Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Armed With New Evidence, Donziger Asks Full Appellate Court for Rehearing on Ecuador Environmental Case

Amazon Defense Coalition (ADC)
26 September 2016 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109

New York, NY – In a new legal filing, the lawyer for New York human rights attorney Steven Donziger criticized a U.S. federal appellate court's decision in favor of Chevron on the $9.5 billion Ecuador environmental judgment as "lawless" and urged the entire court to rehear the case taking into account critical new evidence that completely undermines the main factual basis for the prior ruling.

Deepak Gupta, a prominent appellate lawyer who represents Donziger, is seeking a rehearing by the full 12-member Second Circuit Court of Appeals in New York on various grounds, including that the decision contradicts rulings from 18 separate appellate judges in Canada and Ecuador who have affirmed all or parts of the extensive findings that Chevron dumped billions of gallons of toxic waste into the rainforest, decimating indigenous groups and causing an outbreak of cancer that has killed or threatens to kill thousands of people.

(Here is a summary of the overwhelming evidence against Chevron as found by courts in Ecuador where the company requested the trial be held.)

In his petition for rehearing, Gupta outlined multiple elements of the appellate court's decision – which found the Ecuador judgment was obtained by "fraud", a fact that contradicts findings by three layers of courts in Ecuador – that are illegal and unprecedented in U.S. jurisprudence. Gupta also attacked the court's refusal to reconsider the flawed factual findings of controversial U.S. trial judge Louis A. Kaplan, who along with the appellate court ignored powerful new evidence that nullifies Chevron's claims that the Ecuador judgment was the product of bribery.

"Make no mistake: Mr. Donziger has consistently, vigorously denied the allegations against him – including the outrageous, shifting tale of bribery and ghostwriting by the star witness made rich by Chevron" after being paid more than $2 million by the oil company, Gupta's filing stated.

The critical new evidence ignored by the court includes a forensic report that proves the trial judge in Ecuador wrote the decision against Chevron on his office computer, contrary to the claim by Chevron's paid witness that it was written elsewhere and given to the judge on a flash drive. It also includes the recent admission by Chevron's star witness, Alberto Guerra, that he repeatedly lied and perjured himself in Kaplan's courtroom after being coached for 53 consecutive days by Chevron's lawyers at the U.S. law firm Gibson Dunn & Crutcher.

Donziger's request for a rehearing is largely a moot point for Chevron, which is still on the hook in Canada for the entirety of the Ecuador judgment plus interest after a resounding victory last year by the rainforest communities before Canada's Supreme Court. Earlier this month, over Chevron's objections, a Canadian trial court began enforcement proceedings in that country to seize company assets to pay for the Ecuador judgment. The Canadian judge said he would not be bound by Kaplan's findings and that he would allow the Ecuadorians to present the critical new evidence that undermines Kaplan and the U.S. appellate court, dealing a major setback to Chevron's strategy to evade paying for a clean-up in Ecuador.

The underlying environmental case against Chevron originally was filed in U.S federal court in 1993, but shifted to Ecuador in 2001 at the oil giant's request after it accepted jurisdiction there and promised to pay any adverse judgment. Not only did Chevron violate its promises, the company sold off its assets in Ecuador and threatened the rainforest communities with a "lifetime of litigation" as punishment for pursuing their claims. In the meantime, three layers of courts in Chevron's chosen forum – including Ecuador's Supreme Court – found unanimously that the company (operating as Texaco) deliberately dumped billions of gallons of toxic oil waste into streams and rivers when it operated in Ecuador's Amazon region from 1964 to 1992. The dumping led to an outbreak of cancer and decimated the traditions of five indigenous groups in the area.

Lawyers for the affected Ecuadorian communities repeatedly have blasted Kaplan's so-called factual "findings" that the Ecuador judgment was the product of fraud. In various filings, they have asserted Chevron fabricated false evidence, made illegal payments of at least $2 million to Guerra who later recanted his testimony and admitted lying, and took advantage of judicial bias by Kaplan who held undisclosed investments in Chevron during the trial and who repeatedly made offensive comments about the Ecuadorian villagers. According to prominent trial lawyer John Keker, Chevron also worked with Kaplan to create a "Dickensian farce" in the courtroom where the judge repeatedly refused to hear evidence offered by Donziger and the Ecuadorians, including the extensive scientific proof that Chevron systematically dumped toxic waste at roughly 1,000 separate sites in the Amazon and then implemented a sham remediation to try to evade legal responsibility. (For a copy of Donziger's sworn testimony in the case, see here.)

