The large law firm, which is also Washington, D.C.’s biggest lobbying firm, will pay $15 million, express regret and withdraw from representing Ecuadorian environmental complainants to settle the oil company’s charges that it had participated in a litigation scheme that Chevron has called fraudulent and extortionate. “It also agreed to assist Chevron with discovery against the Ecuadoran plaintiffs and their New York-based lawyer, Steven Donziger,” as well as hand over its five percent share of any moneys the plaintiffs happen to win when the whole thing is over. [Washington Post; Paul Barrett, Bloomberg Business Week; our coverage of the case over years]
“U.S. District Judge Lewis Kaplan in New York said he found ‘clear and convincing evidence’ that attorney Steven Donziger’s legal team used bribery, fraud and extortion in pursuit of an $18 billion judgment against the oil company issued in 2011.” [Reuters, Bloomberg, 485-pp., 1842-footnote opinion; SFGate, Kevin Williamson, Quin Hillyer, Ira Stoll (New York politicians including Comptroller Thomas DiNapoli roped in as allies of Donziger)] We’ve been covering the story for years.
The partner from the prominent plaintiff’s and class-action firm testified that he signed on to the much-ballyhooed environmental suit against Chevron, then backed out almost immediately after seeing the ethical issues [Reuters]
P.S. Testimony from Philadelphia attorney Joseph Kohn of Kohn, Swift, & Graf also appears unhelpful, to say the least, to Steven Donziger’s case [Paul Barrett, Bloomberg Business Week]
“The judge, Alberto Guerra, took the stand … in Manhattan federal court during the trial in a racketeering suit in which Chevron alleged that the verdict in Ecuador was procured through fraud. Guerra has said in a declaration filed with the court that he was paid thousands of dollars by lawyers for the plaintiffs to steer the case in their favor.” A spokesman for Steven Donziger, Chevron’s adversary at the trial, calls the former jurist an “extortionist.” [Bloomberg Business Week, Christie Smythe and Paul M. Barrett; Bernard Vaughan, Reuters; earlier]
More: Roger Parloff/Fortune; earlier Bloomberg (“[Donziger's] media campaign … helped to secure an article in Vanity Fair”).
In the latest remarkable development in the long-running case, the expert consultancy that assisted the plaintiffs, after being sued by Chevron, has flipped:
Stratus Consulting, based in Boulder, Colo., said in a press release today that it “was misled” by [lead plaintiff's attorney Steven] Donziger. Stratus went on to say that the plaintiffs’ legal team used its extensive research as the basis of a 4,000-page report filed with the court in Lago Agrio, Ecuador. The report was supposed to be neutral and independent, but it was not, Stratus said. The consulting firm described a court process in Ecuador that “was tainted by Donziger and the Lago Agrio plaintiffs representatives’ behind-the-scenes activities.”
The Donziger camp fights back — and personally attacks veteran legal reporter Paul Barrett of Bloomberg BusinessWeek, who wrote the above summary — in comments here and here. Much more from Daniel Fisher at Forbes; you can read the damning affidavits from relevant actors at Stratus Consulting here and here.
Striking new ruling (PDF) from Judge Lewis Kaplan denying lawyers’ request to be excused from a subpoena (courtesy David McGowan, Legal Ethics Forum). “Chevron has established at least probable cause to believe there was fraud or other criminal activity in the procurement of the Judgment and in other respects relating to the Lago Agrio litigation in which that Judgment was rendered and in certain litigations in the United States relating to the Ecuadorian litigation.” Kaplan proceeds to lay out over 70 or so pages the aromatic history of the litigation both in Ecuador and stateside.
Via an AP dispatch, the Washington Post covers another round, from Argentina, in the long squabbling over whether American-led lawyers can get foreign courts to enforce a $19 billion environmental judgment from the Ecuadorian courts. You’d think this would have made a good occasion for AP or the Post to mention, at least, the sensational developments of three days ago, in which Chevron filed with a court a sworn affidavit in which a former Ecuadorian judge said that he and a second judge had allowed plaintiff’s lawyers to ghostwrite their judgment in exchange for a promised bribe of $500,000. Those allegations were dramatic enough to generate prompt, substantial coverage in places like Fortune, Reuters, Bloomberg, and Forbes, yet the Post still hasn’t mentioned them, unless you count a vague reference in the AP item to longstanding charges of fraud on both sides.
Roger Parloff at Fortune on eye-popping new allegations in a case we’ve been following for a long time (e.g.):
In Manhattan federal district court this morning, Chevron filed the declaration of a former Ecuadorian judge, Alberto Guerra, who describes how he and a second former judge, Nicolás Zambrano, allegedly allowed the plaintiffs lawyers to ghostwrite their entire 188-page, $18.2 billion judgment against Chevron [in the Lago Agrio environmental litigation] in exchange for a promise of $500,000 from the anticipated recovery.
The bribery charge is completely new, and the ghostwriting charge is more sweeping and better substantiated than before.
Since some readers may be having a hard time keeping all the case’s scandals straight, here’s a précis. Chevron has now presented evidence of two distinct, large-scale, ghostwriting frauds which, among other problems, it maintains, taint the Ecuadorian judgment.
Complicating Chevron’s claims of vindication — and opening an avenue for the plaintiff’s camp to argue against giving any credence to the new allegations — the oil company acknowledges that it has made and intends to go on making payments of “living expenses” to the former Ecuadorian judge, now resident with his family in the United States. Read the whole thing here.
More from Kevin Williamson at National Review Online:
Curious fact: As a senator, Barack Obama did see fit to intervene in the Chevron case — on the side of the Ecuadoran government. After meeting with an old basketball buddy — the abovementioned Mr. Donziger, who stands to make billions of dollars as the plaintiffs’ attorney in the case — Barack Obama wrote a letter to the U.S. trade representative arguing that Ecuador’s actions should not be held against the regime when negotiating trade privileges. Donziger, with the help of a $10,000-a-month lobbyist, also got Andrew Cuomo to threaten to intervene in the case, even though the jurisdiction of the Empire State stops well north of Ecuador.
Yet more: Daniel Fisher, Forbes.