1/5/2011

On November 5, Judge Lewis Kaplan in the Southern District of New York issued an opinion detailing why he is allowing Chevron to depose Steven Donzinger, a Lago Agrio plaintiffs’ attorney in the massive environmental tort litigation in Ecuador (See AmLaw Daily’s write-up:http://amlawdaily.typepad.com/amlawdaily/2010/11/kaplanchevron.html).  Kaplan’s decision was based primarily on outtakes from a documentary, Crude.   

Plaintiffs in Lago Agrio, Ecuador, claim that Chevron violated Ecuadorian environmental law and is liable for polluting the waters in the region.  The list of laws the plaintiffs claim Chevron violated are here:http://www.texacotoxico.org/eng/node/55.  Richard Cabrera was appointed to assess the environmental impacts in the areas where Texaco and Petroecuador operated.  The Ecuadorian court said, “The role of the expert is one of complete impartiality and transparency with respect to the parties and their attorneys,” and it required Cabrera to “observe and ensure the impartiality of his work, and the transparency of his activities.”  Chevron claimed that Stratus Consulting LLC, a U.S.-based environmental consulting company, were the authors of the Cabrera Report.  See http://www.latinbusinesschronicle.com/app/article.aspx?id=4378.

According to Kaplan, there is “substantial reason to believe that Cabrera, the supposedly neutral expert” who was appointed by the Ecuadorian court in Lago Agrio, “worked in collusion with the plaintiffs and that his report was written, at least in major part, by plaintiffs and their consultants.”  Kaplan noted substantial evidence that Donzinger and his associates improperly (1) pressured, intimidated, and influenced Ecuadorian courts, (2) colluded with Cabrera to substitute their own biased work product for the neutral and impartial assessment that Cabrera was appointed to produce, [and] (3) concealed that role.”  Judge Kaplan also said that “at least part of the report was written by consultants retained by the Lago Agrio plaintiffs,” who claimed Cabrera’s work was independently produced.  Further, Donzinger’s statements that Ecuadorian courts are corrupt, that the plaintiffs can prevail only by pressuring and intimidating the courts, and that the facts must be twisted to support the plaintiffs’ theories “raise substantial questions as to his possible criminal liability and amenability to professional discipline.” 

Although the plaintiffs argue that damages total $113 billion, 64,000 chemical sampling results at trial prove Chevron’s culpability, and Chevron’s claim that the contamination was remediated is fraudulent (see the AmLaw Daily article), there are many questions about the impact of Donzinger’s comments on the criminal case in Ecuador.   Where do they go from here?

Donzinger’s blatant disregard for legal ethics, fairness, and the needs of his own clients place the plaintiffs at a crossroads, and perhaps they will never be able to determine if Texaco, rather than Petroecuador, truly is culpable for the damage and suffering.  That said, did he cross the line to threatening the judge and impair the Ecuadorian court’s fairness, or were his statements just hyperbole and indicative of his contempt for the process? 

The case is blight on Ecuador’s judicial system.  In October, judicial authorities disbarred a judge who recused himself after he was accused of misconduct and involvement in a bribery scheme.  The current judge, Nicholas Zambrano, is the third Ecuadorean to hear the case.  (Seehttp://in.reuters.com/article/idINN2814806220101028).  Finding an impartial account of the story is difficult – each side engages in extensive spin.  There is a significant level of animosity toward Chevron in Latin America, regardless of its culpability here.  Commentary strongly favors the plaintiffs – after all, this is a powerful oil company, the victims are indigenous populations, environmental issues pervade, and the media is sympathetic towards those who have suffered.  But, the criticisms of Cabrera’s report and the Ecuadorian government’s support of the plaintiffs is problematic.

Ultimately, the effects of Donzinger’s statements and deposition on the case will depend on Ecuadorian judicial rules and whether Donzinger acted on the colorful statements (one mentioned a desire to stage a massive protest against the court).  Ecuador’s attorney general’s office spokesperson told Law.com that the judiciary system in Ecuador has only been strengthened by reforms in 2005 and is fully independent.  “Ecuador is dismissive of [Kaplan’s] broader findings that the outtakes provide ‘substantial evidence’ of misconduct by plaintiffs’ lawyers.”  (See http://www.law.com/jsp/article.jsp?id=1202474775264)   I’m not sure, in my preliminary investigation of this case, which party will ultimately prevail, but it is evident that the result will not be one based on judicial ethics and fairness, but of policy, maneuvering, and gamesmanship.  There will be no happy victor.  Ecuador’s criminal and civil law and judiciary, and the parties’ public image, will not survive untarnished.  At the least, Judge Kaplan injected levity and ethics into the U.S. proceedings.  One can only hope that Chevron, Donzinger, and the Lago Agrio plaintiffs will someday do the same.

             

Note: Donzinger appeared on 11/22/10 before Judge Kaplan, pursuant to an order that he bring all documents sought by Chevron.