to uphold an injunction that prevents a group of Ecuadorian plaintiffs from trying to collect a multibillion dollar judgment against Chevron Corp.

Read More »