Wednesday, January 29, 2014

Donziger's New Appellate Team Comes Out Firing; Asks for Nullification of RICO Case

Reposted from The Chevron Pit

It was only last week that lawyers for Steven Donziger as well as the Ecuadorian victims of Chevron's pollution in the rainforest – sued alongside their longtime legal advocate – filed their final reply briefs in the oil giant's retaliatory RICO case. Judge Lewis Kaplan is expecting to deliver a ruling in the coming weeks or months.

But long expecting an adverse ruling from a judge who his former lawyer John Keker says has shown "implacable hostility" towards him, Donziger didn't wait for a ruling in the case before securing  appellate counsel.

And that appellate team, lead by a lawyer that the Wall Street Journal calls a "heavy" came out firing, filing a motion asking for the RICO case to be dismissed altogether.

As noted in a press release issued yesterday by Donziger:

The move to dismiss the RICO case – which comes after the close of evidence but before decision – is based largely on Chevron's surprise admission in its final post-trial brief that it cannot block foreign enforcement proceedings that rainforest villagers are using to collect on their $9.5 billion environmental judgment.

"In the end, Chevron all but admits that is it not asking this Court to resolve any concrete case or controversy," said the motion, filed by Deepak Gupta of Gupta Beck in Washington, D.C. "This unseemly spectacle of a case must come to an end."

Deepak Gupta is, of course, the "heavy" referred to by the WSJ. He is a principal at Gupta Beck, a firm he founded in 2012, and formerly held a high-level post at the Consumer Financial Protection Bureau. Before working at the CFPB, he worked as a litigator with Public Citizen for seven years, where he argued some high-profile cases before the Supreme Court.

The press release continues:

"Motions to dismiss usually happen at the beginning of a trial, not after three years of litigation," said Gupta. "But when Chevron dropped all of its damages claims to avoid a jury trial, it painted itself into a corner and deprived the court of jurisdiction."

"After analyzing the case for the last several weeks, we have come to the conclusion that Chevron has not identified a single injury that would give it standing," said Gupta. "That's because none exists."
The motion itself was heralded by respected lawyer and legal analyst Ted Folkman. In a post on his Letters Blogatory site, headlined Lago Agrio: Deepak Gupta In The House, he writes:
If you spend your days reading and writing memoranda of law, you know a good one when you see it. And so when I read Steven Donziger's latest brief in the RICO case last week, my first thought was that his lawyers had finally found their groove. But then I looked at the cover and saw that Donziger had actually gotten a new legal team! I assume (but I do not know) that the new member of the team, Deepak Gupta of Gupta/Beck, had a big hand in the new brief that's both legally compelling and a pleasure to read.
Back to yesterday's press release:
What Chevron really wants from Judge Kaplan is an advisory opinion that it can use for public relations purposes in the U.S. and around the world, a judicial function prohibited by the Constitution, said Gupta. "Courts exist to decide actual cases," said Gupta. "They are not debating societies. Nor do they exist to write advisory opinions for foreign courts."

Gupta said Chevron faces two other intractable problems – first, that the injunction it seeks from Judge Kaplan to block the Ecuador judgment is not authorized by the RICO statute; and, second, that the injunction is functionally equivalent to one declared illegal by the Second Circuit Court of Appeals in an earlier phase of the case.

To get around the latter problem, Chevron is now claiming that its proposed injunction would only stop the Ecuadorians from "collecting" on their judgment, but would not stop the enforcement actions themselves.

"Chevron is now seeking an anti-collection injunction rather than an anti-enforcement injunction," said Gupta.

"Although Chevron never has had standing to bring this lawsuit, whatever argument it might have had for standing (before dropping its damages claim) is now gone – and, with it, so too is this Court's authority over the dispute," said the motion.

Read the rest of the press release here, and the motion to dismiss here.

Tuesday, January 21, 2014

Shut It, You Long-Haired Hippie

An "anti-public service" message from Donny Rico

Reposted from Eye on the Amazon

Donny Rico here to deliver a message to all you long-haired hippie activist types complaining about the environment and human rights. Be warned: things have changed in America and you need to keep your mouths shut. Corporations are the top of the food chain and you need to keep your place or you'll be what's for dinner. Got it?

