Tuesday, January 31, 2017

Part of Canadian Judge's Decision a Slap in the Face To Human Rights Victims Worldwide

After being forced by Chevron to litigate for an astonishing 24 years, Ecuadorian indigenous villagers fighting for their own survival are now set to seize the company's assets in Canada to pay for a court-mandated clean-up of what is probably the world's worst oil-related environmental disaster.

But Canadian trial judge Glenn Hainey, either through ignorance or by making an old-fashioned mistake of corporate law, has just put up a potential roadblock in this historic campaign. In so doing, he inadvertently has damaged the cause of human rights and helped smooth the way for corporate polluters like Chevron to obtain impunity for their environmental crimes.

In a decision last week, Hainey allowed the Ecuadorian villagers to try to seize Chevron's assets in Canada to force the company to pay for its $12 billion environmental judgment in Ecuador. That's a huge victory for human rights. But oddly, Hainey also ruled that the assets in the oil giant's wholly-owned subsidiary in Canada were off-limits to collection.

Given that most of Chevron's estimated $25 billion worth of assets in Canada are held in the company's subsidiary (called Chevron Canada), that could be a big problem for collection if allowed to stand. We believe this part of Hainey's decision will be swiftly reversed, as was a previous trial judge's decision in favor of Chevron on similar grounds.

As background, Chevron has admitted to abandoning 1,000 toxic waste pits on indigenous ancestral lands in the Ecuadorian rainforest. Five indigenous groups have been decimated and are fighting for survival. The company also confessed that it deliberately dumped billions of gallons of toxic oil waste (known as "production waters") into streams and rivers of Ecuador, causing an outbreak of cancer in the affected area as confirmed by several independent health evaluations.

Hainey's decision has dramatic and even terrifying implications for the Ecuadorian villagers and all human rights victims. The thinking behind it explains why all too often the fossil fuel industry feels it can run roughshod over the planet while externalizing the costs of pollution to taxpayers without ever being held accountable in a court of law.

For context, Chevron has 1,500 wholly-owned subsidiaries around the world. Most of these subsidiaries, like many of those the company has set up in Canada, have no operations but are used for tax avoidance purposes and to avoid liability. Hainey ruled that all Chevron and other corporate polluters have to to do to avoid liability is to stuff their high-value assets (like oil fields, refineries, and pipelines) into a paper subsidiary and leave it at that.

Under Hainey's stunning theory, communities like those in Ecuador that win court judgments over environmental pollution are left out in the cold even though they adhere to the rule of law and fight for decades to win court judgments that get upheld on appeal.

What's really crazy about the logic behind the ruling -- and extremely unfair -- is that Chevron gets to keep all the profits from its subsidiaries, but the subs themselves are not allowed to be used to pay the company's debts. Chevron Canada pays about $3 billion annually in dividends to its sole shareholder Chevron yet is immune from any effort to collect a debt against its patron.

American law professor Aaron Marr Page recently published a brilliant deconstruction of the Hainey decision in the Huffington Post that should be a must-read for those who want to understand how such an unjust result can emerge from an apparently well-meaning judge.

After pointing out that Chevron has engaged in many years of forum shopping, judicial sabotage, and falsification of evidence to evade paying for its pollution in Ecuador, Professor Page writes:
Judge Hainey essentially ruled that a multinational fleeing a valid court judgment that hides its assets in a maze of paper subsidiaries can completely insulate itself from paying its obligations, while losing nothing in terms of profit or control... The decision stands as a dangerous precedent for the many other corporate accountability claims that are currently underway in Canadian and other courts.
Professor Page continues:
[Hainey] says to those claims that even if you prevail at the jurisdiction and the merits/liability stages, even if you sustain your victory on appeal, here is yet another barrier that could prevent you from merely collecting on a successful judgment. The chill this could cast more broadly on efforts to enforce human rights norms is obvious.
Professor Page also underscored that Hainey's fundamental error was that he used the wrong legal analysis of the corporate separateness defense raised by Chevron.

The real issue that Hainey missed is that there is a $12 billion judgment against Chevron based on voluminous record evidence documenting in great detail the company's pollution in Ecuador. The decision was affirmed unanimously by Ecuador's Supreme Court in the country where Chevron accepted jurisdiction. Chevron is a scofflaw debtor and no different than a parent who owes child support and flees to another state to evade paying.

