Fed Judge Rules Lawyers In Ecuador Used Fraud And Bribery, Big Win For Chevron

Fed Judge Rules Lawyers In Ecuador Used Fraud And Bribery, Big Win For Chevron


After two decades of court battles, Chevron finally gets Justice
by John Pendleton  |   Wednesday, March 05, 2014
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On Tuesday, a federal judge in New York issued a remarkable ruling that may mark the final chapter in a legal drama that has spanned nearly twenty years and has played out in courtrooms in five different countries.

Back in 2001, Chevron purchased Texaco, a transaction that encompassed not only Texaco's assets worldwide, but also a long-running legal battle in which Texaco was accused of polluting part of an Amazonian region of Ecuador.

In February, 2011, an Ecuadoran judge named judge, Nicolas Zambrano found Chevron liable for tainted soil and water in an area where Texaco (but not Chevron) once drilled for oil. Judge Zambrano awarded an astonishing $19 billion judgment against Chevron in favor of Steven R. Donziger, a Harvard-educated lawyer from New York, and the Ecuadorian farmers he claimed to represent. The judgment would be hard to enforce because Chevron had no assets in Ecuador, so Donziger and his team tried to get judgments in countries where Chevron did have operations, including Argentina, Brazil and Canada.

Last year the Ecuadorean National Court of Justice, the nation's highest court, reduced the fine by half, to $9.5 billion, while upholding the original decision by Judge Zambrano.

Chevron refused to recognize the validity of the judgment and continued to file appeals. In a separate action, Chevron filed a racketeering case in New York against Donziger and his team of lawyers, charging that they had repeatedly interfered with the court process, using tactics that included trying to pressure or even bribe judges.

In Tuesday's ruling, federal District Judge Lewis Kaplan declared that that Donziger and his team had ghost-written the judgment against Chevron and promised $500,000 to an Ecuadorian judge to sign it.

In the course of a six-week-long trial, Chevron's lawyers presented 31 witnesses in person and the written testimony of 37 others. The evidence included coded emails, secret payments and clandestine meetings with judges that Judge Kaplan himself said would "normally come only out of Hollywood." The documents presented to the court also included Donziger's personal notebook and subpoenaed outtakes from a documentary film, entitled "Crude", made about Donziger pursuit of Chevron. Those outtakes, that never appeared on-screen, show Donziger meeting with a consultant in a restaurant in Ecuador. When the consultant tells Donziger that there was no evidence that seepage had escaped from the oil-pits, Donziger responded “This is Ecuador, O.K.,” he said. “At the end of the day, there are a thousand people around the courthouse; you will get whatever you want. Sorry, but it’s true.

In his ruling, Kaplan said Donziger started pursuing the case in hopes of improving environmental conditions in Ecuador and also to make a living for himself, but ultimately corrupted the case by submitting fraudulent evidence, bribing a judge, ghost-writing the judgment and covering up his wrongdoing.

R. Hewitt Pate, Chevron’s general counsel, said “The conspirators who committed that fraud are shameless, and they are tenacious, but Chevron hopes that today’s ruling hastens the end of their scheme. We don’t think any serious court will entertain enforcement of the fraudulent judgment.”

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