Doug Cassel’s Reply to Kevin Jon Heller: Who Bought What?

by Doug Cassel

[Doug Cassel is Professor of Law at Notre Dame Law School]

Kevin Jon Heller’s reply to my post on the fraudulent Ecuadorian judgment against Chevron is entitled, “Chevron’s Buyer’s Remorse.” Heller avers that there is “one reason, and one reason only, that this case was heard before an Ecuadorian court: because that is what Chevron wanted.”

Actually, that is what Texaco wanted. Texaco’s motion and affidavits were filed, and its forum non conveniens motion granted, before Chevron acquired Texaco in 2001. Litigating in the 1990’s, Texaco had no reason to foresee, years later, the arbitrary removal of 27 justices of Ecuador’s Supreme Court in 2004, the unwarranted removal of nine judges of the Constitutional Court in 2007, or President Correa’s declaration of a state of “judicial emergency” in 2011.

More important, Texaco prudently agreed only to be sued, not defrauded, in Ecuador. It reserved the right to contest the validity of any judgment (1) fraudulently obtained, (2) by courts lacking impartiality, or (3) in violation of due process of law. All three reservations apply to the judgment against Chevron.

Heller relies on a “lengthy and thoroughly footnoted” letter from plaintiffs’ attorneys. Length and footnotes do not guarantee accuracy. For the reasons stated in my (also lengthy and footnoted) reply, plaintiffs’ letter is inaccurate, not only on this point, but pervasively. I encourage interested readers to review both letters, and to decide for themselves whether the partially purloined stack of paper, purportedly penned by the Ecuadorian judge, deserves to be called a “judgment.”

http://opiniojuris.org/2012/04/12/doug-cassels-reply-to-kevin-jon-heller-who-bought-what/

33 Responses

  1. Mr. Cassel,

    I won’t make any comments on your view of the case except to say that I respectfully disagree (although, having worked on the case in Ecuador for almost a year as a law student I am obviously a bit impartial).

    As a young human rights lawyers myself, however, I am curious to know why a dedicated human rights lawyer would agreed to advocate on behalf of a corporation with such an atrocious global human rights record as Chevron. Whether in Ecuador, Nigeria, Burma, Kazakhstan or even in Richmond, CA Chevron has operated with impunity and little regard for the rights or health of the people and communities affected by their operations. I recognize that every person or company deserves a fair shot at justice, but knowing that Chevron already has enough high-priced lawyers and politicians in their pocket, I am respectfully interested in why someone with your resume agreed to sign on.

    Thanks in advance for your response,
    Brian

  2. Dear Brian,

    Thank you for your inquiry and for your courtesy.  The following excerpts from my reply to plaintiffs’ letter explain why I believe it is important for the human rights community to speak out against the Ecuadorian trial process and judgment:

    “To be credible, human rights defenders must be consistent in our fidelity to international human rights standards. We cannot selectively vindicate one right (to reparation) by trashing another (to fair trial). The ends do not justify the means.”

    “The plaintiffs’ Legal Team trades on appearances that are inherently attractive to human rights advocates: vulnerable Amazonians victimized by a powerful, polluting corporation. The appearance evokes sympathy – until one examines their shaky evidence and their misconduct of the trial – a labor-intensive task which few outside observers have the time to undertake. The Legal Team is thus effectively insulated from outside scrutiny. Almost the only outsider who knows the record is Chevron. But who in the human rights community would take the word of a multinational oil company against the pleas of lawyers claiming to defend the human rights of the weak against the powerful?”
     

     
    “For the sake of human rights everywhere, advocates would be well served to pierce these stereotypes and to take a close look at what is being done in the name of human rights in the Ecuador case. Our most valuable asset – our credibility – is at stake. We ought not, by default or simply for lack of time, to acquiesce in a frontal assault on due process of law – even against the rich and powerful.”

    As you are doubtless also aware, there is a movement to persuade powerful corporations to accept their responsibilities under the Ruggie Guidelines to do due diligence to respect human rights.  This creates an opportunity for constructive dialogue with companies like Chevron.  To the extent, however, that they believe that human rights lawyers do not really mean what we say when we advocate human rights, and that we pick and choose our preferred human rights, based on the interests of our clients, they are not likely to take us seriously, and the dialogue, if it takes place at all, will be hollow.

    This does not mean that constructive dialogue is the only path to greater corporate human rights responsibility.  Another path is litigation.  But as a matter of principle, lawyers professing to respect human rights should conduct that litigation in a manner consistent with human rights principles of fair trial and due process.  I invite you to read my letter (to which my post linked), and then ask yourself: Did the plaintiffs’ lawyers in Ecuador conduct their trial in a manner consistent with human rights principles?  Or did they decide that the ends — helping their clients — justified the means — committing fraud?   

    Best wishes, Doug Cassel

     

  3. Professor Cassel, I am curious about your views (and Professor Heller’s views) about estoppel in the Lago Agrio case. Suppose the courts in Ecuador were not impartial. Do Texaco’s representations to the court in New York about the quality of the courts in Ecuador have any effect on the arguments available to Chevron now? There are lots of issues here and I don’t think the answer is clear–maybe the distinction between Chevron and Texaco matters here; maybe the distinction in the UFMJRA between lack of an impartial judiciary and fraud in the particular case at hand matters. But I wonder whether you’re sympathetic to the idea of estoppel in “boomerang litigations” like the Lago Agrio case.

  4. Are human rights applicable to non-humans, such as corporations? If so, why?

  5. Well, in some cases yes. The right to property under the European Convention on Human Rights protects legal as well as physical persons, for instance. I guess the policy is that respect for individual rights may in some cases be contingent on broader legal certainty in respect of corporations as well.