See, me and Chevron are paving the way for corporate freedom in America. Freedom from accountability, freedom from watchdog punks and freedom from caring about how our actions affect the rest of yous. When those pesky Ecuadorians spouted off about the fact that Chevron did a piece of work and chose to dump billions of gallons of toxic waste in their rainforest, we decided to turn the tables and it worked like a real charm. Chevron's tired of being the victim just because over a thousand people died of cancer in Ecuador and we wrecked the Amazon rainforest.

Now, I hear some of you babbos got it in your heads to call on the U.S. Senate to investigate or some such garbage and try to put a stop to this. That ain't gonna work. But go ahead and try and see what Chevron has to say about you and your 36 environmental, human rights and corporate accountability groups getting involved. You're just asking for us to label you as "co-conspirators" and sue your asses under RICO, too!

See, RICO ain't just some law to go after the mob, it's the wave of the future. Thanks to RICO, anyone, and I DO MEAN ANYONE who speaks up about Chevron's... ahhh... problems in Ecuador is a "co-conspirator" in the RICO world. That means we can drag yous all to court, subpoena all your emails and documents, and force you to shell out boatloads of cash to lawyers just to defend yourselves. And your reputation? Fuggetaboutit! See we got enough cash to crush your reputations. We'll just call all your friends and tell ‘em you're extortionists. You guys already gotta ask people for money just to stay afloat, so who's gonna give it to ya if we make you look like crooks?

So be smart. Keep quiet and let Chevron do its thing. Oh, and that goes for all of yous activist types and do-good lawyers. If you think big energy companies are gonna let you organize people who got a beef with fracking and new pipelines – think again. We got enough legal muscle and friendly judges out there to go after anyone who does anything to threaten our bottom line. So if you go tellin' people not to buy our products and instead get some organic-vegan-cotton throw pillow or some such tree-hugging junk, well then you're conspiring to cost us money. And THAT is a RICO crime, got it?

If you still don't get the message, watch my little video and you'll learn real fast. See, this ain't gonna end with Chevron. Once we get away with charging our own victims in Ecuador as crooks, there's no limit to who we can go after. Freedom of speech don't mean you can say things we don't like – you've been warned.

Donny Rico, out!

Thursday, January 9, 2014

Desperation: Chevron CEO Asked Venezuela President for Help on Ecuador

In 2014, Watson Faces Host of Challenges As Company Tries to Evade Accountability for Toxic Dumping

Reposted from The Chevron Pit

With shareholder discontent over its Ecuador liability on the rise yet again, Chevron CEO John Watson is facing a new series of challenges in 2014 as the company continues its two-decade campaign to evade accountability for the toxic contamination it left in the Amazon rainforest. One example of the company's desperation: news reports from Latin America recently disclosed that Watson pleaded in person with Venezuela's new President, Nicolas Maduro, for help in blocking enforcement of the Ecuador judgment.

This is what the oil giant does. It uses its political muscle to interfere in court systems around the world. As a Chevron lobbyist told Newsweek, "We can't let little countries like Ecuador screw around with large companies." Ecuador's Supreme Court has affirmed the judgment against Chevron. But Watson simply ignores court decisions from Ecuador that he doesn't like while his lawyers continue their scorched-earth campaign to avoid paying what the company owes. For background, see this 60 Minutes segment and this video from Steven Donziger, one of the lawyers who has fought for years to hold the oil company accountable.

