Environmental lawyer who won a judgment against Chevron lost everything
theintercept.com
theintercept.com
>The evidence demonstrates that Chevron sent the funds in 2013 to the account of Max Gitter, a court-appointed Special Master who at the time was working as Senior Counsel at the high-profile corporate law firm Cleary Gottlieb. Gitter is a personal friend and former law partner of Lewis A. Kaplan, the controversial federal judge who presided over the Chevron “racketeering” (or RICO) case and who repeatedly has been accused of bias in favor of the oil giant in its multiyear attempt to try to taint a $9.5 billion environmental judgment against it handed down by Ecuadorian courts.
>Gitter and an associate were secretly billing Chevron a total of $1,330 per hour for their work sitting in weeks of depositions leading up to the civil RICO trial, which began in October 2013. That amount is more than many of the indigenous peoples in Ecuador who won the judgment make in one year, said Patricio Salazar, the Ecuadorian lawyer for the Front for the Defense of the Amazon (FDA), the group that represents the affected communities.
I think it's 100% clear cut what's going on here
Gitter was appointed as a special master for the trial, after having agreed to do a bunch of work, such as mediation, for free. Appointment of a paid special master is a common practice in the Anglo legal system for cases where the Court needs a neutral third party to manage day-to-day issues in a complex matter. The special master is therefore often a lawyer that the judge trusts. (Maybe the practice of appointing special masters could be made more meritocratic, but nothing suggests either the special master or the judge had any prior connection to Chevron.) The special masters fees are paid by the parties.[1] Indeed, contrary to the article's spin, ordering only one side to pay the special master's fees is usually punishment to that party for having done something wrong.[1a] So of course Chevron paid Gitter. That is standard practice. The plaintiffs were also supposed to pay Gitter. But they refused.
The whole thing about the plaintiffs being impoverished farmers who couldn’t afford the special master’s fees is again out of context. The plaintiffs had millions of dollars in funding from multiple investors for the payment of litigation costs.[2]
The point about not paying Gitter’s law firm to make it seem like there was something improper is again specious. Gitter is a retired partner at his firm, which means he has an association but is not a partner or employee. The special master engagement was his personal engagement, not the firm’s. The firm provided a separate bill for the associate who assisted Gitter. (It is a typical courtesy for firms to loan out associates to assist retired partners with their individual engagements.)[3]
Finally, the Second Circuit's opinion upholding the fee award makes clear that while Gitter initially left off descriptions of how he spent the billed time, the court ordered him to provide those descriptions and he did so: https://casetext.com/case/chevron-corp-v-donziger-29
> Chevron's bill of costs contained copies of the bills it had paid for the compensation and expenses of the special masters and their assistant. In the case of one of the two special masters, former Magistrate Judge Katz, the material included detailed, contemporaneous time records. In the case of the other, Max Gitter, Esq., it included invoices showing the hours worked and the billing rates but not time detail. Accordingly, by order dated November 9, 2017, the Court (1) required that Mr. Gitter and Cleary, Gottlieb provide Donziger and the Court with "time records (including any description of services the existing records contain) sufficient to show the services rendered that were . . . included in the bill of costs taxed by the Clerk," and (2) requested that the special masters make a recommendation with respect to the allocation of the special master costs as between the defendants and Chevron. Donziger then was given until December 4, 2017 to object to the reasonableness of the hours devoted to the services performed by any or all of the special masters or their assistant and until December 23, 2017 to object to the special masters recommendation.
[1] https://www.law.cornell.edu/rules/frcp/rule_53 ("Payment of the master's fees must be allocated among the parties and any property or subject-matter within the court's control.").
[1a] From above. "A party whose unreasonable behavior has occasioned the need to appoint a master, on the other hand, may properly be charged all or a major portion of the master's fees."
[2] Opinion linked above. "Perhaps more fundamentally, Donziger's focus on his supposed personal circumstances should not blind one to the fact that the litigation with Chevron, including this case, has been financed by third-party funders."
[3] Opinion linked above, footnotes 121-122.
I read more about the case, and this is by far not the only party very close to the Chevron being embedded into the process. They pretty much enveloped the guy from all sides with their lawyers.
For example, your article asserts that the RICO judgment against Donzinger has been "discredited." But a tribunal at the Hague, and also courts in Brazil, have found that the Ecuador judgment was procured by fraud. The article asserts that "Kaplan’s findings have been rejected in whole or in part in five different unanimous decisions by appellate courts in Canada and Ecuador, including the entire Supreme Courts of both countries." But when you actually look into it, the article seems to be relying on an early jurisdictional ruling by the Canadian Supreme Court that allowed an enforcement action to go forward: https://business.financialpost.com/opinion/the-plot-to-murde.... But the Canadian Supreme Court ultimately rejected enforcement of the Ecuadoran judgment in Canada: https://www.forbes.com/sites/michaelkrauss/2019/04/05/the-su....