    I think the issue in this case is a bit different. Dr. Cassel’s point seems to be that corporations are entitled to due process in cases in which they are accused of human rights violations – and all the more so in a world in which we are increasingly trying to convince corporations to voluntarily sign on to corporate social responsibility-based voluntary human rights standards.

    I also think this is a grounded assertion, but one that is a bit hard to take at face value given the enormous factual advantage that corporations have had over the marginalized populations victimized by their behavior in the past. Everyone is having to come to terms very quickly with a world where the thumb on the scales of justice may in some cases be that of the plaintiffs not the corporate defendants. To the extent that the plaintiffs’ legal team in the Chevron-Ecuador case engaged in misconduct, this was probably essentially preemptive, in the sense that they may have assumed that the scales would be heavily tipped against them. As Nick Fromherz noted on my blog, this factor may explain misconduct but does not justify it:

    http://terra0nullius.wordpress.com/2012/03/30/an-inconvenient-forum-thoughts-on-the-chevron-ecuador-case/

    But the dilemma remains, in that many judicial systems (and not only in developing countries) apparently remain responsive to not-strictly-legal influences. As a result, there will always be mutually reinforcing temptations on both sides of such controversies to try to prevail through not-strictly-legal means. For what its worth, this state of affairs does seem to motivate the type of long term focus on voluntary compliance that Dr. Cassel espouses.

  6. The degree to which Doug Cassel is willing to uncritically parrot Chevron’s litigation positions — like the idea that it “never operated in Ecuador” — is simply astounding.

    In his reply Cassel, focuses on the fact that Texaco was not yet ChevronTexaco when SDNY Judge Rakoff re-ordered dismissal of the case in 2001.  But that decision then went up on appeal, where “ChevronTexaco, Inc.” briefed and argued to the Second Circuit and made the same promises. See here: http://chevrontoxico.com/assets/docs/2001-12-20-cvx-2d-circuit-brief.pdf

    Last year Chevron tried Cassel’s same argument in front of the Second Circuit and this is what it got in return:

    “[I]n seeking affirmance of the district court’s forum non conveniens dismissal, lawyers from ChevronTexaco appeared in this Court and reaffirmed the concessions that Texaco had made in order to secure dismissal of Plaintiffs’ complaint. In so doing, ChevronTexaco bound itself to those concessions. In 2005,  ChevronTexaco dropped the name “Texaco” and reverted to its original name, Chevron Corporation. There is no indication in the record before us that shortening its name had any effect on ChevronTexaco’s legal obligations. Chevron Corporation therefore remains accountable for the promises upon which we and the district court relied in dismissing Plaintiffs’ action.”

    Does Cassel really think this precedential language from the Second Circuit is irrelevant?  Or is he really just litigating this case on behalf of Chevron, as opposed to the pretense of quasi-academic inquiry he seems to be clocking his work in.

    At a very minimum, Cassel knows that Chevron’s liability for Texaco is a complex, multi-factoral legal issue that draws on the law (and choice of law) of successor liability and veil-piercing, which are well-established in Ecuadorian law.  Indeed, courts around the world, including dozens of U.S. courts in published opinions, have legitimately chosen to disregard alleged corporate separateness in circumstances that suggest a lack of genuinely distinct personalities, an abuse of or disconnect from the purposes of limited liability (such as treatment of a known liability as opposed to a potential future one), or circumstances where crediting separateness would work a manifest injustice on third-parties, such as, specifically in many cases, environmental tort creditors.  Cassel fails to mention that the Ecuadorian judgment he claims to be familiar with addressed these issues in over 25 single-spaced pages of analysis.

    Cassel knows that a world where all corporate liabilities could be effectively extinguished through corporate reorganizations and transactions would be a terrible one for the human rights practice and victims around the world.  Yet he so readily adopts the twisted, self-serving positions of corporate defense that would make this world come to pass. Simply astounding.
    As for the fraud allegations, we deny each and every one of them and have denied them numerous times in legal briefs and press statements.

    Karen Hinton, US spokesperson for the Ecuadorians

  7. “many judicial systems (and not only in developing countries) apparently remain responsive to not-strictly-legal influences” – this is clearly an understatement, of course ALL judicial systems are responsive to influences of all kinds, starting from the US Supreme Court to the UK (former) House of Lords and all others. The point is rather which aims to they pursue while being responsive to these influences, how they maintain fairness and consistency, and whether they are considered “fair” by the majority of their “clients”.

  8. Just briefly in response to Guy, I fully agree that the inputs and outputs of national judicial systems incorporate a range of influences that may be legitimate even where they are not strictly ‘legal’. But I also think this may pose an inherent challenge (of a greater or lesser degree depending on context) to achieving the legal certainty interest you mention, and particularly in cases involving transnational controversies. From this perspective, if there is an effective way of preempting such controversies by encouraging ex ante compliance with voluntary standards, more is the better. Not that CSR approaches are entirely unproblematic, of course…

  9. Karen Hinton is correct about what the Second Circuit said, but she misunderstands what I said.  I responded to Heller’s contention — which repeats what her (public relations) clients have said — namely that “Chevron” filed the motion and the 14 affidavits, when in fact Texaco did so.  The fact that the decision was later upheld on appeal is quite a different matter.  Chevron inherited a position already taken by its predecessor company, a decision already made by the district court, and an appeal already filed.  To have reversed its position on appeal would have been passing strange. 

