Chevron's False Evidence in Ecuador Pollution Case Presented To U.S. Supreme Court

Washington, DC – Ecuadorian rainforest villagers and their longtime U.S. human rights lawyer have presented proof of Chevron's bribes, false evidence, and fraud to the U.S. Supreme Court as part of a petition to try to overturn an unprecedented RICO decision by controversial U.S. trial judge Lewis A. Kaplan.

The U.S. Supreme Court petition is of limited impact in that the Ecuadorian villagers and their lawyer, Steven R. Donziger, are already moving rapidly to enforce the $9.5 billion Ecuador judgment against Chevron's assets in Canada and Brazil. In 2015, Canada's Supreme Court unanimously rejected Chevron's attempt to use Kaplan's RICO decision to block the case in that country.

The U.S. Supreme Court petition, filed by Donziger's lawyer Deepak Gupta, is available here. It will take at least several weeks for the Court to determine whether it will grant a full review of the case, which would require additional briefing and argument. Chevron is being represented by appellate lawyer Theodore B. Olson, a former Solicitor General of the United States who is purported to be the highest-billing lawyer in the United States with some clients paying an estimated $5,000 per hour for his services.

Chevron has an estimated $25 billion of assets in Canada including oil fields and refineries, or more than enough to pay for the entirety of the Ecuador judgment. Interest on the judgment under Canadian law has increased Chevron's liability to an estimated $12 billion. A trial to determine when Chevron must pay the full judgment is expected to begin in Toronto in the coming months.

In the request for U.S. Supreme Court review, Gupta explained that the Kaplan ruling was based largely on false testimony from an admittedly corrupt witness to whom Chevron paid a $2 million bribe – including $38,000 in cash out of a backpack -- and a myriad of other benefits. That witness, Alberto Guerra, later admitted that he lied during the Kaplan proceeding when he manufactured a story that a bribe was paid to the Ecuador trial judge. (See here and here for more background on Guerra's lies and perjury.)

Separately, Guerra falsely testified before Kaplan that lawyers for the villagers "ghostwrote" the judgment against Chevron and gave it to the trial judge on a flash drive just before it was issued. However, a subsequent forensic examination of the trial judge's computer, performed at Chevron's insistence under the auspices of an international arbitration proceeding, completely disproved the allegation by showing the trial judge created a Word document that became the judgment and saved it more than 400 times in the weeks leading up to its issuance. The Second Circuit refused to consider the evidence before essentially rubber-stamping Kaplan's erroneous trial court findings, according to Gupta.

Donziger has blasted Chevron for "using obviously false evidence" to try to frame the lawyers who held the company accountable for its environmental crimes committed against indigenous groups and other residents in Ecuador's Amazon. "It is our view that Kaplan and the Second Circuit owe the people of Ecuador an apology for their refusing to consider evidence that blows up Chevron's false narrative," said Donziger. "This is an ongoing stain on the American judiciary in the eyes of the world and it will not go away unless and until the Supreme Court acts."

Kaplan, who refused to seat a jury for the RICO trial and who repeatedly made ill-considered comments from the bench that were considered racist by the Ecuadorians and many observers, credited Guerra's highly suspect testimony even though it was riddled with inconsistencies. Kaplan also refused to hear any of the voluminous environmental evidence relied on by three layers of courts in Ecuador to find Chevron liable for dumping 16 billion of gallons of toxic oil waste into the rainforest. In the RICO case, Chevron simply conceded the fact of its toxic dumping in the rainforest as a way to avoid a public airing of incriminating internal documents that corroborate the voluminous evidence of oil contamination – contained in 105 technical evidentiary reports -- presented to the Ecuador court.

(As background, here is a summary of the evidence against Chevron from the Ecuador proceeding. For specific examples of Kaplan's inappropriate remarks, see this court filing from 2013.)

The Second Circuit affirmance of Kaplan represents the first time in U.S. history that any federal appellate court has allowed an attack on a foreign judgment by a losing litigant, according to Gupta's petition for review.

In strict legal terms, Donziger has asked the Court to overturn the Second Circuit's affirmance of Kaplan on the theory that a U.S. trial judge has no legal right to let a losing litigant (Chevron) try to collaterally attack a foreign money judgment in U.S. courts – a recipe for international judicial chaos, according to the petition. And the losing litigant should have even less such right when it does so based on fake evidence, Donziger added.

Allowing Kaplan's decision to stand "would unnecessarily provoke friction between legal systems, by encouraging pre-emptive challenges to foreign judgments, without actually resolving the dispute between the parties," the petition asserts. "For this reason, no U.S. court has ever allowed a pre-emptive collateral on a foreign money judgment.

"The ruling is as wrong as it is unprecedented," said the petition.