The issue before Hainey was simple: Chevron Canada is a Chevron asset that obviously can be used to seize a debt owed by Chevron under basic legal principles adhered to by all civilized nations and codified in Canada's Execution Act. It's no different than a court ordering the seizure of the car or bank account of a parent to force payment of court-ordered child support.

Instead of adhering to this bedrock principle of law -- creditors have the right to seize a debtor's assets to satisfy a debt --  Hainey took Chevron's bait and went on a radical tangent by engaging in a "pierce the corporate veil" analysis which has no applicability to this enforcement action. He then bailed out Chevron by claiming Chevron Canada is a "separate" company even though it is totally owned and controlled by Chevron and 100% of its revenues flow up to Chevron as dividends.

But even under the incorrect "pierce the corporate veil" analysis, Hainey still got it wrong. In the modern globalized world, it is preposterous to think a company can avoid liability in one country by moving its assets to a paper subsidiary in another that it totally controls and then claim it is a "separate" company.

Hainey never should have succumbed to Chevron's pressure and used the "pierce the corporate veil" analysis. That analysis should apply only when there is a judgment against a subsidiary that has insufficient assets, forcing the creditor to go after the parent. In the Ecuador case, we have the opposite situation. There is a judgment by the villagers against a parent (Chevron) that refuses to pay and is a scofflaw. The subsidiary is simply one asset of the parent that could be seized to satisfy the judgment and force the parent to respect the rule of law.

When one understands Chevron's quarter-century of abuse of the civil justice systems in Ecuador and the United States, Hainey's decision becomes even more bewildering.

One wonders if he was cowed by the 30 or so Chevron lawyers from powerful law firms who showed up in his court during a four-day motions hearing last September. Most of them stared him down while only four or so of the lawyers actually did the argument.

The tab in legal fees to Chevron for what appeared to be a four-day exercise in judicial intimidation was an estimated $500,000. But that's nothing compared to the $2 billion Chevron has paid to hire 60 law firms and 2,000 lawyers to fight the villagers since the inception of the case in 1993.

While the affected villagers make around $500 per year on average tilling contaminated land courtesy of Chevron, Chevron grosses about $250 billion per year and is the third largest corporation in the U.S. Chevron CEO John Watson takes home around $30 million per year -- or 60,000 times as much as each of his victims in the rainforest.

Hainey might remember that Chevron originally fought for ten years to avoid jurisdiction in the United States. The company filed 14 sworn affidavits before U.S. courts praising Ecuador's courts as fair and accepted jurisdiction in Ecuador as a condition of the change of venue. But once the scientific evidence mounted against it in the Ecuador trial, Chevron sold its assets in the country and started to attack the court system it had previously praised.

Hainey's reasoning no doubt will be recognized as extremely disturbing by Canadian appellate courts, which have a long history of being open to the claims of human rights victims. A previous trial judge tried to block the enforcement trial in 2013 only to be unanimously overturned by two Canadian appellate courts, including the country's Supreme Court.

While Hainey closets himself behind mechanical arguments, human rights victims the world over rightly shudder at his reasoning. Courts like those in Ecuador make valiant efforts to advance the rule of law to hold polluters accountable. To be undermined by a trial judge in a faraway land is both demoralizing and a blow to civil society institutions everywhere.

People actually die from pollution as a result of delays produced by incorrect legal decisions.

As said, Canada's Supreme Court already blocked Chevron's earlier attempt to stop the Ecuadorian villagers from launching what in the commercial context would be considered a routine asset seizure action. Canada's appellate courts should order Chevron to defend itself in a speedy enforcement trial that will have zero tolerance for further litigation abuse.

Monday, January 23, 2017

In Canada, Chevron Faces New Nightmare Scenario Over Ecuador Pollution Liability

A Canadian trial judge on Friday issued a ruling over the potential seizure of Chevron assets to pay for the clean-up of the billions of gallons of toxic waste the company dumped into Ecuador's rainforest. The ruling has enormous implications for Chevron shareholders and the corporate accountability movement on a global scale.

Judge Glenn Hainey of the Ontario Superior Court of Justice ruled that Ecuadorian indigenous groups from the Amazon rainforest can take the oil giant to trial as part of their effort to seize company assets to pay the $9.5 billion tab needed to remediate their ancestral lands.

The indigenous nationalities in 2011 won the largest environmental judgment in history in Ecuador but Chevron has refused to pay, selling off its assets in the country and hiding behind technical arguments. Chevron had insisted the trial be held in Ecuador and accepted jurisdiction there. The company also committed fraud by falsifying evidence and engaging in a sham remediation.

