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Lead Chevron Lawyer Discusses the Rigors of Defending Big Oil
New trial hearing looms in the human rights case against the oil giant
The National Law Journal
January 27, 2009
Jones Day's Robert Mittelstaedt
A decade-long legal battle claiming human rights violations against oil giant Chevron Corp. by a group of Nigerian villagers ended last month in a jury victory for Chevron, but lawyers for the Nigerians are seeking a new trial and, failing that, have pledged an appeal.
The case centered on allegations that the company, by working with the Nigerian military, was responsible for the shooting deaths and injuries to Nigerians at an offshore oil rig in 1998.
U.S. District Judge Susan Illston will consider a new trial request on Feb. 6. The case originally included claims of torture and racketeering, brought under the 200-year-old Alien Tort Claims Act, which allows foreigners to sue in U.S. courts for alleged injuries overseas. It is rare for such cases to be brought and more unusual for them to go to trial. The Chevron case is only the second to go before a jury. Jurors in 2007 sided with Alabama-based Drummond Co. in a suit by a Colombian trade union alleging that Drummond employees had been murdered by a paramilitary group allegedly with the company's aid.
The Chevron case included years of intense pretrial litigation and mountains of paper. The suit alleged that villagers of the Ilaje tribe sailed out to the Parabe oil platform off the coast of Nigeria to conduct what they called a peaceful protest of environmental policies. Chevron argued that the villagers planned to take hostages and demand ransom.
The company successfully argued that the occupation justified its calling the Nigerian military three days after the protest began. Soldiers killed and wounded several villagers.
Initial claims that the company was complicit in military action on shore that burned homes and churches and killed the livestock of villagers were dropped by plaintiffs.
Robert Mittelstaedt, a partner in Jones Day's San Francisco office, led the defense team representing Chevron. He talked about the high-stakes case with The National Law Journal.
NLJ: How did a case this high-profile and with potential risk to the company [both public image and monetary] get to trial? I.e., why didn't it get resolved in 10 years?
RM: Sometimes, the principle at stake in a lawsuit is just too important to compromise. In essence, it was hostage-takers suing the hostages on the theory that they should have paid the ransom demands rather than asking law enforcement to rescue them. Plaintiffs were also saying that Chevron Corporation in California should be deemed responsible for conduct of the Nigerian law enforcement personnel directed against Nigerians in Nigeria. Settling a case based on these theories would have only encouraged more hostage-taking, and more meritless lawsuits.
NLJ: Cases such as this, raising Alien Tort Claims Act allegations, are so rare, what did you take as guidance for how to defend during the trial?
RM: Although it was touted as a human rights case, it looked at times like an old-fashioned personal injury case. And like many trials, the outcome turned heavily on the credibility of witnesses. The trial was designed to give the jury enough information, much of it through cross-examinations of plaintiffs and their witnesses, to decide who was telling the truth.
NLJ: How do unrelated issues, such as gas at $4 per gallon and the accompanying antagonism toward oil companies, just before trial figure into the trial strategy?
RM: Those kinds of issues loomed large during jury selection. But once the testimony started, the jury appears to have focused on the real issues.
NLJ: What do you consider the turning point in the trial, or most significant moment for the defense?
RM: Rather than any particular turning point, it was probably an accumulation of evidence over the course of the five-week trial showing that plaintiffs' story was untrustworthy. Three interesting pieces of testimony come to mind. On cross, plaintiffs' first witness was trying to explain away a letter in which plaintiffs' group threatened Chevron Nigeria with a "mass riot," and he ended up saying mass riot was the same thing as a "peaceful protest," which is how plaintiffs described their three-day invasion of Chevron Nigeria's facilities. Then plaintiffs' expert on Nigerian matters admitted that none of his lengthy testimony elicited by plaintiffs about the hardships of living in the Niger Delta was intended to justify hostage-taking. And plaintiffs' Harvard Business School expert on corporate structure, when confronted with a promise that he would tell the jury that Chevron Corporation's relationship with Chevron Nigeria was "inappropriate," responded, "Where did that quote come from?" As the jury knew full well, that was the promise made by plaintiffs' counsel in his opening statement -- a promise that went unfulfilled.
NLJ: Does this verdict make Alien Tort Claims Act cases less viable for plaintiffs in other cases, given the expense and risk of pursuing them?
RM: The outcome of a trial in one case has little to do with the outcome of a trial in a different case with different facts. But two things are of broader significance here. Chevron's willingness to try this case demonstrates that it is not enough for plaintiffs to file a complaint claiming human rights violations, engage in publicity and expect a settlement. And this trial also shows that juries are able to see through exaggerated rhetoric and determine the truth.
NLJ: What was the cost of the litigation?
RM: Without going into detail, suffice it to say that litigation like this, lasting 10 years and involving over 100 depositions, many of them in Nigeria, is expensive. Plaintiffs and their 12 law firms spared no expense in prosecuting the case, and Chevron had no choice but to defend itself.
NLJ: Was there ever a settlement proposal on the table from Chevron? Or one from the other side?
RM: We might be willing to discuss this question if plaintiffs consent.
NLJ: It was a very hotly litigated case pretrial; how important was that in narrowing the scope of the case?
RM: The case was clearly over pled by plaintiffs, which resulted in the court stripping away RICO [Racketeering Influenced and Corrupt Organizations Act] and several other claims. There are many unresolved issues arising under the Alien Tort statute, including exhaustion and vicarious liability to name only two, which led to considerable motion practice.
NLJ: How successful were the pretrial motions for the defense?
RM: Our motions eliminated some of the more extreme claims, like the claim of crimes against humanity and violation of the RICO Act. Another set of motions was designed to force plaintiffs to name the real-parties-in-interest and produce them for depositions so we could uncover whether some of the claims or persons were fictitious. That may have been the reason that plaintiffs' counsel ultimately dropped half of the case [the onshore incident] in unexplained circumstances suggesting that they discovered the claims may have been fraudulent or testimony perjured.
