Almost two years ago, when I read Paul M. Barrett’s fascinating best-seller, “Glock: The Rise of America’s Gun,” I wondered what subject might next capture the attention of this Harvard-educated lawyer-turned-journalist. Barrett has now produced, “The Law of the Jungle: The $19 Billion Legal Battle Over Oil in the Rain Forest and the Lawyer Who’d Stop at Nothing to Win,” a richly detailed and well-documented narrative of one of the most important environmental litigations in decades—one that brought international attention to the oil pollution of the Ecuadorian rain forest, which may have caused illness and death in the local population.
But the book’s central focus is a story of alleged corruption, bribery and unethical behavior by a vigorous, although at first well-motivated, young New York lawyer whose ethical compass malfunctioned along the way.
The seeds of the controversy were planted in the early 1960s, when Texaco began oil explorations in Ecuador and soon found success in the remote jungle region known as the Oriente. Within several years, oil was produced in large quantities and shipped to the United States for refining. As a result, Ecuador enjoyed an economic boom fueled by the oil production, although economic inequality worsened.
To store oil drilling waste, Texaco dug earthen pits, discharged water into rivers and sprayed petroleum on dirt roads. In 1990, Ecuador nationalized its oil industry and a government-owned company took control over the Oriente oil field.
Although Texaco’s lawyers and public relations specialists later tried to offer their own spin, it appears to have been company policy to conceal evidence of pollution. In 1972, the head of the Texaco office in Florida, which oversaw Latin America, sent a memorandum to company personnel in Quito instructing Texaco employees in Ecuador not to disclose accidents or standard company practices that might result in ecological damage.
Beginning a multi-decade process of what can be best characterized as litigation theater, young Harvard graduate Steven Donziger, through an Ecuadorian classmate whose father was a lawyer, and working with a human rights lawyer, formed a legal team to launch a class action.
Although he was raised in Florida, Donziger’s parents had roots in the New York community (his grandfather was the Brooklyn District Attorney, Aaron Koota). Donziger had worked as a reporter in Nicaragua and later returned to the United States to work for an advocacy group devoted to Cubans who had fled the country in the Mariel boatlift. Apparently, his credentials as a foreign correspondent activist put him in good stead when applying to Harvard, where he focused on critical legal studies, a left-wing scholarly movement.
Firing his first volley, Donziger invited American journalists to the U.S. Courthouse in Foley Square. There he handed out a press release announcing:
“RAINFOREST INDIANS LAUNCH BILLION-DOLLAR LAWSUIT AGAINST TEXACO,” Claim Oil Company Ruined Their Rivers and Land In Amazon Basin of Ecuador; Tribal Leaders to Arrive in New York Today to File Class Action Papers at US Courthouse. ‘Catastrophe Worse Than the Exxon Valdez,’ Lawyers say.”
Thus was born Aguinda v Texaco Inc., a class action that sought to hold American corporations liable for the Ecuadorian oil pollution, with 76 Indians and migrant farmers suing on behalf of 30,000 similarly situated people living in the Oriente, pursuant to the Alien Tort Statute of 1789.
Not unexpectedly, Texaco parried with a forum non conveniens defense, arguing that the appropriate forum for the lawsuit was in Ecuador, where the alleged wrongdoing occurred and the plaintiffs resided, and where they could surely get justice (I recall making a similar argument to a New York court, attempting to persuade a skeptical bench that the New York plaintiffs could find justice in a court in Russia!)
The late Judge Vincent Broderick refused to dismiss the Texaco case and ordered discovery to go forward.
Following Judge Broderick’s death, the case was reassigned to Judge Jed Rakoff, who granted Texaco’s renewed motion to dismiss. On review by the Second Circuit, the district court was asked to take another look at the situation to ensure that if the case was dismissed, Texaco would submit to jurisdiction in Ecuador.
With its priorities clear—to get out of New York—Texaco agreed to submit to jurisdiction in Ecuador. While the New York litigation had been pending, Donziger and his Ecuadorian counsel had turned their attention to getting Ecuador’s legislature to pass the Environmental Management Act, a statute that authorized a group of citizens to seek environmental reparations.
Accordingly, the lawsuit known as Aguinda II (or the Lago Agrio litigation, named for the area where Texaco had its rain forest oil company) went forward in Ecuador in 2003, with plaintiffs seeking $6 billion for pollution clean-up. Meanwhile, two years earlier, Chevron had acquired Texaco for $45 billion, so the litigation became its headache.
