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Chevron v. Donziger – RICO Trial Highlights

Date: Dec 9, 2013

Chevron’s RICO trial against Donziger begins

Randy Mastro of Gibson Dunn & Crutcher, who has led Chevron’s case from its inception, gave the company’s opening. In a sign of the significance Chevron attaches to the case, its vice president and general counsel, R. Hewitt Pate, was present  through the entire first day, having arrived at the courtroom half an  hour before its doors even opened at 8:30 a.m.

Mastro also praised his client for having fought the case as hard as it has. “Chevron didn’t give in,” he told Judge Kaplan. “It stood up and refused to be extorted and defrauded.” If Donziger’s “shakedown” of Chevron succeeds, he warned, “Who will be the next U.S. victim of his paradigm? It will be open season on U.S. corporations in corrupt foreign jurisdictions.” (Fortune)

Chevron Ecuador Lawsuit Funding Firm CEO Tells Judge of Regrets

“One of the financiers of an environmental lawsuit that led to a $19 billion verdict against Chevron Corp. in Ecuador told a judge that he came to regret funding the case once after learning that it may be a fraud.

Burford Capital LLC Chief Executive Officer Christopher Bogart told a Manhattan federal judge yesterday that his firm, which he described as the world’s largest dedicated litigation financing provider, supplied $4 million to the Ecuadorean plaintiffs and later sold the share when it became “deeply concerned about the mounting evidence of fraud and misconduct.”

Chevron alleges in the non-jury trial before U.S. District Judge Lewis Kaplan that a Manhattan lawyer, Steven Donziger, and others involved in the pollution case engaged in a “racketeering enterprise” and won the 2011 verdict through coercion, manufactured evidence and bribery of the Ecuadorean judge who wrote it. The company is seeking a ruling preventing the plaintiffs from trying to enforce the verdict in courts around the world. Burford reached an agreement with Chevron to provide testimony after being described in the lawsuit as a party involved in the scheme, Bogart said yesterday.” (BloombergBusinessweek)

Pollutions Evidence Seeps into Chevron Fraud Trial

A scientist who first tagged Chevron with billions in liabilities for rainforest contamination and is now testifying for the oil giant told the court about his “toxic tour” of the Amazon. David Russell, the head of the environmental consulting firm Global Environmental Operations, started out as the lead scientific witness against the company in 2003. …

After drawing up his observations in the Hotel Lago, he arrived at a cost-estimate of more than $6 billion. He called the figure Thursday a S.W.A.G., or a “Scientific Wild Ass Guess.” Two years into the case, Russell quit after a falling out with Steven Donziger, who was then the lead attorney on the lawsuit representing residents of the Ecuadorean rainforest, and publicly disavowed the estimate. (Courthouse News Service)

Former Ecuadorean Judge testifies to bribery in Chevron case

A former Ecuadorean judge testified on Wednesday that he ghost-wrote rulings for a judge who ordered Chevron Corp to pay $19 billion to villagers whose land had been polluted by oil exploration.

The former judge testified at a trial in New York in which Chevron accuses U.S. lawyer Steven Donziger of bribing the Ecuadorean judges to win the award for the villagers.

Donziger has denied bribing the officials. (Reuters)

Disastrous day for the Lago Agrio plaintiffs in Chevron Trial

In remarkable testimony Tuesday in federal court in Manhattan, the former Ecuadorian judge who signed a $19 billion environmental judgment against Chevron in 2011 seemed startlingly unfamiliar with the contents of the opinion he claims to have authored. He was unable to account for key data, reasoning, case citations, and terms he used in it.

