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Chevron Countersues Over Ecuador

Chevron levels RICO charges over $113 Billion trial in Ecuador.


Courthouse News Service


MANHATTAN -- Chevron filed suit Tuesday against the dozens of people and companies behind an "extortionate" $113 billion environmental lawsuit that the oil giant faces in Lago Agrio, Ecuador.

Over the past few months, Chevron has been conducting discovery in courts throughout the
United States to retrieve evidence that it hopes will prove the multibillion dollar litigation is tainted by a conspiracy of misconduct.

The environmental lawsuit seeks damages for alleged contamination caused by Texaco, which Chevron later acquired, during 30 years of oil drilling in the country. Chevron contends that
Ecuador's state-owned oil company, Petroecuador, assumed operation of the Texaco oil fields in the 1990s and their own mismanagement brought about disastrous environmental consequences.

Two Chevron attorneys also face criminal prosecution in
Ecuador over allegations that they broke the law defending their client.

New York, Chevron, has concluded discovery against filmmaker Joseph Berlinger and the crew of the 2009 documentary "Crude," which chronicles how oil production has devastated the rainforest community while providing an intimate look at the players behind the lawsuit.

After getting a hold of hundreds of hours of "Crude" outtakes, Chevron says it obtained indisputable evidence of corruption behind the scenes in the Ecuadorian courts.

The outtakes reveal the American lawyer who spearheaded the lawsuit, Steven Donziger, bragging about meeting with the judges, elected Ecuadorian officials and supposedly independent, court-appointed experts.

Discovery is still ongoing with regard to Donziger, who is named as the lead defendant in Chevron's 214-page lawsuit. Other defendants include the Amazon Defense Front and Stratus Consulting. Alleged co-conspirators who are not named as defendants include Joseph Kohn and his firm Kohn, Swift & Graf; the law firm Emery Celli Brinckerhoff & Abady; the firm Motley Rice; the firm Patton Boggs; and spokeswoman Karen Hinton.

"Over the course of several years, defendants Steven Donziger and his co-defendants and co-conspirators have sought to extort, defraud, and otherwise tortiously injure plaintiff Chevron by means of a plan they conceived and substantially executed in the United States," according to the complaint. "The enterprise's ultimate aim is to create enough pressure on Chevron in the
United States to extort it into paying to stop the campaign against it."

Karen Hinton, the spokeswoman for the Ecuadorian plaintiffs, argued that Chevron is guilty of the pressure tactics it is complaining about.

"This outrageous action today is corporate bullying at its worse," Hinton wrote in a statement. "Chevron is cornered by the overwhelming evidence of guilt in the intentional contamination of one of the most pristine rainforests in the world. Try bringing an oil company to justice for the mess it made, and you risk abusive legal attacks, personal vilification and abusive delay tactics."

Chevron says the lawsuit in Lago Agrio is a sham funded by Donziger and Kohn who are only looking to achieve a huge settlement. They claim the corrupt Ecuadorian government and judicial system is kowtowing to help the Ecuadorian plaintiffs win the lawsuit, since the money will go toward cleaning up the consequences of their mismanagement.

"The RICO defendants have adopted a strategy to intimidate Ecuadorian judges, whom they have described as 'mak[ing] decisions based on who they fear the most, not based on what the laws should dictate,' and they have colluded with the Republic of Ecuador to procure sham criminal charges against Chevron's attorneys," Chevron claims.

"To pressure Chevron in the
United States, the RICO defendants have cited this fabricated evidence, [a] supposedly 'independent' report and these trumped-up criminal charges in false statements to the U.S. Congress, the U.S. Department of Justice, state and federal regulatory agencies, including the Securities and Exchange Commission, the U.S. media, and Chevron shareholders, among others. They also made false statements to U.S. courts in an attempt to cover up their wrongdoing and to obstruct Chevron's discovery efforts."

Chevron says it was released of any obligation to pay for environmental damage in
Ecuador through a 1995 settlement under which it paid the country $40 million for remediation and community development.

While Texaco was negotiating its exit strategy with the Ecuadorian government, Chevron says American trial lawyers were scheming how to horn in with a class action. Complicating matters, Chevron transferred the ensuing litigation from the
New York courts to Ecuador.
Representatives for the Ecuadorian plaintiffs have said that Chevron's subsequent uproar over the supposed misconduct in Lago Agrio is the company's attempt to sabotage litigation that is not going in its favor.

"The Ecuadorian plaintiffs are not intimidated by Chevron's latest, desperate attempt to derail their lawsuit," Hinton, the spokeswoman, wrote in a statement. "Chevron fought for 10 years to move this case from the
United States to Ecuador. Now that the evidence is in, Chevron is running fast and furious away from the court of its own choosing with desperate attempts, such as this, to discredit the case."

 Judges in
New York with a hand in Chevron's ongoing discovery have said Chevron's legal strategy does not excuse questionable tactics that may be going on in Lago Agrio.

"I am not naïve," U.S. District Judge Lewis Kaplan said at the first discovery hearing in the case in May 2010. "I don't assume that anyone's hands in this are clean."

Hinton, the spokeswoman for the Ecuadorian plaintiffs, discussed what had muddied Chevron's hands in her statement.

"Chevron should explain its own misconduct," Hinton said. "Chevron has lied not only to the Ecuadorian court but also to
U.S. courts about its substandard practices in Ecuador as well as a fraudulent remediation that exposed more people to illegal levels of toxins."

Chevron's lawsuit comes as the ongoing trial against it in
Ecuador appears to be drawing to a close. In Lago Agrio last week, lawyers for the Ecuadorians suing Chevron submitted the first part of their final written argument to the court. Chevron had submitted its initial closing brief, asking for dismissal of the case, to the Ecuador court on Jan. 6.

Gerald Lefcourt, an attorney for Donziger, said Tuesday that the verdict in Lago Agrio is imminent.

"Chevron is desperate to distract attention away from the decision we expect, which will require Chevron to clean up the mess it left there," Lefcourt said in a statement. "The lawsuit Chevron filed today is a cynical bid to buy cover. Chevron just wants to tell its shareholders, its partners, its bankers and Wall Street that it has a way to avoid paying the billions of dollars it will take to address the harm it caused."

In the Friday's lawsuit, Chevron asks for treble damages, a restraining order and an injunction. It is represented by Randy Mastro with Gibson, Dunn & Crutcher.

Republished with permission from Courthouse News Service.



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