These are some of the colossal challenges Watson faces in 2014 because of the company's failure to pay the Ecuador judgement:

  • Legal actions to enforce the Ecuador judgment against Chevron are proceeding in Canada, Argentina, Brazil, and Ecuador. These actions can no longer can be pushed under the rug by the company. Just last month, a Canadian appellate court green-lighted an enforcement proceeding that puts an estimated $15 in Chevron assets in play; Chevron's defense brief is due later this month. The Canadian court also openly derided Chevron's two-decade effort to challenge jurisdiction in three different countries.
  • Canada is now considered one of the most strategically important oil producers in the world, with the third largest proven reserves. If the Ecuadorian villagers prevail in what is widely seen as one of the world's most reputable judicial systems – one that, unlike the U.S., is not the product of constant political warring -- they can collect the entirety of their $9.5 billion judgment and begin a long-awaited clean-up.
  • On the shareholder front, Watson is likely to face a firestorm over Chevron's Ecuador quagmire. Displeasure over his $32 million compensation package is at an all-time high. Prominent shareholders – including the New York state comptroller – are backing resolutions related to the Ecuador case that directly challenge Watson's stewardship. One calls for the separation of the CEO and Chairman positions; another calls for the appointment of a Board member with environmental expertise. In 2011, these resolutions garnered a whopping 38% of shareholder support.
  • Copies of the three resolutions related to Chevron that will be voted on at the 2014 annual meeting in May are here, here and here. Background on Chevron's shareholder dissent can be read here.

  • Watson has become so nervous about the fallout from the Ecuador judgment in Latin American that he personally asked Venezuela President Maduro for help during a recent visit to that country, according to media reports. Watson must shudder at the thought of an enforcement action against Chevron in the oil-rich country, which has the largest proven reserves in the world. Any action against Chevron by Venezuela's courts could have a massive impact on the company's prospects. It also could lead to huge problems for Watson and R. Hewitt Pate, Chevron's General Counsel and the mastermind behind the company's exorbitantly expensive ($400 million per year
  • Another way to understand why Watson visited Venezuela is that Ecuador President Rafael Correa is waging diplomatic war against Chevron in Latin America. Chevron's lobbying effort in Washington to cut off U.S. trade preferences to Ecuador could cost the small country 300,000 jobs. Correa has called Chevron's campaign against Ecuador "criminal" and has vowed to defend his country's sovereignty. Chevron's bullying tactics hardly endear itself to the people of the region. Correa, who polls show is South America's most admired leader, has launched the anti-Chevron offensive through ALBA, a regional body that includes Venezuela, Brazil, Bolivia and Argentina.
  • Citizen committees in solidarity with the Ecuadorian villagers have sprouted up in several countries (like Venezuela and France) in response to Chevron's abominable behavior. A recent report by famed Argentina journalist Jorge Lanata has spread firsthand proof through Latin America of Chevron's environmental crimes in Ecuador. A huge new Chevron investment in Argentina's gas fields is being hampered by grass roots support for efforts to enforce the Ecuador liability in that country, according to local news reports and The New York Times.
  • In Ecuador, the country's Supreme Court in November issued a 222-page decision that unanimously affirmed an intermediate appellate court decision in favor of the villagers. The judgment is now final and ironclad, which opens up the possibility of enforcement actions being filed in yet more jurisdictions. The court rejected each element of Chevron's fake narrative that it was the victim of an "extortion" plot by the villagers, who suffer from high cancer rates and other diseases due to Chevron's sub-standard operational practices. See these photos on the Huffington Post to get a sense of the human impact on the people Chevron claims are trying to extort money from the company.
  • Chevron is now openly conceding in legal papers that it faces enormous risk to its operations from the Ecuador case. In a recent filing in New York, Chevron admitted that the seizure of the company's trademarks in Ecuador is "causing millions of dollars of harm to Chevron" and that the Ecuadorian villagers have "injured Chevron is both calculable and incalculable ways" by winning their case. Yet the company has continually failed to disclose these monumental risks to shareholders in its public filings, prompting calls by a group of shareholders and a U.S. Congresswoman for an SEC investigation of the company.
  • Aside from Venezuela, another game changer for Chevron is that an Ecuador court recently froze $96 million in cash owed the company from Ecuador's government from an international arbitration decision. If these funds are recovered by the villagers, one of Chevron's main tactical advantages – superior resources – will be significantly mitigated. The villagers will then be able to expand and redouble their legal efforts to force Chevron to clean up its toxic waste.
  • The backlash against Chevron for its fugitive-like behavior and aggressive counterattack strategy has begun to take shape. Just last week numerous environmental and human rights organizations, including Amazon Watch and the Sierra Club, slammed the company in an open letter for using the legal system to try to intimidate and silence its critics. An announcement that several more prominent civil society organizations have signed is expected soon.
  • Chevron's retaliatory RICO case in New York remains a trial to nowhere, while outraging civil society organizations and public interest groups. (For a great summary of the trial, see this recent blog from the Huffington Post.) After being helped along by an activist judge who seems to despise the concept of tribal leaders suing an American company in their own courts, Chevron lost credibility when it suddenly dropped all damages claims on the eve of trial to avoid a jury. On the legal front, Chevron's case faces enormous obstacles and is highly unlikely to survive appeal. The remedy sought by Chevron – an injunction from a U.S. court preventing enforcement of a foreign court judgment – already has been declared illegal by a federal appeals court and produced scorn from legal scholars worldwide.

