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Federal Judge Asked To Stay Case Over $19b Ecuador Judgment

Submitted by: The Law Offices of Steven Donziger

Categories: Human Rights, Environment

Posted: Jun 04, 2013 – 02:19 PM EST


NEW YORK, Jun. 04 /CSRwire/ - A New York federal judge long accused of bias against Ecuadorian rainforest residents over a $19B pollution case is continuing to allow Chevron to “systematically harass” two victims of its toxic pollution and their long-time New York lawyer, according to new motions filed in recent days.

The lawyer, Steven R. Donziger, asked Judge Lewis A. Kaplan to grant a three-month stay to prevent the case from degenerating into a “mockery” where unrepresented defendants are fighting hundreds of Chevron lawyers and are barred by the court from mounting a basic defense using evidence of Chevron’s pollution and corrupt acts in Ecuador. The motion is available here.

“This is an extraordinary situation where the evidence suggests that a federal judge is allowing a major oil company to crush its critics by denying them a defense and overwhelming them with abusive legal tactics to drive up their costs, making it virtually impossible for them to obtain counsel,” said Donziger.

“Judge Kaplan is now allowing Chevron to pursue litigation over litigation over litigation,” said Donziger. “It’s unprecedented and offensive.”

In the motion seeking the stay, Donziger outlined for Judge Kaplan how he is now litigating alone (pro se) against at least 114 lawyers from Chevron’s lead outside firm in a case with millions of pages of discovery documents, a privilege log that is 15,000 pages long, and close to 1,200 docket entries. Chevron also disclosed that it has well over 100 private investigators working on the case, some of who have conducted secret surveillance of the plaintiffs and their lawyers to intimidate them, said Donziger.

Despite the request for a stay, Judge Kaplan is allowing 14 depositions in three weeks, with the first starting tomorrow and the last – of Chevron’s CEO, John Watson – scheduled for June 27. Kaplan also is allowing Chevron to depose Donziger for another two days on top of the 16 days he already testified in 2010 and 2011.

“This compressed schedule is a per se violation of my due process rights,” said Donziger. “There is simply not enough time to adequately prepare to take depositions, to defend myself in my own deposition, review millions of pages of discovery, and also search for substitute counsel,” he said.

Chevron previously identified roughly 2,000 legal personnel and 60 law firms who have worked on the case. An affidavit from a former FBI agent describing some of the surveillance of Donziger can be found here. Kaplan is also allowing Chevron to hide the identities of three Ecuadorian witnesses against the Ecuadorians and Donziger, a blatant violation of their due process rights that a prior lawyer likened to tactics used by courts in the Spanish Inquisition.

In his papers, Donziger said that he has never tried a federal case and that he needed time to procure a new lawyer in the face of a “concerted effort” by Chevron to interfere with his right to counsel.

He disclosed evidence that Chevron has now filed civil suits against four different law firms and one funder who have supported the Ecuadorians, falsely claiming they are part of a “conspiracy” to extort money. Donziger also took aim at Randy Mastro, Chevron’s lead lawyer from Gibson Dunn, for making false public statements to the media about the case to “scare off” supporters. (For background on how Mastro and Gibson Dunn have committed ethical violations behalf of Chevron, see here.)

Donziger’s former counsel, famed San Francisco-based trial lawyer John Keker, withdrew from the case two weeks ago because Donziger could not pay his fees. On his way out, Keker took the unusual step of publicly criticizing Judge Kaplan for letting the case degenerate into a “Dickensian farce” due to Chevron’s abusive litigation tactics.

“Through scorched earth litigation, executed by its army of hundreds of lawyers, Chevron is using its limitless resources to crush defendants and win this case though might rather than merit,” Keker said in his motion to withdraw. “Encouraged by this court’s implacable hostility toward Donziger, Chevron will file any motion, however meritless, in the hope that the Court will use it to hurt Donziger.”

Keker also said his firm “would be proud” to represent Donziger at trial if it could get the resources. “We are confident that were we to do so, we would prevail,” Keker said.

Donziger also called on Judge Kaplan to allow him and the Ecuadorians sufficient latitude to develop a defense via questioning of key Chevron witnesses, including CEO Watson, Deputy General Counsel Edward Scott, and Rhonda Zyglocki, who used to head Chevron’s lobbying and governmental affairs division. All are scheduled to be deposed this month.

