Supreme Court Faces Major Test With Chevron’s Facially Corrupt RICO Case


Reposted from The Chevron Pit.

An explosive new report that details how U.S. courts endorsed Chevron’s fabricated evidence in its facially corrupt RICO case against Ecuadorian indigenous villagers presents a major test for the U.S. Supreme Court. (See this press release summarizing the report.)

The 33-page report — called How U.S. Courts Got It Wrong In Chevron’s Amazon Pollution Case — is absolutely devastating for Chevron’s bogus civil “racketeering” judgment against Ecuadorian villagers and their counsel, Steven Donziger. That judgment was issued in 2014 by U.S. trial judge Lewis A. Kaplan following a unanimous decision a year earlier by Ecuador’s highest court that Chevron was liable for $9.5 billion in environmental damages.

Now, the U.S. Supreme Court will have the opportunity to reverse what a leading commentator calls the “facially corrupt” Chevron RICO case. See here for a Huffington Post analysis by Aaron Page, an experienced human rights attorney. Page helped write the new report which rebuts in great detail 12 false or distorted “findings” by Judge Kaplan that were rubber-stamped by the Second Circuit Court of Appeals, the federal appellate court tin New York that oversees Kaplan.

The background of the Amazon pollution case is illustrative of Chevron’s abject bad faith in dealing with its pollution problem in Ecuador and the utter failure of U.S. courts to stop the company from abusing the civil justice system to evade paying for the harm it caused. Thousands of people in the affected region have either died or face an imminent risk of death as cancer rates have skyrocketed in the area where Chevron deliberately dumped billions of gallons of toxic oil waste.

After the Ecuadorian villagers originally filed their claims in the U.S., Chevron had insisted the trial take place in Ecuador and had accepted jurisdiction there. The company at the time filed 14 sworn affidavits before a U.S. judge praising the fairness of Ecuador’s courts. Chevron clearly figured it could engineer a political dismissal of the case in Ecuador, which is exactly what the company tried to do but failed.

Then, as the trial in Ecuador proceeded and the evidence against Chevron mounted, the company started to trash the very court system that it previously had praised. Chevron officials threatened the villagers with a “lifetime of litigation” if they persisted in pursuing the case. “We will fight this until hell freezes over, and then fight it out on the ice,” warned Charles James, Chevron’s General Counsel.

Chevron then vowed never to pay the judgment and launched a “demonization” campaign against Donziger and the villagers, of which the RICO case was a central component. To attack Donziger and his colleagues, Chevron even hired the same public relations firm that ran the Swift Boat campaign against John Kerry in the 2004 presidential campaign.

In what can only be described as a shocking example of American judicial imperialism, Kaplan let Chevron’s army of private lawyers commandeer his courtroom to attack the Ecuadorians and their counsel to try to taint the Ecuador judgment so the company could evade paying the judgment. Despite its surface swagger, Chevron displayed real cowardice when it came time to actually put its RICO evidence to the test.

Company lawyers apparently had so little confidence in their “evidence” that they dropped all money damages on the eve of trial to avoid a jury of impartial fact finders. Also at Chevron’s insistence, Kaplan prohibited all evidence related to Chevron’s contamination and fraudulent cover-up in Ecuador from being mentioned in open court.

The entire Kaplan RICO proceeding was akin to a “Dickensian farce” as described by prominent lawyer John Keker, who withdrew from defending the case in protest of Kaplan’s biased behavior. The Chevron RICO strategy against Donziger was in fact part and parcel of the company’s own racketeering scheme to undermine the valid Ecuador judgment.

In fact, when Donziger brilliantly counterclaimed Chevron before Kaplan with overwhelming evidence of the company’s crimes and fraud in Ecuador, the judge predictably refused to let those claims be litigated. Only Chevron’s fabricated and distorted evidence was allowed to be heard; the real evidence from the villagers and Donziger was barred.

This was judicial farce, pure and simple — what the villagers describe as a “mockery of justice” from beginning to end. To get a feel for Kaplan’s inappropriate behavior and outright hostility toward the Ecuadorian villagers, read this fascinating account from Harvard Law School graduate Marissa Vahring who worked on the trial team defending the RICO case. Here’s another account of Chevron’s corruption from a lawyer who works at the environmental group Earth Rights International.

The latest report — How U.S. Courts Got It Wrong — destroys what little is left of Kaplan’s and Chevron’s credibility in the RICO matter.

The new report explains that Kaplan’s “findings” were based primarily on discredited testimony from an admittedly corrupt witness paid $2 million by Chevron to falsely claim the plaintiffs offered a bribe to the Ecuador trial judge.The witness, Alberto Guerra, later admitted under oath that he lied on key issues before Kaplan and a forensic report scientifically debunked his testimony.

Guerra also admitted paying and accepting bribes when he practiced law in Ecuador. “Money talks, but gold screams,” Guerra told Chevron lawyers when he was negotiating his rich compensation package in exchange for becoming a company stooge. Yet Kaplan “credited” Guerra’s testimony and the Second Circuit — as is typical of appellate courts in most cases but should not have happened in this extraordinary situation — deferred to the trial judge on this point without any independent analysis.

It later turned out that during the RICO trial, despite multiple calls for his recusal for bias, Kaplan hid the fact he had investments in Chevron. On two occasions, the Second Circuit held hearings on motions to remove Kaplan from the trial without this critical information that the judge refused to disclose. The big picture is that corporate corruption permeated Kaplan’s federal courtroom to such a degree that it was almost too much for the appellate court to acknowledge, much less address.

Page stated the RICO case now presents a major test for the integrity of our highest court. “The simple question is whether the Supreme Court stand with the rule of law, or will it stand with Chevron’s attacks on the rule of law,” he said. Already, 19 law scholars and 17 environmental and human rights groups have weighed in with briefs urging the Court to reverse Kaplan’s RICO decision.

Even if the Supreme Court declines review of Judge Kaplan’s legal fiasco — which is possible given that the Court accepts only about 75 petitions for review each year out of the thousands submitted — the historical record of Chevron’s lies and fraud is clear as the villagers proceed with asset seizure actions against the company in Canada and elsewhere. Already, Canada’s Supreme Court has ruled in favor of the villagers while Brazil’s courts have refused to block a separate enforcement action.

It will be interesting to watch Chevron lawyers react if they are forced to put Guerra on the stand in Canada without Judge Kaplan there to protect his credibility. Even Chevron’s own lawyers might be forced by Canada’s courts to explain their roles in coaching Guerra prior to his untruthful testimony in the RICO case.

Unlike Kaplan, who did all he could to rig the RICO trial in Chevron’s favor, a trial judge in Toronto will assess the full evidence in an enforcement trial with neither fear nor favor. For Chevron, a neutral arbiter assessing its fabricated and distorted evidence is a recipe for a litigation disaster.