Here are some of the important implications from the latest Canada decision:

Chevron has definitively lost its bid to avoid an enforcement trial in Canada. Chevron used every technical defense in the book to avoid the trial. Even Canada's Supreme Court ruled against Chevron. Now it must face a terrifying day of reckoning over how its key witness, Alberto Guerra, has lied under oath and that its fundamental story about judicial bribery is false.

Chevron's U.S. lawyer Randy Mastro will face enormous risk. American lawyers Randy Mastro and Avi Weitzman of the U.S. law firm Gibson Dunn & Crutcher violated the law by arranging for Guerra to be paid $2 million for his false testimony in a farcical retaliation trial in the U.S. They coached Guerra for 53 consecutive days before he testified; Guerra later admitted lying on the stand. Gibson Dunn's obstruction of justice in the U.S. "racketeering" trial will be front and center in the Canada proceeding.

Look for Chevron's executives to try to settle before the trial: Chevron shareholders already are up in arms over management's mishandling of the Ecuador liability. Look for embattled CEO John Watson to order his lawyers to try to settle the case before Guerra is forced to take the stand and the company's entire narrative falls apart.

Chevron's strategy of perpetual delay just got shellacked. Trial judge Hainey tossed out two of the company's main defenses which already had been litigated and rejected by three layers of courts in Ecuador. The company will be kept on a short leash in Canada, undermining its strategy of delaying any judicial procedure that could hold it accountable on the merits.

Chevron is kidding itself if it thinks its Canadian subsidiary is immune from liability. The part of the Hainey decision that immunized Chevron's wholly-owned subsidiary from enforcement runs counter to logic, violates the spirit of a prior decision of the Canada Supreme Court, and is likely to be reversed on appeal.  Ten separate Canadian appellate judges already reversed this ruling when issued by a prior trial judge in 2013.

Karen Hinton, the spokesperson for the villagers, was eloquent in her response to the latest development. She called it a "resounding victory for Ecuadorian indigenous groups and farmer communities who have struggled for more than two decades to clean up its toxic waste."

Hinton added:
The court sent Chevron a powerful message that it can no longer ride the legal merry-go-round and re-litigate the same discredited defenses in different courts as part of its strategy of delay...The villagers expect to proceed later this year with their seizure of Chevron's assets to force the company to respect multiple court judgments that found it guilty of dumping billions of gallons of toxic waste into the waterways of Ecuador, causing an outbreak of cancer and other harms afflicting thousands of people. Ultimately, we are confident that Canada's courts will hold Chevron fully accountable for its outrageous and criminal conduct in Ecuador.
Carlos Guaman, an Ecuador community leader and the executive director of the coalition that brought the enforcement action, said he wanted to "thank" Canada's courts "for sending a strong message to Chevron that its outrageous strategy of blocking justice will soon end."


Thursday, January 5, 2017

Chevron's Massive Pollution In Ecuador Frames Death of Legendary Nurse Rosa Moreno

Rosa Moreno, the legendary nurse in Ecuador who spent three decades treating children and others afflicted with cancer in the area of Chevron's oil pollution in the Amazon rainforest, has now herself succumbed to cancer, the Amazon Defense Coalition reported on Wednesday. One might reasonably question whether Chevron's refusal to clean up its pollution in Ecuador played a role in this tragic event.

Moreno, a splendid human being well-known to those of us who write The Chevron Pit, died this week in the Amazon village of San Carlos after a two-year battle with the illness. Moreno, 55, had hosted a long line of celebrities -- including Brad Pitt and the actor Trudie Styler -- in her tiny health clinic in the town of San Carlos as she tried to sensitize the world to the plight of people who won a historic $9.5 billion judgment against Chevron in 2013.
Rosa Moreno in front of the San Carlos clinic
San Carlos is akin to Love Canal in the United States, only worse. For decades the village has been home to dozens of toxic waste Superfund sites that include open-air waste pits filled with oil sludge that that were built by Texaco in the 1970s and abandoned. Texaco installed pipes to run the toxic waste into nearby streams and rivers relied on by locals for drinking water. The pits were documented in a report on 60 Minutes and in the documentary Crude by acclaimed filmmaker Joe Berlinger.

