Chevron's Defense In Canada: The Abusive Litigation Strategy Continues

Reposted from The Chevron Pit

As we predicted, Chevron's jurisdictional shell game to evade its legal obligations to the people of Ecuador has now hit the courts of Canada with full force.

One might remember statements by various Chevron officials a few years ago that the company planned to fight the villagers it poisoned in Ecuador until "hell freezes over, and then skate it out on the ice." This blog describes one way the company tries to make it work in practice.

No doubt that Chevron's filing last week in Toronto of its written defense to efforts by impoverished rainforest villagers to enforce their judgment in Canada is a victory of sorts in that the company tried for three years to block the case from even proceeding.  The villagers had to go all the way to Canada's Supreme Court to force the oil major onto the playing field where neutral judges can actually analyze its outrageous claims. (For more on the unanimous Supreme Court decision and why it poses significant new risk for Chevron, see here.)

That's the good news. The bad news is that the villagers and their counsel once again might have to jump through the same old hoops to convince yet another trial court not to fall prey to Chevron's shell game. These are the same hoops the villagers and their lawyers have been forced to navigate ad infinitum since their claims against Chevron were originally filed in 1993.

For Chevron, the goal in this matter is simple: litigation in perpetuity. The company sold off its assets in Ecuador when it saw the evidence mount against it. The company clearly believes it is cheaper to fight the people it poisoned than to pay for a remediation of their ancestral lands and much-needed cancer treatment. Chevron clearly does not much care whether it loses any particular legal issue as long as its long-term strategy of delay remains viable.

True to this strategy, Chevron lawyers Clarke Hunter and Benjamin Zarnett are using the filing in Canada to repeat the discredited half-truths and outright lies used by Chevron to cover up and distract attention from its environmental crimes and fraud in Ecuador. Said wrongdoing by Chevron has been meticulously documented by more than 100 scientific evidentiary studies of the contamination. Three layers of courts (including five justices on the Supreme Court) in the South American nation have affirmed the fundamental fact of Chevron's liability. (For a summary of the evidence against Chevron, see here. For a summary of Chevron's cancer problem in Ecuador, see here. For the Ecuador Supreme Court decision, see here.)

Chevron's Canada defense makes it clear that the company plans to coax Canadian courts into the trap of re-litigating numerous procedural and substantive issues already decided by courts in Ecuador in the country where Chevron insisted the trial be held.

While the affected communities of Ecuador continue to suffer the shocking health and economic impacts of Chevron's contamination, consider the company's new machinations to delay relief:

• After vigorously fighting the case in Ecuador's courts for 11 years, Chevron now wants Canada's courts to let it re-litigate whether the company was subject to jurisdiction during that entire time. In its submission, Chevron conveniently fails to mention that it voluntarily stipulated to jurisdiction in Ecuador. Ecuador's courts already ruled against the company on this issue. Chevron knows this claim is a loser, but it will use it to try to buy months of delay if Canada's courts let it.
• Chevron also claims that a new statute in Ecuador which became law in 1999 (the Environmental Management Act) and was used by the villagers for procedural purposes was applied retroactively in violation of the country's Constitution. In fact, the substantive claims of the case against Chevron in Ecuador are based on a civil statute dating to 1861. Again, Chevron lost this issue in the courts of Ecuador. It is a certain loser in Canada, but of course that's not the point for the oil giant.
• In another attempt to muck up the Canadian proceeding, Chevron is asking the court to rule that the sham "remediation" it conducted in Ecuador in the mid-1990s that resulted in a release for the company from Ecuador's government should bar the private lawsuit of the villagers. Yet the villagers were not a party to the release and cannot be bound by it. Ecuador's courts rejected Chevron's claim in this regard at every turn. So has an international investor arbitration panel convened by Chevron. Again, this is an opportunity for Chevron to buy time.
• In what could be its most audacious demand, Chevron is urging Canada's courts to blindly accept the highly flawed findings from the "racketeering" show trial of U.S. trial judge Lewis A. Kaplan. Not only does Kaplan's ruling against the villagers completely contradict the Supreme Court of Ecuador, it is also wrong on the merits. The judge showed his hostility toward the Ecuadorians repeatedly, accepted Chevron's falsified evidence, and refused to even read the Ecuador trial court judgment. More than 35 law scholars from nine countries have filed a brief urging Kaplan's reversal. (For background on the many flaws in Kaplan's decision, see here and here.)

