Given U.S. District Judge Lewis Kaplan’s previous rulings in Chevron’s racketeering case against plaintiffs lawyer Steven Donziger and others, it would have been a surprise if the judge granted a motion by Donziger’s lawyers at Keker & Van Nest to dismiss the case outright. And indeed, on Monday Kaplan refused to throw out the case–though he did toss related claims of fraud and tortious interference.
As anyone following Chevron’s Ecuadorean saga will recall, Chevron its lawyers at Gibson, Dunn & Crutcher sued Donziger and related defendants in U.S. District Court in Manhattan in February 2011, just weeks before an Ecuadorean judge handed down an $18.2 billion judgment against the oil giant in the Lago Agrio environmental contamination case. In addition to claiming that Ecuador’s courts were corrupt, Chevron alleged that Donziger, who’s the lead U.S. lawyer for the Amazonian plaintiffs, and several other plaintiffs lawyers and consultants conspired to extort and defraud Chevron by fabricating evidence, intimidating witnesses, and making false and misleading statements to U.S. courts.
In Monday’s 55-page opinion, Kaplan turned aside Donziger’s argument that Chevron’s RICO claims should be dismissed due to the U.S. Supreme Court’s decision in Morrison v. National Australia Bank, which curtailed the reach of U.S. securities laws over foreign transactions. While agreeing that the Morrison holding would bar claims over foreign racketeering conduct, he concluded that the allegations against Donziger hit close enough to home. “The scheme alleged here wasconceived and orchestrated in the United States to injure a U.S. plaintiff, involved a predominately U.S. enterprise, and was carried out in material respects, though by no means entirely, here,” the judge wrote.
However, Kaplan dismissed Chevron’s tortious interference claim on statute of limitations grounds, and he knocked out a claim allegingtrespass to chattels because Chevron didn’t allege physical interference with Chevron’s property as required by law. Kaplan also found that Chevron’s claim of unjust enrichment was premature, since the plaintiffs have not yet recovered against Chevron, and he dismissed most of the fraud claim against Donziger after finding that Chevron would have poured as much money into the Lago Agrio litigation regardless of Donziger’s alleged wrongdoing.
Meanwhile, in a separate ruling, Kaplan refused to attach the assets of Donziger and several Lago Agrio plaintiffs to satisfy a $780 million claim for damages brought by Chevron. Kaplan found that Chevron hadn’t shown that it was likely to prevail on its claims against Donziger and that it failed to state a claim against the Lago Agrioplaintiffs, who were not defendants in the RICO suit.
Keker & Van Nest’s John Keker, who represents Donziger, did not respond to a request for comment. Gibson Dunn’s Randy Mastro referred questions to his client. “Chevron is pleased with the Court’s order, which upholds the core of Chevron’s RICO claim on every predicate criminal act asserted by the company,” said Hewitt Pate, Chevron’s general counsel, in a statement. “We are eager to move forward with our racketeering case to hold the perpetrators of this unprecedented fraud and misconduct accountable.”
Karen Hinton, a representative for the Ecuadorean plaintiffs, issued a statement Monday calling Chevron’s RICO charges “baseless” and “nothing more than a public relations stunt to hide the company’s environmental abuses and fraud in Ecuador.”
“If the RICO case proceeds to trial, which is highly doubtful in light of today’s ruling, the rainforest communities and their counsel plan to file counterclaims against Chevron and certain of its executives for fraud and are confident that the case will result in a finding of additional liability against individuals in Chevron who are responsible for the environmental disaster and cover-up,” Hinton said.
Note: An earlier version of this incorrectly reported Judge Kaplan’s first name. We regret the error.
