Chevron Scrubs Lawsuit to Block Ecuador Award

Chevron Scrubs Lawsuit to Block Ecuador Award

~ By Adam Klasfeld

MANHATTAN (CN) April 22 - With little fanfare, Chevron dropped a charge from their racketeering lawsuit against an attorney who helped engineer an environmental case that resulted in an $18 billion judgment against the company in Ecuador.

As the parties are gearing up for a November trial in Manhattan to block the award, Chevron filed a proposed amended complaint on Thursday that removes attorney Steven Donziger as a party to one of the counts.

Donziger, however, is not too happy about the change, as it could prevent him from participating in a trial to determine whether the judgment he secured is enforceable.

Chevron spokesman Kent Robertson told Courthouse News that it made the change because Donziger does not "have a dog in that fight." He added that the Ecuadoreans can seek any lawyer they want to defend the judgment.

After Chevron filed the amended complaint, a spokeswoman for Donziger's Ecuadorean clients said that Chevron was engaging in an "un-American" bid to interfere with the attorney's due-process rights. Spokeswoman Karen Hinton added in an interview that Chevron's explanation was "complete nonsense."

Not only does Donziger have a dog in the fight, he is the central figure of Chevron's basis for attacking the judgment, Hinton said.

Well before the Lago Agrio, Ecuador, court entered its Feb. 14 verdict against Chevron, the oil giant condemned the proceedings there as fraudulent, and it accused of Donziger of acting like an organized crime leader in how he handled the case on behalf of Ecuadorean natives.

On Feb. 1, Chevron filed a federal lawsuit against Donziger and several other defendants in Manhattan, accusing them of violating anti-racketeering law, a statute originally conceived to deter mob bosses and gangsters. The lawsuit named dozens of other defendants from the Ecuadorean trial for counts fraud, conspiracy, tortious interference and related counts.

By March, Chevron had asked U.S. District Judge Lewis Kaplan to grant an early trial on Count 9 of the lawsuit, seeking a judgment declaring the $18 billion award unenforceable.

San Francisco-based attorney John Keker, who represents Donziger, said that Chevron was trying to interfere with his client's constitutional rights to fair trial.

Chevron has received the lion's share of rulings in Judge Kaplan's court, and this maneuver proved no different. In granting the request for a separate trial on Count 9, Kaplan said it was the key claim of Chevron's complaint.

"The core of this case is the issue of the enforceability of the Judgment outside of Ecuador," Kaplan wrote on April 15. "Once that issue is decided, one way or the other, it is likely that the rest of the case will vanish or at least pale in significance."

Days after Kaplan issued the order, Chevron amended its original complaint, adding new evidence and quietly dropping Donziger from Count 9.

In an ironic twist, Donziger, who has spent months blasting the "false and malicious" allegations against him, apparently want this charge to stand, for now.

Hinton, the Ecuadoreans' spokeswoman, says that Chevron is "petrified" to face off against Donziger's lawyer, Keker, who recently won a sex-discrimination jury trial against Chevron in California.

A footnote of Kaplan's April 15 order suggests Chevron has been planning to eliminate Donziger from the count, and that Kaplan may support the motion.

"Attorney Donziger, for example, is named as a defendant on Count 9," the order states. "Nevertheless, Chevron already has asserted that only the LAPs [Lago Agrio plaintiffs] and the Amazon Defense Front are entitled to contest the declaratory judgment claim because only they are judgment creditors. ... They have indicated also that either the Court or Chevron could drop him as a defendant on that count. ... While the Court does not now express a view on these matters, it is appropriate to recognize that changes in the parties may be in the offing and that those changes, should they occur, could further reduce or eliminate any overlap of proof."

Robertson, the Chevron spokesman, said Chevron dropped the charge based on "some observations that Judge Kaplan made in prior orders."

"The people who own the judgment are the named plaintiffs," Robertson said. "The [Ecuadorean] plaintiffs, or the Frente, could use any attorney on the planet, but Donziger doesn't have a dog in that fight. ... Donziger and his chosen counsel will have every opportunity to explain his misconduct."

Hinton was incredulous about Chevron's explanation in a phone interview.

"Chevron is accusing Steven Donzinger of orchestrating the fraud that would lead to the judgment not being enforceable," Hinton said, adding, "He doesn't have a dog in that fight?"

"To prevent Donziger from defending himself, Chevron is engaging in un-American behavior to deny due process to a litigant just like the company has tried to deny due process to thousands of its victims in Ecuador," Hinton said in a statement.

A trial date has been set for Nov. 14.