    More important, there was no need for Chevron to reverse course, because Texaco had the prudence to reserve the right to challenge a fraudulent judgment. Ms. Hinton correctly states that plaintiffs publicly deny fraud in their briefs and press statements.  But in their internal emails and other documents, now revealed in discovery, they privately tell a different story.  I invite interested readers to read their “lengthy” reply to me, and mine to theirs (both referenced in the post) and to draw their own conclusions.

  10. Ms. Hinton writes “as for the fraud allegations, we deny each and every one of them …. ”  Unfortunately for her and for Donziger, Fajardo, the Amazon Defense Coalition and et al, at least eight different U.S. District Court Judges have already concluded that Chevron has prima facie shown fraud by them.  Do we really think all eight of them are wrong?

    “… what has blatantly occurred in this matter would in fact be considered fraud by any court.” Chevron Corp. v. Champ, Nos. 1:10-mc-27, 1:10-mc-28, 2010 U.S. Dist. LEXIS97440, at *16 (W.D.N.C. Aug. 30, 2010).

    “Seven federal courts have made crime-fraud findings over Defendants’ conduct, vitiating their privilege claims.  See, e.g., Chevron Corp. v. The Weinberg Group, No. 11-mc-00409-JMF, slip op. at 8 (D.D.C. Sept. 8, 2011) (granting Chevron’s motion to compel LAPs’consultant, the Weinberg Group, to produce documents responsive to Chevron’s subpoena because the Weinberg Group’s assertions of work product protection were trumped by the crime-fraud exception); Chevron Corp. v. Page, No. RWT-11-1942, Oral Arg. Tr. at 10:17-21, 11:13-23 (D. Md. Aug. 31, 2011) (granting Chevron’s motion to compel LAPs’ legal team member, Aaron Marr Page, to produce documents responsive to Chevron’s subpoena and finding any asserted privilege was vitiated as actions undertaken by LAPs’ legal team fell under the crime-fraud exception); In re Application of Chevron Corp., No. 10-cv-1146-IEG(WMC), 2010 WL 3584520, at *6 (S.D. Cal. Sept. 10, 2010) (affirming the magistrate’s order granting Chevron’s application for discovery from LAPs’ consultant, E-Tech, waiving work product doctrine, and finding “ample evidence” that the crime-fraud exception applied); In re Chevron Corp., Nos. 1:10-mc-00021-22, slip op. at 3-4 (D.N.M. Sept. 2, 2010) (ordering LAPs’ consultant, E-Tech, to produce documents for which attorney-client privilege had been asserted because they triggered the crime-fraud exception); Chevron Corp. v. Salazar, No. 11-civ-3718, 2011 WL 3424486, at *3 (S.D.N.Y. Aug. 3, 2011) (granting Chevron’s motion to compel LAPs’ legal team members, Laura Garr, Andrew Woods, Joseph Kohn, and Kohn, Swift, & Graf, P.C., to produce documents responsive to Chevron’s subpoenas and upon which they asserted attorney-client privilege and the work product doctrine); Chevron Corp. v. Champ, Nos. 1:10-mc-27, 1:10-mc-28, 2010 WL 3418394, at *6 (W.D.N.C. Aug. 30, 2010) (granting Chevron’s application for discovery and ordering all responsive documents be produced because the crime-fraud exception vitiated any applicable privilege or work product protection); accord In re Application of Chevron Corp., 633 F.3d 153, 166 (3d Cir. 2011) (vacating court below on other grounds but noting, “we believe that this showing . . . is sufficient to make a prima facie showing of a fraud that satisfies the first element of the showing necessary to apply the crime-fraud exception to the attorney-client privilege”).”

    DECLARATION, Case 1:11-cv-00691-LAK, Document 400, Filed 03/02/12, pages 1-2 (footnotes not included)
     
    See also Chevron v. Donziger, 768 F. Supp. 2d 581, 636 (S.D.N.Y. 2011), rev’d on other grounds, 303 F.3d 470 (2d Cir. 2012)(footnotes not included)(emphasis supplied)

    “Chevron thus is likely to prevail on its contention that the Ecuadorian judgment in this case “was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law,” at least in cases of this sort.
    ….

    There is ample evidence of fraud in the Ecuadorian proceedings. The LAPs, through their counsel, submitted forged expert reports in the name of Dr. Calmbacher.  Their counsel orchestrated a scheme in which Stratus ghost-wrote much or all of Cabrera’s supposedly independent damages assessment without, as far as the record discloses, notifying the Ecuadorian court of its involvement.  They submitted comments of Stratus, bolstering the Cabrera report, but without disclosing Stratus’s prior participation.  Despite the apparent relationship between the LAPs and Cabrera, both parties repeatedly misrepresented to the Ecuadorian court that there was no relationship or any form of inappropriate contact that might prejudice Chevron in the proceedings.

    When it became evident that the LAPs’ improper contacts with Cabrera, including the pre-appointment meetings, ghost-writing, and illicit payments, would be revealed through the Section 1782 proceedings, LAP representatives undertook a scheme to “cleanse” the Cabrera report. They hired new consultants who, without visiting Ecuador or conducting new site inspections and relying heavily on the initial Cabrera report, submitted opinions that increased the damages assessment from $27 billion to $113 billion.”

  11. In response to Mr. Cassel’s comment, Chevron has cherry picked comments/video out of context, deleted or omitted sections of comments/video and, in one instance, incorrectly translated a comment that it presented frequently in U.S. courts as evidence of fraud.

    See this link that gives a more complete picture about Chevron’s charges:

    http://chevrontoxico.com/news-and-multimedia/what-chevron-does-not-want-you-to-see.html 

    I am sure if Mr. Cassel were to release every email and every memo he has written in the past 19 years — both personal and professional — he would want the people reading these documents to see the entire document, not just a few words or sentences. He would want them to see what was written before and after an email.

