Oil giant pursues a “scorched earth” campaign against its most dogged critic
Steven Donziger is getting smashed into the concrete like a spent cigarette butt.
Since Donziger is a lawyer — and lawyers aren’t always the most sympathetic of characters — you might be excused for not caring too much about his fate. There are other things to worry about, after all: accelerating climate change, the people suffering in the Philippines, the mass extinction of plants and animals. But if you care about the health of the planet, you should pay attention to Donziger’s plight, because it’s a test of whether and how citizens will be able to use the law to hold corporations accountable for their behavior.
The attempted crushing of Steven Donziger comes courtesy of Chevron, one of largest oil companies in the world. For 20 years, Donzinger and Chevron have been locked in a sort of legal cage fight that has leapt from courtrooms in New York City to the remote forests of the Ecuadorian Amazon and back again. For most of that time, Donzinger was the pursuer as he sought to compel Chevron to pay for the cleanup of an oil spill in the jungle and damages to nearby communities. Now the script has been flipped, and Donzinger is the one under trial as Chevron accuses the plaintiff attorney of waging a “campaign of deceit and distortion.”
As you can already tell, the litigation in this matter is byzantine, so I’ll try to keep the background to the basics. Between 1964 and 1990, the oil company Texaco and the state-owned Petroecuador dumped billions of gallons of toxic wastewater and millions of gallons of crude oil into the jungles around the town of Lago Agrio. In 1993, lawyers in the US (soon joined by a young Donziger, fresh out of Harvard Law School) brought a suit against Texaco in US court. When Chevron bought Texaco in 2001, the California-based oil giant became the defendant. Chevron continued Texaco’s legal strategy of trying to get the case moved to Ecuador, and in 2003 the dispute was taken up by a court in Quito.
The trial lasted years, as the case was moved from one judge to another and the discovery hearings ping-ponged between Lago Agrio and Quito. A 2009 documentary film, Crude, depicted in dramatic detail the efforts by Donziger and Ecuadorian attorney Pablo Fajardo to hold Chevron accountable for its alleged crimes. Finally, in 2011, an Ecuadorian court handed down a verdict: The rainforest villagers who had suffered from the spill were awarded an $18 billion judgment against Chevron. (Just this month, Ecuador’s highest court affirmed the ruling, though it reduced the damages award to $9.5 billion).
But on the eve of the Ecuadorian court’s 2011 verdict, Chevron launched a counterattack. It filed a suit in federal court in New York charging Donziger and the Ecuadorian villagers with engaging in a massive fraud in an attempt to extort billions of dollars from the oil giant.
The new case, Chevron v Donziger et. al., is now underway in a Manhattan courtroom; the trial started a month ago, and is expected to last through the end of November. Chevron claims, among other things, that Donziger and his colleagues ghost wrote an environmental damage report, blackmailed an Ecuadorian judge, and bribed another judge who allowed Donziger to write the $19 billion judgment against the company.
Naturally, Donziger denies those claims. “I reject those allegations totally,” he told me in a recent interview. “The expert report was completely valid and done in compliance with Ecuadorian court rules, and, in the end, the Ecuadorian court decided not to use it. Instead the court relied on more than 100 other technical reports. Now, the ghost writing of the judgment is completely preposterous. It wasn’t done. That’s part of Chevron’s need to manufacture evidence to avoid paying the judgment for their deliberate dumping.”
Photo by Scott Wong
Just to make the story messier, the judge who allegedly solicited a bribe in the case admitted in court last month that he has accepted hundreds of thousands of dollars from Chevron, as well as a car, a home, and health insurance while he and his family are in the US. It seems clear that none of the parties involved in the case have perfectly clean hands. (If you want to go deeper into the legal maze, you can find Chevron’s views and opinions here, and the Ecuadorian villagers’ views and opinions here.)
“It’s complicated, the facts are murky, and the ethics of everyone involved are abominable,” Naomi Roht-Arriaza, a professor at UC-Hastings Law School, told me. “Everybody seems to have played a horrible role.”
But the story here isn’t Donziger or his alleged malfeasance. The more important story, I think, is how Chevron has waged a no-holds-barred campaign to beat back its critics — a campaign that, regardless of whether it’s successful, could have a chilling effect on future litigation against corporations.
John Keker, a defense attorney who represented Donziger until the besieged lawyer could no longer pay his bills, describes Chevron’s efforts as “scorched-earth litigation.” Here’s how Keker explained Chevron’s legal tactics when he filed a motion to be dismissed from the case:
“Chevron is using its limitless resources to crush defendants and win this case through might rather than merit. There is no sign that Chevron wants a trial on the merits. Instead, it will continue its endless drumbeat of motions — for summary judgment, for attachment, to re-instate long-dismissed claims, for penetration of attorney client privilege, for contempt and case-ending sanctions, to compel discover already denied or deemed moot, etc., etc. — to have the case resolved in its favor without a trial. … Encouraged by this Court’s implacable hostility to Donziger, Chevron will file any motion, however meritless, in the hope the Court will use it to hurt Donziger. Dongizer does not have the resources to defend against Chevron’s motion strategy.”