Chevron bought Texaco in 2001 and inherited the liability from the disaster. Over the years, the company has used 60 law firms and roughly 2,000 lawyers to evade paying for the court-mandated clean-up.

Aside from the pits, one of which is pictured below, Texaco located a large oil separation station in the middle of town. The station systematically discharged billions of gallons of benzene-laced production waters into rivers and streams, creating a ticking time bomb that has killed or threatens to kill thousands of people. Chevron never even extended the courtesy of putting up fences around the hazardous waste sites to keep animals out and to warn people away.

Oil pit built by Texaco in the 1970s and abandoned by Chevron near San Carlos, where Rosa Moreno lived.

Moreno was a bright light in the middle of what might be the most contaminated town on earth. From a press release from the Amazon Defense Coalition, the grass roots organization that brought the historic lawsuit against Chevron:
Moreno was mostly known as a person who tried against all odds to stave off the impending health disaster with her compassionate care of young children. Her clinic was a short walk from her house, and she was often found there seven days per week. Moreno meticulously kept a handwritten log of people in the clinic who had died, often without receiving proper treatment given the paucity of doctors in the area. The list in recent years had grown to dozens of names -- many young children -- even though only 2,000 people lived in the town. Each name on the list had a date of birth and date of death scrawled in Moreno's distinctive script.
Steven Donziger, the longtime U.S. legal advisor to the affected Ecuadorian communities who has been targeted by Chevron for his work to hold the company accountable, laid some of the blame for Moreno's death at the feet of the company:
I firmly believe Rosa and many others like her in San Carlos would not have died had Chevron mets its legal and moral responsibilities to the people of Ecuador. Rosa's death, like those of many others in Ecuador, was entirely preventable. Chevron should provide compensation to her family and medicine and diagnostic equipment for the San Carlos clinic, in addition to remediating the abysmal environmental conditions that continue to put innocent lives at risk.
Moreno's legacy will live on in many ways.

Many of the celebrities who visited Moreno in her clinic took action to alleviate the human suffering and to protest Chevron's outrageous behavior. They include Styler, who has written articles to call attention to Chevron's human rights abuses and who started a project with UNICEF that has delivered clean water to numerous villages in the affected area.

Rosa Moreno and colleague Mariana Jimenez in San Francisco
Rep. James P. McGovern (D-MA), the only U.S. Congressman to visit the devastated area, toured the health clinic in 2008 and then vividly described the horrific conditions created by Chevron in a moving letter to President-elect Obama. Bianca Jagger went to Chevron's shareholder meeting and gave the company's CEO hell in a blistering speech. Berlinger's film included Moreno and scenes from her clinic.

Karen Hinton, the former press secretary for New York City Mayor Bill DeBlasio, has hounded Chevron for its irresponsible behavior in Ecuador in a series of blogs published on The Huffington Post. And Donziger -- a classmate of Barack Obama from Harvard Law School -- has been a thorn in Chevron's side for more than two decades, as his own writings illustrate.

If you have any doubt about the cause of Moreno's death, look no further than the numerous independent studies that demonstrate Chevron's toxic legacy has produced skyrocketing cancer rates in the area where she lived. One study from a former Rand Corporation analyst predicts 9,000 deaths in the affected area in the coming years if Chevron refuses to remediate the disaster.

For more on Texaco and Chevron's dastardly behavior in Ecuador, see this video.

Although Chevron's management team surely never thought it possible, Rosa was among the many impoverished Ecuadorians who banded together and fought for years before finally holding the company legally accountable in 2011 after an eight-year trial. In a paradigmatic breakthrough in the human rights area, several prominent corporate law and litigation firms around the world signed up to represent the villagers. And in 2013, Ecuador's Supreme Court unanimously affirmed the trial court ruling in a 222-page decision that meticulously documented the overwhelming evidence against Chevron.

Although the lawsuit originally was filed in the U.S., the trial was held in Ecuador at Chevron's request and the company willingly accepted jurisdiction there. Of course, Chevron thought it could engineer a political dismissal by pressuring Ecuador's government. That unethical strategy backfired.

Chevron's continued obstinance -- it sold off its assets in Ecuador during the trial and has vowed to fight "until hell freezes over" -- forced Rosa and her friends to try to seize company assets in Canada to pay for their clean-up. That country's Supreme Court recently backed the villagers in a unanimous opinion. Chevron is now facing its own ticking time bomb in court.