    If the court is corrupt and the judgment fixed, then why did the judiciary take nine years to render a decision? That’s a long time to fake a trial and a lot of unnecessary trouble.

    Bottom line is this: Mr. Cassel is being used by Chevron to discredit people, some of whom have toiled for 19 years litigating against Texaco and now Chevron. Chevron thought the Ecuadorians and their lawyers would tire and go away. They didn’t. So now it’s panic time, and Chevron is forced to buy some credibility. 

    Mr. Cassel isn’t the only person or group Chevron has approached to clean up its image; he’s just the only one to agree to be the oil giant’s hired gun.

    Karen Hinton
    U.S. spokesperson for the Ecuadorians

  12. In response to the question from Ted Folkman, the estoppel claim has been rejected by both US and international tribunals, under both US and international law.  In an appeal filed jointly by Ecuador and the Aguinda plaintiffs, the US Court of Appeals for the 2nd Circuit ruled last year, “There is … no conflict between Texaco’s promises to the district court and Chevron’s … challenge to Ecuador’s conduct with respect to the [Ecuadorian] litigation.  Texaco expressly conditioned its promises on a reservation of its rights under New York’s Recognition of Foreign Country Money Judgments Act …  Chevron has thus reserved its right to challenge any judgment issued in [the Ecuador litigation] on the grounds that the Ecuadorian judicial system ‘does not provide impartial tribunals or procedures compatible with the requirements of due process of law,'[or]  that the judgment itself ‘was obtained by fraud,’ … ”  The Court went on to reject Ecuador’s and the plaintiffs’ claims of judicial estoppel, equitable estoppel and collateral estoppel.  Ecuador et al. v. Chevron, 638 F.3d 384, 396-97, 397-401 (2nd Cir. 2011). 

    Ecuador’s estoppel claim under international law was rejected by an arbitral tribunal in Chevron and Texaco v. Ecuador, Partial Award on the Merits, March 30, 2010, pp. 161-69, accessible at http://italaw.com/documents.  The tribunal noted that “from mid-2000 onwards” there were no unequivocal statements by Chevron or Texaco that the courts of Ecuador were fair, whereas “significant changes” affecting Ecuador’s judiciary took place in 2004.  Par. 349.

    For both reasons, then — Texaco’s reservation of its right to challenge a fraudulent judgment, and the significant deterioration of Ecuador’s judiciary after 2004 — the estoppel claims have been authoritatively (and in my opinion deservedly) rejected.  I am not aware of any court that has accepted them, despite the able counsel (Winston & Strawn) who presented the estoppel claims in both cases.

  13. In further reply to Ted Folkman, I should add that the Second Circuit left open the possibility of future litigation on the estoppel issue, in the event Chevron were to challenge the Ecuadorian judgment on grounds other than those reserved by Texaco.  But as noted earlier, Texaco’s reservation leaves Chevron ample grounds to challenge the judgment.  It certainly covers all the grounds on which I challenge the judgment.

  14. Mr./Ms. Observer, why don’t you identify yourself as an employee or paid consultant to Chevron or Gibson Dunn, as I have done as a spokesperson for the Ecuadorians?

    In some of the 30 plus discovery proceedings in the 16 or so court jurisdictions across the country where Chevron attacked the Ecuadorians, we did not always have an attorney to represent us because we could not afford one at that time or did not have time to identify one. In other proceedings, we were not allowed to defend ourselves.

    When we did have an attorney present and were allowed to address the court, U.S. federal judges had this to say about Chevron’s charges:

    Judge Fortunato P. Benevides, a member of the Fifth U.S. Circuit Court of Appeals, said that Chevron used “hyperbole” and was “throw(ing) these words like massive fraud” in its allegations that the plaintiffs “colluded” with a court-appointed expert.
    Judge Benevides said that “in the system that they (Ecuadorians) have, they have an inquisitorial system, and they gather evidence. They–they gather evidence from different folks. I mean, that’s just the way they operate, and then they–then they make their report, and the Court either adopts it or doesn’t. It’s not–it’s not the–it’s not the system—oral system that we have in the United States. I mean, the fact that things were turned over to [a court expert] doesn’t bother me at all. I think the question is was he supposed to report the documents… That’s all you’ve got. I mean, you can throw these words about massive fraud and, uh, all this hyperbole, but that’s–that’s what this case is about….. you’re making a mountain out of a molehill. This is a very simple case.

    Magistrate Judge Joe B. Brown said that what should be a limited proceeding is quickly “spiraling out of control.” Judge Brown ruled that the oil giant cannot “use” the U.S. federal court “to try a dispute that is pending in a foreign proceeding.”

    Judge Brown wrote that the discovery proceeding initiated by Chevron “is not an opportunity to put on a full trial” and ruled that “Chevron is not entitled to pierce the work-product protection…because it has not shown the ‘exceptional circumstances’ required” by the Federal Rules of Civil Procedure.

    Judge Brown noted “The case against Chevron is being heard in Ecuador at the request of the company after 30,000 Ecuadorians originally filed suit in U.S. federal court in 1993.“Chevron had the opportunity to litigate this matter in the United States and strongly opposed jurisdiction in favor of litigating in the Ecuadorian courts. While fraud on any court is a serious accusation that must be investigated, it is not within the power of this court to do so, any more than a court in Ecuador should be used to investigate fraud on this court.”

    In an appeal to the U.S. Court of Appeals for the Second Circuit, Judge Gerard E. Lynch referenced Chevron’s allegations that Ecuador’s judiciary is unfair or biased, saying “Well yes, you you…like the Ecuadorian Court when they were in the pockets of the oil companies and you don’t like them now that they’re in the pocket of a populist regime that doesn’t like your oil companies.”

