Eye on the Amazon

Chevron's Illegal Payments To Witnesses Should Prompt Supreme Court To Reconsider Case

Members of the Cofán Dureno community in northern Ecuador have suffered numerous problems from oil production on their lands. Laura Mendo, 59, recalls a time when the Cofán wandered freely and lived off the land. Now the rivers are contaminated, crops don't grow, and new illnesses and cancer have been introduced. Photo credit: Amazon Watch

For nearly three decades, Ecuadorian communities have tried to hold Texaco (now Chevron) accountable for the company's legacy of oil pollution in the Ecuadorian Amazon. The saga has stretched across the globe, across multiple court rooms and tribunals, and yet justice for the Ecuadorian victims remains elusive. This week, we told a side of this saga that hasn't really been heard. On behalf of our friends at Amazon Watch and Rainforest Action Network, we filed an amicus brief with the U.S. Supreme Court that details the illegal and unethical tactics Chevron and its lawyers used to try to obstruct judicial proceedings in Ecuador and obtain favorable testimony in the U.S. proceedings to support its retaliatory suit against the Ecuadorian victims and their lawyers.

I can't do justice to the complex and multifaceted history of the Chevron/Ecuador saga in a blog post, but here's a basic recap of how things got to where they are now: Ecuadorian villagers first filed suit against Texaco, whose operations in Ecuador were marked by egregious disrespect for local communities and their environment, in federal court in New York in 1993. After nearly 10 years of arguing over which court should hear the dispute, Texaco (which became a part of Chevron) convinced the court the case should be dismissed and heard in Ecuador instead, praising the fairness of the Ecuadorian judiciary. In 2003, the Ecuadorians refiled the case against Chevron in Ecuador. After years of litigation, the Ecuadorian court ruled in favor of the communities in 2011, issuing a multi-billion dollar judgment against Chevron for the devastation its operations left behind. Chevron appealed the decision and the appellate court, and Ecuador's highest court, both upheld the verdict ordering Chevron to pay to clean up the mess it left behind.

Sounds like that should be the end of the story, right? Hardly. Chevron, which no longer had assets in Ecuador, refused to pay. Instead, Chevron launched a retaliatory campaign against Ecuador, the Ecuadorians, their lawyers, and a wide range of other organizations and activists who had supported them. Chevron filed an international arbitration claim against the Government of Ecuador – before the Ecuadorian court had even issued its decision – alleging the judicial proceedings over its pollution of the Ecuadorian Amazon violated the company's rights as an investor. (Under a treaty between the U.S. and Ecuador known as a "Bilateral Investment Treaty," foreign corporations investing in Ecuador can have investment disputes heard in front of a panel of private arbitrators.)

Chevron also returned to the U.S. and filed suit in federal court in New York, asking the court to prohibit the Ecuadorians from enforcing any judgment issued by Ecuador anywhere in the world. Despite the fact that Chevron chose to have this case heard in Ecuador, over the objections of the Ecuadorians and their lawyers, Chevron now claimed the Ecuadorian courts were corrupt and incapable of issuing an impartial judgment fit for recognition and enforcement in our courts. The suit claimed the Ecuadorian victims, their lawyers, activists, and even Chevron's own shareholders were all a part of a massive conspiracy and a "public pressure campaign" to try to force Chevron to settle fraudulent claims.

The suit also brought claims under the racketeering and organized crime statute – known as RICO – alleging the Ecuadorians lawyers had procured the Ecuadorian judgment by fraudulent means. It's worth noting what Chevron did not argue – it never tried to show the Ecuadorian court got it wrong and Chevron wasn't responsible for the massive contamination. The RICO proceedings were utterly bizarre, defying all assumptions about how our legal system is supposed to work. (I recommend reading Marissa's description of what it was like when she volunteered on the trial before coming to work for us.) But in 2014, following a very strange bench trial, the judge ruled for Chevron.

The Ecuadorians and their lawyers are now petitioning the U.S. Supreme Court to hear their appeal. The brief we filed this week, which asks the Court to grant certiorari and hear their case, focuses on the facts that the trial court didn't consider: specifically, Chevron's misconduct in Ecuador and in the U.S. proceedings. In Ecuador, Chevron tampered with evidence of pollution, lied to the Ecuadorian court, paid millions of dollars to avoid damaging testimony, and sought to entrap a judge in a fabricated bribery scandal, creating the appearance of corruption in order to prevent enforcement in case it lost the case in Ecuador. Chevron continued to use dirty tactics in the U.S. proceedings, which ultimately led the trial court to make critical factual errors – errors we now know were simply wrong.

Central to Chevron's case below was its claim that the Ecuadorians' legal team had offered (but never paid) a bribe to the Ecuadorian judge to let them "ghostwrite" the judgment. Despite virtually limitless discovery, including access to the Ecuadorians' lawyers' litigation files, documents, hard drives, and even a personal diary, Chevron's lawyers never produced any direct evidence – no draft judgment, nor any communications by Petitioners evidencing a ghostwriting or bribery scheme.

Instead, all it could produce was the testimony of Alberto Guerra, an admittedly corrupt former judge who had previously tried to solicit a bribe from Chevron, and who came with a multi-million-dollar price tag. The trial court's decision relied heavily on Guerra's testimony and it is the only evidence for numerous conclusions. But Guerra subsequently admitted to lying on the stand during the trial about central facts of his bribery and ghostwriting allegations, and much of the "corroborating evidence" that supposedly supported Guerra's bought-and-paid for testimony has been refuted in later proceedings.

Chevron's conduct below shows why courts normally don't hear cases that seek, as Chevron did here, to have a court preemptively bar enforcement of a foreign judgment, before the winners have even tried to enforce it. Litigation would never end because the loser could always challenge a ruling in another forum. Indeed, if that's now allowed, then Chevron's misdeeds here – for example, payment of illegal gratuities and bribes to witnesses in exchange for favorable testimony, which violate U.S. law – could easily give the Ecuadorians and their lawyers a basis to turn to the courts in yet another country to file suit attacking the U.S. trial court's judgment as procured by fraud and unenforceable.

We don't know whether the Supreme Court will agree to hear the case. But this saga is far from over regardless of whether the Court hears it – the Ecuadorians are still pursuing enforcement proceedings in Canada, and the arbitration panel hearing Chevron's case against Ecuador has yet to rule. We can't help but wonder whether Chevron and its attorneys at Gibson Dunn may one day soon find themselves in the position of having to answer for their wrongdoing in these proceedings.

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