In separate comments, Donziger said he was "deeply disappointed" with the Second Circuit panel for "rubber-stamping" the erroneous findings of the trial judge without independent analysis. "The panel ignored the deep flaws in the proceeding below and refused to consider critical new evidence that blows up Chevron's bogus fraud narrative, including an admission by the company's paid witness that he lied to frame me with a false allegation of bribery," said Donziger. "Guerra's testimony itself is part of criminal activity by Chevron and its lawyers to evade paying compensation due the people of Ecuador by implementing a strategy to demonize the lawyers who helped hold the company accountable."

Donziger added: "The appellate panel's decision not only ignored critical factual developments that nullify the district court's findings, it sidestepped profoundly important legal questions that could have a huge and negative impact on constitutionally-protected advocacy in our society. The Second Circuit looks very much like it is engaged a brazen attempt to protect the interests of a powerful American oil company from an adverse decision by a foreign court, rather than issue a ruling grounded in the facts and the law. That's the only way I can explain how this normally esteemed court deviated so profoundly from established law."

Gupta's petition asserted the court was mistaken on several counts, as follows:

  • The decision affirming Kaplan's ruling represents the first time that U.S. court has allowed a party that lost a money judgment in a foreign country where it wanted the trial held to preemptively attack that judgment in a U.S. court, violating comity and upsetting the normal functioning of international law;
  • The decision violates a previous Second Circuit panel's decision in the same case that barred a collateral attack on a foreign judgment in U.S. courts;
  • In a blatant example of judicial imperialism, the decision contravenes a ruling of the highest court in a foreign country on a question of that country's own law;
  • The decision ignores critical factual developments since the end of the Kaplan trial that render the findings of the judge – who Gupta says never had the legal authority to take the case – completely moot.

"The panel's lawless opinion can only be explained by its mistaken belief that appellant Steven Donziger has not challenged the facts, bringing to mind the adage that bad facts make bad law," said Gupta. "But facts are not the same as fact findings. The district court erected a fortress a hundreds of pages of alternative findings and drive-by credibility determinations, many embedded in one of nearly 2,000 footnotes, so that they could not be challenged on appeal."

Gupta emphasized that the Second Circuit panel that heard the Ecuador case – comprised of Judges Barrington D. Parker, Amalya L. Kearse, and Richard C. Wesley – ignored the evidence that Chevron witness Guerra lied on several critical points that Kaplan relied on for his findings. The panel also ignored new forensic evidence that proves the trial judge authored the judgment, contrary to Chevron's claims that it was secretly written by the plaintiffs.

Chevron's lawyers at the U.S. law firm of Gibson Dunn & Crutcher – led by Randy Mastro, Avi Weitzman, Reed Brodsky, and Andrea Neumann – elaborately coached Guerra for close to two months before allowing him to testify. Donziger has said Mastro and the Gibson Dunn team actually coached Guerra to lie, a fact which Guerra essentially admitted after trial when being cross-examined under oath in a separate arbitration proceeding between Chevron and Ecuador's government. Evidence also emerged that Mastro and his team directly negotiated Chevron's compensation to Guerra at the same time they were helping to shape his testimony – a huge ethical breach, said Donziger.

Kaplan also refused to grant Donziger and two Ecuadorian villagers a jury trial, despite the fact Chevron originally sued them for roughly $60 billion – thought to be the highest potential liability for any individual in U.S. history. In an act that Donziger called cowardly, Chevron dropped its entire damages claim on the eve of trial and only sought injunctive relief so that Kaplan could decide the case alone. Under the U.S. Constitution, a defendant in a civil case only receives a jury trial if he is being sued for money.

Donziger said he hoped the Second Circuit would regard the latest petition as an opportunity to correct not only the flaws in its Ecuador decision, but also its reputation as a court increasingly known for its hostility toward human rights victims worldwide. One recent petition by a prominent international legal group representing victims of the 1984 Bhopal disaster in India said the Second Circuit had become a "graveyard" for human rights claims. Another commentator, the Canadian Joe Emersberger, recently raised similar concerns about the court with regard to claims by thousands of Haitians who died of cholera after U.N. troops negligently dumped raw sewage in a river, only to be denied the right to sue by the same court.

"Unfortunately, the Second Circuit has become known around the world as a dead end for human rights victims when those victims challenge powerful corporate or institutional interests," said Donziger. "My hope is that the full court will have the foresight to rethink some of these important human rights issues in the context of the Ecuador case where thousands of rainforest inhabitants continue to suffer and die due to Chevron's stubborn refusal to comply with the rule of law and address its legal and moral obligations."

Two Ecuadorian villagers who appeared in the Kaplan proceeding, Javier Piaguaje and Hugo Camacho, also joined in the petition for a rehearing by the full court. Their brief, written by New York University Law Professor Burt Neuborne, is available here.