    U.S. District Judge Marcia Crone asked a Chevron lawyer about the company’s effort to have the case transferred to Ecuador: “Weren’t you trying to circumvent the procedures of the Ecuadorian Court?….You’re not getting what you want there, so now you come to the United States and–where there’s more liberal discovery allowed perhaps than in Ecuador, and I–and I think that you, in the first place got a forum non conveniens dismissal from – – in the United States in favor of having procedures in Ecuador, and now maybe this is kind of what you bargained for.”

    And, then there are dozens of interesting comments by the Second Circuit judges who reversed Judge Kaplan’s preliminary injunction. See this link for the transcript of the hearing:
    http://chevrontoxico.com/assets/docs/2011-2nd-circuit-transcript.pdf

  15. Ah, Ms. Hinton, how quickly and conveniently you forget. Just about a month ago, I wrote on this very website:

    “12.  Before you ask, I have no affiliation with Texaco, Chevron, the oil biz, Chevron’s lawyers, Ecuador, the plaintiffs, etc., and I get no $$$  or other benefits from Chevron’s side of this mess (or any side, for that matter).  If you think I have neglected to deny some conflict relationship by artful choice of words, consider it denied as well.”

    And nice that you quote only from transcripts, not from opinions, and by judges properly testing propositions of counsel by means of hard questions.  You are posting on a website full of lawyers, Ms. Hinton – they know how to read judicial questioning in oral hearing transcripts. When the judges in question though better of the matter, after looking at the evidence, they made no similar comments in their later published opinions.  The Second Circuit reversed the SDNY preliminary injunction solely on the legal issue of whether the statute in question provided a basis for injunctive relief.

  16.  
    Re Chevron’s commitments to the Second Circuit, I wonder how Professor Cassel reconciles the idea that, in his words, Chevron “inherited” its predecessor Texaco’s legal position before the New York courts (and took full advantage of that position to obtain dismissal), but didn’t “inherit” a whit of Texaco’s liability in Ecuador?   If Texaco was truly such a bona fide independent entity just after the 2001 Chevron-Texaco merger, why didn’t Texaco, not “ChevronTexaco,” show up on the Second Circuit briefs?  Professor Cassel, your explanation about why Chevron didn’t reverse its position at that time may well be true, but is also legally insignificant: it did not reverse course but instead ratified the Texaco position, and, as the Second Circuit unequivocally held, it is now bound by that position.

    This goes to a larger point about all the “internal” material that Professor Cassel enjoys highlighting.  This material, as Karen Hinton notes above, is a tiny fraction of the avalanche of emails and video that Chevron (we say improperly) received, and if there was anything else we can be sure Chevron would be using it.  But while it may be fun to play with, the fact is that it is legally irrelevant.  This isn’t a game of who said what: this is a legal case built on facts.  For all the controversy about who thought what about the role of the expert Cabrera, for example, numerous Ecuadorian legal experts have now looked at the situation and testified that nothing in the Cabrera process was prohibited under the Ecuadorian law and procedure that both parties were operating under at the time, and Chevron’s attempt to portray the Cabrera process as improper has been rejected by both the Ecuadorian trial and appeals courts—courts far better positioned to answer questions of Ecuadorian law than any of the other courts and tribunals that Chevron has been so desperately inviting to party.  Ah, you say, but the Ecuadorian courts are corrupt, colluding, etc, and now we go down the rabbit hole of Chevron’s endless (and infinitely adaptable) conspiracy theories…

    To be frank, Professor Cassel, what you are doing is not arguing from “the facts,” but rather making insinuations and speculations from decontextualized snippets.  In your reply, you essentially mock the idea that context is important for understanding such snippets, but this “website full of lawyers” in particular will recognize how absurd that is.  Snippets can easily be distorted by an unscrupulous party even to the point of suggesting the opposite of their real truth.  Context is especially important when dealing, as here, with material that was translated from another language, or made by someone speaking a foreign tongue, or otherwise intertwined in the mixing of languages and legal, social, and political cultures that has characterized the Ecuador lawsuit from the beginning.

    Well, you say, come out with the context, put on your case in full!  But where are we now, the Honorable Court of Doug Cassel?  Though honestly I might prefer to litigate in front of you than some others out there, suppose I were to go through that whole process and prevail.  Would your decision be res judicata?  Or could Chevron simply hire another professor to play the game all over again?

    Which raises the question of why you consider it so urgent to hale us into your court at this time.  Chevron has presented its false narrative to numerous courts, including a demand of hundreds of millions of dollars from the plaintiffs’ representatives and the largely indigent plaintiffs themselves.  One consequence of such ongoing and future litigation, as this “website full of lawyers” will surely recognize, is that the plaintiffs’ hands are significantly tied behind their backs, even as you berate them for not answering you back in the minutest detail.  But why not simply wait for the judgments of courts with all the facts?  Why all the effort to rush everything to a judgment of public opinion?  It all seems reminiscent of the ugly spectable of a prosecutor selectively leaking damning information to allies in the press to goad the public into declaring guilt long before trial.  Surely this is not the kind of due process you intend to champion.

