Chevron Corporation today announced that it has filed an appeal seeking review by Ecuador’s National Court of Justice of the adverse appellate judgment issued against the company in early 2012 by a panel of three temporary judges in the environmental lawsuit in Ecuador.

“Today’s appeal gives the National Court of Justice an opportunity to correct the grave injustices that have occurred in this case.”

Chevron’s appeal, called a petition for cassation, details multiple legal grounds for reversal of the January appellate court decision. The appeal establishes that the lower courts violated the Ecuadorian constitution by refusing to take any corrective action in response to the extensive fraud and corruption committed by plaintiffs’ lawyers and their representatives. The filing goes on to outline several other fundamental points, including: that the lower court’s judgment is unlawfully premised on fraudulent and scientifically baseless evidence; that the judgment is illegally based upon the retroactive application of law; that it ignores the releases of liability granted to Texaco Petroleum Co. (Tex Pet) by the government of Ecuador following a cleanup of Tex Pet’s share of remediation sites in the 1990s; and that the judgment awarded punitive and other damages never requested in plaintiffs’ complaint and not allowed under Ecuadorian law.

“Throughout the course of this litigation, judges corruptly operating in concert with the plaintiffs’ lawyers have created, rather than corrected, injustice,” said Hewitt Pate, Chevron vice president and general counsel. “Today’s appeal gives the National Court of Justice an opportunity to correct the grave injustices that have occurred in this case.”

In addition to the cassation appeal filing today, Chevron continues to seek recourse through legal proceedings outside of Ecuador. In the arbitration proceedings Chevron instituted against Ecuador in The Hague under the U.S.-Ecuador Bilateral Investment Treaty (BIT), the Tribunal issued an order on February 9, 2011, requiring Ecuador to take all measures at its disposal to suspend enforcement of the Lago Agrio judgment until further order of the Tribunal. The Tribunal also recorded that if it were established that any judgment made by an Ecuadorian court in the Lago Agrio case was a breach of an obligation Ecuador owed to Chevron as a matter of international law, any loss arising from the enforcement of such judgment (within and without Ecuador) may be losses for which Ecuador would be responsible to Chevron under international law.

Based on the Tribunal’s order, Chevron has asked that the Ecuadorian appellate court take all steps to suspend enforcement of the Lago Agrio judgment until further order of the Tribunal, including suspension of any requirement that Chevron post a bond to prevent enforcement of the judgment during the cassation appeal. Any demand that Chevron post a bond in this case would be a violation of Ecuador’s international obligations under the order of the BIT Tribunal, and Chevron has no obligation to post such a bond.

The plaintiffs have indicated that they will seek to have Ecuador defy the BIT Tribunal’s order by pursuing enforcement of the corrupt judgment outside of Ecuador before the BIT Tribunal has an opportunity to review the merits of the case. In the event the plaintiffs carry through on their threats to file enforcement actions against Chevron affiliates in other countries, Chevron will take appropriate steps to defend against this fraud.

Chevron also is pursuing an action in the U.S. District Court for the Southern District of New York against the Lago Agrio plaintiffs’ representatives for violations of the federal racketeering statute, common-law fraud and other relief based upon the overwhelming evidence of their fraud and corruption.

A copy of Chevron’s cassation appeal can be accessed here.

Chevron continues to seek recourse through legal proceedings outside of Ecuador. In the arbitration proceedings Chevron instituted against Ecuador in The Hague under the U.S.-Ecuador Bilateral Investment Treaty, the Tribunal issued an order on February 9, 2011 requiring Ecuador to take all measures at its disposal to prevent enforcement of the Lago Agrio judgment until further order of the Tribunal. The Tribunal also recorded that if it were established that any judgment made by an Ecuadorian court in the Lago Agrio case was a breach of an obligation Ecuador owed to Chevron as a matter of international law, any loss arising from the enforcement of such judgment (within and without Ecuador) may be losses for which Ecuador would be responsible to Chevron under international law. Chevron also is pursuing an action in the U.S. District Court for the Southern District of New York against the Lago Agrio plaintiffs’ representatives for violations of the federal racketeering statute, common-law fraud, and other relief based upon the overwhelming evidence of their fraud and corruption.

In response to the ruling, Chevron issued the following statement:

“Today’s decision is another glaring example of the politicization and corruption of Ecuador’s judiciary that has plagued this fraudulent case from the start. The Lago Agrio judgment was procured through a corrupt and fraudulent scheme, much of which was captured on film and memorialized in the plaintiffs’ representatives’ own emails and correspondence. Their misconduct includes fabricating expert reports, manufacturing evidence, bribing and colluding with court officials, waging a campaign of intimidation against judges, and even ghostwriting parts of the verdict itself.