Chevron has a track record of bribing witnesses for favorable testimony, trying to pay off Ecuadorian government officials to quash the case, trying to entrap a judge in a video scandal, spiriting its own employees out of Ecuador to avoid criminal prosecution, trying to threaten Ecuadorian judges with jail time if they did not rule in the company's favor, trying to pay journalists to spy on the villagers, using 180 agents from Kroll to spy on adversary counsel, breaking promises to U.S. courts that it would pay the Ecuador judgment, and having top officials like Sylvia Garrigo claim on camera that the company does not believe it should be in court at all over the Ecuador contamination.

The Ecuador-related problems faced by Watson are largely of his own making. The company has invested an estimated $2 billion to beat back the Ecuador judgment. It has used 60 law firms, 12 investigative firms, and dozens of lobbyists and public relations firms to try to intimidate its critics. And it has done so for years and years.

Only two weeks into 2014, Chevron's grand strategy to avoid paying for a cleanup of its contamination in Ecuador is fraying at the edges. Its "lifetime of litigation" strategy is sputtering. Days after the closing arguments in the RICO trial— with no remedy even if the company wins — a court in Ontario gave the Ecuadorians an early Christmas present.

Ontario Court of Appeal Justice James C. MacPherson wrote:

Even before the Ecuadorian judgment was released, Chevron, speaking through a spokesman, stated that Chevron intended to contest the judgment if Chevron lost. He said: 'We're going to fight this until hell freezes over. And then we'll fight it out on the ice.'

Chevron's wish is granted. After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard on the merits in an appropriate jurisdiction. At this juncture, Ontario is that jurisdiction.

This is shaping up to be a perilous year indeed for Watson and his management team. The deep freeze and long winter north of the border does not bode well for Chevron's fight on the ice to block enforcement. The odds favor the villagers.

Wednesday, January 8, 2014

Lost In Translation: Justice for the Ecuadorian Villagers in Chevron's Retaliatory RICO Trial

Julio Gomez, a Colombia-born American lawyer, stunned a New York courtroom where Chevron is trying to attack a $9 billion Ecuador judgment against it for dumping toxic waste into the Amazon.

When Gomez began his closing remarks in Spanish on behalf of the Ecuadorian villagers who won the judgment, he refused a translator for a mostly English-speaking audience.

Reverting to English, he told the packed courtroom: "(for) those who didn't understand what I have just said now have, for one brief moment, a sense of what my clients felt" during the seven-week trial before U.S. Federal Judge Lewis A. Kaplan.

While both sides paid for translators during the trial, trying a case as complicated as Chevron's retaliatory racketeering lawsuit against the Ecuadorians and their counsel was confusing enough in English much less in Spanish.

Much got lost in translation, including justice for Gomez's clients.

No U.S. court has jurisdiction over another country's judicial system, even when that system rules against a U.S.-based corporation that just happens to be responsible for the deliberate contamination of Ecuador's rainforest. That Texaco, now owned by Chevron, admitted to having dumped 16 billion gallons of toxic water into the rainforest's waterways and abandoned hundreds of huge, unlined waste pits filled with pure crude and other toxins is NOT in dispute.