    Re estoppel, the Second Circuit in its March 2011 opinion did not dispositively “reject Ecuador’s and the plaintiffs’ claims of judicial estoppel, equitable estoppel and collateral estoppel,” but rather went out of its way to say that those claims were available to the plaintiffs if Chevron made any attempt to resist enforcement of the judgment on any ground not specified in New York’s recognition act:

    “A conflict may arise if the Ecuadorian courts do issue a final judgment, and the arbitrators subsequently enter an award that is inconsistent with that judgment. Any such conflict, should it arise, could be resolved in any resulting proceedings to enforce the judgment. In such a [enforcement] proceeding, Plaintiffs would be free to argue that Chevron is estopped from refusing to pay that judgment based solely on the force of its release claim.  New York’s Recognition of Foreign Country Money Judgments Act, which is the sole reserved route for Chevron to challenge any final judgment resulting from the Lago Agrio litigation, provides only limited ways to attack a judgment based on a prior agreement. . . . At this point, however, we need not address the merits of any such argument.”

    “To the extent it seeks to use any arbitral award obtained on grounds other than those reserved in its pledge to the district court to block enforcement of any final judgment Plaintiffs may obtain in the Ecuadorian courts, Plaintiffs’ claims of equitable estoppel, like their claims of judicial estoppel, can be raised and resolved at that time.”
     

  17. First, a question (or a statement seeking clarification or correction, if you like) for those who have pointed out that the 2d Circuit reversed the district court on other grounds and so didn’t disturb Judge Kaplan’s findings about fraud and so on. It’s true that the 2d Circuit reversed on a ground unrelated to the substance of the claims. But I don’t understand why people think it’s somehow significant that the 2d Circuit didn’t “disturb” Kaplan’s findings. Of course they didn’t. They had no reason even to consider those findings, because the entire legal predicate for the case was tossed. The 2d Circuit said, “Whatever the merits of Chevron’s complaints about the Ecuadorian courts, however, the procedural device it has chosen to present those claims is simply unavailable.” Thus the 2d Circuit has expressed no opinion, one way or the other, about the merits of Chevron’s claims. Vacating the injunction and ordering dismissal of the entire claim (i.e., the entire severed declaratory judgment claim) also seem to put to bed the notion that somehow Judge Kaplan’s findings, which ground and justify the vacated injunction, remain. I mean, it’s not like there would be any viable issue preclusion claim. So isn’t it a little misleading to wave around the “undisturbed findings” of Judge Kaplan?

    Second, I also thought it was funny that Hinton relied on questions or statements by judges at oral arguments as evidence of the federal courts totally rejecting Chevron’s claims. That was pretty weak sauce.

  18. I also don’t understand those who say that Cassel is somehow denying that Chevron inherited Texaco’s legal liabilities (whatever they turn out to be). Can someone point me to where Cassel actually does that?
     
    What Cassel seems to be disputing is the claim that Chevron has no grounds for objecting to the Ecuadorian judgment simply because of Texaco’s forum non conveniens argument. And he seems to be disputing that claim even on the assumption that Texaco’s litigation strategy (forum non conveniens etc.) binds Chevron. To see my point, suppose that there was no evidence whatsoever suggesting even the appearance of shadiness (fraud, non-independence in the judiciary, etc.) in the Ecuadorian system vis-a-vis this case, and suppose the Ecuadorian courts found against Chevron for, say, $1 billion, on the basis of a carefully reasoned and fully itemized assessment of damages. In that case, Cassel would, on the basis of his arguments spelled out in his letter and elsewhere, have to accept that Chevron was liable in that amount and bound to pay the judgment. But what makes the real case different from the hypothetical one is that there is some evidence suggesting the possibility of fraud and corruption surrounding this judgment. So it’s not a denial that Chevron took on the legal liability of Texaco, but rather a denial that Chevron ought to be  compelled to accept the Ecuadorian judgment, given the rule of law and due process issues.
     
    Or am I missing something?

  19. Responding to Observer, if you have no connections to Gibson Dunn or Chevron, then identify yourself. I assume, though, you are a lawyer given that you subtly question my right to post here as a non-lawyer.  To Observer and Anonsters, I will post “opinion” comments Saturday, but right now I am going to play Monopoly with my daughter.

  20. Karen Hinton:
     
    Daww, that just made me instantly like you. Why can’t everyone just get along?

  21. Hello Anonsters,

    You are right that the findings by Judge Kaplan of a substantial likelihood of success on the merits, etc., no longer remain in legal effect.  But referring to those rulings is “misleading” only if I was trying to imply to you and other readers that Judge Kaplan’s findings do in fact continue to have legal consequences.  

    I was not.  My purpose in citing Judge Kaplan and the other 7 District Courts was instead to show that 8 independent and impartial judges have looked at the evidence in adversarial proceedings and, after doing so, have concluded that Chevron has shown at least a prima facie case of fraud by Donziger, Fajardo, et al.  So, Ms. Hinton’s denial  of the fraud claims can be tested – and has failed the test so far on 8 separate occasions before different US District Courts.  

    Additionally, three international arbitrators, including the arbitrator appointed by Ecuador, have on three occasions now ordered Ecuador to not assist in enforcement of the  USD$18 billion judgment.  Those arbitrators have not spoken to the question of success on the denial of justice claim before them – the legal standard for provisional measures they employed did not require them to do so.  But it is hard to imagine that they would have issued those orders unless they were seriously concerned about what happened in the Ecuadorian court.  

    As we try to judge for ourselves whether the Ecuadorian judgment was fraudulently procured, that point should be significant for all of us even if the legal consequence of one of those 8 US court rulings, Judge Kaplan’s issuance of a preliminary injunction, has been overturned for other reasons.  A lot of US courts, including but by no means limited to Kaplan’s, have looked at the evidence and smell fraud.  The international arbitrators decided that enforcement of the Ecuador judgment should be halted.  I find that a lot more persuasive than Ms. Hinton’s character assassinations and overheated PR rhetoric.  

    Magistrate Judge Howell said it most clearly: “what has blatantly occurred in this matter would in fact be considered fraud by any court.”