Rosa, your legacy will inspire the affected communities and their allies around the world to fight on until Chevron pays the court judgment in full and the responsible individuals are held accountable for their misconduct.

Monday, October 31, 2016

Exxon Campaign Against Environmental Groups and AG Offices Eerily Similar To Chevron's Against Ecuadorian Indigenous

Reposted from Medium.

Exxon and Chevron have something in common other than oil these days. They both are playing big victims in big ways to distract from their environmental wrongdoing.

These gigantic companies are arguing in court that separate but similar “illegal conspiracies” against them are underway by groups of environmentalists, states attorneys general, trial lawyers and liberal-leaning advocates.

Chevron says it’s being “victimized” by a group of impoverished Ecuadorian indigenous peoples and their lawyers who won a historic $9.5 billion judgment for water and soil contamination in the Ecuador rainforest and want Chevron to pay up now, after 23 years of litigation.


Ecuadorian women and their children living in the rainforest who Chevron says are “conspiring” against the oil giant in collusion with their lawyers and environmental groups, like Amazon Watch — Photo by Lou Dematteis

Note: Chevron demanded the historic court case be tried in Ecuador, in the first place, and accepted jurisdiction there. Three levels of Ecuador’s courts have upheld the damage award, based on no fewer than 106 technical evidentiary reports submitted to the court.
But, like Donald Trump who refuses to accept the outcome of the presidential election unless he wins, Chevron refuses to pay the environmental judgment.
That’s after the company stripped its assets from Ecuador during the trial, forcing the Ecuadorians — who have suffered from decades of pollution — to file a lawsuit in Canada to seize company assets there as payment for the Ecuador judgment.
Meanwhile, Exxon would have us believe environmental groups and states attorneys general are colluding — in violation of their 1st, 4th and 15th Amendment rights — by demanding to know what Exxon knew about climate change in the 1970s but intentionally kept from shareholders and the public. They are asking questions about possible securities law violations based on Exxon’s obvious deceptions about global warming. Check out one of numerous internal admissions kept from shareholders.


While Chevron wrote the “victim” playbook, Exxon is taking pages from it. Examples of the eerily similar campaigns:

Similar Message


Exxon spokesman Alan Jeffers used this line in recent news coverage to describe its victimization: “This is a conspiracy to deliberately misrepresent the company’s position and to tear down the company.”

Chevron’s main lawyer Randy Mastro — known for “exonerating” NJ Governor Chris Christie in the Bridgegate scandal — has accused the Ecuadorians and their lawyers of a “criminal conspiracy” and said, if successful, “it will be open season on U.S. corporations.”

Similar Tactics


Chevron has by its own admission sought to demonize one of the Ecuadorians’ lawyers, Steven Donziger. In much the same way, Exxon is demonizing the motivations of state attorneys general.

Exxon has recruited U.S. Congressman Lamar Smith to conduct hearings on the investigation launched by state attorney generals. As Chairman of the House Science Committee, the Texas lawmaker has subpoenaed the environmental groups and Attorneys General in New York and Massachusetts for all sorts of documents as an obvious form of harrassment.

Chevron played a similar card over ten years ago, lobbying Congress to end Ecuador’s trade preferences in retaliation for “allowing” the Ecuadorians to file a lawsuit against the oil giant. Had Congress agreed, Ecuador would have lost thousands of jobs for its low-income residents. A Chevron lobbyist told Newsweek the U.S. “…can’t let little countries screw around with big companies like this — companies that have made big investments around the world.”

Similar Legal Strategy


Chevron countersued the Ecuadorians and their lawyers claiming their entire case was a “sham” and that they were trying to extort money from the company.

In turn, Exxon took the AGs and the environmentalists to court.

Here’s the reality on these two so-called “conspiracies”.

When it became clear the Ecuadorians would win their long court battle in Ecuador, Chevron unveiled an intimidation campaign in the U.S. designed to discredit the Ecuadorians and their lawyers, delay the enforcement of the Ecuador judgment and deceive the public and financial markets about what happened in the South American country.

With over 2,000 lawyers and legal assistants, at least six major public relations firms and as many, if not more, lobbying firms in tow, Chevron filed a retaliatory, RICO lawsuit for extortion and bribery against the Ecuadorians and launched a coast-to-coast PR slander campaign against them and their lawyers.

Now comes Exxon with a similar campaign against 350.org, Sierra Club, the Environmental Defense Fund and the Natural Resources Defense Council and 40 other well-known environmental and social justice groups, as well as the Attorney General.

