What do you call an operation in which the lead lawyer in a multi-billion dollar lawsuit talks about threatening judges, an environmental activist worries about a cameraman recording plans to subvert justice, a supposed independent court expert submits a report written for him by plaintiffs, documents are forged, ex parte meetings engaged in with government officials, and the skullduggery emerges only because a documentary filmaker let the lawyers dictate his “art?” Well, it’s a racket, sure. Corrupt? Claro.

Since Chevron was the subject of this corrupt scheme under the guise of a lawsuit claiming environmental damage in Ecuador, it’s comes as no surprise that the company has now filed a RICO lawsuit against the lawyers, activists and various hangers-on involved in the shakedown. (UPDATE: Here’s Chevron’s filing in the Southern District of New York.)

Courthouse News Service reports the news, “Chevron Levels RICO Charges Over $113B Trial in Ecuador,” with the suit naming Steven Donziger, the New York trial lawyer who masterminded the scheme, as the lead defendant in the 214-page suit.

Other defendants include the Amazon Defense Front and Stratus Consulting. Alleged co-conspirators who are not named as defendants include Joseph Kohn and his firm Kohn, Swift & Graf; the law firm Emery Celli Brinckerhoff & Abady; the firm Motley Rice; the firm Patton Boggs; and spokeswoman Karen Hinton.

Courthouse News Service quotes from Chevron’s complaint:

Over the course of several years, defendants Steven Donziger and his co-defendants and co-conspirators have sought to extort, defraud, and otherwise tortiously injure plaintiff Chevron by means of a plan they conceived and substantially executed in the United States. The enterprise’s ultimate aim is to create enough pressure on Chevron in the United States to extort it into paying to stop the campaign against it. (continue reading…)

Thank goodness for “Crude,” the documentary-style film that followed the litigation and PR campaign against Chevron. Thanks to the cameramen and their cameras, we learn that the $27 billion — and then $113 billion — lawsuit orchestrated by U.S. trial lawyers isn’t about cleaning up the environment in Ecuador, justice for Amazonians, or punishing rapacious corporations. No, it’s all about “the business of the plaintiffs’ law, to make f****** money.”

That’s the revealing quote from Steven Donziger, the trial lawyer whose frank admissions on outtakes from “Crude” have shown the litigation to be a naked shakedown of a deep-pockets U.S. company. You can watch Donziger utter the uncensored remarks in the clip below, shot after a plaintiffs’ group exited the offices of The San Francisco Chronicle in April 2007.

Excerpts:

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Ever since Shopfloor began blogging about the Ecuador-based litigation against Chevron in May 2007, we’ve argued that the lawsuit was a blatant shakedown by U.S. trial lawyers. In claiming Chevron owed $27 billlion — and then $113 billion — for environmental damage from Texaco’s oil drilling in the Amazon, the U.S. attorneys and Lago Agrio plaintiffs in Ecuador were really trying to pressure Chevron (which had bought Texaco in 2001) into a huge settlement. The bigger the settlement, the bigger the check for the U.S. lawyers being paid on a contingency basis.

Their preposterous claims relied not on facts or the law, but rather a multifaceted and ugly public relations and political campaign. At work was a combine of U.S. trial lawyers, environmental activists and anti-corporate bloggers, magnifying their accusations through a sympathetic mainstream media. The shakedown campaign recorded several PR victories, including a  “60 Minutes” hit piece against Chevron and most notably a full-length, overwhelmingly pro-plaintiffs’ film, “Crude,” by well-known documentarian Joe Berlinger.

In Ecuador the plaintiffs’ team manipulated the court system and made common cause with the leftist, anti-American regime of President Rafael Correa. (More on that in a later post.)

The response to our arguments? Chevron lies, America exploits the Third World, Ecuadorians are dying and you’re an inhumane corporate shill.