    My apologies that I was not clear the first time.

  22. But she absolutely should play Monopoly with her daughter instead of spending time on this stuff.  Much better idea.

    Goodnight all.

  23. Thanks for your answers…stepping back a bit, I truly wonder why – when faced with (alleged) harm to the health and life of thousands of people on the one side and (alleged) harm to the financial interests of a corporation on the other – the law as it stands today has some problems in identifying the “person” deserving stronger protection. I think we all agree that – whatever the solution in this specific case – the law ought to change…

  24. I reply here to the comment by Aaron Page, one of the lawyers for plaintiffs in the Ecuador litigation, but not one accused of fraud in my letter.  (I will reply separately to the inquiries by anonster and Guy.)

    First, Page is correct that the 2nd circuit left open the possibility of future litigation on estoppel, in the event Chevron were to go beyond Texaco’s reservation of rights under the New York statute.  I had already made that point in a comment on this page, but perhaps Page had not seen it.

    Second, I have never suggested that Chevron did not inherit whatever liability — as well as whatever defenses — Texaco might have had.  As I pointed out in my letter, I cannot tell what that liability (if any) might be, because there has been no fair trial.  What is clear is that Texaco’s (and now Chevron’s) defenses against enforcement of the judgment — fraud and violations of due process and impartiality (among others) — are established by evidence that includes plaintiffs’ own words in their documentary outtakes, emails and Donziger’s deposition. 

    Page’s excuse that inculpatory admissions by his co-counsel are only “decontextualized snippets” does not go very far to explain emails among plaintiffs’ attorneys admitting that if their correspondence becomes public, “all of us, your attorneys, might go to jail.” 

    Nor does it excuse what plaintiffs themselves called their “secret account,” from which they made illicit payments to the court’s supposedly impartial expert, including $10,000 paid to “calm him down”  long after his “report” (actually written by plaintiffs’ lawyers and consultants) was turned in to the court.  Nor does it excuse ghost writing his report (in English, no less, a language he does not speak, which then had to be translated for him), all the while claiming in public that he was an “impartial” expert for the court, rather than plaintiffs’ partner in fraud.

    And if all this was so proper under Ecuadorian law, then why did plaintiffs’ lawyers try to cover it up with emails reporting (decoded in the brackets): “Today the cook [the Judge] met with the waiter [the supposedly independent expert] to coordinate the menu [the plan for the allegedly neutral expert’s report] at the restaurant [the Court].”

    I could go on.  Citations to specific emails by plaintiffs (and other evidence,) for all this and more, can be found in my letter linked in the post.   No fairminded lawyer could review all the evidence about the trial and the “judgment” without reaching the same conclusion as have multiple federal courts: this was a fraud.

    The suggestion that Ecuadorian appellate courts have blessed this fraud shows only how far and how low Page must look to defend the indefensible.  As my letter details, any Ecuadorian judge who would dare to upset what President Correa calls “the most important judgment in the history of the country” had better start looking for new employment.   

    Finally, Mr. Page, you are not in “my court.”  In pages like this one, you are in the court of public opinion.  Readers, not I, will be the judges. 

  25. One of Chevron’s King & Spalding lawyers, Doak Bishop, said recently that “[t]he plaintiffs are really irrelevant. They always were irrelevant. There were never any real parties in interest in this case… There will be no prejudice to [the rainforest communities] or any individual by holding up enforcement of the judgment.” A clearer statement of Chevron’s arrogance and callousness toward the thousands of lives it has destroyed is difficult to imagine. Something to remember the next time Chevron talks about plaintiff “fraud.”

  26. KJH:
     
    That was pretty silly even by your standards. That Chevron is a giant corporate soulless dick condemnable in the eyes of God and man doesn’t mean that any claim they make about fraud, when they provide evidence tending to support the claim, is false. It would be like conservatives dropping by and saying, “Well, Kevin Jon Heller is an asshole on his blog at times, so keep that in mind the next time he tries to get you to empathize with someone.” Doesn’t work, either way. The claims stand or fall on their own merits (as weighed against the evidence). Personally, I have no stake in any of this. I’m not even practicing at the moment. But what I’ve read has convinced me that Chevron at least has a prima facie case and should indeed be allowed to pursue its case through discovery and so on.
     
    Doug Cassel:
     
    (Best given name ever, btw. Just saying.) You said:
    Page’s excuse that inculpatory admissions by his co-counsel are only ”decontextualized snippets” does not go very far to explain emails among plaintiffs’ attorneys admitting that if their correspondence becomes public, “all of us, your attorneys, might go to jail.” 

    That’s a statement you repeatedly invoke to make your point, but it seems to me that that’s one of the least convincing ones to quote given its context. I think it’s quite plausible to read that quote, in the context of the rest of the e-mail, as saying, basically, “Look, if all this stuff becomes public, we might go to jail, because we don’t have the kinds of protections from arbitrary or abusive government action that you have up there in Denver, CO.” The implication, then, is that if they did live in such a country, releasing their e-mail wouldn’t include a threat of jail. Of course, that explanation itself would tend to undermine their claim that everyone can trust a judgment of the Ecuadorian court system, but at least it wouldn’t represent a bald confession of jail-worthy wrongdoing by the lawyers.

  27. In reply to anonster’s comments:

    About the legal status of Judge Kaplan’s findings of fact in view of the reversal of his injunction: my point about the court of appeals’ not disturbing his findings of fact was directed, not to the continuing legal effect of his findings, but to plaintiffs’ ongoing campaign to discredit Judge Kaplan.  You are correct that the court of appeals had no need to address his findings of fact, since they reversed on legal grounds.  But plaintiffs also asked the court of appeals to remove Judge Kaplan from the case.  Not only did the court of appeals decline to remove him, it expressly stated that the issues of fact could come before “the district court” again.  So plaintiffs’ effort to use the court of appeals’ reversal on legal grounds as a way to discredit Judge Kaplan’s findings of fact is not well taken.

