Sanctioned American Lawyer Has No Connection to $10 Billion Class-Action Against Chevron In Ecuador

Chevron Criticized for Using Court Decision to Hide Environmental Liability in Rainforest

Amazon Defense Coalition
19 October 2007 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109

Quito, Ecuador - Representatives of indigenous groups and Amazon rainforest communities suing Chevron for massive oil contamination in Ecuador announced today that an American attorney sanctioned this week by a U.S. court for filing bogus claims has no connection to their own class action lawsuit that is nearing a decision in the coming months.

Pablo Fajardo, the lead counsel for the $10 billion class action lawsuit against Chevron in Ecuador's rainforest (Aguinda v. ChevronTexaco), blasted the oil giant for trying to discredit the long-running Ecuador action by trying to link it to the problems created by the American lawyer in a much smaller case in San Francisco, which has only two plaintiffs.

The American lawyer in the smaller San Francisco case, Cristobal Bonifaz, was ordered this week by U.S. federal judge William Alsup to pay Chevron $45,000 after it turned out three of his plaintiffs never actually had cancer, as had been claimed in the lawsuit. Alsup found that Bonifaz, a Massachusetts resident, had never investigated the claims of his clients before filing the lawsuit.

All three of the bogus claims have been dismissed from the case. "Counsel were obligated to investigate first and sue second, not the other way around," Alsup wrote in his ruling.

Fajardo explained that Bonifaz was fired from the legal team in the larger Aguinda case in early 2006 for engaging in "ethically questionable" conduct that included failing to meet with his clients, representing the Ecuadorian government in a related litigation against Chevron without first receiving a conflict of interest waiver, and inadvertently waiving the foreign sovereign immunity defense in that second case.

The latter mistake - which happened in 2005 before a U.S. federal court in New York -- threatened to shift the entire multi-billion environmental liability caused by Chevron to Ecuador's government, possibly depriving the Aguinda plaintiffs of any recovery. The mistake is now moot, as Chevron this year lost that second action at the trial level after Ecuador's government also fired Bonifaz and hired new lawyers.

Fajardo said: "Bonifaz purports to fight for human rights, but as one can see from the federal court's decision, he regularly forgets to respect the human rights of his own clients in the Amazon rainforest. His irresponsible behavior has diminished the credibility of the entire legal profession and harmed the interests of some of the most vulnerable people on the planet."

Fajardo also blasted Chevron's lawyers for trying to use the sanctions against Bonifaz in the San Francisco case as a vehicle to discredit the ongoing class action in Ecuador. In the Ecuador case, the vast majority of 54,000 chemical sampling results - most of them generated by Chevron scientists -- indicate levels of carcinogenic toxins up to thousands of times higher than EPA norms, according to lawyers for the plaintiffs.

Chevron's environmental problems in Ecuador also prompted the Securities and Exchange Commission to contact the company for failing to disclose the potential liability to shareholders. Ecuador's Attorney General has asked the U.S. Department of Justice to investigate Chevron for fraudulent behavior in a purported cleanup of the damage.

Chevron has admitted in court that it dumped 18 billion gallons of toxic water of formation into Ecuador's rainforest from 1964 to 1992. Four indigenous groups claim they are on the verge of extinction due to the contamination, and several peer-reviewed academic studies in evidence at the trial have found skyrocketing rates of cancer in the region in Ecuador where Chevron operated.

"Chevron is currently facing a massive liability in Ecuador in a case that will end in a few months with what could be one of the largest judgments ever against an oil company," said Fajardo.

Also sanctioned by Judge Alsup were Terry Collingsworth and Paul Hoffman. Collingsworth was co-counsel with Bonifaz in the case where they inadvertently waived the foreign sovereign immunity defense, exposing Ecuador's government to billions of dollars of potential liability.

Hoffman had claimed he only served as local counsel and was unaware of the false claims. But Judge Alsup criticized him for not asking basic questions of Bonifaz before the false claims were filed.

The three lawyers were ordered by Judge Alsup to notify their respective bar associations of the sanctions.