Donziger's New Legal Team Strikes Back at Chevron by Seeking Nullification of RICO Case

New York, NY – In a bold and unusual move, the new appellate team representing New York attorney Steven Donziger is seeking to dismiss Chevron's retaliatory RICO case because the oil giant now admits that there is nothing that a U.S. court can do to block foreign enforcement proceedings targeting the company's assets.

The move to dismiss the RICO case – which comes after the close of evidence but before decision – is based largely on Chevron's surprise admission in its final post-trial brief that it cannot block foreign enforcement proceedings that rainforest villagers are using to collect on their $9.5 billion environmental judgment. Chevron had stripped most of its assets from Ecuador years ago in anticipation of the judgment, which was issued in 2011 and was unanimously affirmed last November by Ecuador's Supreme Court.

"In the end, Chevron all but admits that is it not asking this Court to resolve any concrete case or controversy," said the motion, filed by Deepak Gupta of Gupta Beck in Washington, D.C. "This unseemly spectacle of a case must come to an end."

The motion to dismiss can be read here. Donziger's post-trial reply brief, which outlines additional weaknesses in Chevron's RICO case, can read here. A recent letter criticizing Chevron for its abusive litigation tactics toward the Ecuadorians and signed by more than 40 advocacy groups can be read here.

The Donziger team's latest move comes after the parties traded final briefs following a seven-week bench trial that took place in New York before federal judge Lewis A. Kaplan. Kaplan had denied Donziger and two Ecuadorian villagers, Hugo Camacho and Javier Piaguaje, a jury of impartial fact finders after Chevron sued them under the racketeering statute for $60 billion. The size of the potential personal liability is thought to be the largrest in U.S. history.

To avoid a jury, Chevron dropped the damages claims against Donziger and his clients on the eve of trial, which began on October 15. Judge Kaplan is expected to make a decision in the coming weeks.

Last week, Donziger's new appellate team – led by Gupta, who formerly held high-level posts at the Consumer Financial Protection Bureau and worked as a litigator with Public Citizen – filed a motion before Judge Kaplan asking him to dismiss all of Chevron's claims on the grounds that the oil giant lacks standing and there is no actual "case or controversy" as required by the Constitution for jurisdiction to exist.

"Motions to dismiss usually happen at the beginning of a trial, not after three years of litigation," said Gupta. "But when Chevron dropped all of its damages claims to avoid a jury trial, it painted itself into a corner and deprived the court of jurisdiction."

"After analyzing the case for the last several weeks, we have come to the conclusion that Chevron has not identified a single injury that would give it standing," said Gupta. "That's because none exists."

Gupta's motion to dismiss describes Chevron's dilemma as follows:

• Chevron claims it has been injured by enforcement proceedings targeting company assets abroad. Yet the injunction Chevron seeks against Donziger and his clients would not bar those proceedings, according to Chevron's own admission.
• Chevron has asked Judge Kaplan to prohibit Donziger and the Ecuadorian plaintiffs from "profiting" from the Ecuador judgment. But given that no enforcement action has collected funds, there is no actual injury as required by law for jurisdiction to exist.
• Chevron also hurt itself during the RICO trial by not contesting the overwhelming scientific evidence relied on by the Ecuador courts to find the company liable. Chevron therefore conceded the underlying validity of the judgment against it in Ecuador, according to the motion.
• Finally, no U.S. trial court has the authority to act as a de facto appellate court over another country's judiciary – which is what Chevron is asking Judge Kaplan to do with regard to Ecuador – without violating comity and running afoul of other important principles of domestic and international law.

The motion also points out that Chevron wanted the trial to be held in Ecuador and promised to abide by any adverse decision subject only to narrow defenses which do not include using the RICO statute.

What Chevron really wants from Judge Kaplan is an advisory opinion that it can use for public relations purposes in the U.S. and around the world, a judicial function prohibited by the Constitution, said Gupta. "Courts exist to decide actual cases," said Gupta. "They are not debating societies. Nor do they exist to write advisory opinions for foreign courts."

Gupta said Chevron faces two other intractable problems – first, that the injunction it seeks from Judge Kaplan to block the Ecuador judgment is not authorized by the RICO statute; and, second, that the injunction is functionally equivalent to one declared illegal by the Second Circuit Court of Appeals in an earlier phase of the case.

To get around the latter problem, Chevron is now claiming that its proposed injunction would only stop the Ecuadorians from "collecting" on their judgment, but would not stop the enforcement actions themselves.

"Chevron is now seeking an anti-collection injunction rather than an anti-enforcement injunction," said Gupta.

"Although Chevron never has had standing to bring this lawsuit, whatever argument it might have had for standing (before dropping its damages claim) is now gone – and, with it, so too is this Court's authority over the dispute," said the motion.

Judge Kaplan's history of bias against Donziger and the Ecuadorians has been documented in previous petitions filed with the court that can be found here and here. Renowned trial attorney John Keker, who formerly represented Donziger in the RICO case, recently accused Judge Kaplan of demonstrating "implacable hostility" toward his client and said the case had degenerated into a "Dickensian farce" due to Chevron's abusive litigation tactics.

During the pendency of the Ecuador litigation, Judge Kaplan called Donziger a "field general" rather than a lawyer; claimed the underlying case brought by the villagers "is not bona fide litigation"; and repeatedly called the Ecuadorian indigenous groups who have been victimized by Chevron's pollution the "so-called" plaintiffs.

Donziger has long maintained that he expects Judge Kaplan to rule against him despite the many questions about jurisdiction and the factual infirmities in Chevron's case.

"I have said for a long time that Chevron has been using its RICO case primarily as a weapon to distract attention from its reckless misconduct in Ecuador, as confirmed by that country's highest court and dozens of independent journalists," said Donziger.

For more background on the case, see this summary of the evidence; this video on the case and this 60 Minutes segment.