The strikingly poor performance of the judge, Nicolás Zambrano Lozada, appeared to bolster Chevron’s contention that the $19 billion judgment in the environmental case, commenced in Lago Agrio, Ecuador in 2003, was not written by Zambrano at all, but rather by the plaintiffs lawyers themselves, who, Chevron maintains, won that opportunity by agreeing to pay Zambrano $500,000 from out of any eventual recovery. Zambrano maintains that he wrote the ruling without any assistance from anyone. (Fortune)

The Chevron Judge Who Knows Little About His Judgment

Yesterday, Chevron had an opportunity in federal court in Manhattan to interrogate the former Ecuadorian judge who issued the ruling. Turns out he doesn’t know much about it.  Nicolas Zambrano, whose name appeared on the 188-page, single-spaced decision from a provincial court in Lago Agrio, Ecuador, could not recall the name of the chemical substance the ruling described as “the most powerful carcinogenic agent” allegedly associated with oil contamination in the rainforest. He could not identify the study that the decision described as providing “statistical data of the highest importance to delivering this ruling.” He likewise did not recall what legal theory of “causation” the decision relied upon to link oil pollution to ecological and human harm.

Conceding that he does not speak or read French or English, he could not plausibly explain how the ruling he claimed as his own could include legal citations in those languages drawn from French, Australian, and U.S. doctrines. Zambrano said that his secretary, an 18-year-old woman who also, so far as he knew, did not speak or read French or English, found the far-flung legal materials on various websites. “The young woman who would help me type the judgment, she was the one going on the Internet,” Zambrano testified. She “chose the Spanish option” on legal websites. “That is how I would become aware or informed of the subject I was interested in. She would print them, so I could read them later.” (Bloomberg Businessweek)

Lawyer describes fraud, lies and acrimony in $19 billion Chevron case

Since its founding 40 years ago, Kohn, Swift & Graf has earned a national reputation for filing sophisticated class-action lawsuits against major corporations. It says so right on the Philadelphia law firm’s website. In humiliating testimony on Nov. 4 in federal court in New York, Joseph Kohn claimed that in the course of representing residents of the Ecuadorian rainforest in litigation against the oil industry, he and his firm were serially defrauded—not by a corporate foe, but by a fellow plaintiffs’ attorney. …

Hoping for a slice of any winnings, Kohn financed Donziger’s lawsuit, which began in New York in 1993, was dismissed in  2001, and was eventually restarted in Ecuador in 2003. After investing roughly $7 million in the case, including $1.1 million paid directly to Donziger, Kohn and his firm backed out of the Ecuador litigation in 2009. He testified that he withdrew because Donziger repeatedly lied to him about the improper ghostwriting of a supposedly “independent” damages report submitted by Donziger’s legal team to the court in Ecuador. (BloombergBusinessweek)

Sex and Blackmail now on the docket in Chevron Pollution Case

Lawyers representing Donziger have tried to turn the tables one more time, putting on witnesses to explain how and why the plaintiffs’ attorney pressed his long-running suit against Chevron in Ecuador. Alejandro Ponce Villacris, an Ecuadorian lawyer who worked with Donziger from mid-2005 through late 2008, took the stand to testify that Donziger did not violate Ecuadorian legal regulations. On cross-examination by Chevron’s attorneys, however, Ponce conceded that members of the plaintiffs’ legal team in Ecuador discussed a “sex scandal” concerning one of the six judges who, at various times from 2003 through 2011, presided over the Ecuadorian trial. When asked whether the plaintiffs, as a way of gaining courtroom leverage, threatened the Ecuadorian judge in 2006 with the filing of a public complaint about the sex scandal, Ponce said, “I don’t recall that.” Pressed on the point, he said repeatedly: “Not that I can recall.”

Eventually, U.S. District Judge Lewis Kaplan, who is hearing the racketeering case without a jury, intervened. As for the plaintiffs threatening the Ecuadorian judge with disclosure of alleged sexual improprieties as a way of getting him to rule in their favor, Kaplan declared: “I think, actually, it’s undisputed that occurred.” Kaplan’s definitive statement that Donziger’s team had engaged in what amounted to a form of blackmail appeared to startle a number of people in the packed Manhattan courtroom. (BloombergBusinessweek)

Chevron trial nears its end

Mr. Donziger, who is scheduled to appear in his defense Monday, took the unusual step of pre-releasing his written testimony to reporters at the end of last week, some of which could be disallowed by District Judge Lewis A. Kaplan. Mr. Donziger accuses the judge of being biased against him and stacking the case in favor of Chevron through rulings that, among other things, forced him to turn over personal and confidential documents that Chevron is now using against him.