“Evidence of these crimes has been provided to Ecuador’s courts and prosecutors, but authorities there have taken no corrective actions. In the United States, however, no less than eight federal judges have found that the trial in Ecuador has been marred by the fraud and misconduct of the plaintiffs’ representatives. And an international Tribunal presiding in the Permanent Court of Arbitration in The Hague has ordered Ecuador to take all measures at its disposal to suspend enforcement of the Lago Agrio judgment within and without Ecuador.

“Chevron does not believe that the Ecuador ruling is enforceable in any court that observes the rule of law. The company will continue to seek to hold accountable the perpetrators of this fraud.”

Background:

Chevron is defending itself against false allegations that it is responsible for environmental and social harms in the Amazon region of Ecuador. Chevron has never conducted oil production operations in Ecuador, and its subsidiary, Texaco Petroleum (TexPet), fully remediated its share of environmental impacts arising from its participation in an oil producing consortium with Petroecuador prior to 1992. After the remediation work was certified by all agencies of the Ecuadorian government responsible for oversight, TexPet received a complete release from Ecuador’s national, provincial and municipal governments prior to being acquired by Chevron in 2001. Petroecuador was the majority owner of the consortium in which TexPet participated until 1992 and has been the sole owner of greatly expanded oil operations in the former concession area over the past two decades. Last month, Petroecuador announced it will complete its remediation of the sites it is responsible for at a cost of $70 million. This figure stands in contrast to the multi-billion dollar judgment affirmed today.

Chevron Corporation today published a letter submitted to Galo Chiriboga, Ecuador’s Prosecutor General, documenting evidence of fraud and corruption in the litigation against Chevron in Ecuador.  The company called on Ecuadorian authorities to investigate the misconduct of the plaintiffs’ lawyers and the presiding judge, Nicholas Zambrano, in the drafting of the fraudulent judgment rendered against Chevron earlier this year.

Chevron submitted evidence showing that plaintiffs’ representatives—including Steven Donziger, Pablo Fajardo, Juan Pablo Sáenz, Julio Prieto, and Luis Yanza—covertly worked with Judge Zambrano to draft the judgment.  The letter states that the fraudulent conduct “is causing serious, ongoing harm to Chevron Corporation and to the Republic of Ecuador.”

“To date, the plaintiffs’ representatives have failed to offer any explanation for how their internal, never-filed documents came to appear in the fraudulent Lago Agrio judgment,” said Hewitt Pate, Chevron vice president and general counsel.  “Nor has the Judge explained how the plaintiffs’ private work came to be included in the decision bearing his name.  In the interest of justice and due process, it is incumbent upon the authorities in Ecuador to investigate the full extent of this misconduct.”

There is substantial and unrefuted evidence that the judgment against Chevron is fraudulent. The evidence provided to the Prosecutor General includes:

• The judgment copies exact language from a June 2009 email that Fajardo sent to Donziger, Sáenz, and Prieto.  The body of the email includes a short memo from a not-yet identified third party and a “transcri[ption]” of a published Ecuadorian court opinion.  That “transcription” contains numerous mistakes not found in the published court opinion itself.  The judgment repeats all of these mistakes, exactly, as well as a citation error Fajardo made in his email.
• The judgment also refers to several test samples by names that are not found in the record, but rather in private spreadsheets created by the plaintiffs, which contain information from the plaintiffs’ own database.  The judgment replicates errors contained in the plaintiffs’ database and replicates errors in the database attributing data to the wrong experts and confuses measurement units.
• The judgment contains language from a private memorandum authored by plaintiffs’ attorney Juan Pablo Sáenz and other members of plaintiffs’ legal team around November 2007 regarding a Chevron subsidiary’s merger with Texaco.  No fewer than fifteen instances, significant portions of the Sáenz memorandum, including entire sentences, appear verbatim or nearly verbatim in the judgment.

Much of this evidence is corroborated by expert analyses commissioned by Chevron that found the similarities between the plaintiffs’ documents and the judgment are too great to be coincidence, and concluded that either plaintiffs wrote at least part of the judgment, or the author(s) of the judgment had access to documents prepared by the plaintiffs’ representatives and lawyers that were never submitted during the trial.

“This evidence raises disturbing questions about who is really behind the Lago Agrio judgment,” added Pate.  “This is just the latest chapter in an established pattern of fraud being carried out by plaintiffs’ lawyers and their representatives.”

In addition to the letter, Chevron has submitted corresponding evidence including video outtakes, emails, and other documents to prosecutors in Ecuador.

“Chevron welcomes Petroecuador’s announcement that it will remediate the remaining sites it is responsible for under the remediation agreement. Petroecuador’s $70 million remediation budget, which covers an area larger than that of TexPet’s remediation, is within a reasonable cost range under U.N. standards. This figure stands in contrast to the multi-billion dollar claim fabricated by American plaintiffs’ lawyers to extort money from Chevron through a ghost-written judgment.

“The Ecuadorian government deserves credit for taking positive steps to help the people and environment of the Oriente and to break the cycle of corruption and misinformation caused by the fraudulent case against Chevron.

