The Amazon Post

This blogger writes about the Chevron annual meeting:

Apparently deciding he’s had enough, Chevron CEO John Watson came out and, according to the blog Fuel, gentlemanly challenged activists, telling one heavily involved in the Chevron Ecuador legal issue “You know very well, personally, that we’re being victimized by the plaintiffs’ lawyers, referring mostly to the work of Steven Donziger.

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Earlier today, the Second Circuit Court of Appeals affirmed a Southern District of New York order granting discovery and depositions from Steven Donziger, the lead Lago Agrio plaintiffs’ representative.  In his prior ruling, District Judge Lewis A. Kaplan ordered Donziger to turn over all documents and materials that complied with a 1782 discovery motion filed by Chevron.  In considering Chevron’s petition, the District Court found:

  • The government of Ecuador “has been working closely with Donziger for years and stands to gain billions for Ecuador if the Lago Agrio plaintiffs prevail against Chevron.” (View memorandum opinion)
  • “The evidence before this Court shows that Donziger has attempted to (1) intimidate the Ecuadorian judges, (2) obtain political support for the Ecuadorian lawsuit, (3) persuade the GOE to promote the interests of the Lago Agrio plaintiffs, (4) obtain favorable media coverage, (5) solicit the support of celebrities (including Daryl Hannah and Trudie Styler) and environmental groups, (6) procure and package ‘expert’ testimony for use in Ecuador, (7) pressure Chevron to pay a large settlement, and (8) obtain a book deal.”
  • “There is evidence obtained in other Section 1782 actions brought by Chevron that Donziger and others associated with him have presented false evidence and engaged in other misconduct in Ecuador.”
  • “In this Court’s judgment, the need (for discovery) is extremely great in view of the extraordinary evidence already before it. To turn a blind eye to evidence suggesting improper influence on and intimidation of the Ecuadorian courts by both Donziger and the GOE, improper manipulation of the criminal process in that country, knowing submission by the Lago Agrio plaintiffs of at least one fraudulent report, and improper collusion with Cabrera, the supposedly neutral court-appointed expert, could defeat the purpose of Section 1782, deprive the Individual Petitioners of evidence needed for their defense in a criminal case, and frustrate the BIT arbitration.”
  • “Donziger’s own words raise substantial questions as to his possible criminal liability and amenability to professional discipline.”

Today’s Second Circuit decision not only affirmed the District Court’s prior orders, but lauded Judge Kaplan’s analysis.  The panel wrote, “in light of the complexity of this case and the urgency of its adjudication, we wish to note the exemplary manner in which the able District Judge has discharged his duties. There is no question but that all concerned, not least this Court, are well served by the careful and comprehensive analysis which is evident repeatedly throughout the many memoranda and orders of the District Court, many of which were produced with rapidity in the context of the District Court’s daunting schedule in this and other important cases.”

“It will be very expensive to clean up, but far less than the profits they took out of Ecuador.” – Steve Donziger, lead trial attorney. 10/29/09.

Mr. Donziger’s math is finally adding up and, perhaps unintentionally, Mr. Donziger has exposed one of the most fraudulent aspects of the Ecuador trial – the $27 billion damage recommendation known as the “Cabrera Report.”

The assessment developed by the plaintiffs’ representatives and delivered to the court by mining engineer Richard Cabrera looks to hold Chevron liable for more than $27 billion in damages. In part of the dubious $27 billion claim, Cabrera recommends Chevron pay damages of $2.743 billion for pit remediation.  In comparison, Petroecuador, the government-owned oil company responsible for the current condition of Ecuador’s oil fields, remediates pits to current laws and standards at a cost of $85,000 per pit. Cabrera’s estimates imply a per-pit remediation cost of up to $3 million per pit. This recommendation is more than 30 times higher than the cost the state pays for pit remediation.

Meanwhile, Texaco Petroleum made less than $500 million during the days of the consortium.  The vast majority of the proceeds, approximately $25 billion, went to the government of Ecuador.  And, at the conclusion of the consortium, Texaco Petroleum performed remediation work at 108 of 321 well sites – work that corresponded with the company’s 37.5% stake in the consortium. The remaining remediation is the admitted responsibility of Petroecuador.

So, no matter how you slice it, Mr. Donziger has finally conceded the truth about remediation costs.  Any realistic assessment of the conditions in Ecuador clearly shows that the remediation work for which Petroecuador is responsible would cost a fraction of what Mr. Donziger and his colleagues have contended.  Now, if they would only focus their efforts on the responsible party rather than the deep pockets, some solutions might actually occur.

“This lawsuit started in the United States and is financed by a law firm.” – Julio Prieto, plaintiff’s attorney

In a December 7th interview with Ecuadorian radio station Majestad, plaintiff’s attorney Julio Prieto makes mention of a law firm bankrolling the environmental lawsuit currently pending against Chevron in Ecuador.