In a contest between Kaplan's judicial imperialism v. Ecuador's Supreme Court, we are siding with Ecuador's Supreme Court and we suspect Canada's courts will too.

Interestingly, Chevron lawyers Hunter and Zarnett are going all in-in on Chevron's corrupt and discredited witness, Alberto Guerra. In the company's defense submission, they repeat Guerra's lies -- made after Chevron paid him $2 million for his testimony -- that the plaintiffs "ghostwrote" the trial court judgment. That allegation has been completely disproven by Guerra's ever-changing testimony and a recent computer forensic analysis. (For background on the Guerra corruption issue, see here.)

Of course, Chevron hopes the day where Guerra has to testify under oath in Canada will never come. The company's plan is for Canada's courts to get so bogged down in the minutia of Ecuadorian law and procedure that the merits of Chevron's horrific contamination in the rainforest and fraudulent cover-up will never see the light of day. The goal is for the lawyers for the villagers to run out of funds before Guerra's bluff is called under oath before a neutral judge.

Canada's courts should be careful not to become complicit in Chevron's attempts to use the country's judicial resources to continue its abusive global demonization campaign. After waiting for 22 years, Ecuador's citizens deserve a final ruling on the merits as soon as possible.

Chevron's Forum Shopping Over Ecuador Pollution Hits Dead End In Canada

Reposted from The Chevron Pit

It is widely known that Chevron has acted as a serial forum shopper when it comes to trying to evade its liability for creating an environmental disaster in Ecuador's Amazon. But Chevron's game of corporate subterfuge and litigation abuse seems to be unraveling before our very eyes, spelling huge new risks for company shareholders.

In short, CEO John Watson's billion-dollar campaign to buy impunity for Chevron's human rights abuses in Ecuador is flaming out. Watson himself is at risk of being whipsawed by his own short-sightedness.

Canada's Supreme Court ruled in early September that thousands of Ecuadorian rainforest villagers have the legal right to try to seize company assets in that country to force it to pay for its court-mandated clean-up in Ecuador. This is serious: for the first time in two decades, the villagers have a direct path to a full recovery of their $9.5 billion judgment. (Chevron has an estimated $15 billion of assets in Canada, including a refinery, offshore oil field, and office buildings.)

Ecuador's Supreme Court already ruled in 2013 that Chevron must pay up. But Watson had sold off company assets in the country as the evidence mounted against it during the trial there. Watson's posture of evasion has not only infuriated shareholders and alienated environmental and human rights groups, but has unjustly forced the impoverished villagers to chase down company assets elsewhere.

In finding that the villagers had jurisdiction over Chevron in Canada, Canada's Supreme Court dealt a severe blow to Watson's strategy. In a unanimous decision, the court said this in reference to Chevron and other debtors who try to evade paying foreign court judgments:

Through their own behaviour and legal non-compliance, they have made themselves the subject of outstanding obligations, so they must be called upon to answer for their debts in various jurisdictions... The need to acknowledge and show respect for the legal action of other states has consistently remained one of comity's core components, and militates in favor of recognition and enforcement.

Murray Klippenstein, a Canadian lawyer who represented several human rights groups in the country who support the Ecuadorian villagers, praised the decision in a legal publication. He said,

Chevron some time ago declared a total war, scorched earth legal strategy against this claim by the Ecuadorian villagers, and in this proceeding in Canada, Chevron was seeking to import into the law of international reciprocal enforcement of judgments an entirely novel test... in its decision the Supreme Court methodically and meticulously analyzed, and rejected, that attempt, based on existing legal principles -- and rightly so.

While Chevron forum shops, thousands of vulnerable people in Ecuador have suffered from cancer and other grievous health impacts such as spontaneous miscarriages due to the company's failure to remediate its contamination. Thousands have either perished or face a real risk of death in the coming years. (For background on Chevron's cancer problem in Ecuador as documented by several independent scientific studies, see here.)

