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NEW YORK, May 16, 2017 – A federal appellate court in New York ignored devastating new evidence that Chevron and its lawyers fabricated witness testimony and distorted key evidence when it affirmed an unprecedented decision designed to immunize the company from a historic $9.5 billion environmental liability in Ecuador, according to a new report called How U.S. Courts Got It Wrong In Chevron’s Amazon Pollution Case.
The 33-page report – written by lawyers for the Ecuadorian rainforest communities that won the environmental judgment against Chevron — rebuts 12 false or distorted findings by U.S. trial judge Lewis A. Kaplan in Chevron’s retaliatory RICO case that were affirmed without independent analysis by the Second Circuit Court of Appeals in a decision issued last August. The false or distorted findings were based primarily on discredited testimony from an admittedly corrupt Chevron witness paid $2 million by the company to claim falsely that the plaintiffs offered a bribe to the Ecuador trial judge in exchange for “ghostwriting” the judgment.
(The full report is available here.)
The new report by the affected communities is being released at a time when the U.S. Supreme Court is being urged by dozens of law scholars, environmental groups, and human rights organizations to reverse the Second Circuit ruling on the grounds that it failed to consider Chevron’s fabrication of evidence or seriously address a myriad of legal problems with using the RICO statute to intimidate adversary counsel during an ongoing litigation, said Steven Donziger and Aaron Page, U.S. lawyers who represent the affected Ecuadorian communities.
The report focuses largely on how the paid-for Chevron witness, Alberto Guerra, destroyed his own credibility when he admitted under oath in a separate arbitration proceeding that he lied on the stand before Judge Kaplan. Later, a forensic analysis by one of the world’s leading computer experts scientifically debunked Guerra’s ghostwriting story. Both of these critical developments were ignored by Judge Kaplan and the Second Circuit panel that reviewed his decision.
Guerra’s various stories about a bribe were honed in coaching sessions with Chevron lawyers at the U.S. law firm of Gibson Dunn & Crutcher that spanned no fewer than 53 days, according to Guerra’s own admissions. Chevron is still paying Guerra a large salary, housing costs, health care and his personal income taxes while maintaining him in a secret location in the U.S., according to court records. The company agreed to pay the witness $12,000 monthly for no work other than being a witness under the company’s control, according to his contract with Chevron which was disclosed during the RICO proceeding.
(For detailed evidence of the corrupt acts committed by Chevron and Guerra that was ignored by the Second Circuit, see here and here. For background on the many procedural flaws in Judge Kaplan’s RICO proceeding, see here.)
The villagers have long claimed that Chevron officials and its outside lawyers conspired to fabricate false evidence through Guerra’s testimony and present it to U.S. courts as part of a long-running campaign of forum shopping to evade paying the Ecuador liability, which was issued based on overwhelming evidence in the venue where the company had accepted jurisdiction. Lawyers for the villagers say they plan to ask federal authorities to investigate whether the Chevron officials and associates involved violated criminal statutes and the constitutional rights of the defendants, including Donziger, a human rights attorney based on New York who has advised the affected communities for over two decades.
“The bottom line is that Chevron used the RICO case as a central component of a corporate racketeering scheme designed to retaliate against the rainforest communities and their counsel for holding the company accountable for its environmental atrocities,” said Donziger, who has offered his own detailed rebuttal to the RICO allegations. “The villagers did not commit racketeering; Chevron committed racketeering against the very people it poisoned, and it used fake evidence and the U.S. courts to carry out its scheme.”
Donziger, the primary target of Chevron’s avowed “demonization” campaign against adversary counsel, called the RICO episode a “shameful chapter” in the history of the U.S. judiciary. Page, one of roughly 100 U.S. citizens targeted by Chevron in discovery actions related to the RICO proceeding, also was unsparing in his criticism of the oil giant.
“This report summarizes the extensive and incontrovertible evidence that Chevron officials and its lawyers conspired to present false evidence to a U.S. judge to try to undermine a valid court judgment in Ecuador related to the company’s environmental damage,” said Page. “The appeal of the RICO case now presents a major test for the Supreme Court. Either it can uphold our nation’s commitment to the rule of law, or let stand an egregious injustice committed by Chevron that undermines the credibility of our judiciary and stains the image of our country.”
