Chevron Fraud in Ecuador: Response to Fortune.com Article
Amazon Defense Coalition
13 September 2010 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
The Amazon Defense Coalition issued the following response today to an article that appeared today on Fortune.com about the oil contamination lawsuit against Chevron, filed by Ecuadorians living in the contaminated area:
Roger Parloff's legal analysis in Fortune (Evidence of fraud mounts in Ecuadorian suit against Chevron, September 13) is one-sided and fails to adequately capture the enormous financial risk faced by Chevron in Ecuador, even if one accepts his erroneous theory about fraud regarding an expert damage assessment. Importantly, Parloff has never been to Ecuador, never examined the 200,000-page trial record, never seen an original lab report from the 64,000 sampling results at trial, never talked to any witnesses who have testified in the case, and utterly fails to understand either the enormous quantum of evidence or the procedural rules that govern trials in Chevron's preferred forum of Ecuador.
Chevron Attacks Court, Not Content of Report
Parloff's theory (and one adopted by several U.S. judges without expertise in Ecuadorian law and procedure) is that ex parte contacts with or party submissions to a court-appointed expert are improper and that therefore the Ecuador damages assessment of $27 billion, prepared by court expert Richard Cabrera, is somehow invalid. This is incorrect as a matter of fact and law. Moreover, neither Parloff nor Chevron can point to even one aspect of the Cabrera report that is not reasonable, scientifically sound, and based on the evidence before the court. Given what we know from the BP disaster in the Gulf and other large environmental clean-ups, the damages number in Ecuador is actually modest when one considers the half-century of time that the extensive contamination has been harming the rainforest and its tens of thousands of inhabitants.
Chevron Met Ex Parte & Its Work Used in Court Reports
Parloff failed to fully explain that both parties before the Ecuador court have cooperated with court-appointed experts throughout the case. Cabrera invited the parties to give him information; this is memorialized in various court orders. Chevron, for tactical reasons (apparently because it wanted to discredit the court), chose to boycott the Cabrera process. But throughout the trial both parties had ex parte contact with a variety of experts on various occasions and often prepared materials for experts in whole or in part for adoption. This includes Chevron's contacts with court-appointed experts such as Gerardo Barros and Jorge Bermeo, who did independent reports on various aspects of the damages. Some of the independent court experts who prepared reports at Chevron's request either used or adopted materials that Chevron's legal team (including U.S. counsel and U.S. consulting experts) drafted – exactly the supposed "fraud" that Chevron's public relations machine falsely claims taints the trial.
Manufactured Controversy Is a Sideshow
Much of the evidence that Parloff breathlessly reports that Chevron's outside counsel "discovered" has been known to the court in Ecuador and Chevron itself for more than two years. This includes the fact that Cabrera was given (under court order) thousands of pages from the plaintiffs for use in his report. The manufactured controversy over the Cabrera report is a sideshow designed by Chevron to fog up the issue of its own enormous liability in the face of questions from several of its large institutional shareholders and analysts who cover the oil industry. There are now more than 100 expert reports in evidence before the Ecuador court, totaling tens of thousands of pages. An additional damage assessment from each party is due September 16th; Chevron, which has never been interested in the truth, has announced that it will boycott that process and forego the submission of its own report.
Plaintiffs In Strong Enforcement Position
The idea that Ecuador's court must base damages only on the Cabrera report is ludicrous. Under Ecuadorian law, the judge is not required to adopt any portion of any expert report. Thus, for Chevron to focus its million-dollar U.S. discovery strategy on the Cabrera report is increasingly futile. Parloff fails to realize that even if an enforcement court in the U.S. or some other country were to find contacts between a party and court experts to be improper, it would not nullify a finding of liability and damages given the voluminous evidence against Chevron and the numerous independent bases to impose liability and damages – including Chevron's own technical reports, which prove the case of the plaintiffs. Contrary to Parloff's conclusion, that puts the Amazonian plaintiffs in a very strong litigation position in an enforcement context.
Chevron's Abusive Litigation Causes More Suffering
Chevron faces an enormous liability in Ecuador because it deliberately and indisputably discharged billions of gallons of toxic waste into the rainforest over a 26-year period, decimating indigenous groups and poisoning the water supply in an area the size of Rhode Island. Rather than deal with the evidence, Chevron has unleashed a massive public relations assault on the Ecuador court system, tried to sue lawyers for the plaintiffs, tried to intimidate court-appointed experts into quitting the case and launched an abusive collateral litigation strategy in U.S. federal courts to try to exhaust the resources of the Amazonian communities. Lacking a real defense, Chevron has tried to undermine the rule of law as part of "delay and distract" stratagem that keeps tens of thousands of suffering people waiting decades for a resolution of their claims. Chevron's latest ploy was to recruit a journalist to go undercover in Ecuador to spy on court personnel and the plaintiffs, who in the past have been victimized with death threats and an attempted kidnapping. Chevron's behavior in the Ecuador trial is a textbook example of abusive litigation.
Chevron Turns Down Chance To Submit Its Own Damage Assessment
The Ecuador court order in early August allowed Chevron to submit its own damages assessment. That should have been seen as a victory for the company. One would think its lawyers would be grinning from ear to ear. Instead, the company's local counsel filed a motion to block the court's order and hence the company's own ability to get what it always asked for – the right to go head to head with Cabrera on a damages assessment. This is just the latest and most obvious sign of the Chevron's obstructionism.
The Real Story is Chevron's Fraud
Chevron's problem in Ecuador is that it is losing the case based on the evidence and that its own officials are under criminal indictment for fraud related to a sham remediation. The real story is that the evidence convincingly demonstrates that an American company went to a foreign nation and deliberately devastated the Amazon rainforest environment out of greed. The destruction was done in violation of Ecuadorian laws, industry standards, Chevron's own operating contract, and all sense of basic decency. Chevron's allegations of "fraud" are themselves part of an elaborate scheme to cover up the company's pervasive illegality in its Ecuador drilling operation and in its advocacy during the trial.