Now, thanks to outtakes from “Crude” that Chevron successfully obtained through the U.S. courts,  the trial lawyer/activist/media combine can no longer pretend any sort of moral high ground. Footage reveals Steven Donziger, the lead U.S. attorney who has directed the anti-Chevron campaign in Ecuador and the United States,  to be a cynical, arrogant and foul-mouthed commentator. And, unfortunately for the plaintiffs’ case, Donziger is remarkably frank.

Take for example, this video below. At a June 6, 2007, meeting Donziger outlined the plaintiffs’ strategy to intimidate the Ecuadorian courts through the show of brute force. [Warning: Language]

Excerpts:

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Steven Donziger, the U.S. trial lawyer who has directed the infamous $113 billion litigation shakedown against Chevron, is scheduled to appear in court in the Southern District of New York.  Donziger, who could make millions in a successful lawsuit against Chevron, is being held accountable by the U.S. judicial system.

Last week Judge Lewis Kaplan ordered Donziger to appear today with all the documents sought by Chevron so the company can defend itself from the accusations that its predecessor company, Texaco, left environmental damage behind after operations in Ecuador. (Updated and revised: The court hearing is at 2 p.m.)

Do we detect a level of judicial frustration in Kaplan’s order? Consider the judge’s hand-written note, which reads:

“ORDERED that this order shall not be construed* to imply that Donziger is not already in violation of a previous order that required the production forthwith of all documents responsive to the subpoena.”

Revelations from outtakes from the documentary-style film about the litigation, “Crude,” have already revealed Donziger and his team of activists to be manipulating the Ecuadorian judicial system, orchestrating bogus expert reports, and mounting a cynical, arrogant and dishonest public relations campaign to bludgeon Chevron into a settlement.

Kaplan has rebuffed Donziger’s claims that the New York trial lawyer’s actions in Ecuador are protected by attorney-client privilege  — he’s really running a political/PR operation   — and so must answer Chevron’s questions and provide documents sought by the company.

Chevron’s memorandum of law in support of its motion to require Donziger to produce documents does an excellent job of summarizing the games the U.S. trial attorney has played to avoid accountability, including appeals to the Second Circuit. After numerous delays, Donziger submitted a “privilege log” more than 2,000 pages long to claim he did not have to produce 8,562 documents.

Everything’s off limits! As Chevron’s attorneys from Gibson Dunn note: “Donziger even claims that communications with rock musician Sting’s wife, Trudie Styler, who appears with Donziger in the movie, Crude, as a celebrity touring the Rainforest, are somehow privileged.” (continue reading…)

Congratulations to Corporate Counsel for being the first media outlet to post the videos of the outtakes from the documentary-style movie “Crude” that have revealed the trial lawyer/activist lawsuit against Chevron for environmental damage in Ecuador to at its core a multi-billion-dollar shakedown against the U.S. company.

The magazine’s sister publication, The American Lawyer, obtained copies of the outtakes from the U.S. District Court, Southern District of New York, after Judge Lewis Kaplan ordered their release to the public.  Corporate Counsel has now posted the key videos with short summaries from Michael Goldhaber, the reporter who has provided the most thorough coverage of the court proceedings in New York.

From “EXCLUSIVE: Chevron In Ecuador — the Tapes the Plaintiffs Don’t Want You to See“:

In the final version of Crude — the 2009 Joel [sic] Berlinger documentary on the epic environmental suit brought by Amazon tribespeople against Chevron Corporation in Ecuador — lead U.S. plaintiffs’ attorney Steven Donziger remarks: “This is something you would never do in the United States, but Ecuador, you know, this is how the game is played, it’s dirty.”

If Donziger would say something so provocative for the final cut, reasoned Chevron’s lawyers at Gibson, Dunn & Crutcher, then just imagine how outrageous he must look in the extra footage.

Well, the public no longer needs to use its imagination.

As Goldhaber explains, Chevron views the first two outtakes (there are six total) as the most legally damning, showing the team of lawyers/activists orchestrating the supposedly independent court-appointed expert’s damage assessment.

