The Beginning of the End: Day One of Chevron’s Legal Farce Comes to Canada


Reposted from The Chevron Pit.

The best part of Day One of Chevron’s enforcement trial is that it has started. For the oil giant and its odyssey in Ecuador, this could be the beginning of the end.

The first day of the long-awaited trial to enforce the $9.5 billion environmental judgment against Chevron began with the company flooding the courtroom with 20 lawyers to argue a simple motion over a legal technicality. Twenty more lawyers from the company were in the gallery. With Chevron, that’s just how it rolls. The company can’t file a simple motion without a football team of clerks taking it to the courthouse, all billing their hourly rate.

For more than two decades, Chevron has spent at least $2 billion and used 60 law firms to try to obstruct efforts by the villagers to hold the company accountable for billions of gallons of toxic dumping in Ecuador’s rainforest when it operated there from 1964 to 1992. (For background on the overwhelming evidence against Chevron, see here.)

This includes sending the case from U.S. federal court to Ecuador for trial back in 2001; selling off its assets in Ecuador as evidence mounted against it; bringing the case back to the U.S. when it lost the trial it wanted in Ecuador; getting a U.S. trial judge to buy its fabricated evidence of “fraud” from a lying witness to whom the company paid $2 million; filing two international arbitration actions against Ecuador’s government to obtain a taxpayer-funded bailout of its liability; and going to more than 25 U.S. courts to sue more than 100 lawyers, activists, bloggers and supporters of the villagers as part of an intimidation campaign.

Thus far, little of this unprecedented and unethical defense strategy has worked. In Canada, Chevron is clearly coming to the end of the trail.

The small army of Chevron lawyers who entered the Superior Court of Ontario on Monday is trying to use its muscle to again deny due process of law to Ecuadorian villagers who have suffered from high cancer rates and other health impacts related to Chevron’s deliberate dumping of billions of gallons of toxic waste into the rainforest. They have come to Canada to collect on their judgment because Chevron refuses to pay up, despite having made promises to do so as a condition of sending the case to Ecuador from U.S. federal court in 2001.

Chevron’s goal is to prevent the villagers from collecting the first dollar of their judgment on the theory that all Chevron’s assets in Canada are held by a wholly-owned subsidiary, and not by Chevron. There is virtually no chance the argument will work for the simple reason that Canadian law (and the law in almost every other country) makes it clear that any party can collect any assets of a scofflaw debtor to force payment, be it a subsidiary or money in a bank account.

In its corporate shell game game that started more than two decades ago, Chevron was as slippery as ever on Monday. Any objective observer could see it wasn’t working; Justice Glen Hainey – a highly respected jurist – looked bored while Chevron’s lawyers droned on for almost three hours as they explained the 1,000 or so reasons why they believed Chevron Canada was not really the same as Chevron Corporation.

People are dying in Ecuador because of Chevron’s dumping and technicalities is all its lawyers could talk about.

Chevron lawyer Benjamin Zarnett tried to claim that even though Chevron owns its subsidiary in Canada, the Ecuadorians could not seize it because it is not an actual “asset” as required by law but is instead only an “operating body” – whatever that means, as there is no such distinction in the law that we can ascertain. Put simply, while Chevron reaps 100% of the profits of Chevron Canada, it feels it should not pay for any of its liabilities.

Alan Lenczner, the litigator extraordinaire who represents the Ecuadorian villagers in Canada, summarized Canadian law in a way that explains why Chevron is in trouble: “According to Canada’s Supreme Court, a debt is enforceable against any and all assets of a given debtor.” Pretty simple, and true the world over.

The larger issue for Chevron is that it is being engulfed by risk in Canada; its team of ethically-challenged lawyers at Gibson Dunn & Crutcher in the New York – the same crowd that fabricated the “fraud” evidence by coaching witness Alberto Guerra for 53 consecutive days to lie on the stand – are at risk of being ordered to disgorge their documents to the Canadian court as part of the enforcement trial. That would be poetic justice to say the least.

Chevron’s use of 2,000 legal personnel to implement a scorched earth strategy to kill off the case clearly has failed. Otherwise, the trial to seize the company’s substantial assets in Canada would not be taking place. And unlike in the U.S., Canadian judges cannot be so easily influenced by corporate power and political connections; they will actually rule on the merits, which is something that Chevron deeply fears.

In fact, the villagers are within a short distance of a total victory where they can collect 100% of the judgment, plus statutory interest – a result few saw coming, and one that has never happened before on anything close to this scale when indigenous groups are the plaintiffs and a major oil company the defendant.  Last year, Canada’s Supreme Court delivered a unanimous opinion granting the villagers the right to proceed with their action; numerous Canadian civil society organizations have weighed in on their behalf.

Later this week, Justice Hainey will hear argument on whether Chevron’s defenses to enforcement – largely centered on its discredited and wholly fabricated “fraud” narrative that has unraveled – will be allowed in as evidence. The villagers believe Chevron should not be given yet another bite at the apple after its arguments already were fully litigated and rejected by three layers of courts in Ecuador.

If Chevron loses the motion, or even part of it, look for the company to approach the villagers for a way out of its growing risk and ongoing reputational harm for being convicted as a human rights violator. Trust us: the pain Chevron will feel to settle the case will hurt a lot less than the pain of its assets being publicly seized in humiliating fashion.

This is what happens when an oil company has to face justice before the transparent, neutral courts of Canada. We look forward to the rest of the motions hearing – expected to last until the end of the week – and the enforcement trial, which is expected to begin in 2017.

Stay tuned as the resolution to the world’s most important corporate accountability case gets closer.