Barrett’s detailed account of the events that followed during the course of litigation in Ecuador is worthy of a Hollywood movie—but one that proves the point that truth is stranger than fiction. While Donziger and company enlisted the help of Hollywood celebrities in support of their cause (including, among others, Bianca Jagger) and managed to secure a sympathetic portrayal on 60 Minutes, according to the conclusions of the next judge to get the case, Judge Lewis Kaplan, they engaged in much darker activities, including multiple extortionate acts, such as the ghostwriting of the judgment and promise of $500,000 for the trial judge for signing a favorable judgment; the ghostwriting of an expert’s report upon which the author of the judgment (in turn, a ghostwriter for the trial judge) relied for a multi-billion dollar damages award; and the false portrayal of the expert as neutral and impartial, with payments and other inducements to ensure that he “played ball.”
Horrified by both the legitimate and illegitimate progress being made in the Ecuador litigation, Chevron went on the offensive, adding Gibson Dunn & Crutcher to its team along with an army of investigators. With the largesse afforded to it by 28 U.S.C. §1782 (which allows a litigant to obtain assistance from the federal court for information that might be useful in a foreign proceeding), and in an irony that only a litigator can appreciate, Chevron now returned to the New York forum it once eschewed to uncover the machinations of the Aguinda plaintiffs.
There, they make the acquaintance of an apparently sympathetic audience in the person of Kaplan, who, in overruling claims of privilege, granted extremely broad discovery into the most private documents of the plaintiffs’ legal team, as well as out-takes of a film in which Donziger boasted of his successful manipulation of the judiciary in Ecuador.
Fighting back, the Donziger team, facing abandonment from its law firm financer (Kohn Swift & Graf in Philadelphia), obtained litigation financing from Burford Capital and additional legal assistance from Patton Boggs and its partner, James Tyrrell.
In early 2011, with the Ecuadorian court ruling imminent (which ultimately awarded judgment of about $19 billion, although later reduced), Gibson Dunn launched its broadside attack on the plaintiffs’ legal team and its consultants, filing a RICO suit, which was then assigned to Kaplan, because he had handled the Section 1782 proceedings.
In what is probably the most interesting portion of the book for the New York lawyer crowd, Barrett sets out some of the most shocking evidence presented at the trial before Kaplan, recited in his impressive 485-page opinion. During the course of that proceeding, there is a confession by a prior Ecuadorian judge of payments and corruption in the Ecuador case and apologies from consultants, lawyers and others who had assisted in the effort, all of whom claimed they had not been aware of the deceit and fraud perpetrated by Donziger.
What might be characterized as yet another irony, in order to avoid a jury trial and the possible evocation of sympathy for the plaintiffs, Chevron announced that it was waiving its damage claims in the RICO suit and seeking only injunctive relief, which meant the case would be tried by Kaplan without a jury.
While notable for its craftsmanship and unusual length, Kaplan’s opinion provides in a very few words what is probably the most salient characterization of the entire affair:
“The saga of the Lago Agrio case is sad. It is distressing that the course of justice was perverted. The LAPs [plaintiffs] received the zealous representation they wanted, but it is sad that it was not always characterized by honor and honesty as well. It is troubling that, in the words of Jeffrey Shinder, what happened here probably means that “we’ll never know whether or not there was a case to be made against Chevron.”
But we have come full circle. As the court wrote at the outset, “[t]he issue in this case is not what happened in the Oriente more than twenty years ago and who, if anyone, now is responsible for any wrongs then done. The issue here, instead, is whether a court decision was procured by corrupt means, regardless of whether the cause was just.
The decision in the Lago Agrio case was obtained by corrupt means. The defendants here may not be allowed to benefit from that in any way. The order entered today will prevent them from doing so.”
Although Kaplan’s decision (which is on appeal) enjoins enforcement of the Ecuadorian judgment in the United States, left open is the question of whether it will be enforced in other jurisdictions where Chevron has assets.
Barrett’s work is a tour de force in its capturing of massive detail, both legal and non-legal, and in recounting this unusual saga of idealism gone awry. While Kaplan notes that his judicial inquiry was confined to corruption of the legal process, Barrett explores the broader issue, leaving the reader juxtaposing in the mind’s eye the image of terrible environmental destruction in a poor country, with that of a lawyer whose dishonest acts leave one unsure whether the plaintiffs ever got a fair shake.
Parodying the old Levy’s rye bread commercial, I would observe that you don’t have to be a lawyer to enjoy Barrett’s book. It is a thoroughly researched and impressively presented account of one of the most significant and interesting litigations in recent times.