Chevron blocked the original case from being heard in U.S. courts (where it was filed in 1993) and insisted the litigation take place in Ecuador. Once in Ecuador, Chevron sold off its assets in the country and tried to get the matter dismissed on jurisdictional grounds even though it had promised U.S. courts it would accept jurisdiction there.

When those arguments didn't work, Chevron lawyer Ricardo Reis Veiga corruptly "persuaded" the country's Attorney General to call the trial judge to insist that the case be tossed. (The judge refused the entirely inappropriate request; Reis Veiga still works for Chevron.)

After years of trying to delay and sabotage the proceedings in Ecuador -- Chevron lawyers even threatened judges with jail time and filed thousands of frivolous motions -- the courts ruled against the company based on more than 100 technical evidentiary reports and the company's own internal environmental audits. But despite its earlier promises, Chevron then refused to pay and said it would fight the matter "until hell freezes over and then fight it out on the ice."

In Canada, Chevron tried to block the case from proceeding by claiming its assets were held by a wholly-owned subsidiary. In Argentina, where another enforcement action was filed, Watson flew down to meet with the country's President. He then invested billions in a new gas field in exchange for an entirely corrupt dismissal of the enforcement action there on "technical" grounds.

Back in the United States, Chevron --without as much as an evidentiary hearing -- convinced a rogue trial judge to enter an illegal order purporting to block the villagers from even attempting to enforce their judgment anywhere in the world. The trial judge was reversed unanimously on appeal and mocked by international law scholars around the world.

Chevron will face major hurdles in Canada when it tries to allege it was the victim of "fraud" by the very people it poisoned in Ecuador. Its evidence in this regard was rejected unanimously by Ecuador's Supreme Court and has been debunked even more since.

It turns out that Chevron's evidence that the decision in Ecuador was "ghostwritten" by lawyers from the villagers comes from a discredited witness paid $2 million by the company. Whistleblower videos disclosed this year prove Chevron technicians tried to hide evidence of oil contamination at its former well sites in Ecuador as part of an elaborate (and unsuccessful) scheme to defraud the courts during the trial there.

Chevron's litigation tricks have forestalled justice for far too long. Something tells us the respected courts of Canada understand that point very well.

Canada's Highest Court Gives Ecuadorians Green Light To Pursue Chevron Assets

Reposted from DeSmog

Chevron lost a high-profile pollution case in Ecuador in 2011 and was ordered to pay $9.5 billion for cleanup of billions of gallons of toxic waste in the Amazon rainforest. So far, the company hasn't paid a dime – but a recent ruling in Canada might finally force Chevron to pay up.

Chevron appealed the 2011 ruling all the way to Ecuador's highest court, the National Court of Justice, which voted 5-0 in 2013 against the company. But Chevron still refuses to comply with the ruling, and since the Big Oil behemoth has no assets in Ecuador, the plaintiffs were forced to seek enforcement of the decision elsewhere.

Last Friday, the Supreme Court of Canada ruled unanimously to allow Ecuadorian plaintiffs to pursue just such an enforcement action. In the majority opinion, Justice Clément Gascon wrote that the ruling had implications for attempts to hold the entire global oil industry accountable for its pollution and other abuses.

"In a world in which businesses, assets and people cross borders with ease, courts are increasingly called upon to recognize and enforce judgments from other jurisdictions," Gascon wrote in the 7-0 ruling, according to The Globe & Mail. "Sometimes, successful recognition and enforcement in another forum is the only means by which a foreign judgment creditor can obtain its due."

Some 30,000 Ecuadorians have been affected by the oil pollution in the Amazon, left behind when Texaco (which Chevron bought in 2000) ceased operating hundreds of oil wells in the country in 1990.

Humberto Piaguaje, the Coordinator of the Union of People Affected by Texaco, welcomed the ruling, saying in a statement, "after 22 years we can perform actions to collect the judgment against Chevron and immediately start repairing our territories."

Chevron is fighting a multi-front battle against the Ecuadorian judgement. The company secured a favorable ruling under RICO statutes in a New York court last year after its lawyers convinced a federal judge that the Ecuador ruling was the result of a corrupt judicial process.

