On September 4, the Canadian Supreme Court ruled that Indigenous people from the Ecuadorean Amazon are allowed to use Canadian courts to try (key word is “try”) to collect US$9 billion in damages from Chevron that they were awarded in Ecuador. Canadians must now counter Chevron’s inevitable propaganda campaign as the legal battle continues.
In 1993, U.S. lawyer Steven Donziger and others filed a lawsuit in New York against Texaco on behalf of the people whose land and water had been thoroughly contaminated over a 26 year period. A 2011 Bloomberg article pointed something out that can easily get buried under all the complexities of the litigation: from 1964-1990, Texaco ran “all drilling, waste-disposal, and pipeline operations” in the region. Sixteen billion gallons of waste had been dumped. The victims had organized protests against Texaco since 1986 according to a detailed report in the Nation. Litigation has dragged on for decades, so Chevron (which merged with Texaco in 2001) has cynically taken to claiming that Ecuador’s state oil company, Petroecuador, is primarily responsible for the disaster. If you retain nothing else written here, remember that the litigation began in 1993 just after Texaco had spent 26 years contaminating the area.
In 1993, if Texaco had been forced to defend itself in the United States, it stood a very good chance of losing. Texaco obviously believed that because it spent nine years fighting like hell to get the case moved to Ecuador. In 2002, Chevron won that battle. A U.S. appeals court said that the case would have to be tried in Ecuador, but the court also made Chevron promise that it would pay any judgment awarded by Ecuador’s judiciary. As you might have guessed, there was a loophole.
In 2013, the Ecuadorean Supreme Court upheld lower court rulings against Chevron but awarded only US$9 billion in damages to the victims (half what lower courts awarded). By then Chevron had sold almost all its assets in Ecuador and forced the victims’ lawyers to chase it around the world to collect.
A year later, Chevron appeared to have turned the tables on Steven Donziger and his clients for good. It had sued Donziger and a few of his Ecuadorean allies for racketeering. In 2014, Judge Lewis Kaplan of the District Court of New York concluded (based on laughably weak evidence) that Donziger won a provincial court ruling in Ecuador through fraudulent means. It was not even alleged that the subsequent appeal and Ecuadorean Supreme Court ruling were won through fraud. Though it hasn’t tried, Chevron can still attempt to prove fraud and seek damages through Ecuadorean courts where, as recently as 2011, it won a judgment in its favor. However, Kaplan also said that the entire Ecuadorean judiciary is incapable of resolving “cases of this nature” fairly. You can download Kaplan’s 485 page ruling from Chevron’s website. Kaplan’s sweeping condemnation of Ecuador’s entire judiciary helps get Chevron out of its promise to let Ecuador’s judiciary – that Chevron had once lavishly praised – settle the case.
One of the remarkable things revealed by Kaplan’s ruling is that Chevron still doesn’t trust U.S. courts to rule on the merits of the case. To avoid disclosing confidential documents about Texaco’s operations from 1964 to1990, Chevron dropped its allegation that the entire case against it was a “sham”. Kaplan mentioned this key change in Chevron’s legal strategy in his ruling but made no comment on its obvious motive. In contrast, Kaplan blasted the Ecuadorean defendants for responding to Chevron’s move by seeking a change in their strategy. Chevron also maneuvered around facing a jury by abruptly dropping its demand for damages. Donziger, quite unlike Chevron, was forced to disclose several years of his confidential case files, bank records, phone records, and tax returns. He was even made to disclose personal computer files which contained a diary where he reflected on things like his marriage (see pages 24-29 of this appellate brief). Kaplan actually quoted from Donziger’s personal diary in his ruling. A filmmaker was also forced to release over 600 hours of outtakes from a documentary (Crude) which was sympathetic to Donziger’s clients.
Kaplan concluded that the first judgment against Chevron in Ecuador had been ghostwritten by Donziger and a few others. Despite the truly Orwellian level of access that Chevron was granted by Kaplan into Donziger’s personal life, this conclusion rests – as law professor Burt Neuborne put it – on the uncorroborated word of ”a crooked Ecuadorian ex-judge [Alberto Guerra] who was removed from the bench for corruption, and who has cynically played both parties against each other by soliciting bribes from each, culminating in the payment by Chevron of approximately US$2 million in cash and valuable benefits.” Guerra met with Chevron at least 53 times to rehearse his testimony. Neuborne is working to overturn Kaplan’s ruling on behalf of two of Donziger’s co-defendants in the “racketeering” case. Neuborne’s two appellate briefs (here and here) succinctly demolish Kaplan’s ruling.
Kaplan argues that crooked people are often relied on to expose corruption. True, but their accounts should lead to some corroborating evidence. Neuborne explained that Kaplan “simply overrode conclusive evidence refuting Guerra’s story”. This letter brief describes more evidence refuting Guerra that has since emerged.
As terrible as Kaplan’s ruling is in many ways, its sweeping condemnation of Ecuador’s judiciary is arguably its most comical feature. If his analysis did not carry legal weight, one would hesitate to dignify it with a response. Kaplan relied on a political pundit who is deeply hostile to Ecuadorean President Rafael Correa, on 250 Ecuadorean newspaper articles, and on some heated remarks made by Donziger who worried about judges being corrupted by Chevron. Revealingly, Kaplan gave weight to Donziger’s opinion of Ecuadorean judges, but not to Donziger’s opinion of Chevron. The government of Ecuador noted in an amicus brief that citing “250 articles from like-minded political opponents of the current Government speaks more to the freedoms enjoyed by the President’s critics than to the merit of their criticism.”
Rafael Correa, who first took office in 2007, certainly changed the judicial climate in Ecuador, and he has cheered the victims in their struggle against Chevron. Neuborne wrote “If a President’s, or a Governor’s, speaking out on issues, and exercising political influence over the selection of judges, is sufficient to render an entire judiciary incapable of dispensing impartial justice in accordance with the rule of law, the judiciaries of more than thirty states that elect their judges, including New York, are rendered illegitimate.” He added the simple point that “there is nothing in the idea of fidelity to the rule of law that guarantees Chevron a corporate-friendly judicial climate”.
Perhaps the sickening injustice of this endless legal farce is best explained by a thought experiment. Imagine a vigilante group somehow dumping sixteen billion gallons of oil all over the neighborhoods where Chevron executives live. Would the executives have to struggle for decades to make the culprits pay dearly for what they did?