What is in dispute is who is responsible, and Ecuador's highest court has upheld the decision. It's Chevron.

Now Chevron wants a U.S. court opinion that says that's wrong. But imagine a U.S. judge sitting in judgment of the decision of a British or German court and declaring it unenforceable and fraudulent. It would never happen. And it certainly shouldn't happen in a case where the defendant (Chevron) wanted the case tried in Ecuador in the first place, begging and pleading with U.S. courts to send it there.

Ecuador, though, is a small country that has commanded almost no respect in Kaplan's courtroom for the past three years. In fact, Kaplan has treated the country with a level of nastiness that violates basic principles of comity between nations. He recently remarked from the bench about

Ecuador's judiciary: "[b]elieve me, if this were the High Court in London, you can be sure I'd wait" (on a ruling then before the Ecuador court).

But wait for an Ecuador court? Not a chance.

Kaplan even claimed the underlying case affirmed by Ecuador's Supreme Court was "not bona fide litigation". In his decisions, he has consistently called the villagers the "so-called" plaintiffs, suggesting they might not even exist.

There's also this telling comment about the lawsuit from a Chevron lobbyist: "We can't let little countries like Ecuador screw around with large companies."

No indeed.

In traveling to Latin America and working with people from Ecuador, Columbia, Brazil and Argentina, I often hear the same refrain: "Americans are arrogant. They think they know it all."

The way the Ecuadorians have been treated by the U.S. court system, as well as by some U.S. reporters covering the trial in front of Kaplan, has done nothing to change this view. For example:

  • During the trial, Judge Kaplan struck large sections of written and oral testimony about Chevron's contamination of the rainforest, declaring that it had nothing to do with Chevron's charge that the lawsuit itself is fraudulent and that the Ecuadorians' lawyers and other advocates have lied about the contamination in order to"extort" money from the oil company.

    Don't ask me to explain the inexplicable. I can't. I've seen the contamination with my own eyes. I've talked to people who have lost their loved ones to cancer due to exposures to toxins left behind by Chevron. I've seen the overwhelming scientific evidence against Chevron. This lawsuit is anything but fraudulent.

    As a Canadian appellate judge recently wrote in a ruling allowing the Ecuadorians to attempt to seize Chevron assets in that country: "...the Ecuadorean plaintiffs deserve to have the ...enforcement of the Ecuadorean judgment heard on the merits in an appropriate jurisdiction."

    Because Chevron refuses to pay the court judgment, the villagers have filed collection actions in Canada, Brazil and Argentina to seize Chevron's assets so they can generate funds to clean up their ancestral lands. The RICO lawsuit in the U.S. is nothing less than Chevron's latest attempt to block those asset seizures and ultimately to obtain impunity for its wrongdoing.
  • A clerk of Kaplan's rolled her eyes and smirked when Javier Piaguaje, one of the Ecuadorians who sued Chevron, walked into the courtroom wearing the traditional dress of his indigenous tribe, the Secoya. Piaguaje has lost family members to cancer and was set to testify about the contamination – until Chevron's lawyers objected and the judge excluded that portion of his testimony. The clerk's bold show of disrespect for Piaguaje and his plight was jarring to someone like myself who hasn't spent a lot of time in a courtroom. If this kind of behavior is fairly common, then I can certainly understand better why American citizens of color often say they are intimidated by the U.S. judiciary.
  • Another Ecuadorian, Donald Moncayo, who organizes tours of the contaminated areas in the rainforest, traveled for two days from the rainforest to New York's concrete jungle to testify. While on the stand, he mentioned his laptop. Judge Kaplan asked Moncayo if had the laptop with him in New York. When he answered, yes, Kaplan turned to Chevron's lawyer, Randy Mastro, and said, "Take it from here, Mr. Mastro." Mastro then motioned to seize the laptop, and Kaplan ordered it turned over to Chevron within two hours. Since Moncayo was not one of the named defendants in Chevron's RICO case, he had no legal representation. Kaplan denied motions to allow him time to find an attorney.