• Video 1: “Plaintiffs’ lead Ecuadorian lawyer, Pablo Fajardo, gives a PowerPoint presentation to his team that envisions extensive coordination with the independent damages expert.” You mean the same Pablo Fajardo who won the ostensibly prestigious Goldman Environmental Prize in 2008?
• Video 2: “The day after the PowerPoint presentation where the Ecuadorian plaintiffs laid out their plan to coordinate with the court-appointed expert, one of plaintiffs’ consultants suggests that it was ‘bizarre’ that the meeting included ‘perito,’ which means ‘[the] expert.’” That expert is Richard Cabrera, who recommended the $27 billion damage figure.

The PR front group in the lawsuit, the Amazon Defense Coalition, claims that ex parte contacts are common in Ecuador. Sure, and no one worries that one side in the lawsuit gets to write the expert’s report and pick the damage figures.

Corporate Counsel is, of course, a special-interest publication, reaching an audience of mostly business attorneys. Now it’s up to all the major media outlets that have covered the litigation against Chevron — The New York Times and “60 Minutes” come mind — to follow-up and give these outtakes the attention they deserve.  Thomson/Reuters also requested copies of the videos from the U.S. District Court, so there’s a powerful media distribution system available.

Until then, good job, Corporate Counsel!

A follow-up to the Shopfloor post immediately below, “Judge’s Ruling on ‘Crude’ Shows that the Truth is in the Outtakes“…

In ruling that movie director Joe Berlinger had to submit to depositions so Chevron can fully defend itself in court, Judge Lewis Kaplan also rejected Berlinger’s attempt to punish the company because it had suppposedly violated an order from the Second Circuit when it used the film outtakes for public relations purposes.

Berlinger’s claim rested in part on the assertion that Chevron supplied one of its court filings to Shopfloor, the blog of the National Association of Manufacturers, and that I wrote about the document in this Aug. 3 post. See, PR! But the assertion wasn’t true — as we explained here — and even it were, so what? There’s this thing called the First Amendment.

Judge Kaplan did not treat Berlinger’s claims kindly. In his 28-page ruling, starting on page 24, he writes:

As an initial matter, there is irony in Berlinger’s application. On the one hand, he has resisted production of his outtakes, and resists the discovery that Chevron now seeks, by invoking the Free Press Clause of the First Amendment. Yet he seeks to prevent Chevron from publicly discussing litigation taking place on the public record. The First Amendment, however, protects Chevron’s right to speak about this litigation at least to the same, and probably to a greater, extent than it protects Berlinger’s desire to avoid giving evidence in court like any other citizen. But Berlinger’s cross-motion fails for reasons having nothing to do with the First Amendment.

Alas, First Amendment advocates and media mavens like Reporters Committee for Freedom of the Press appeared untroubled by Berlinger’s disregard for constitutionally protected liberties.

Judge Kaplan then provides a quick lesson on how federal courts use electronic filings, which make the documents public records, accessible by people like bloggers: (continue reading…)

A federal judge today dealt another setback to the trial lawyer/activist/media combine trying to shake down Chevron for alleged environmental damage in Ecuador. Judge Lewis Kaplan of the U.S. District Court, Southern District of New York, ruled that film director Joe Berlinger must provide additional evidence about the shooting of his documentary-style film, “Crude.” David Itzkoff of the Arts Beat blog at The New York Times covers the ruling, “Filmmaker Ordered to Give Testimony in Chevron Case“:

A federal judge in Manhattan ruled on Tuesday that a documentary filmmaker must submit to depositions in a case involving Chevron, writing in a strongly worded opinion that the oil company’s original request to see the filmmaker’s raw documentary footage was “no fishing expedition.”

In July a federal appeals court ruled that the filmmaker, Joe Berlinger, must turn over a portion of unused footage from his documentary “Crude” to Chevron, which said that the footage may be useful in its fight against a lawsuit in Ecuador.