Exxon’s PR guru Suzanne McCarron told a Business Week reporter that the effort against Exxon “feels very orchestrated” and “we wanted to know who’s behind this thing.”

Of course, it’s no secret — and never has been — who is behind it. All McCarron had to do was Google search “Exxon” and “climate change” and the people criticizing her company will appear. It’s absurd to believe the groups “behind this thing” don’t have constitutional rights to criticize and probe the actions and policies of a publicly-traded company.

But, like Chevron, if Exxon could build a different narrative — one of intrigue, conspiracies, and collusion — then the leaders of the “conspiracy” could be discredited and demonized, just as Chevron tried to do to the lawyers for the Ecuadorian villagers.

“Exxon has hired an army of lawyers to try and distract from the real story here: that they lied about their knowledge of climate change for decades,” said 350.org communications director Jamie Henn. “Delay and deceit.”

“Exxon’s filing leaves out the fact that they have spent millions of dollars funding misinformation campaigns, faux think tanks, and the elections of climate deniers. They’re reacting this way because they know the stakes of this investigation are enormous.”

The Ecuadorians could tell the U.S. environmental groups a thing or two about delay, deceit, and distractions.

Delay: 23 years of litigation in U.S., Ecuadorian and now Canadian courts, thanks to the litigious Chevron and its bottomless pit of money for lawyers.


Another example of Chevron’s deceit and deception in Ecuador rainforest.

Deceit: Chevron’s paying a witness over $2 million in cash and benefits to testify falsely against the Ecuadorians that they bribed a sitting judge and wrote the judgment for him. The $2 million is four times the amount of the false bribery claim. Chevron’s lawyer Mastro and his team spent 53 days “coaching” the witness to lie.

Distractions: Filing lawsuits in dozens of jurisdictions to draw attention away from the pollution in Ecuador and drain the Ecuadorians of any money for lawyers so they are not able to enforce the judgment that three layers of appellate courts in Ecuador have upheld.

Despite the delays, deceit and distractions, the Ecuadorians are still fighting Chevron and could end up collecting the full amount of their judgment in Canada, where the country’s Supreme Court backed them in a unanimous procedural decision in 2015.

Time will tell. Chevron as well as Exxon should look around and see how the world is changing. Time is running out for both climate change deniers and corporate polluters.

Monday, September 19, 2016

Calling Chevron's Bluff

The courthouse in Canada

Reposted from Eye on the Amazon.

One of the worst oil-related disasters in history occurred when Texaco, later purchased by oil giant Chevron, deliberately dumped 18 billion gallons of toxic waste into the Ecuadorian Amazon over the course of decades. The resulting health crisis in the rainforest home of 30,000 Amazonian inhabitants continues to this day. A $40 million deal with the government of Ecuador in 1995 resulted in a sham remediation, after which Texaco publicly washed its hands of the affair.

Not satisfied with such an egregious lack of justice, the affected communities have continued to demand accountability, taking their case all the way to the Ecuadorian Supreme Court, and winning: in 2011 an Ecuadorian judge found Chevron liable for $9.5 billion in damages, a ruling upheld by the Supreme Court. Instead of doing the right thing, however, Chevron took its assets and fled from Ecuador, and continues to use its corporate might to avoid accountability. Nonetheless, the communities and their allies around the world haven't given up the quest for justice.

The quest continues


Amazon Watch spent four days last week in a courthouse in Toronto to witness the latest, and hopefully last, chapter in this epic quest for justice.

When Chevron fled Ecuador after the $9.5 billion judgement against it, the affected communities turned to the courts in Brazil, Argentina and Canada to hold the company accountable, seeking summary judgments allowing the seizure of the assets of Chevron subsidiaries in order to pay for the Ecuador judgement.

Backed by a unanimous 2015 decision from Canada's Supreme Court giving a green light for the Ecuadorians to sue Chevron in Canada, last week's trial is an important step in the quest for justice. The principal issue before the court was whether to grant the Ecuadorian's request for access to Chevron Canada's assets to cover the $9.5 billion judgement, versus Chevron's defense motion to summarily dismiss the entire claim. The Ecuadorians base their plea on the massive evidence of contamination in Ecuador and a $9.5 billion verdict issued in Ecuador and upheld by its highest court. Chevron claims the verdict itself is fraudulent, basing this claim on the fact that it managed to win a retaliatory RICO (racketeering) lawsuit in the US by alleging bribery, corruption, and a "ghostwritten" judgment by the Ecuadorian court.