The report, released as the villagers are enforcing their judgment against Chevron’s assets in Canada and Brazil, also documents Judge Kaplan’s hostility toward the Ecuadorians and their lawyers and his favorable treatment of Chevron in a proceeding that amounted to a “Dickensian farce”, according to a legal motion filed by prominent defense lawyer John Keker, who participated in the case. Kaplan refused to seat a jury and committed numerous procedural violations to favor Chevron, according to the report.
“This document is not only a guide to one of the greatest corporate abuses of our civil justice system ever, but it exposes Chevron’s lies and fabricated evidence to enforcement courts in other countries that have been asked to seize company assets to pay for the court-mandated clean-up in Ecuador,” said Page, who helped research and write the report.
The detailed rebuttals to the false or erroneous findings of the Second Circuit include:
**A description of a new scientific report that the Second Circuit refused to consider that examined the office computer of the Ecuador trial judge. The examination, conducted under the auspices of an international investor arbitration panel, proved the trial judge opened and saved a Word document that became the judgment more than 400 times over a three-month period prior to its issuance. This contradicts Guerra’s false claim that the judgment was written by the plaintiffs and given to the judge on a flash drive just days before it was made public.
**Information explaining how a preliminary damages report that pegged Chevron’s liability in Ecuador at $6 billion was completely proper and was not an attempt to “extort” the company, as Judge Kaplan maintained. Kaplan claimed the preliminary figure was “inflated” when in reality Ecuador’s courts – relying on Chevron’s own evidence – later determined actual damages to be $9.5 billion.
**Information demonstrating that the refusal of lawyers for the villagers to adduce scientific evidence “favorable” to Chevron was well within their discretion and did not amount to an attempt to extort the company for damages, as Judge Kaplan maintained.
**Evidence that the treatment of expert witnesses by lawyers for the Ecuadorians was completely proper and consistent with Ecuadorian law, as confirmed by three layers of courts in that country and by Chevron’s own practices with regard to treatment of its own experts.
The report also names some of the individuals at the Chevron law firm of Gibson Dunn & Crutcher who were involved in the fabrication of evidence, including Randy Mastro, the former deputy mayor of New York City under the administration of Rudy Giuliani. The Gibson Dunn firm, in echoes of its current problems in the Chevron case, recently was sanctioned by the High Court of London for fabricating evidence to help frame a political opponent of a client who was President of the African nation of Djibouti.
Gibson Dunn advertises its lawyers as a “rescue squad” for scandal-plagued clients, but the firm frequently has been criticized and sanctioned by courts for crossing the ethical line. In the Chevron case, a federal judge in Oregon scolded the firm for using a discovery action to harass a non-profit group that was working with the Ecuadorian villagers.
Other amicus briefs before the U.S. Supreme Court (see here and here) argue that Judge Kaplan’s RICO decision and the Second Circuit affirmance violate international law and amount to an unconstitutional SLAPP-style lawsuit. SLAPP lawsuits are designed by corporate or government entities to harass political opponents and to silence criticism in violation of the First Amendment. The Second Circuit also refused to consider the First Amendment claims raised by Donziger and the environmental groups.
After an eight-year trial that lasted from 2003 to 2011, the Ecuador court found that Chevron deliberately dumped billions of gallons of toxic waste into the rainforest when it operated more than 400 well sites (under the Texaco brand) from 1964 to 1992. The company’s sub-standard operational practices decimated indigenous groups and caused an outbreak of cancer that has killed or threatens to kill numerous people, according to independent health studies cited by the court. Chevron had filed 14 sworn affidavits praising Ecuador’s court system when it was trying to shift the venue to Ecuador from U.S. federal court, where the Ecuadorians initially sued the company.
As evidence against it in Ecuador mounted and the country’s highest court unanimously affirmed the judgment, Chevron switched gears and began to attack the country’s courts while threatening the villagers with a “lifetime of litigation” if they persisted. “We will fight this until hell freezes over, and then fight it out on the ice,” said Chevron’s General Counsel, Charles James. Chevron has used at least 60 law firms and 2,000 lawyers to defend the company since the inception of the case.
Donziger, described by the magazine Bloomberg BusinessWeek as a lawyer of “Herculean tenacity”, represented himself alone for several months in the RICO case against more than 100 lawyers at the Gibson Dunn firm. Donziger personally deposed Chevron CEO John Watson and other top company officials, but Judge Kaplan imposed a gag order preventing release of the transcripts.