The company has also entered into an arbitration process at the Hague, where its lawyers are attempting to argue that the government of Ecuador absolved Texaco of all liability when it ceased its Ecuador operations and left the country 25 years ago, though Chevron's main legal defense in that case recently hit a major snag when it was rejected by the arbitrators.

Chevron once issued a statement threatening the Ecuadorians with "a lifetime of appellate and collateral litigation" if they continued to pursue their lawsuit – a company official later vowed to "fight until hell freezes over … and then we'll fight it out on the ice" – and the company appears to be making good on that threat.

Still, the Canada ruling comes at a bad time for Chevron, which has lost as much as $100 billion in market value over the past year thanks to cratering oil prices and other factors. Among them is the fact that the company made $24.7 billion from operations over that same time period while laying out $41.7 billion in expenditures and dividend payments.

At some point, says Amazon Watch's Paul Paz y Miño, Chevron investors have to start wondering if the billions spent by the company on its aggressive, scorched earth legal strategy have really been worth it – especially as Ecuadorians continue to get sick and die as a result of the pollution still littering the forest floor.

"What does that say about [CEO John Watson's] leadership? If I were a shareholder I'd say you have to pay this back to the company. You can't mismanage the funds of our shareholders any further," Paz y Miño told DeSmog.
The Financial Post reports that Chevron has assets worth roughly $15 billion in Canada, more than enough to satisfy the Ecuadorian judgement.

The Canadian assets include a network of Chevron gas stations in B.C.; a 20 per cent-stake in the Athabasca Oil Sands Project in Alberta; a 26.9 per cent interest in the Hibernia Field and a 23.6 per cent interest in Hibernia South Expansion off the shore of Newfoundland and Labrador; a 26.6 per cent interest in the Hebron Field in Newfoundland; an interest in the Duvernay Shale Field; and an interest in the Kitimat LNG Project in B.C.

The Ecuadorian plaintiffs say they want to seize and sell the shares of Chevron Canada to satisfy the $9.5 billion judgment – which has actually risen to $10 billion with interest, according to Amazon Watch's Paz y Miño, who says the Canadian courts will count that interest.

But even if the plaintiffs ultimately win the enforcement action in Canada, a judge will still have to sort through the so-called "corporate veil" and determine whether the seizure of assets owned by Chevron Canada, which is not directly owned by Chevron, can be used to satisfy the latter's debt. No less than seven companies stand between Chevron Canada and its US-based parent company, according to the Financial Post.

In the end, however, Paz y Miño says the lawsuit has never been about money.

"They're sitting there twisting a knife into the people of Ecuador," he told DeSmog. "This isn't about saying, ‘These people were responsible for something that happened in the past, and they should be held accountable.' It's about stopping the poisoning of people that's still going on. Chevron is continuing to poison people, and won't clean up the pollution."

Chevron Paying Notre Dame "Human Rights" Professor Cassel To Publicly Attack Ecuadorian Villagers

Reposted from The Chevron Pit

If you want a new example of corruption in legal academia, look no further than Chevron's relationship with Notre Dame "human rights" law professor Douglas Cassel. Chevron is paying Cassel to attack the rainforest villagers and lawyers who have held Chevron accountable in Ecuador for its environmental disaster in one of the great recent successes of the corporate accountability and human rights movements.

As far as we can tell, Cassel never even spoke or wrote about this historic human rights case until Chevron started to pay him in 2012. He now tries to downplay his financial relationship with Chevron when writing blogs that largely regurgitate the company's talking points and are rife with factual distortions and other shortcomings, as this critique to his "Open Letter" points out in detail.

Cassel is being used by Chevron to help it evade paying the $10 billion judgment it owes to the people of Ecuador for dumping toxic waste into the rainforest when it operated in the South American nation between 1964 and 1992.

It is pretty clear that Cassel also is allowing himself to play a central role in a classic oil industry subterfuge. Since the corporation (Chevron) that dumped billions of gallons of oil waste into the rainforest no longer has credibility, it tries to enlist a third party academic to launder its agitprop. It is another example of how Chevron tries to use money to corrupt institutions, whether they be courts or universities as we describe in more detail below.

