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Chevron Judge Denies Ecuadoreans’ Request for Trial Delay

Date: Jul 16, 2013

Chevron Corp. (CVX:US)’s trial won’t be delayed in a civil racketeering case in which it accuses Ecuadoreans of fabricating evidence to win a $19 billion verdict in a pollution lawsuit.

Chevron sued Ecuadoreans who claimed the San Ramon, California-based company was responsible for pollution in the Amazon rainforest. The company accused the plaintiffs and their lawyer, Steven Donziger in New York, of making up evidence in the case. A trial in Manhattan federal court is set for Oct. 15.

John Keker, a lawyer for Donziger, notified U.S. District Judge Lewis Kaplan in May that he was leaving the case because he hadn’t been paid. Kaplan today denied Donziger’s request to delay the proceedings, saying that he has had months to find another lawyer and that Keker began “complaining publicly” about not getting paid as early as March.

“As an initial matter, Mr. Donziger — despite repeated invitations to do so — has offered no competent evidence of his financial situation,” Kaplan said in today’s ruling. “It is unclear whether he has money to pay counsel but chooses not to spend it, or whether he in fact does not have any.”

Chevron was ordered in 2011 to pay as much as $18.2 billion in damages for Texaco’s alleged dumping of toxic drilling waste in the Ecuadorean jungle from 1964 to about 1992.

18-Year Case

The judgment came in an 18-year lawsuit decided by a judge in Lago Agrio, a provincial capital near the Colombian border. The judgment by the Ecuadorean court has now reached $19 billion.

Chevron denied wrongdoing, saying that Texaco cleaned up its share of the pollution at its former oil fields, which were taken over by PetroEcuador, Ecuador’s state oil company. Chevron contends it was released from any future liability by an agreement between Texaco and Ecuador.

The judge noted that the Ecuadorean plaintiffs have continued litigating the case in various courts around the world, including Ecuador, Canada, Argentina and Brazil.

“Mr. Donziger and the Lago Agrio plaintiff representatives have claimed that the Lago Agrio plaintiffs are out of money,” Kaplan said. “To the contrary, the record establishes that they have raised millions of dollars in exchange for shares of any recovery on the judgment and supplemented that cash by obtaining legal services through contingent fee arrangements.

Spending Choice

“If those who control the money — and as far as the record discloses, they include Mr. Donziger — choose to spend it elsewhere or to regard this case as an unimportant sideshow, that is their prerogative. But they are not entitled to delay this case on the basis of that self-serving decision.”

The company accuses Donziger of improperly influencing a court expert whose findings were used by the judge in Ecuador.

Donziger denied wrongdoing, and plaintiffs in the pollution case said the oil company is attacking him to avoid responsibility for the damages.

Bill Hamilton, a spokesman for the Ecuadorean plaintiffs with Fenton Communications, declined to comment on Kaplan’s ruling.

The racketeering case is Chevron v. Donziger, 1:11-cv-00691, U.S. District Court, District of New York (Manhattan). The case in Ecuador is Aquinda v. Chevron, 002-2003, Superior Court of Nueva Loja, Lago Agrio, Ecuador.

By Patricia Hurtado-Bloomberg Businessweek, July 16, 2013