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Bloomberg’s Paul Barrett reported Dec. 16 that “Chevron made more progress in its table-turning campaign against plaintiffs' lawyers suing the oil company over pollution in Ecuador.”
As I explained here, from 1964-1990 Texaco dumped billions of gallons of toxic waste in the Ecuadorian rain forest. In 1993, the company was sued in the United States by the Ecuadorian victims of that pollution but, by 2002, Chevron (which merged with Texaco in 2001) succeeded in getting a U.S. court to say that the matter had to be settled in Ecuador. An appeals court upheld that decision but made Chevron promise to abide by what Ecuador’s judiciary decided. In 2013, the Ecuadorean Supreme Court awarded US$9 billion in damages to the victims. By then Chevron had sold off its assets in Ecuador and its “table-turning campaign” was well under way. In 2011, Chevron sued Steven Donziger and other victims’ lawyers for extortion in the U.S. In 2014, Judge Lewis Kaplan ruled in Chevron’s favor. He allowed Chevron to maneuver around facing a jury or having to defend what it did in the Ecuadorian rainforest for 26 years. Crucially, Kaplan also ruled that “Ecuador does not provide impartial tribunals or procedures compatible with due process in cases of this nature” (see pages 416 to 431 of the ruling) to justify letting Chevron disregard its promise to accept Ecuadorian jurisdiction over the case when it no longer suited the company. I’ve written about the arguments made by legal scholar Burt Neuborne that demolish the shockingly feeble basis for Kaplan’s conclusion about Ecuador’s judiciary.
In September, Canada’s Supreme Court cleared the way for the Ecuadorean victims to try to seize Chevron’s assets in Canada. That key battle will heat up early next year. Also, under cross-examination Chevron’s star witnesses in the extortion trial recently admitted to lying on the stand. So why is Paul Barrett hyping a US$28 million default judgement (meaning it wasn’t contested) in Gibraltar as “progress” for Chevron?
Paul Barrett is no novice to this topic. He knows that US$28 million is trivial compared to the hundreds of millions (according to a book he wrote about this case) that Chevron has paid lawyers to fight this battle. He surely understands why the victims’ lawyers opted not to litigate what they saw as a frivolous suit in Gibraltar aimed at depleting their resources.
Barrett’s book, which was published in 2014, was titled Law of the Jungle: The $19 Billion Legal Battle Over Oil in the Rain Forest and the Lawyer Who’d Stop at Nothing to Win. The “lawyer” is Steven Donziger. The value of US$19 billion is what a local court in Ecuador awarded the victims. It was upheld by an appeals court but the Ecuadorian Supreme Court reduced it to US$9 billion in November 2013 – ten months before the book came out. Brad Pitt bought the movie rights to the book which reads way more like a pitch to Hollywood than serious journalism. Barrett owes a partial debt of gratitude to judge Kaplan for being able to sell his book that way. Kaplan let Chevron’s lawyers run wild with discovery, forcing Donziger to disclose years’ worth of personal information. Like Kaplan in his ruling, Barrett quotes from Donziger’s personal diary in his book. He provides details about the strain the litigation put on Donziger’s marriage. Thanks to Kaplan, Chevron‘s lawyers and management were spared any remotely comparable level of scrutiny. Picking through the personal correspondence of Chevron executives and lawyers would help answer many questions about a lawsuit Chevron faces in San Francisco. The U.S. judge in that case has allowed Chevron to delay the discovery process for four years and counting. By contrast, Donziger was given three weeks by Kaplan to fully comply with Chevron’s deep dive into his personal life and case files.
Barrett’s book did not even mention, never mind discuss, Kaplan's extremely important and absurd dismissal of Ecuador’s entire judiciary. Barrett wrote that Kaplan’s “exhaustive ruling didn’t have the earmarks of bias”. How would Barrett recognize a bias he obviously shares with Kaplan? For example, Barrett’s book mentions that two of Chevron’s lawyers faced criminal proceedings in Ecuador but he doesn’t say that Ecuadorian courts dismissed those proceedings in 2011. Barrett claims that Ecuador’s government “rewarded” the first trial judge who ruled against Chevron with a job as legal adviser to a state-controlled oil refinery after his judicial career was terminated. Ecuador’s Judicial Council removed the judge from office because of his work on an unrelated case after – key word is “after” – he ruled against Chevron. Barrett totally failed to notice what that really says about judicial independence in Ecuador. The judge’s career did not take off after ruling against Chevron, quite the contrary, nor does Barrett mention any suspicious lifestyle changes like the ones enjoyed by Chevron's star witness.
Chevron has very successfully worked the U.S. legal system to avoid responsibility for what was done in Ecuador from 1964-1990. Ecuador’s judiciary has been deemed either reliable or unreliable as and when it suited Chevron; the discovery process has been applied ruthlessly or not as and when it suited Chevron; U.S. juries have been evaded because it has suited Chevron. It’s enough to make one think that when it comes to a company with about US$200 billion a year in total revenues (double the GDP of Ecuador in current US dollars), what Kaplan said about Ecuador is true of the United States. It “does not provide impartial tribunals or procedures compatible with due process in cases of this nature”.
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