Kaplan's ruling also warrants reversal because he allowed Chevron to abuse the RICO statute to allow a private party to seek purely injunctive relief and not money damages when such action is not authorized by the law -- all to avoid a jury where the company's problematic evidence almost certainly would have been rejected. The U.S. Constitution allows the defendant a jury trial in a civil case only when he or she is sued for money. By dropping its money damages claim, Chevron virtually guaranteed it would win the case given Kaplan's obvious proclivities in favor of the company, said Donziger.

Without a jury, Donziger had predicted prior to the RICO trial that he stood no chance of prevailing. One of his lawyers, the highly respected John Keker of Keker & Van Nest in San Francisco, withdrew prior to trial after accusing Kaplan of letting the case "degenerate into a Dickensian farce" where he let Chevron file hundreds of frivolous motions "to hurt Donziger" and exhaust his resources. It also turned out that during the RICO trial Kaplan held undisclosed investments in Chevron, prompting further questions about his partiality.

Even though Chevron did not have enough confidence in its evidence to put it before a jury of impartial fact-finders, after the trial it still tried to collect $32 million from Donziger to pay for a small portion of the estimated $2 billion in legal fees it paid to 60 law firms. Donziger says the fee request is illegal given that he was denied a jury trial and in any event is connected to fraudulent legal work related to the fabrication of false evidence and the preparation of Guerra for 53 consecutive days before he lied on the stand. That work was done by Gibson Dunn & Crutcher, an American law firm with a history of ethically dubious behavior in a practice group headed by Randy Mastro, a former deputy mayor to Rudy Guliani known for his divisive approach to politics.

Mastro is the same lawyer embroiled in allegations of misconduct over the Ecuador case whose young associate Kristin Hendricks was fined by a federal judge in Oregon for abusing the discovery process to harass an Ecuadorian lawyer for the affected communities. Hendricks later left the firm as its work on the Ecuador matter became embroiled in scandal. Mastro also headed a supposed investigation that purported to "exonerate" New Jersey Governor Chris Christie in the George Washington bridge scandal; the Gibson Dunn lawyers who worked on the investigation were slammed by a separate judge after claiming to have "lost" their notes after the results of the investigation were called into question.

In terms of Chevron's attempt to collect legal fees from Donziger, a human rights lawyer of modest means, there is no precedent in U.S. history for such fees to be collected in a RICO case absent a jury trial. Donziger has called the attempt "another Chevron intimidation tool" used by the company to threaten human rights lawyers worldwide with financial ruin if they dare to sue the company.

Lauded in the environmental world and with speaking engagements at some of the world's leading law schools, Donziger works out of an apartment in Manhattan where he lives with his family. He has been the target of an expensive personal attack strategy involving six public relations firms paid by Chevron, including the one that executed the Swift Boat campaign against John Kerry in the 2004 presidential election. Chevron also admitted it paid $15 million to the corporate espionage firm Kroll to spy on Donziger and his colleagues. An internal Chevron email from 2009 admitted its long-term strategy was "to demonize Donziger" to distract attention from its own wrongdoing.

Donziger was uncertain about the prospects of the U.S. Supreme Court petition, but he said his primary focus is on helping his clients enforce the judgment against Chevron's assets in Canada and elsewhere. Thousand of Ecuadorian villagers are expected to contract cancer in the coming years absent a clean-up, according to independent health evaluations of the local population.

He also issued the following statement:

"It is my view that the U.S. RICO proceedings were initiated by Chevron to create a smokescreen to distract attention from the company's crimes and fraud in Ecuador, as found by three layers of courts in the venue of its choosing. Eighteen appellate judges in Ecuador and Canada who have reviewed all or part of the facts have now ruled in favor of the villagers, while only one U.S. trial judge with obvious animus toward the Ecuadorians ruled the other way. Kaplan's decision is an outlier with little or no credibility in the eyes of two separate Supreme Courts who have actually reviewed the evidence, one in Canada and one in Ecuador.

"So if the U.S. Supreme Court rejects our petition and decides not to review Chevron's false evidence, it will have no impact on the enforcement of the judgment against Chevron. But it will have an enormously negative impact on the image of the U.S. judiciary in the eyes of the world. It will show that our highest court has no interest in properly policing trial judges who accept corrupt evidence and who conduct proceedings that fall below minimum standards of due process as required by international law, while thousands of people suffer and untold numbers die as a result.

"More chillingly, the Second Circuit and Kaplan endorsed a new Chevron playbook that outlines a wholly improper method of corporate counterattack to threaten and silence human rights victims and their lawyers. Other companies already are copying Chevron's playbook to try to silence advocates in other human rights cases. The Supreme Court should not duck its responsibilities in this regard because this approach represents a grave abuse of our civil justice system and a profound threat to our democracy. The legal issues have huge First Amendment implications. If allowed to stand, these unprecedented pro-corporate decisions could undermine American law for decades to come. Our hope is that the Supreme Court will put an end to Chevron's charade and reboot the proceeding so the final result in the U.S. is consistent with both domestic and international law."