Judge Kaplan’s 28-page ruling is here. He makes three points:

Berlinger’s suppression of the “Crude” outtakes tells you that despite all his claims about trying to make a fair movie, he was perfectly happy with being manipulated by Donziger and in turn with manipulating the audience, just as long as he had a compelling storyline. Didn’t matter if it was true or not.

But the truth matters when a U.S.-based business employing thousands of people is subject to a trial lawyer shakedown — $27 billion claimed in damages! —  and some of its employees are facing criminal charges in Ecuador.

In a Financial Post blog entry, “Turning the tables,” Silvia Santacruz, an Ecuadorian economist based in New York and the publisher of Ecuador Mining News.com, provides knowledgeable perspective about the trial lawyer/activist litigation against Chevron.  She also critiques the one-sided and misleading documentary-style film about the dispute, “Crude.” Companies usually try to buy peace in circumstances like these, Santacruz observes, funding NGOs in order to avoid a PR beating to their market capitalization. But…

[One] American firm — Chevron — is not only fearless of green campaigners’ tactics, it is giving them a taste of their own medicine. In the process, it may also highlight the problems with government ownership of natural resources, including eco-disasters, that environmentalist activists blithely ignore.

In this case, the government-owned operator is Petroecuador, which has continued to develop the Amazon region’s oil resources after ending its consortium with Texaco — later bought by Chevron — in 1992.  Santacruz, who recently traveled to the Lago Agrio region in Ecuador, reports the reality ignored by the activists, U.S. trial lawyers and, too often, the U.S. media who report on the litigation.

During my visit to the oil spills, I found some reforested sites, others being cleaned up, and just a few crude spills collected in pools. At one site, known as the “Presidential Well” after Correa gave a press conference there, I noticed that the pipelines were warm. Petroleum was being pumped, and the spill was recent — I threw a stone that sank instantly. I had no doubt: Petroecuador is currently operating there. So, how can Correa and environmentalists accuse Texaco of a “pollution 30 times greater than the Exxon-Mobil,” when the company left 20 years ago?

Recent data reveal that state-owned Petroecuador has caused 1,415 crude spills between 2000 and 2008, an average of one incident every other day. But environmentalists in Ecuador do not care about Petroecuador and continue to point fingers at Chevron instead. Astonishingly, my country’s ecological disaster does not make the green campaigners blink. State-owned companies’ pollution is simply not on their radar screen. They seem to care not so much about my country’s indigenous people as they do about Chevron’s pockets.

So that was actually Petroecuador oil that the actress Daryl Hannah stuck her hand into for all those anti-Chevron publicity photos. She seemed not to care so much about the country’s indigenous people as she did about her own self-promotion, but that’s Hollywood environmentalism for you.

Santacruz is an Ecuadorian, an economist, and a person with first-hand knowledge of the energy industry in developing countries. Her insights merit serious attention. Instead, we predict, the Amazon Defense Coalition will attack her motives and dream up some sort of nefarious connection. That’s SOP for the activists, who seem to care not so much about truth as they do about Chevron’s pockets.

Outtakes from the documentary-style movie “Crude” should leave no doubt that the campaign against Chevron instigated by U.S. trial lawyers has nothing to do with the law or justice, and everything to do with politics, PR and manipulating Ecuador’s judicial system.

Chevron has recently filed additional transcripts in federal court to support the company’s legal motions. Among the transcripts’ astonishing revelations:

• The U.S. trial lawyer leading the litigation, Steven Donziger, and the plaintiffs’ team discuss the need for “an army” of supporters to surround the courthouse in Lago Agrio, Ecuador, to pressure the judge hearing the lawsuit.
• The head of the supposedly independent group, Amazon Watch, worries that the cameraman recording the conversation is documenting an illegal conspiracy.

In July, Chevron successfully argued in federal court — the Southern District of New York and the Second Circuit Court of Appeals — that it had a legal right to review outtakes from the anti-Chevron film, “Crude.”  Both the plaintiffs suing the company for $27.4 billion — the Amazon Defense Coalition, ostensibly representing Ecuadorians harmed by oil drilling — and the movie’s director, Joe Berlinger, vigorously fought the motion.