American Law Professor Chris Gowen, who is part of Donziger's defense team, said in a news conference last month that Chevron has “a personal vendetta against Steven.” Gowen told reporters:
“I’m particularly appalled to see the way the Ecuadorians are being treated in this case. I don’t think I have ever seen a case in my life — and I’m a trial lawyer — where there is no legal basis to proceed. And to see them dragged through this lawsuit is an embarrassment to our legal system. … The legal basis for anything against the Ecuadorians was absurd.”
Gowen and Keker, of course, are clearly on Donziger’s side; you’d expect them to blast Chevron. But some independent observers also have expressed concern about Chevron’s legal tactics. Most worrisome is Chevron’s use of RICO — the Racketeer Influenced and Corrupt Organizations Act — against Dongizer. RICO is used most commonly to prosecute mafia figures. Some lawyers and legal scholars say that employing RICO against a plaintiff attorney could set a dangerous precedent.
Susan Bozorgi, a Miami-based criminal defense lawyer, told Newsweek that she worries about what it will mean if Chevron wins: “[RICO] was meant to be used against the mob. The danger about a case like this is that it could send a message to a lawyer who wants to take up a cause for an underdog that Big Brother, the big corporate entity, is going to start coming after you for criminal conduct.”
UC-Hastings law professor Roht-Arriaza said to me: “I’m not a RICO expert, but I don’t know of any case that involves the behavior of companies abroad, where the company has turned around and sued under RICO. Chevron has been sued before, but they haven’t done this, even when it looked like things weren’t going well for them.” She continued: “It’s interesting the number of levels on which Chevron is fighting back. They are not only doing this, they are also bringing all of these arbitration cases, basically trying to say that the Ecuadorian court shouldn’t have brought any judgment.”
It is interesting — especially when you consider that it’s unlikely Chevron will ever have to pay any damages, even though it lost the case. Chevron doesn’t have any assets in Ecuador that can be seized. And in 2011 a US judge — Judge Lewis Kaplan — ruled that the plaintiffs can’t enforce the judgment here in the US. That has forced Donzinger and the Ecuadorian villagers into a costly, country-by-country effort to try to enforce the judgment and receive some of the damages. (Judge Kaplan, it should be noted, is also presiding over the current case, which explains John Keker’s suspicion of the court.)
So, if Chevron has little to fear in terms of payment, then why is it pressing the case? Is this just revenge litigation, a personal destruction campaign waged via lawyers?
To me, at least, it does seem that way. Chevron comes across as a petroleum industry Tony Soprano, determined to crush all challengers by any means necessary — which would make its RICO civil suit the greatest demonstration of psychological projection since Freud coined the term.
“I think part of what Chevron may be trying to do, and you’d have to ask them, is make it more difficult for plaintiffs to get the kind of law firm support they need to make this [kind of litigation] happen,” Roht-Arriaza says.
I did ask Chevron. A company spokesperson, Justin Higgs, didn’t respond directly to my questions about why the company continues to pursue the case even though it is unlikely to pay damages, and instead just offered the company’s standard line. “[Chevron] is fighting [Donziger’s] actions because it has an obligation to its employees, retirees, and stockholders not to be defrauded out of billions of dollars and not to be unfairly maligned in the court of public opinion or in any court of law,” Higgs wrote to me in an email. “Chevron is seeking equitable relief from the fraud, including an injunction that would bar the RICO defendants from profiting from their fraudulent acts. … Scapegoating a large American company, while convenient, doesn’t deliver the solutions the people of the region deserve and certainly doesn’t serve their right to the truth.”
Of course, scapegoating is in the eye of the beholder. For his part, Donziger feels he’s the one being hounded. “They are trying to destroy my life,” he told me. “It’s improper, it’s illegal, and it’s unethical. They have hired people to follow me. They sued me for $60 billion, and then they dropped that down to $100 million, and then they dropped that because they are scared of having a jury trial. And now they are using a US federal judge, who I think is biased in their favor, and who is denying my due process rights.”
Then Donziger said, “There is an intimidation factor. The entire idea behind the entire RICO case is not to fight wrongdoers. It’s a weapon to intimidate their critics.”
If he’s right — and Chevron has spent all of this money just to intimidate people and prevent future litigation — then it leads us to a sobering conclusion: Even if the judge rules in Donziger’s favor, Chevron still wins.
This story has been corrected since its original posting.