Chevron Using 60 Law Firms and 2,000 Legal Personnel To Evade Ecuador Environmental Liability, Company Reports

Chevron is deploying at least 2,000 lawyers and legal professionals from more than 60 law firms – including 114 lawyers from the single U.S. firm of Gibson Dunn & Crutcher – in an attempt to deny a fair trial to Ecuadorian villagers in New York as the oil giant furiously tries to contain the growing international fallout from its $19 billion Ecuador environmental liability, according to recent court filings in New York.

The new information was revealed in a U.S. court filing in New York, where Chevron has launched a “fraud” case against the indigenous and farmer villagers who brought suit against the company and two of their lawyers. In response, Chevron faces counterclaims accusing the company of using the fraud case as a smokescreen to distract attention from judicial findings in Ecuador that it committed environmental crimes, conducted a fraudulent remediation, and launched an intimidation campaign against judges in Ecuador.

Since an Ecuador court in 2011 found Chevron liable for $19.04 billion for the deliberate dumping of toxic waste when it operated in the country in the 1970s and 1980s, the affected indigenous and farmer communities have filed seizure lawsuits targeting roughly $15 billion in company assets in Canada, Argentina, and Brazil (see here) – something Chevron describes as causing “http://chevrontoxico.com/assets/docs/2011-02-15-mitchell-declaration.pdf” target=”_blank” rel=”noreferrer noopener”>irreparable harm” to its global operations. Additional seizure actions are slated soon for Colombia and other countries because Chevron refuses to comply with its legal obligations in Ecuador, according to Pablo Fajardo, lead counsel in the lawsuit.

Chevron is also under growing diplomatic pressure in Latin America over the Ecuador lawsuit. In recent days, a regional diplomatic body started by Venezuela in 2009 – the Boliviarian Alliance for the Americas, or ALBA – decided to take up the issue of Chevron’s campaign to undermine the rule of law in Ecuador at the request of Ecuador President Rafael Correa. Venezuela Vice President Nicolas Maduro – whose country holds billions of dollars of Chevron assets – recently called for a regional meeting to address Chevron’s “aggression” against Ecuador. (See article here.)

In a letter directed to U.S. Judge Lewis A. Kaplan, who is overseeing the New York proceeding, the lawyers fighting the case accused Chevron of trying to “inundate the Court and counsel with an avalanche of motions, papers, and complaints” as part of its campaign to mount a “show trial” designed “to bulldoze” its way to a judgment.

“This rush to judgment, this mismatch of resources, this abuse of the civil litigation system to bulldoze a result must stop,” said the letter, which was signed by John Keker of Keker & Van Nest in San Francisco and Craig Smyser of Smyser, Kaplan & Veselka in Houston.

“Let there be no mistake: this is not about delay,” the letter continued. “We look forward to a trial to a jury hearing our evidence. We ask for a fair trial, however, not a show trial.”

Evidence of Chevron’s avalanche of legal filings in the case, which is scheduled for trial in October, includes:

**The disclosure by Chevron that an estimated 2,000 legal personnel have worked on the case – “more people that inhabit many of the towns in the rain forest” where toxic waste was dumped for 30 years, said the letter.

**Chevron submitted a privilege log to the court that was 15,000 pages long, made 224 legal filings just in the last three months, and produced some 6 million pages of discovery documents knowing the defendants could not review them in the short time allowed.

**Over the last 30 days alone, Chevron has served the defendants with more than 10,000 pages of motions, briefs, letters and notices.

**Chevron recently filed another baseless “fraud” lawsuit against a key supporter in Europe in a desperate effort to dry up funding for the case.

**Chevron listed 114 lawyers from Gibson Dunn as working on the case – more than 10% of the lawyers in the entire firm, one of the largest in the world.

**Chevron has identified more than 60 law firms that have worked on the case – including the prominent U.S. law firms King & Spalding, Jones Day, and Boies Schiller & Flexner.

The letter also noted that Judge Kaplan – who has been accused of bias (see here and mandamus petition here) against the Ecuadorians and who was unanimously overturned on appeal in an earlier phase of the case – is permitting dozens of depositions to proceed before first ruling on basic pre-trial issues that will set the scope of the underlying claims.

Kaplan’s management of the case is leading to a massive waste of resources which is designed to benefit Chevron, the third-largest American company with gross revenue in 2012 of nearly $250 billion, said Humberto Piaguaje, the coordinator of the litigation for the rainforest communities and a leader of the Secoya indigenous group.

“Chevron knows it can’t defend itself on the merits, so it is trying to use its unlimited resources to try to crush the lawyers who have bravely defended our rights,” he said. “Chevron’s goal is to get rid of the lawyers so we will be defenseless in the face of the company’s contamination of our ancestral lands.”

Kaplan has not ruled on counterclaims filed more than six months ago by a U.S. lawyer for the Ecuadorians, Steven R. Donziger, or on different counterclaims asserted against Chevron by Stratus, an environmental consulting firm. He also has yet to rule on whether Chevron can assert a claim of unjust enrichment against the Ecuadorians, and has failed to resolve two Chevron motions for summary judgment that the Ecuadorians say are premature given that discovery is just beginning.

“Absent a settling of the issues raised… the parties cannot know what witnesses to depose, what additional discovery might be needed, and what experts would be necessary” even though the expert deadline set by Kaplan already has passed, said the letter.

“Chevron’s intent is to leverage its huge advantage in money to bury the [Ecuadorian plaintiffs], Donziger and Stratus under wave after wave of motions and discovery manoeuvring to make it impossible for Defendants to mount a coherent defense,” said the letter.

To underscore its point, the letter cited a recent comment by Chevron CEO John Watson to Forbes saying the case ends only “when the plaintiffs’ lawyers give up”. It also cited a comment by the U.S. Second Circuit Court of Appeals that Chevron had “bombard[ed] this Court with distracting and irrelevant documents” during a recent appeal of certain issues in the case.

In January of last year, the Ecuador appellate court also blasted Chevron for trying to flood its chambers with duplicative and irrelevant filings and accused the company of some of the most unethical behavior it had seen in the history of the country’s judicial system.

In the Ecuador trial, which lasted eight years due in part to Chevron’s delaying tactics, the oil giant was found to have discharged billions of gallons of toxic waste into the Amazon when it operated in the country from 1964 to 1992 under the Texaco brand, decimating indigenous groups and causing an outbreak of cancer and other oil-related diseases. (For a summary of the evidence, see here and view this video here.

The company is now spending a whopping $400 million annually on legal costs to try to evade its obligation to pay the judgment, according to estimates from representatives of the communities in Ecuador who brought the lawsuit. “This is probably the most money any company in history has spent defending itself on environmental claims,” said Aaron Page, a U.S. lawyer for the Ecuadorians. “The total legal cost for Chevron shareholders is likely approaching $2 billion and it is rising fast.”

SKV represents the Ecuadorians Hugo Gerardo Camache and Javier Piaguaje, two of the 47 named plaintiffs in the underlying case. Keker represents Donziger, who lives in Manhattan. Donziger filed counterclaims accusing Chevron of fraud, extortion, and of mounting an espionage campaign against him and his family.

The underlying environmental lawsuit was filed in 1993 in U.S. federal court before it was shifted to Ecuador in 2002 at Chevron’s request. At the time, Chevron filed 14 sworn affidavits in U.S. court praising the fairness of Ecuador’s judicial system.