During the litigation, Chevron was so desperate to avoid losing that it paid $2 million to a discredited witness to present false testimony about a supposed bribe that was later disproven by computer forensic analysis. It also threatened judges in Ecuador with jail time if they did not rule in its favor. Chevron lawyers filed thousands of frivolous motions to delay and sabotage the judicial process. (For more on Chevron's unethical payments of thousands of dollars in cash to key witness Alberto Guerra, see here and here. For a general account of the company's corruption in Ecuador, see this sworn affidavit.)

Chevron has tried to enlist other academics in its cash-for-support propaganda plan. Most have resisted the entreaties, but the results are poor for those who signed on. When in 2008 Chevron tried to use Dr. Douglas Southgate to defend its toxic dumping in Ecuador, it turned out he was affiliated with an institute funded by the oil and gas industry designed to cast doubt on global warning. See here for background.

Chevron also tried to use Dr. Ralph Marquez to "monitor" the science in the Ecuador case during visits by court experts to the company's highly contaminated well sites. Once Marquez was exposed as a former chief lobbyist for the chemical industry in the state of Texas (and a confidant of Karl Rove), he disappeared from the case. (See here for background.)

Chevron's lineage with low-grade "academics" reflects poorly on both Cassel's personal ethics and those of Notre Dame's reputable law school. Notre Dame should not be letting Cassel trade on its credibility to sell his own soul (and by extension the university's) to a corporate human rights abuser – particularly when there is no real transparency about the amount of money changing hands and the conditions placed by the company on any "research" for publication.

While Cassel reaps cash for the arrangement, Notre Dame must pay a high cost via its harmed reputation and compromised academic integrity. The New York Times just exposed the same type of academic corruption at various universities – including the University of Florida – where Monsanto and other companies are battling to stop the labeling of genetically-modified foods by quietly paying academics to advocate their positions without full transparency.

Most universities now require their faculty to be completely transparent about any financial relationships they might have with third parties. Notre Dame needs to get on board. Cassel's failure to be transparent about his financial ties to Chevron creates a conflict of interest given his responsibilities to teach Notre Dame's students consistent with the high standards of scholarship and professional objectivity demanded by a top-flight university.

Does Cassel tell his students that he is taking money from Chevron, a company that multiple courts have found to have committed environmental human rights abuses in Ecuador on a grand scale? When he teaches the case, does he provide the financial details of his conflict of interest? Does he disclose his contract so students can assess if Chevron has editorial control (or influence) over what he publishes as a so-called "academic"? Is anyone at Notre Dame asking these questions?

Cassel's spectacle is made worse by the fact Notre Dame expressly states that its mission is to help combat poverty, oppression, and injustice – the very life conditions forced on thousands of indigenous persons and farmers in Ecuador by the irresponsible operating practices of Cassel's client. (For background on the overwhelming evidence against Chevron in the case, see here. For the high rates of cancer in the rainforest where Chevron operated, see here. For a legal brief responding in detail to Chevron's allegations of fraud, see here.)

Last week, after Canada's Supreme Court ruled unanimously that the Ecuadorian villagers could try to seize Chevron's assets in that country to pay for their clean-up, Cassel predictably posted a blog trying to minimize the importance of the decision. In fact, the decision is highly significant and was reported in all major media (see here for our take on the significance) for good reason. Which interpretation of the decision does Cassel plan to teach in the classroom – his "own" version consistent with Chevron's talking points, or the perspective of the Canadian justices and villagers?

It is worth nothing that Cassel is isolated in his pro-Chevron view of the case. At least 35 prominent international law scholars from nine countries have filed a legal brief supporting the villagers as have numerous U.S. environmental and human rights groups. As far as we can tell, Cassel is virtually alone in legal academia as a wholesale backer of Chevron defenses that already have been rejected by multiple courts, including Ecuador's top court. We doubt he would take such a position if he were not being paid.

Notre Dame appears to have a strong "conflict of interest" policy that prohibits any "situation where financial or other personal or
professional considerations compromise an individual’s objectivity, professional judgment,
professional integrity, and/or ability to perform his or her professional responsibilities to the
University." On its website, the law school says a Notre Dame lawyer should embody "exceptional moral and ethical standards" and "compassion" for others.

These standards might be a good starting point for Notre Dame faculty to use when assessing Cassel's behavior.