    Afterwards, standing on a noisy New York City street, Moncayo had no idea why three men in expensive black suits in a Lincoln town car were driving away with his laptop, which they kept for 14 hours. On the laptop were photos of his children and wife. This high-drama tactic produced nothing for Chevron, except a story that Moncayo will never forget and will repeat over and over again. His parting words at the airport were, "I will never step foot in this country again."

    Not one reporter covering the trial wrote about what happened to Moncayo.
  • Some did write, however, about what the former Ecuador judge who wrote the $9 billion judgment was wearing to keep warm in a courtroom so cold even hardy New Yorkers were shivering. The former judge, Nicholas Zambrano, traveled voluntarily from Ecuador to Kaplan's courtroom to defend against Chevron's baseless allegation that he accepted a bribe. Zambrano also received an unceremonious welcome: Kaplan allowed Mastro to berate him after he creepily promised a "warm New York welcome".

    Mastro literally gave Zambrano a trick pop quiz about his ruling on the stand. To keep warm on the second day of his testimony, Zambrano wore a wool cap, a scarf and gloves. One reporter described his attire and testimony as "bizarre" and headlined his article, "Attempt to Rehabilitate Chevron Judge Gets Very Weird."

    It is possible that Judge Zambrano was making a "fashion statement" of his own to tell Kaplan what he really thinks of the idea of a New York judge serving as a self-appointed arbiter of a foreign nation's judicial rulings. But the American reporters didn't see it that way. Instead, they wrote about how Zambrano could not answer some of Mastro's trick questions in the pop quiz. Little did they know that Kaplan – who has never been to Ecuador and certainly would never go there to appear in a trial to defend one of his rulings – dismissed the pop quiz in a side bar with just the attorneys present. In an apparent defense of Zambrano, Kaplan remarked that even the highly-regarded U.S. Judges Benjamin Cardozo and Learned Hand would not be able to remember details of a three-year-old decision.
  • While reporters focused on the pop quiz and Zambrano's attire, another former Ecuador judge (Alberto Guerra) to whom Chevron paid huge sums to turn on Zambrano got on and off the witness stand relatively unscathed – at least in the eyes of Kaplan and most reporters. In fact, nobody covering the trial detailed how Guerra testified that he changed his story about the alleged bribe three times to get Chevron to pay him more money and agree to move his entire family to the United States. Chevron has entered into a contract with Guerra that provides him with at least $350,000 over two years in exchange for favorable testimony. Chevron also has an option to continue the "funding relationship" indefinitely. Questions raised about faked deposit slips Guerra submitted as evidence were just not as interesting as Zambrano's wool cap.

Of course, what is really weird and bizarre is that the Ecuadorians sought to have the New York court hear the trial when the case originally was filed in 1993, but the court sent them packing back to Ecuador. A different U.S. trial judge concluded in 2001 that the courts in Ecuador were sufficiently independent and fair, and more than capable of hearing the case. Gomez, in his final brief to the court, captured this sad irony:

"When the Amazon communities came here many years ago seeking justice, this Court was eager to expel them from New York – it tried to do so once and was reversed by the Second Circuit Court of Appeals, then managed to dispense with them more permanently the second time around. With no regard for this history, this Court now appears determined to maintain a death-grip on these Ecuadorian citizens, and to make itself the global, authoritative voice in this dispute.

"This Court has locked the Lago Agrio Plaintiffs into this case to this point by giving Chevron every benefit of every doubt even when there has been no good reason to do so, and, at times, by finding uncertainty in the law where none really exists. In so doing, the Court has forced the Lago Agrio Plaintiffs to expend massive resources here that likely otherwise would have been allocated to attempting to enforce the judgment that it took them eighteen years to win – one of Chevron's obvious main objectives in filing this blunt instrument of a lawsuit...."

In the opening of his final brief on behalf of the Ecuadorians, Gomez aptly wrote: "The United States courts have failed the Ecuadorian Amazon communities."

Within the next two months Kaplan is expected to issue his opinion. In the eyes of the Ecuadorians that is all it will be – his opinion and, an arrogant one, at that.