Also at issue is what lawyers call "piercing the corporate veil" of hidden parent-subsidiary relationships in order to hold Chevron Canada – a wholly owned subsidiary of Chevron Corp. – liable for the actions and its parent company. The Ecuadorians assert that their action doesn't really hold Chevron Canada responsible, it simply seeks to hold Chevron accountable by seizing assets it controls in Canada through what is actually nothing more than a holding company. This is an important issue for corporate accountability advocates everywhere, because corporations around the world attempt to hide behind the corporate veil.

Therefore, Ontario Superior Court Judge Glenn Hainey will have to decide whether to grant a summary judgement in favor of either the Ecuadorians or Chevron, or to send the case to trial to examine in depth the claims made by both sides.

This last option was welcomed by the lawyer for the Ecuadorians, Alan Lenczner, who encouraged Judge Hainey to give him the opportunity to demonstrate the falsehood of Chevron's claims of bribery and a ghostwritten judgement in Ecuador, and the resulting invalidity of the US RICO decision.

Lenczner's offer provoked quite a reaction from Chevron's legal team in the courtroom (over a dozen US and Canadian lawyers), but he persisted. "That's the issue and what should be tried here. If they're right and have confidence in that, then they can show you and... well then, we lose," Lenczner continued emphatically. "We should have a trial on the ghostwriting! Here's how a trial would go. I will stand up and file a judgment which will be valid until you [the judge] set it aside. Chevron will then bring on their defense and call Guerra [Chevron's “witness” to the alleged bribery]... They won't call Guerra, they're afraid to," concluded Lenczner. By doing so he called their bluff; Chevron's RICO verdict is predicated on the testimony of a corrupt witness, who has since admitted he lied in exchange for over $2 million from Chevron.

To explain the details of this sordid tale and just how Chevron has apparently backed itself into a seemingly impossible corner, we must return to the beginning of the story and detail more about Chevron's efforts to escape justice at all costs.

The history


While Texaco long since admitted to dumping the toxic waste as a cost-saving measure, and is therefore responsible (as the sole operator) for the contamination, Chevron, since its purchase of Texaco, has itself dumped billions of dollars into fighting to avoid a full cleanup, even while knowing full well it could never win the case based on the merits.

The number of legal hoops that Chevron has jumped through to avoid accountability are impressive. When the communities brought their first claim against Texaco, in New York, Texaco spent a decade arguing that Ecuador was the proper venue for the case. It eventually won that argument, but then on the first day of the trial in Ecuador objected to the entire case and claimed it shouldn't be there either. It proceeded to drag out this second trial another eight years and used every dirty trick in the book to throw wrenches in the wheel of justice.

As the case was finally coming to an end in Ecuador, leaked internal memos revealed Chevron's plan to vilify the Ecuadorians, their lawyers and the entire Ecuadorian judicial system, as an attempt to invalidate in the court of public opinion any judgement that would be issued against it. Sparing no expense, the company waged a scorched earth legal strategy and hit pay-dirt when US Federal Judge Lewis Kaplan suggested Chevron file a RICO (racketeering) suit in the US; Kaplan made his suggestion based primarily off doctored outtake clips from the documentary Crude.

Kaplan's court was exactly what Chevron desperately needed – a friendly judge thousands of miles away from the actual events in the Amazon who didn't read Spanish and expressed public disdain for the Ecuadorians before his trial even began. Most importantly for Chevron, Kaplan would not even allow the word "contamination" in his courtroom, let alone evidence of the actual crime of Chevron's toxic waste. Further, Kaplan's willingness to grant any request of Chevron's lawyers at Gibson Dunn & Crutcher meant the widespread issuing of subpoenas of a long list of "non party co-conspirators" – a tactic to intimidate and harass anyone critical of Chevron in support of the Ecuadorians (including Amazon Watch).

The underlying claims made by Chevron are that the Ecuadorian verdict was obtained by fraud committed by the Ecuadorian and US legal team led by Steven Donziger. Chevron claims that Ecuadorian Judge Alberto Guerra was offered a $500,000 bribe by the Ecuadorian's lawyers to ghostwrite the $9.5 billion judgment and give it to the presiding judge Nicolas Zambrano. The truth is none of that actually happened.