To be clear, we don't mind taking on Cassel's pro-Chevron arguments and we do not dispute his right to be heard. What we do mind is his lack of ethics and fundamental dishonesty in trying to downplay – and often hide – his relationship with Chevron as a way to try to enhance his own credibility.

We are waiting for Cassel to disclose any and all of his written agreements with Chevron. It would be interesting to know how much he charges to compromise his personal ethics, the ideals of the human rights movement, and the academic integrity of a university.

Canada Decision Is Message to Chevron: Stop Deaths in Ecuador Now!

Reposted from Eye on the Amazon

Last week, the Supreme Court of Canada handed Chevron another defeat in its efforts to forever avoid paying to clean up its toxic mess in the Amazon. It ruled unanimously that the Ecuadorian communities could pursue an enforcement action with the aim of seizing Chevron's Canadian assets to cover its $10 billion liability. That means 18 appellate judges in Canada and Ecuador have now ruled against Chevron, and three more in the U.S. are currently considering following suit regarding Chevron's bogus RICO retaliation. Even Judge Kaplan, who issued that decision and ran an amazingly biased proceeding, did not exonerate Chevron for its contamination.

In light of yet another of Chevron's courtroom setbacks in the Ecuador pollution case, company CEO John Watson and his management team again face a stark choice: admit defeat and prevent further death to rainforest villagers, or continue on their disastrous folly by denying the truth. How many more people will lose their lives if Chevron fights on? Chevron is already widely recognized as a global corporate criminal, it has won awards to that effect and has seen protests against it in 20 countries on a single day. Condemning more innocent people in Ecuador to suffer and die is simply inhuman.

We've written before about Chevron's choice to choose profit over people in Ecuador by dumping 18 billion gallons of toxic waste into the Amazon in order to save $3 per barrel. While operating as Texaco – the first to drill in the Amazon – they chose to reject pleas to safely line accumulating waste pits, stating that $4 million was too high a price to avoid poisoning local communities. That was merely one of the first of Chevron's irresponsible choices with devastating consequences.

Chevron's efforts to escape justice and attack its victims are a threat to anyone harmed by similar corporate misdeeds. By using its endless resources to drag out this fight, Chevron is violating the very idea of justice. These legal actions are not simply exercises to determine who is responsible for a past crime, they are to force the company to stop committing the same deadly crime over and over. Every single day that Chevron chooses to ignore its responsibility, the health crisis deepens and environmental conditions worsen.

Now thanks to the Canadian decision, CEO John Watson and Chief Counsel Hugh Pate are again faced with a choice. Will they continue their path down the “dark side” or will they finally decide to do what's right and value the lives of those in Ecuador suffering from their admitted contamination? Do 10,000 more people need to become sick with cancer because Watson can't admit what the whole world knows? Every single dollar Chevron spends trying to defend itself in Canada could be used today to clean up Ecuador, provide clean water and health services to the sick people of the Amazon.

The unanimous decision of the Canadian Supreme Court sends a clear message to Watson: ultimately, Chevron will lose again. Next year, Watson will stand in front of shareholders and the board of directors and have to explain why Chevron is back in court in a nation where it holds over $15 billion of assets at risk of seizure. Chevron will also face questions in court about why they hid the fact that their own technicians found toxic contamination in allegedly remediated well sites where only Texaco had ever operated.

There are many reasons why now is finally the time for Watson to finally decide to do what is right. The risk and interest grows daily in Canada. Chevron has lost $100 billion in market value in the last year. The amount Chevron owes has already increased by $500 million and will continue to increase over the course of a trial. But most importantly, Chevron can stop the ongoing deaths and environmental destruction. It has the means to end this nightmare in Ecuador and to help those people it admitted to harming when Texaco first acknowledged deliberate dumping.

Any court system that examines the evidence will find that Chevron intentionally polluted the environment and perpetrated a sham remediation, as the most litigated trial in Ecuador's history determined. If John Watson chooses to invest billions to pay lawyers to fight so that eventuality takes place after he steps down as CEO, he will hold responsibility for future deaths solely on his shoulders – and conscience, if he still has one.

Even Darth Vader did the right thing eventually. It didn't stop his empire from falling, but at least he reclaimed some measure of humanity in the process.