The referenced firm is Kohn, Swift & Graf PC of Philadelphia, the primary entity providing a majority of, if not all of the funding for the lawsuit against Chevron.

When U.S.-based trial lawyer, Cristóbal Bonifaz, first concocted the original lawsuit against Texaco in 1993, he contacted Harold Kohn, a Philadelphia class-action lawyer. Shortly thereafter, Kohn’s son, Joe, who later became a partner at Kohn Swift & Graf, signed on. Subsequently, Kohn enlisted Steven Donziger, a New York-based trial lawyer who went to law school with Bonifaz’s son.

When asked about his motivation for taking on the case against Chevron in the movie Crude, Joe Kohn candidly stated, “it was not taken as a pro bono case, you know, a lot of my motivation is, at the end of the day… it will be a lucrative case for the firm.”

As part of the Kohn, Swift and Graf financed PR campaign to take Chevron’s reputation hostage and ransom it back to the company in the form of a large settlement, Kohn has hired DC lobbyist Ben Barnes to lobby the US Congress on “environmental matters resulting from oil exploration in Ecuador.” Barnes then hired DC based PR representative Karen Hinton to spread misinformation and distort the facts of the case.

Years of misinformation and distortion spread by U.S. trial lawyers and their PR cohorts lead the public and media to believe that 30,000 indigenous Amazonians are behind this lawsuit, and that any financial award from a settlement or verdict would go to the indigenous peoples of the Oriente.

However, the truth tells a different story.  Kohn’s firm has coordinated a series of economic and political relationships between the Ecuadorian government, U.S. trial lawyers and activist groups in an effort to put pressure on a small rural courtroom in Lago Agrio, Ecuador, to find Chevron guilty in an environmental lawsuit. Any financial awards as a result of a settlement or judgment against Chevron would invariably go only to the Ecuadorian government and the U.S. contingency fee lawyers driving this frivolous lawsuit. In fact, Washington Pesántez Prosecutor General of Ecuador confirmed that “90% [of any judgment against Chevron] would be delivered to the State…”

One thing is certain, Chevron will continue to fight this misguided and disingenuous lawsuit until justice prevails.

“Well, our clients never released Texaco.” – Steven Donziger, 60 Minutes, May 3, 2009

The U.S.-based trial lawyers in the lawsuit against Chevron claim their clients never signed-off on Texaco Petroleum’s remediation, giving them standing to sue the company.

Mr. Donziger fails to mention, however, that this could have never been the case, because the remediation work was conducted on State-owned lands and was reviewed and approved on behalf of the plaintiffs, and every other Ecuadorian citizen, by Ecuadorian officials. According to the law, Ecuadorian officials represent all Ecuadorian citizens.  Otherwise any release would have required the individual consent of every Ecuadorian. Mr. Donziger also fails to mention that none of his 48 clients have filed claims for personal injury or property damage.

When the oil production concession between Texaco Petroleum and Petroecuador ended in 1992, Texaco Petroleum agreed to perform a $40 million remediation program to remediate sites mutually agreed to by both parties and the Government of Ecuador.

During the remediation, dozens of government inspectors, laboratory personnel, and State representatives reviewed the remediation and granted Texaco Petroleum, and all its respective principals and subsidiaries, a full and complete release from any remaining environmental liability.

In addition, four different lawsuits for environmental harm that were filed in 1994 by the municipalities of la Joya de los Sachas, Shushufindi, Lago Agrio and Orellana were settled in 1996. The jurisdictions of these municipalities cover the entire area of the former concession. All four settlements were approved by Ecuadorian courts therefore putting an end to any future environmental claim on those territories under the jurisdiction of such municipalities.

Click on map for larger image:


At the time, under Ecuadorian law, only the government had the right to bring claims for environmental impacts to the state-owned land where the oil operations took place.   Another problem for Mr. Donziger and his colleagues was that they could not file an American styled class action as they do not exist under the Ecuadorian law system.  So, according to press reports, they lobbied Ecuador’s legislature and convinced officials to write a new law to allow collective lawsuits for damages by private citizens when environmental harm had been caused.  In 1999, a year after Texaco Petroleum completed its remediation and was granted a full release by the government, the Environmental Management Act (EMA) was passed.

Still, the 1999 EMA cannot be applied retroactively to a matter already fully settled with the Government of Ecuador. Moreover, the EMA does not grant the clients of Mr. Donziger or any individual “the right” to unrestrictedly sue for environmental harm. This “right” can only be exercised to the extent that plaintiffs have sustained a direct harm (no such claim has been made or proven by any of the 48 plaintiffs). Thus, the plaintiffs are trying to improperly apply the 1999 EMA law in an attempt to extort a settlement from Chevron.