Judge Kaplan also appointed – over the objection of Donziger – his former law partner, Max Gitter, as a Special Master to make rulings during depositions. Gitter, who has a history of bias against the Ecuadorians and Donziger, works at a large corporate law firm in New York City and bills at his standard hourly rates, which include $630 per hour for an associate to assist him.

The bills of Gitter and another Special Master appointed by the court, former U.S. Magistrate Judge Theodore H. Katz, are supposed to be split evenly between Chevron (which reported $242 billion in revenue in 2012) and the Ecuadorians and Donziger, but the latter objected to their appointment and have refused to pay, saying they do not have enough money to pay for their own counsel much less the Special Masters.

A petition to have the case reassigned from Judge Kaplan is currently pending before the Second Circuit. That petition can read here, and a supplemental petition filed last month can be read here.

Background on the litigation

Chevron filed the New York “fraud” case in 2011 to retaliate against Donziger and others who successfully held the oil giant accountable in Ecuador for what experts believe is one of the worst oil-related disasters in history. The underlying environmental case was filed in 1993 in New York federal court and concerns Chevron’s use of substandard operational practices Ecuador’s Amazon rainforest from 1964 to 1992. (Chevron operated in Ecuador under the Texaco brand.)

In 2001, a New York court transferred the underlying case to Ecuador in exchange for Chevron’s stipulation that it would accept jurisdiction and abide by any adverse judgment there. To persuade the U.S. court to transfer the case, Chevron had filed 14 sworn affidavits from experts praising Ecuador’s judicial system. When the trial in Ecuador began and evidence quickly pointed to the company’s culpability, Chevron shifted gears and began to attack the same Ecuador courts it had previously praised.

Based largely on Chevron’s own evidence and admissions – and after an eight-year trial – the Ecuador court in 2011 found the company liable for $19 billion for deliberately discharging billons of gallons of toxic waste into Amazon waterways and forests when it operated several oil fields in the rainforest from 1964 to 1992. Evidence before the court found Chevron’s dumping decimated indigenous groups and caused dramatically higher cancer rates. The evidence also showed Chevron tried repeatedly to sabotage the trial, threatening judges with jail time and filing hundreds of frivolous motions, including 39 in one 50-minute period.

(A video on the evidence behind the case can be seen here. A 60 Minutes segment on the case, which documents Chevron’s deliberate pollution, can be viewed here.)

In anticipation of losing the Ecuador case, Chevron sued Donziger, his Ecuadorian co-counsel Pablo Fajardo, longtime Amazon community leader Luis Yanza, and all 47 named Ecuadorian plaintiffs for triple damages on the underlying judgment plus costs, or roughly $60 billion. Chevron brought the case in the same New York court where it had fought for years to have the original lawsuit blocked so the case could be tried in Ecuador.

Internal Chevron documents later confirmed that the company for years has had a long-term strategy “to demonize” Donziger as a way to evade the Ecuador liability. Documents also show that Chevron has offered enormous cash payouts to the Ecuador government to illegally quash the case.

Donziger lives and works out of a small apartment in Manhattan, while Mssrs. Camacho and Payaguaje – beset by economic and health problems related to the toxic pollution – are essentially impoverished and have no funds to pay for a law firm. They are currently represented by Julio Gomez, a solo practitioner in New Jersey.

Judge Kaplan’s history of bias against the Ecuadorians is well-documented. He has continually referred to them as the “so-called” plaintiffs and said their case is not “bona fide litigation” but instead is part of an effort by American lawyers “to be the next big thing in fixing the balance of payments deficit” of the United States. For more on Judge Kaplan’s insulting comments, see here.

Judge Kaplan also suffered a stunning rebuke in 2012 when the Second Circuit Court of Appeals unanimously reversed him for imposing an illegal injunction to block the Ecuadorians from enforcing their winning judgment against Chevron assets in other countries. The Second Circuit ruled that the Ecuadorians had the legal right to enforce their judgment in any country of their choosing. The U.S. Supreme Court rejected a Chevron petition to review that decision, so it stands as controlling law.

To satisfy the Ecuador judgment, the affected rainforest communities have filed lawsuits to seize billions of dollars of Chevron assets in Brazil, Canada, and Argentina.

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