Bombshell Retreat: Chevron Seeks to Drop $60 Billion in Damages In Ecuador Case

Pleads With U.S. Court To Block Airing of Its Ecuador Abuses Before a Jury; Wants Secret Proceedings

New York, NY – In a clear 11th-hour retreat that suggests it does not believe its own allegations, Chevron has taken the extraordinary step of pleading with a U.S. judge to block a jury from deciding its retaliatory "fraud" and RICO claims against Ecuadorian villagers and their U.S. lawyer. The company also said it was even prepared to drop a $60 billion damages claim if the judge agrees to deny the defendants a jury trial. Chevron's $60 billion figure is based on three times the $19 billion Ecuadorian judgement, plus costs.

In another stunning request embedded in a series of motions filed in recent days, Chevron also demanded that federal judge Lewis A. Kaplan bar all evidence of the company’s extensive record of environmental pollution in Ecuador and that he conduct secret proceedings for certain witnesses where the defendants will be booted out of the courtroom.

"Chevron has shown over and over that its only legal strategy is to outspend everyone and continue to run from the law for another twenty years," said Chris Gowen, who is advising the Ecuadorians and their longtime U.S. lawyer, Steven R. Donziger. "When a litigant tries to avoid a jury, you can be certain that litigant knows it has no case. This is an extraordinarily telling moment that suggests a collapse of confidence in the Chevron camp," Gowen added.

Donziger and his clients have long contended that Chevron’s RICO case was a function of distorted and manufactured evidence helped along by Judge Kaplan, who has consistently made disparaging remarks about Ecuador’s judicial system. Donziger filed detailed counterclaims accusing Chevron of using the RICO case as a smokescreen to hide its environmental crimes, fraud and bribery attempts in Ecuador. (Kaplan has refused to let those claims go forward in the context of the RICO trial.)

Chevron filed a motion on Sunday informing Kaplan of its intentions. While it said it will definitely drop damages claims against the Ecuadorians, it said it had yet to decide for certain whether it will do so against Donziger.

Donziger, who has been targeted by Chevron as part of a personal "demonization" campaign confirmed by its public relations officials, criticized Chevron for trying to duck a jury trial.

"For three years, Chevron has used its RICO suit largely for public relations purposes to falsely taint the Ecuador case and tarnish my personal reputation," said Donziger. "When it comes time to put their allegations to the test, Chevron chickens out and runs into the arms of its favorite judge for protection. The entire situation is an affront to American values."

It is no mystery why Chevron is so anxious to have Judge Kaplan decide the matter alone.

Kaplan has consistently ruled in favor of Chevron and is currently the subject of a petition for recusal that will be argued in late September before a three-judge appellate panel in Manhattan. The scheduling of such an argument just before trial is a rare occurrence and suggests the higher court is watching Kaplan with great scrutiny.

Last week, Chevron lead lawyer Randy Mastro hastily organized a conference call with Judge Kaplan’s law clerk in a last-ditch attempt to push back a deadline for filing the motion to drop the damages claims. Mastro appeared to be trying to avoid showing Chevron’s true intentions with regard to the jury issue out of fear it would look bad, said Gowen. Kaplan denied Chevron’s request.

Kaplan has scheduled the trial for October 15, but in a recent ruling even he suggested it might not happen. It is also unclear, given an earlier reversal suffered by Kaplan by the appellate court in the case, if he will even grant Chevron’s request to deny Donziger and his clients a jury. For a full analysis of the dilemma facing Judge Kaplan and Chevron’s growing jitters, see here.

(Under U.S. law, defendants generally are entitled to a jury trial in civil cases with money damages. If the damages sought are equitable in nature – such as an injunction – then a jury often is not required.)

Chevron’s ultimate goal, according to several recent court filings, is to have Kaplan conduct a rapid "show trial" that would bar Donziger and his clients from mounting a meaningful defense. Once Kaplan makes his expected "findings" against Donziger and the Ecuadorians, Chevron would then ask him to re-issue the same controversial global injunction purporting to bar worldwide enforcement of the Ecuador judgment that the Second Circuit Court of Appeals already ruled was illegal in 2011.

The Ecuadorians believe any such injunction would be illegal and likely would backfire against the oil giant in foreign courts. Because of Kaplan’s long record of bias – he once called the Ecuador case a "giant game" and the villagers the "so-called" plaintiffs – any ruling by him would have little legitimacy in seizure actions targeting billions of dollars of Chevron assets pending in Argentina, Canada and Brazil.

In another sign of its growing concern, Chevron is also asking Judge Kaplan to bar all evidence of the company’s extensive record of environmental pollution in Ecuador from being presented at trial.

In its motion, Chevron also demanded that Kaplan bar evidence that the company:

• Met dozens of times with Ecuadorian government officials as part of an illegal scheme to quash the case;
• Held numerous meetings with judges and independent court-appointed experts in Ecuador – the same conduct Chevron alleges was illegal when in engaged in by the defendants;
• Tried to entrap a sitting judge in Ecuador in a fake bribery scandal that was secretly videotaped, and then had its lawyers lie and claim the company had no involvement;
• Set up a series of dummy companies in Ecuador through "dirty tricks" operative Diego Borja to hide the fact that the laboratory it used to process soil samples during the trial was under its control;
• Took videos of its contaminated well sites in Ecuador showing its own technicians laughing at the pollution and trying to cover it up.

Chevron also asked Judge Kaplan to deny Donziger and his clients the right to make any reference to the size of Chevron’s legal team, which is estimated to contain up to 2,000 persons and include 60 different law firms. They also asked the court to prohibit them from talking about death threats and other forms of harassment that the plaintiffs’ lawyers and advocates endured during the trial in Ecuador.

Chevron also asked Kaplan to bar Donziger from testifying to his belief that his conduct during the trial was lawful under Ecuadorian law.

An Ecuador court in 2011 found overwhelming scientific evidence that Chevron deliberately dumped billions of gallons of toxic waste into the rainforest, decimating indigenous groups and causing an epidemic of cancer and other oil-related illness that has killed or threatens to kill thousands of people.

A summary of the evidence relied on by the Ecuador court to find Chevron liable can be found here, a video overview of Chevron’s human rights violations can be viewed here, and a 60 Minutes segment on Chevron’s contamination in Ecuador can be seen here. A summary of the numerous U.S. courts that have rejected Chevron’s fraud allegations can be read here.

Chevron fought for years to venue the trial in Ecuador after it was filed in U.S. federal court in 1993. Once the trial was moved to that country and the evidence pointed to Chevron’s guilt, the company shifted gears and started to attack the same court system that it once praised. When it lost the case in Ecuador in 2011, Chevron retaliated by suing the villagers and their lawyers under RICO in the same court in New York where it previously fought against holding the underlying trial.

"Chevron hoped to use the RICO suit to intimidate the Ecuadorians and Donziger into giving up, and that has failed," said Han Shan, a human rights and environmental activist who has been a long-time supporter of the affected Ecuadorian communities. "Its next best option is to orchestrate a show trial without a jury. But a verdict from such a show trial will command no respect around the world given Judge Kaplan’s lack of credibility in this case. Chevron is in a bind."