While admitting to some “errors” in handling the Ecuadorean case, Mr. Donziger flatly denies having offered Judge Zambrano a $500,000 bribe or having even seen or met with the judge. He said the only evidence Chevron has of the alleged bribe is the testimony of another Ecuadorean judge who disgraced himself and undermined his testimony by himself soliciting a bribe from Mr. Donziger. (Washington Times)

Chevron makes its case in Trial over $19 bln Ecuadorean judgment

Chevron, which rested its case on Tuesday, has brought a series of expert witnesses from the fields of linguistics, psychology and computer science to testify in the case over the past four weeks.

The star witness was Alberto Guerra, a former Ecuadorean judge who said he was paid by lawyers for the villagers to ghostwrite rulings for the judge in the case.

Donziger was aware of the arrangement, he said.

“Mr. Donziger thanked me for the work that I was going to do,” Guerra said. (Reuters)

Chevron Assails Lawyer Who Led Multibillion-Dollar Suit Against It

In one of the more dramatic moments in a legal battle that has stretched for 20 years, a lawyer for Chevron questioned Mr. Donziger over a string of emails that he received from an Ecuadorean colleague that included words like “puppet” and “puppeteer.” The words, the company maintains, were references to two judges involved in bribes that it says Mr. Donziger and his associates arranged.

“ ‘The puppet will finish the entire matter tomorrow’ — do you recall that, Mr. Donziger?” asked the lawyer, Randy M. Mastro, quoting from the emails. “The puppeteer is pulling the string and the puppet is returning the package.”

Days after Judge Zambrano took over the Lago Agrio case, an Ecuadorean lawyer sent an email to Mr. Donziger reading, “The puppeteer won’t move his puppet unless the audience pays him,” Mr. Mastro said in court on Tuesday. Mr. Mastro then cited payments to Mr. Guerra that he said followed that message, which Chevron has claimed were bribes. (New York Times)

Chevron v. Donziger: The Goat on the Stick

Drawing from a dizzying range of sources, Mastro showed that Donziger or his colleagues have referred to him as the cabeza or commander-in-chief, while Donziger once called Fajardo his “young field lawyer in Lago Agrio.” Donziger’s contract gave him “overall responsibility for the strategic direction of the Litigation and [its] day-to-day management.” As Donziger once put it, “I am at the epicenter of the media, political, and legal activity surrounding the case both in Ecuador and the U.S.” Despite claiming to effectively work for Fajardo, Chevron established that Donziger made more than six times Fajardo’s salary, and that Donziger’s allotted contingency fee is over three times larger.

“You must have a very generous boss Mr. Donziger,” said Mastro sarcastically.  Specifically, Mastro established that Donziger is entitled to 31.5 percent of the 20 percent of the Ecuadorian judgment allocated to fees. That came to roughly $1.2 billion when the judgment stood at $19 billion. Now that Ecuador’s highest court has lopped off the penal component and halved the verdict to $9.5 billion, Donziger stands to earn about $600 million. (American Lawyer, Litigation Daily)

Chevron uses ‘Thermonuclear Device’ of RICO Against Donziger

Mastro is seeking a ruling preventing Donziger and the named plaintiffs from profiting from the judgment in Ecuador. That may only be applicable in the U.S. But combined with a finding that Donziger committed fraud in obtaining that judgment, Mastro said, the ruling could make it difficult for him to enforce it anywhere Chevron has assets.