    As to the current legal status of his findings of fact, I am not up enough on collateral estoppel to know whether his findings would still have collateral estoppel effect in a future case.  Perhaps a civil procedure expert could advise us on that.

    In regard to plaintiffs’ counsel’s email, stating that “all of us, your attorneys, might go to jail,” I respect your effort to explore possible innocent interpretations of that statement, as a good judge should do.  However, I do not believe that your alternative reading, which hypothesizes that plaintiffs’ lawyers feared being jailed in Ecuador, for lack of protection from “arbitrary or abusive government action,” fits the facts.   That email was sent in March 2010, at a time when plaintiffs’ lawyers had already publicly enjoyed the government’s “full support,” in the words of President Correa, since 2007.  Plaintiffs’ representatives who met with Correa in 2007 emailed afterward that he had even privately said he would “call the judge.”  In 2008 Correa publicly called plaintiffs’ lawyers “real heroes.”  In 2011, when their “judgment” came out, Correa hailed it as the “most important judgment in the history of the country.” (All the cites are in my letter linked in the post.) 

    So I don’t think plaintiffs’ lawyers had any reason to fear arbitrary action against them in Ecuador.  Quite the contrary: they had every reason to expect impunity — which is in fact what they have received to date in Ecuador.

    The correct interpretation, it seems to me, is that the email (written for internal, and hence presumably candid, consumption by the legal team) meant what it said: plaintiffs’ lawyers were concerned that their conduct, hitherto concealed but now about to be revealed, was at least arguably criminal, such that they had good reason to fear possible criminal prosecution.

    Finally, although I am not the monitor of this web site,  I encourage you to consider different word choices in future comments.

  28. In response to Guy’s most recent comment above:

    The issue I am raising is not the balance between, as you say, “(alleged) harm” to health and life on the one side, and “(alleged) harm to the financial interests of a corporation on the other.”  While Chevron’s financial interests are of course a priority concern for the company, my concerns are different.  Two sets of human rights values are in play here: the right to redress, on the one hand, and the right to fair trial and due process, on the other.  Human rights lawyers do not insist on due process in order to exalt procedural over substantive rights; we respect due process of law because experience teaches that, without fair and honest courts, all other rights are at risk.  The task of human rights lawyers is not to choose between redress and due process, or to balance one against the other, but to ensure that our own conduct, at least, respects both sets of rights.  This can and must be done.  It was not done in the Ecuador trial.

  29. Yes we are in the court of public opinion, as we have been from the beginning, but at this moment it is you who are urging the entire human rights community to  reject the entire Ecuador case on the basis of snippets, selected by Chevron from an unprecedented haul of documents and stitched together by a team of several hundred lawyers working tens of thousands of hours.  Why not wait until you have heard the other side in the form of a full and proper defense (i.e., not a court looking for a prima facie or even likelihood of success showing)?  Why are you, repeatedly, urging public condemnation now on limited facts and how is that consistent with your value of due process? 

  30. Again, I am puzzled that procedural due process is simply assumed to be the same for human beings and for corporations – in my view, your appropriate concerns for due process in Latin America would be better shown and demonstrated by fighting against impunity for – say – human rights violations against desaparecidos, illegal expropriations of small farmers, and lack of land reforms mandated by the various constitutions (Brazil in primis). But I understand your point, am not criticising you for this specific choice of defending the “human” (?) rights of corporations -I just wonder about the assumptions you all seem to be operating under.

  31. Aaron Page asks (1) why do I now urge condemnation of the Ecuadorian “judgment” (my quotes, not his) and (2) “why not wait” for a “full and proper defense” of the judgment, in order to be consistent with due process values?

    On timing, as I have said repeatedly, I think this case should settle, and settle soon.  Delay would divert even more resources — potentially immense resources — to litigation in multiple fora, because plaintiffs’ lawyers have announced their plan to shop their judgment around to different countries where Chevron has assets, in an effort to execute on the judgment. 

    As summarized in my letter, which reviews both plaintiffs’ and Chevron’s evidence, I do not believe that the case for Chevron’s liability has been made.  But whether or not Texaco or Chevron is liable for anything in the Amazon, I would rather see the enormous sums that are about to be gobbled up by legal fees devoted to human needs in Ecuador.  A settlement could accomplish that, and quickly.

    As for due process values, plaintiffs have had ample notice of my concerns and ample opportunity to reply, and they have in fact replied (at length).

    As for what Page calls “limited facts,” I have reviewed thousands of pages of materials related to this case (including the 188 page “judgment”).  I have read plaintiffs’ reply to my Open Letter and the materials they cite therein.  I have also read numerous press releases by plaintiffs, going back years, and the legal documents they cited.  Nothing I have read causes me to doubt two basic conclusions: (1) the Ecuadorian proceeding was fraudulent, and (2) the evidence does not support plaintiffs’ legal team’s claim of a current, public health “catastrophe.”

    That said, if Mr. Page thinks it could be useful, I would be happy to meet with him for a further exchange of views.
     

Trackbacks and Pingbacks

  1. […] a further comment on litigation over oil extraction-related damages in Bolivia by Chevron-associated law professor […]

  2. […] representative, and Aaron Page, one of their lawyers, and a lengthy memorandum. Of particular note: A recent post, with comments, at Opinio Juris, in which Cassel, Hinton, and Page participated, Cassel’s open letter to the human rights […]