Chevron attorney Randy Mastro assailed plaintiffs’ lawyer Steven Donziger today, accusing him of running a massive scheme to extort a $19 billion environmental judgment against the oil company in Ecuador.
Launching his case in opening arguments before Southern District Judge Lewis Kaplan, Mastro said Donziger bribed a judge and had coconspirators ghost-write judicial opinions in the litigation in Lago Agrio, Ecuador, as a part of a plot to “coerce a big pay day out of the company to make the pain go away.”
“It’s been a long hard road to get here, but judgment day is at hand,” said Mastro, a partner at Gibson, Dunn & Crutcher. He urged Kaplan to hold Donziger responsible as the man who “masterminded and orchestrated” the scheme and along the way committed “multiple acts of wire and mail fraud, extortion, bribery, witness tampering and money laundering.”
“Your honor, it’s a shakedown scheme pure and simple,” Mastro said.
But Donziger’s lawyer Richard Friedman said Mastro had his client all wrong, as Donziger had come to the aid of a poor, “disfavored minority”—the indigenous people of the Amazonian rain forest in the Oriente region in Ecuador, who were left to deal with the oil pollution created by Texaco, Chevron’s predecessor in Ecuador.
“He was trying to hold a multi-national corporation responsible for the environmental harm to a third-world country,” Friedman said of Donziger and the $19 billion award in the Lago Agrio litigation. “He’s here because he managed to get justice for his clients.”
Friedman, of Friedman Rubin in Washington State, came into the case just a few weeks ago along with Zoe Littlepage of Littlepage & Booth in Houston.
They face an uphill battle defending Donziger against racketeering and fraud allegations in the bench trial before Kaplan, who has found in prior opinions that there was a likelihood that the judgment was procured by fraud.
Kaplan in 2011 issued a preliminary injunction against enforcement of the Ecuadorian judgment after finding it likely the judgment was procured by fraud, but he was later reversed by the U.S. Court of Appeals for the Second Circuit (NYLJ, Sept. 20, 2011).
The case was originally brought against Texaco in New York in 1993, but it was later dismissed on grounds of forum non conveniens. Texaco later settled the litigation in Ecuador in a deal in which it promised extensive clean-up efforts in the Oriente that Donziger says the company never delivered on.
The company was released from liability by the Ecuadorian government in 1998 and became part of Chevron in 2002, but Donziger pressed forward and secured the $19 billion judgment against Chevron in 2011.
Charging that the result was poisoned by fraud, corruption and the intimidation of judges, Chevron went on the attack with a global effort to prevent its assets from being attached.
The centerpiece of its effort was to file suit in New York and, ultimately, to accuse Donziger of procuring the judgment by fraud—an effort that included petitioning Kaplan for enforcement of a subpoena for damning outtakes of the documentary Crude, a Donziger-solicited effort to document the plaintiffs’ case in Lago Agrio.
Courts in Ecuador
Before Kaplan, Mastro said Tuesday that damning statements made by Donziger in the documentary, his diary of the litigation and witness testimony will show Kaplan that injunctive relief is warranted to prevent Donziger and his clients in Lago Agrio from collecting on the judgment.
Quoting from Crude, Mastro reminded Kaplan that Donziger is caught on film saying of the Ecuador judiciary “this is how the game is played—dirty.”
Donziger, Mastro said, is also captured on film walking into a courthouse in Ecuador to allegedly intimidate a judge, and saying, “This is something we would never do in the United States. This is out of bounds both in terms of judicial behavior and what a lawyer would do.”
But Freidman said Mastro was using “random acts” and a “tsunami of out-of-context clips” to make a racketeering conspiracy out of what was merely rough-and-tumble lawyering.
“A lot of it is unseemly, a lot of it is rude, and not how we would want to conduct ourselves in a U.S. Courthouse…but the world in Ecuador is different and he was faced with challenges many of us will never face,” Friedman said.
Trying to provide additional context, Friedman told the court that, “For years, Chevron begged, borrowed, did everything it could” to get the case moved out of New York and tried in Ecuador, and now the oil company hates the result and wants it undone.
Friedman said Donziger, based in New York, initially had his doubts about litigating the case in Ecuador, but he had to deal with the situation on the ground and the Ecuadorian judicial system as he found it.
Friedman compared Donziger to Thurgood Marshall and Ralph Nader in that he “understood to get justice for his client you had to get legal change and social change.”
But Mastro told the court that social justice has nothing to do with it, and Donziger stands to make $1.2 billion if the judgment is enforced.
“[I]f Donziger gets away with this here” and is allowed to successfully collect on the judgment, Mastro said, “it will be open season on U.S. companies in corrupt foreign countries.”
Donziger, he said, acting with another lawyer in Ecuador, bribed a judge, Nicholas Zambrano, $500,000 to allow the Lago Agrio plaintiffs to write a decision he did no more than sign. Mastro said another former judge, Alberto Guerra, will testify for Chevron to confirm the bribery.
Zambrano, however, is expected to testify for Donziger at trial and Freidman told Kaplan “the time for name-calling is over” for “at the end of this trial, an objective factfinder will conclude that Mr. Donziger did not bribe a judge.”
Mastro said he will present a lineup of witnesses to build his case over the next three weeks, including many former associates or backers of Donziger who were appalled by revelations of his tactics, especially that environmental reports and judicial opinions were ghostwritten.
Constantine Cannon managing partner Jeffrey Shinder, Mastro said, quit an alliance with Donziger after he became “sickened and disgusted” by how Donziger was doing business.
Mastro said Shinder and Joseph Kohn of Kohn Swift & Graf, who helped fund the litigation in return for a stake in the case, will be among a series of witnesses who will provide testimony, either in person or in writing, relating how Donziger deceived them.
Mastro said Donziger “lied to” Kohn and another funder, Christopher Bogart of Burford Capital. Had Kohn and Bogart “known the truth, they never would have funded or continued to fund” Donziger in the litigation, he said.
Mastro also said that two former consultants with the Boulder Colorado-based Stratus Consulting who helped ghostwrite a damning environmental report for Donziger will admit to doing so.
Also representing Chevron are Gibson Dunn partners William Thomson, Scott Edelman, Andrea Neuman and recently added, Reed Brodsky, a former Southern District prosecutor who helped convict Raj Rajaratnam and Rajat Gupta of insider trading.
Representing two name plaintiffs in the Lago Agrio litigation who were also named as defendants in the fraud case before Kaplan is solo practitioner Julio Gomez. Appellate counsel is Patton Boggs.
Donziger was formerly represented by John Keker of Keker & Van Nest in San Francisco. Keker quit his representation in May and Donziger had been representing himself until the recent addition of Friedman and Littlepage.
Citing rulings and comments from the bench, Donziger has tried on more than one occasion to have Kaplan removed from the case. The most recent attempt was rejected by the U.S. Court of Appeals for the Second Circuit in September.
Donziger and his team have said they cannot get a fair trial before the judge and public relations packets handed out by a spokesman for Donziger yesterday called it a “rigged show trial.”
Friedman may have accidently tread on the same ground Tuesday when he said, “Your honor may want to believe that Donziger and these lawyers bribed a judge….”
Kaplan cut him off, saying the verdict will be based on an objective analysis of the evidence as presented to the court.
“This is the last time I’m going to tolerate that type of suggestion,” he told Friedman.
@|Mark Hamblett can be contacted at email@example.com.