He also hopes Donziger’s lesson resonates with other lawyers who file suit in foreign courts to obtain large judgments they can use as leverage for settlements in the U.S. Dole Food used a similar approach, although stopping short of suing under RICO, to challenge lawsuits filed by U.S. lawyers claiming thousands of Nicaraguan workers had been made sterile by agricultural chemicals. (It later paid to settle many of those cases.) (Forbes)

Chevron’s Ecuadorean Foes Hit With Double-Whammy

A March 26, 2007, email from Pablo Fajardo to the Ecuadorean legal team – bearing the subject line “Orange Alert” – began: “Today the cook met with the waiter to coordinate the menu.”

Chevron believes that the “cook” refers to Yanez, who allegedly met with Cabrera – “the waiter” – to hatch a plan for the global assessment “menu.”
Ponce again insisted that he did not know what these terms meant, and he added that was not included on that email.

Brodsky undermined that denial by confronting Ponce with another Oct. 8, 2007, email from Fajardo listing the witness as the first of six recipients.
In screaming caps, the email states, “LET’S ALSO COOPERATE WITH THE COOK SO THAT HE CAN RESPOND BEFORE THE JUDICIAL COUNCIL.”
Chevron believes this refers to the Ecuadorean Judicial Council’s handling of a complaint against Yanez.
U.S. District Judge Lewis Kaplan, who is hearing the case without a jury, quipped, “I don’t imagine they have jurisdiction over restaurants.” (Courthouse News Service)

U.S trial ends over Ecuador pollution judgment against Chevron

An attorney for Chevron Corp on Tuesday accused U.S. lawyer Steven Donziger of orchestrating an international criminal conspiracy by using bribery and fraud in Ecuador to secure a multibillion-dollar pollution judgment against the oil company.

“It was a scheme so audacious, so bold, that it would make even a Mafia boss blush,” lawyer Randy Mastro said during his closing argument before U.S. District Judge Lewis Kaplan, who is presiding over the non-jury trial. (Reuters)

Chevron pollution case twist: Ecuadorians back away from their American lawyer”

The Secoya leader explained that, in addition to the differences over accounting, the Ecuadorian council was concerned that Chevron’s racketeering suit against Donziger in the U.S. had become a distraction from the pollution litigation in Ecuador. “We also took action because of Donziger’s attitude,” Piaguaje testified.

Called as a witness by the U.S.-based legal team defending Donziger and the Ecuadorians in the rainforest, Piaguaje cast a cloud of confusion over the proceedings before U.S. District Judge Lewis Kaplan. At a different point in his testimony, Piaguaje reiterated that the Ecuadorian plaintiffs had “suspended” Donziger “from his functions.” He also said, though, that Donziger remained a lawyer for the Ecuadorian plaintiffs. Piaguaje’s tone remained calm throughout his testimony. After several hours in the chilly courtroom, he slipped a dark coat over his traditional tunic. (BloombergBusinessweek)

Chevron Claims Trial Showed Proof of Fraud in Ecuador

Closing arguments began today in Manhattan after six weeks of trial in which the company claimed lawyers for the plaintiffs in the Ecuador environmental case bribed judges and drafted much of the actual ruling. Steven Donziger, a New York attorney accused of leading the scheme, has denied allegations of wrongdoing and maintained the judgment is valid.

Randy Mastro, a lawyer for Chevron, the second-largest U.S. energy company, argued to U.S. District Judge Lewis Kaplan that the evidence showed the pollution ruling was a fraud.

“One thing has always been certain: this judgment was ghostwritten by these plaintiffs,” Mastro told Kaplan today.  Mastro said “strings of words” from Donziger’s e-mails and sequences of numbers from an internal database that appear verbatim in the judgment show the plaintiffs’ influence.  “This is like not even fingerprints,” Mastro said. “This is like 10 fingers, both palms. Their internal work product shows up word for word in the document because they wrote it themselves.”

…..

Mastro, the Chevron lawyer, said today that Donziger’s testimony about his smaller role in the case is contradicted by the fact that he makes “six or seven times” more than Fajardo.  “In every business I’ve ever been in the boss makes more money,” Mastro told the judge.  “To him the ends came to justify the means, the methods didn’t matter,” Mastro said. “He set about to make the big score and set his sights on Chevron.”  (Bloomberg)