No wonder: The outtakes show the litigation not to be the great moral cause that plaintiffs claim, but rather a cynical shake-down effort directed at the company because it’s American and it’s profitable. But that’s the nature of many of the lawsuits filed against U.S. companies that operate in poor countries.

As evidence, consider Chevron Document 22-4 (available   here Scribd version,), which documents portions of a June 6, 2007 conversation among Donziger, Luis Yanza (Ecuadorian coordinator for the plaintiffs) and Atossa Soltani, founder and director of Amazon Watch.

Most of the conversation is in Spanish, translated into English. (The transcripts include both languages.) The word “ejército” is translated as “army,” but it sounds more like a goon squad to us. Luis Yanza says at one point: “They would have to receive minimal training… things– details, so they do a good job for us. That’s it. And then, if it goes well, and we need, uh, if we need weapons, we can provide weapons.”

This is the same Luis Yanza awarded the Goldman Environmental Prize in 2008, including an award of $150,000, for organizing Amazonian Indians.
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The documentary evidence has been mounting for many months now that the U.S. trial lawyers’ litigation against Chevron for environmental damages in Ecuador was built on collusion, fraud and lies, all marketed as an environmental and humanitarian campaign.

This week’s revelations from outtakes from the documentary-style film “Crude” sealed the case. The collusion, fraud and lies are now on film, visible for the courts and the whole world to see.

So this next step makes eminent sense.

Chevron Files Petition in Ecuador Seeking Dismissal of Lawsuit

SAN RAMON, Calif., Aug. 6, 2010 – Chevron Corporation has today filed a petition before the Provincial Court of Sucumbíos in Lago Agrio, Ecuador seeking dismissal of the lawsuit pending against it there. In support of its petition, Chevron has submitted to the court video outtakes from the movie Crude that show the plaintiffs’ counsel, consultants, and associates meeting with the court’s supposedly neutral “Global Expert,” Richard Stalin Cabrera Vega, to plan and create the $27.3 billion damages report that Cabrera later would present to the court as his own.

Chevron believes that the video evidence proves that plaintiffs’ counsel and consultants colluded with Cabrera to present a fraudulent report and then to present a fraudulent “peer review” of their own work. Chevron also believes that the video proves that plaintiffs’ and Cabrera’s denials of their collusion in filings and testimony before the Ecuadorian court, before various United States courts and other institutions, and before the worldwide press have been false.

Chevron’s petition argues that the case must be dismissed as a sanction for the abusive misconduct by plaintiffs and their attorneys, and because the fraudulent “Global Expert” report submitted under Cabrera’s name is the only “evidence” supporting plaintiffs’ case.

Roger Alford of Pepperdine University School of Law has been reporting on Chevron’s court filing this week based on the “Crude” footage, including responses from Karen Hinton, the trial lawyers’ PR person, and an attorney for the Ecuadorian plaintiffs. His excellent posts are at the Opinio Juris blog here. But you cannot spin or explain away the clear meaning of the words of Steven Donziger, the head U.S. trial lawyer. As Alford writes:

In responding to concerns from their own experts that there was not evidence of groundwater contamination, Donziger replies, “This is all for the Court just a bunch of smoke and mirrors and bullshit.” (p. 12). That’s right, Donziger is caught on tape saying that the evidence he is gathering for inclusion in the court-appointed expert report about groundwater contamination is just smoke and mirrors and bullshit.

I would rarely advise our readers to read a court filing they don’t have to, especially during the summer recess. But this one is explosive.

Shopfloor posts:

• ‘Crude’ Footage Reveals Lies Behind Trial Lawyers’ Suit Against Chevron
• What Else Will Footage from ‘Crude’ Show?
• Chevron ‘Cherrypicks’ Film Footage? That’s Hilarious

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