On Monday, Chevron filed a new motion for summary judgment in
its fraud and racketeering case against the lawyers and expert
witnesses who helped 47 Ecuadoreans from the Lago Agrio region
of the rainforest obtain an $18 billion judgment against the oil
company from an Ecuadorean court in 2011. The motion discloses
what seems to be incredibly powerful evidence that the
Ecuadorean judgment was illegitimate: A onetime presiding judge
on the Ecuadorean case, Alberto Guerra, submitted a declaration asserting that he acted as the middleman in setting up a
$500,000 bribe from plaintiffs' lawyers to the Ecuadorean judge
who entered the judgment against Chevron. Guerra claimed that
the plaintiffs actually drafted the 2011 judgment and that he,
as a behind-the-scenes ghostwriter, worked with plaintiffs'
lawyers to make it seem more like a court ruling. According to
his declaration, filed before U.S. District Judge Lewis Kaplan
of Manhattan, Guerra had previously received regular payments
from the plaintiffs in the Chevron case to ghostwrite other
rulings subsequently issued by the presiding judge. And, to
boot, Guerra asserted that Chevron - unlike the plaintiffs -
didn't respond to his solicitation of bribes.
Chevron filed additional new evidence to back Guerra's
declaration, including draft versions of ghostwritten rulings
found on the former judge's computer, mail and bank records
showing his contacts with the plaintiffs and sworn statements by
other witnesses supposedly involved in the bribery scheme.
"Guerra's testimony and corroborating evidence confirm what the
extensive overlap between the (plaintiffs') internal files and
the judgment already prove: that the (plaintiffs) corrupted the
Ecuadorean court and wrote the $18 billion judgment against
Chevron," wrote the oil company's lawyers at Gibson, Dunn &
Crutcher.
Guerra has some credibility issues, since, by his own
admission, he was dismissed from the Ecuadorean court and has
been in financial straits. His declaration disclosed a payment
of $38,000 from Chevron to compensate him for his time and
expenses, including the surrender of his computer, flash drives
and cell phones. The Lago Agrio plaintiffs and their allies
claimed that isn't all the former judge received. In a
statement, Ecuadorean plaintiffs' lawyer Pablo Fajardo said that
Guerra previously offered to sell his testimony to his clients
but they refused to pay. "It always was obvious that Guerra
wished to sell himself to the highest bidder, a fact which
undermined his credibility and made him a profoundly unreliable
witness," Fajardo's statement said. The Ecuadoreans also claim
(without supporting evidence, from what I can tell) that Chevron
is using Guerra's testimony to cajole and intimidate other
former judges in Ecuador.
These latest disclosures are profoundly disheartening,
regardless of which side you believe in this case. If you trust
Chevron and the documentary evidence, the plaintiffs bought an
$18 billion judgment from Ecuadorean judges. If you believe the
plaintiffs, former Ecuadorean jurists are for sale to Chevron.
Either way, I'm increasingly skeptical that we'll ever know what
happened all those decades ago in Lago Agrio. This case has been
under way, in various permutations, in courts in Ecuador and the
United States since 1993. There are binary questions at its
heart: Either Chevron predecessor Texaco did or did not
contaminate the Lago Agrio region and impair the health of its
residents. Chevron has been just as adamant in denying liability
as the Ecuadoreans have in asserting it. Yet the longer the case
progresses, the more elusive an answer seems to be.
Chevron's bulldog lawyers at Gibson Dunn might disagree.
They'd say that with enough time, they will eventually prove all
of the misbehavior they suspect of the Ecuadorean plaintiffs and
their lawyers. I'd counter that they've been going full bore for
about three years, using some of the most ingenious and
aggressive litigation tactics ever deployed in a civil case.
Chevron also makes no secret of its long-running investigation
within Ecuador of the Lago Agrio plaintiffs and lawyers. But for
all of the resources the company has devoted to discrediting its
foes, in court and out, Chevron only recently obtained evidence
of Guerra's supposed bribe-taking and ghostwriting -- even
though Guerra's declaration asserts that he twice solicited a
bribe from a Chevron lawyer in Ecuador. (The declaration does
not reveal what, if anything, Chevron's Ecuadorean counsel told
the company about Guerra's approaches.)
Time, moreover, may not be on Chevron's side. The
Ecuadoreans are pursuing attachment action in Canada and Brazil
based on the $18 billion Ecuadorean judgment. (The oil company
does not have assets in Ecuador.) Chevron wants Judge Kaplan in
New York to rule that the Ecuadorean judgment is a fraud that
should be nullified, but even the 2nd Circuit Court of Appeals,
when it vacated a preliminary injunction barring the Ecuadorean
plaintiffs from enforcing their judgment against Chevron,
expressed concerns about international comity and the
application of U.S. rulings in overseas courts. The
circumstances are different now, especially with Chevron's new
evidence that the Ecuadorean judgment was illegitimately
procured, but even if Kaplan grants the company's summary
judgment motion, the plaintiffs will likely press international
courts to enforce the Ecuadorean judgment while appeals are
under way in the United States. Meanwhile, Chevron is in a nasty fight with a major shareholder, the New York State Common
Retirement Fund, over whether to settle the Ecuadorean case. The
New York pension fund argues that it's too expensive and
distracting for the company to continue litigating; Chevron
responded with an ethics complaint in November against the
fund's administrator, New York Comptroller Thomas DiNapoli, whom
the oil company accuses of accepting campaign contributions from
supporters of the Ecuadorean plaintiffs.
I've been writing about litigation long enough that I don't
have any illusions about what it can achieve. Litigation doesn't
often produce binary answers. Most cases settle because truth
lies between the positions espoused by opposing sides. And in
most cases, that's a just outcome. But I'm not sure a settlement
of the Chevron litigation, with all we've come to know about the
Ecuadorean case and all that remains to be known, would bring
justice to either side. In this case, truth and justice are too
intertwined, and I don't believe that continuing to litigate
will answer the ultimate question of whether Chevron is
responsible for ongoing environmental catastrophe in Ecuador.
The Chevron case, more than any other I know, stands as a
paradigm not only of how hard two sides can fight but also of
how little they can ultimately accomplish.
(This article has been corrected. A previous version
incorrectly reported that draft versions of the 2011 judgment
against Chevron were found on Guerra's computer. It also
incorrectly referred to a court fight between Chevron and the
New York comptroller.)
(Reporting by Alison Frankel)
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