As RICO Trial Ends, Chevron Still Faces Myriad Problems Over Ecuador Judgment Even If It Wins

New York, NY – As Chevron's RICO trial winds down this week in New York federal court, the company faces a wave of ongoing problems related to its multi-billion dollar Ecuador liability that cannot be solved by controversial judge Lewis A. Kaplan even if he rules in favor of the oil giant, according to an analysis of the facts by the plaintiffs.

That analysis, called "Chevron's RICO Trial to Nowhere", lists eight reasons why the oil giant's case will not allow the company to achieve its objective of blocking international enforcement efforts and likely will not survive appellate review in the United States. It is available here.

In the RICO case, closing arguments for lawyer Steven Donziger and two of his Ecuadorian clients will emphasize that any decision by Kaplan in favor of Chevron will directly contravene a Supreme Court decision from Ecuador that affirmed findings that the oil giant is liable for the deliberate dumping of billions of gallons of toxic waste into the Amazon rainforest. A video describing Chevron's substandard operating practices in Ecuador, which decimated indigenous groups, can be viewed here.

The memo also points out why any decision in favor of Chevron is not likely to survive appellate review in the United States.

On the international front, there is nothing that Judge Kaplan can do from his Manhattan courtroom to block international enforcement efforts targeting billions of dollars of Chevron assets in Canada, Brazil and Argentina – no matter how hard he tries, said Christopher Gowen, a lawyer representing Donziger.

And in the RICO case itself, Chevron's key witness – former judge Alberto Guerra – suffers from severe credibility problems given that he admitted to taking bribes in Ecuador and that Chevron paid him exorbitant sums of money for his testimony. Guerra's testimony is contradicted by multiple witnesses and Chevron's payments violate various laws and ethical rules in the U.S. preventing payments in exchange for testimony, said Gowen.

Also during closing arguments, attorneys for Donziger will show Judge Kaplan evidence that Guerra himself fabricated evidence and committed a fraud on the court during his testimony.

"The bottom line of Chevron's RICO case is that the only court with any jurisdiction over this matter, The Ecuadorian Supreme Court, ruled last week issuing a 222 page opinion dismissing every one of Chevron's claims," said Christopher Gowen, a professor of ethics and a member of Donziger's legal team.

"Chevron's remedy of injunctive relief is simply not available under the law," he said. "And foreign enforcement courts do not want to be told how to rule by a U.S. judge – particularly one who did not provide a fair trial and who believes he can play the role of the world's chief appellate judge."

Gowen said Donziger and the Ecuadorians consider it a "foregone conclusion" that Kaplan will rule in favor of Chevron given his bias and the fact he excluded all key evidence about Chevron's environmental contamination relied on by the Ecuador court to find the company liable. "Judge Kaplan ran a show trial to inject his own politics into a case that allows him to spread those views around the world," said Gowen.

Among Chevron's many problems with the RICO case, according to the memo prepared by lawyers for the Ecuadorian plaintiffs:

• Judge Kaplan had no authority to conduct the RICO trial in the United States given that Chevron agreed to abide by any judgment from Ecuador's courts, subject only to its available defenses in enforcement actions. Filing a RICO case is not a defense to enforcement actions abroad, said Gowen.
• Chevron's RICO case violates settled principles of international comity by asking a trial court judge in the United States to rule on another country's judicial system. Ecuador's Supreme Court decision against Chevron "is entitled to respect by the United States and by ever other nation in the world, just as an opinion of the Supreme Court of the United States is entitled to respect," according to the plaintiff's analysis.
• Given that on the eve of trial Chevron dropped all damages claims to avoid a jury, it's proposed remedy of an injunction has no basis in the law and runs counter to a previous appellate decision in the case that overturned Kaplan. In short, U.S. courts have no legal authority to impose an injunction blocking enforcement of judgments from other countries, according to the analysis.
• The RICO statute also does not authorize a private party – as opposed to the U.S. government – to seek injunctive relief of any sort. Thus, the RICO statute does not provide a basis for the remedy Chevron seeks and the case should have been thrown out when the company dropped damages claims, according to the analysis.

Aside from the many legal problems faced by Chevron, the company has two additional hurdles – the failure to establish that Donziger did anything wrong in Ecuador, and Kaplan's own track record of bias against the New York lawyer and his clients. Both problems are going to severely limit the legitimacy of any decision by Kaplan.

On the factual front, Donziger explained clearly that a key issue – the drafting of a damages assessment by the plaintiffs – was consistent with Ecuador law and that Chevron's lawyer engaged in the same practices. Donziger also denied bribing a judge, and Chevron presented no evidence that he did other than a triple hearsay statement from Guerra.

As for Kaplan, he has repeatedly referred to the Ecuadorians as the "so-called plaintiffs," blasted their case as "not bona fide litigation" even before he heard evidence, and said that Donziger was trying to become "the next big thing in fixing the balance of payments deficit." He also invited Chevron to file the RICO case when presiding over an earlier discovery matter related to the Ecuador case. Judges in other countries will be aware of Kaplan's bias if they are not already, said Gowen.

For background on court filings related to Kaplan's bias, see here and here.

As for Donziger, the memo makes clear that he will continue with his commitment to help the Ecuadorians get relief from the extensive oil contamination that afflicts their homeland. His full written witness statement is available here.

"Mr. Donziger is unbowed by the combined efforts of Chevron and Judge Kaplan to inappropriately try to quash the Ecuador legal judgment and he will continue his lawful work on behalf of his clients so they can receive a proper cleanup of their ancestral lands, adequate medical attention, and clean water," the memo asserted.