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Donziger Dodges Ecuadorians’ Suit Over $18B Judgment – Law360

Date: Sep 9, 2014

A New York state judge has ruled that Ecuador’s courts are the proper venue for a suit against class action attorney Steven Donziger brought by a group of indigenous Ecuadorians seeking a share of the $18.2 billion pollution-related judgment Donziger helped secure against Chevron Corp., according to an order posted Friday.

Judge Debra A. James’ Aug. 29 order granting a motion to dismiss filed by the Law Offices of Steven R. Donziger and the Amazon Defense Coalition — a nonprofit organization tasked with representing Ecuador inhabitants and administering proceeds from the so-called Lago Agrio judgment — draws a distinction between the current case and a similar action filed in New York federal court.

Judge James noted the plaintiff in the federal case is a United States citizen, but the plaintiffs in the state court case are all residents of Ecuador and mostly members of the Huaorani indigenous people, along with the fact that the underlying judgment in question was issued by an Ecuadorian court against Chevron subsidiary Texaco Inc.

“It cannot be gainsaid that the interest of Ecuador in determining the rights of its own citizens in the Lago Agrio judgment is greater than that of New York state or any other jurisdiction,” Judge James wrote. “The Donziger defendants have demonstrated that Ecuador is a forum more convenient to the parties or witnesses than New York.”

An Ecuadorian court issued the $18.2 billion judgment against Texaco — later slashed in 2013 to $9.5 billion — for allegedly dumped crude oil into the region over the course of a decades-long oil drilling operation, causing residents to develop cancer and destroying natural resources. Chevron acquired Texaco’s liability when it purchased the company in 2001.

The indigenous Ecuadorians filed the current case in 2013, claiming Donziger and the ADF are seeking complete control of the proceeds of the Lago Agria litigation for their own benefit and to the detriment of the Huaorani.

According to the plaintiff’s complaint, Donziger and the ADF have agreements with investors and funders to sell interest in the Lago Agrio judgment, and that after the Republic of Ecuador receives an expected 90 percent of the judgment and the remaining funds are distributed to lawyers and investors, little will remain for the indigenous Huaorani who suffered the effects of the pollution.

The complaint also says ADF is a nonprofit organization that allegedly brought suit on behalf of plaintiffs and all other indigenous people who were harmed by Texaco’s petroleum activities in Ecuador, but that no retainer agreement exists to allow Donziger to represent the Huaorani’s interests.

Judge James was persuaded by arguments from the defendants that the issues in the suit dealt solely with Ecuadorian law and Donziger’s representation of the Lago Agria plaintiffs within the Ecuadorian legal system, and that a New York state court lacked jurisdiction to hear the case.

“This court finds that plaintiffs have not refuted the showing by defendants that Donziger’s duties as primary attorney in the United States for LAPs in the Lago Agrio litigation did not arise from his representation of LAPs in New York but solely and exclusively from his representation of LAPs in the courts of Ecuador,” Judge James wrote. “The lawsuit at bar challenges Donziger’s representation of plaintiff interests in the court of Ecuador and therefore does not implicate New York’s interest in regulating the conduct of its attorneys within its borders.”

Attorneys for the parties did not immediately respond to a request for comment from Law360.

The plaintiffs are represented by Kathryn Lee Crawford of Schwarz Rimberg Boyd & Rader LLP and by Judith Kimerling, Esq.

Steven Donziger is represented by Stuart G. Gross of Gross Law.

Kemperi Baihua Huani, et al. v. Steven Donziger et al., case number 151372/2013, in the Supreme Court of the State of New York, County of New York.

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