In a mockery of justice, Judge Lewis Kaplan accepted the testimony of Guerra, even though it came to light during the trial that Guerra received millions of dollars from Chevron to testify and had been coached for 57 days before the trial. Guerra himself had already lost his position as a judge because he had admitted to taking at least 20 bribes in other cases, some for as low as $200. Kaplan even acknowledged that Guerra was not a very credible witness, but decided to believe him in this instance. This despite the fact that Guerra was unable to produce the evidence he claimed he had of the verdict he supposedly wrote for Zambrano, and that the details his story changed several times during his testimony.

Few people know that the way Chevron found out that Guerra was corrupt in the first place was because, as he admitted during the RICO trial, he approached Chevron looking for a bribe. Chevron claims it turned him down, but curiously it didn't report the incident to anyone. Ultimately, Guerra should never have been permitted to take the stand, but Kaplan allowed it. After a trial called a "Dickensian farce" by noted California Attorney John Keker, Kaplan issued a 500-page verdict and blasted the Ecuadorians and their lawyers. He never claimed that Chevron was innocent of the environmental crimes in the Amazon, but he declared that the Ecuadorian judgment was unenforceable in the U.S. The Second Circuit Appeals Court inexplicably held up Kaplan's verdict a few months ago. And while the Ecuadorians' appeal to the Second Circuit was based on Chevron's misuse of the RICO statute and their lawyer Donziger vehemently contested the "facts" of Kaplan's ruling, Chevron's PR spin machine often succeeds in getting the mainstream media to not report on the facts of the case but only on the allegations of fraud. Nor has the media reported widely that Kaplan's RICO verdict offers no legal remedy for Chevron since no one has sought to enforce the case in the U.S.

Nonetheless, things were looking bright for Chevron, even knowing that the Ecuadorian's lawyers will likely appeal Second Circuit decision. But soon, Chevron's strategy of legal shell games and forum shopping began to backfire. At the same time as the RICO case, Chevron filed a case against the government of Ecuador at the Hague under a bilateral trade agreement. A panel of three judges were tasked with determining if Ecuador had offered Chevron adequate legal protection. A ruling in Chevron's favor could essentially end up forcing the government of Ecuador, and thus its taxpayers, to foot the bill for the cleanup. While this tribunal process offered no role for the actual affected people of Ecuador, but it did offer another opportunity for more evidence from Ecuador to see the light of day.

After Kaplan had already issued his verdict, Chevron's "star witness" Guerra took the stand before the tribunal... and proceeded to recant his RICO testimony about the bribe he allegedly received from the Ecuadorians! Furthermore, he admitted he came to no arrangement with Zambrano and he had no evidence of a ghostwritten judgement. Guerra also admitted that he told Chevron what they wanted to hear to get a bigger payout as reported by Vice News:

In testimony before the tribunal, Guerra admitted that at this point he tried to get more money from Chevron. "At some point, I said, well, why don't you add some zeroes to that amount, and then later on I said, 'I think it could be 50,000.'"

In an even bigger blow to Chevron, the government of Ecuador produced an expert forensic report of the computer of Judge Zambrano proving the judgment was written over the course of four months and no external devices, nor pasted-in excerpts from Guerra were inserted into the judgment.

The US Second Circuit Court of Appeals did not consider Guerra's new testimony nor the forensic report, but the court in Toronto might. And THAT brings us to this past week in Canada. Chevron cannot afford to have Alberto Guerra get back on the stand. Their lawyers are desperate to avoid that – so much so that they made an outrageous and false claim in the last few moments of the hearing stating that they "held transcripts of both Guerra's RICO and Tribunal testimonies side-by-side and there was no daylight between them." That appears to be a pretty desperate lie when Guerra stated in the Tribunal when referring to the RICO testimony, "yes sir, I lied there." You could see a solar flare through that gaping hole.

So now we wait, hopefully not too long, for Judge Hainey to decide. In the meantime, some Canadian journalists have already started to ask: "where is Alberto Guerra? Does anyone know?" Presumably he's still living somewhere in the US in the house Chevron bought for him and driving the car they gave him to the mall each week to spend some of the monthly stipend he still receives from his friends in San Ramon. We can't wait to see if he surfaces.

We certainly hope someone does track Guerra down, because the Ecuadorian communities living in the midst of Chevron's deadly oil waste shouldn't have to wait a day longer. As their lawyer Lenczner said in closing, "this case calls for assistance not barriers. These people have been waiting more than 20 years."