“Petroecuador’s remediation should be completed without further interference, and the perpetrators of the fraudulent litigation — who have lobbied to delay the remediation — should be brought to justice. Chevron would welcome a constructive dialogue with the government of Ecuador on both topics.”

Dr. Ann Maest is a managing scientist at Straus Consulting, and she’s the go to expert on all things groundwater. In the press release announcing her reappointment to the National Academy of Sciences, they mention that she is focused on the environmental effects of mining and petroleum extraction and production, and, more recently, on the effects of climate change on water quality.

Maest is in high demand as an expert for those looking to stop oil and mineral exploration. She’s also heavily used by the federal government, even though after new details about her past work are coming to light as a result of a lawsuit. From The New York Times:

An environmental consulting firm named as a defendant in a racketeering suit filed by Chevron Corp. over a landmark pollution lawsuit in Ecuador is continuing to work on another blockbuster case: the Deepwater Horizon oil spill investigation. Boulder, Colo.-based Stratus Consulting, a long-term contractor with the National Oceanic and Atmospheric Administration and other federal agencies, is gathering and analyzing data concerning the Gulf of Mexico spill.

Chevron is suing those behind the Ecuadorian case including: the lead attorney Steven Donziger; Stratus Consulting; and Maest. As part of their lawsuit, Chevron obtained through discovery, outtakes from a documentary called “Crude” that show Donziger and Maest colluding ignore their own findings and make up some new unsubstantiated claims. Watch this:

Maest says that in their study contamination has not spread and is only found at the site of the pit. Donziger says let’s just extrapolate and say what we want. Maest readily agrees. Donziger goes on to say that it’s Ecuador and if they have 1000 people around the court house they win, the report is just smoke, mirrors, and bullshit.

Of course when you’re endeavoring to pull off a multi-billion dollar legal heist in a banana republic you don’t stop at just inventing damages; you stack the deck on the judicial side as well, since that just requires a little “donation.” What Chevron has been able to show from the outtakes and records obtained is the Maest and her firm drafted substantial portions of the report of the independent expert, Richard Cabrera, who they allege Donziger was instrumental in getting appointed to do the court order study of the alleged environmental damage. Sounds like a criminal enterprise to extort, right? That’s what Chevron thinks, and it’s why they’re suing under RICO.

In addition to being sued, Maest’s work (if that’s what you want to call it) was thouroughly debunked by another team of scientists.

It is hardly a surprise that Donziger is an old Harvard buddy of, you guessed it, President Obama. What’s really surprising is that here we have a National Academy of Science member caught red-handed agreeing to make up data, and our government wants to give her more business.

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In a separate proceeding, Chevron awaits the opinion of the Court of Appeals for the Second Circuit with respect to its suit seeking a declaration that the fraudulent judgment is unenforceable.

The motion for attachment can be downloaded here.

Arbitrators expect to rule as early as next month on whether they can hear a dispute between Chevron Corp and Ecuador related to a marathon pollution liability case, according to a letter to the lawyers involved.

The tribunal, working under The Hague’s Permanent Court of Arbitration (PCA), ordered the Republic of Ecuador in February to suspend enforcement of any judgment in the lawsuit filed by rainforest dwellers against Chevron.

Chevron lost that case a few days later, as the company had expected. A New York judge then sought to freeze the $18 billion judgment against the second-largest U.S. oil company, before he was overruled on appeal.

Chevron, arguing the judicial process in Ecuador was corrupted, is now banking on the arbitrators, who must first decide whether they will become the latest body to weigh in on what has become a landmark international legal battle.

“The current expectation is that the decision will be issued in the course of late December 2011 or early January 2012,” Martin Doe of the PCA wrote in a Nov. 11 letter, which wound up in the filings of related U.S. lawsuits.

“If that goes our way, we can begin arguments on the merits,” a Chevron spokesman said on Monday.

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Two decades into the battle over Chevron’s environmental legacy in Ecuador, the stage finally seems to be set for the final act. With Chevron facing an $18 billion Ecuadorian judgment over pollution in Lago Agrio and arbitrators mulling whether to roll the judgment back, it’s time to predict how the play will end. In my last Global Lawyer column, I concluded that ordering Ecuador to indemnify Chevron is the least problematic relief available to the arbitrators. In this column, I will explain how I see the global dispute playing out. Hint: Before the curtain falls, the oil company wins. …

Assuming the arbitrators order Ecuador to indemnify Chevron, do you really think Ecuador will let that $18 billion judgment stand? Ecuador’s appeal courts can simply overturn the judgment. Or perhaps even likelier: the appeals courts can reduce the judgment to a relatively token amount. Curtailing damages would preserve a semblance of anti-gringo justice for the domestic audience in Ecuador, and a semblance of judicial independence for the international audience. You heard it here first.

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