The article you linked came out before the Canadian decision, so I can't fault it for not taking that into account. However, what's deeply misleading was suggesting that the 2015 Canadian decision "discredited" the U.S. RICO judgment. The Canadian courts did not grapple with whether the Ecuadorean judgment was procured by fraud. They were dealing with the very different issue of whether the judgment -- even if it was legitimate -- could be enforced against Chevron's Canadian entity, which is an entirely different company. It was misleading to suggest that the Canadian decision allowing the enforcement proceeding to go forward somehow "discredited" the U.S. RICO judgment.
WTF? A nation state couldn’t have seized the assets? It seems that multinational megacorps are truly more powerful than and above the law in small countries these days.
The backstory here is, Chevron used to have a lot of assets in Ecuador as part of a joint venture with the Ecuador state oil company. The joint venture wound up, Chevron left, and now there's some dispute over whether any remaining clean-up is properly the responsibility of Chevron or Ecuador. But this is being discussed after they closed everything down, sold up, and left.
All that's left if for Ecuador to go try and convince the legal system of other countries (where Chevron does have assets) to do something. And so far, that's not working very well for them.
They can send much nastier things too. When you get to state-level actions, the law, or at least the repercussions for breaking it gets a lot iffier.
Why in small countries? They do what they want in America too.
Is it any wonder that I'm extremely jaded with any corporation's public speech about how they care or how they're a responsible citizen? At the end of the day, corporate incentives are driven by shareholders and most shareholders are short-term driven, and only cry out after disasters happen, never before.
Most corporations these days feel no different from tobacco companies talking about caring about consumer health.
vote your proxies.
or support year-round initiatives such as https://www.yourstake.org/petition/disclose-corporate-politi...
At this point I would be fine with them sending in their army and raiding the place. If some of the higher-ups get collateral-damaged during the raid that wouldn't be a huge loss to the world.
Incidentally, the Government of Ecuador did buy a 25% share in the Texaco Lake Agrio oil field, via Petroecuador. And they also did raid offices at various points of the longstanding lawsuit iirc.
Why would buying Chevron shares necessitate giving Chevron money?
[0] Please correct me if I'm unknowingly bullshitting here!
The ever so slight downside to this is that, while Norway's state investment fund is vastly wealthy shareholder of many companies that can throw its weight around, I am, regrettably, not.
One solution for this is for you to give me money.
And likely the judge punishing him received a lot of compensation from shady sources.
This shows that there is a huge difference between being right and being found right by an American court.
Probably the only chance that this lawyer has left for his life is if someone rich and powerful - who by sheer luck is unconnected to the petrol industry - takes pity on him. He'll need millions to clean up this mess and that price doesn't change no matter the facts. He could be a Saint for what it's worth and he'll still need to pay up to receive the justice that he is owed.
However, he later started suing in various foreign courts for enforcement of that judgement, and lawsuits filed in the US are the business of US courts, and lawsuits to enforce judgements obtained via fraud, collusion, and bribery are tained. So if Donziger knew the judgement was obtained corruptly (and there's some very inconvenient footage of Donziger admitting as much to a documentary film crew...), then he's been a very naughty boy, and it's well within the right of a court to request he provide more information about what exactly he did. And the way courts enforce compliance with these requests is, yes, fines and imprisonment.
There's nothing all that weird about this. It's unfortunate because the people Donziger represented are very sympathetic, and have clearly been deeply wronged. Nonetheless, you're really not supposed lie and cheat to obtain justice for your clients.
After Donzinger procured the Ecuadorean judgment, Chevron filed a RICO case against him in New York: http://www.theamazonpost.com/wp-content/uploads/Chevron-Ecua.... (Start at page 298.) Chevron sought an injunction preventing the plaintiffs from enforcing the judgment in the U.S. (i.e. starting a court proceeding in the U.S. to seize U.S. assets to pay the Ecuadorean judgment). The New York court had jurisdiction because what it was being asked to do was prevent execution of the judgment in the U.S.
Donzinger ended up under house arrest after being charged with criminal contempt for refusing to turn over documents: https://www.courtlistener.com/recap/gov.uscourts.nysd.374606...
> Further, respondent was afforded a full and fair opportunity to litigate, as evinced by the voluminous record on which Judge Kaplan's findings were based. Judge Kaplan conducted a seven-week trial, heard 31 live witnesses (including respondent), and considered sworn testimony of three dozen others, as well as thousands of documents. Respondent appealed Judge Kaplan's decision, yet chose not to challenge the underlying factual findings. Thus, his argument that he was denied meaningful appellate review fails.
> Because Judge Kaplan's findings constitute uncontroverted evidence of serious professional misconduct which immediately threatens the public interest, respondent should be immediately suspended, pursuant to 22 NYCRR 1240.9 (a) (5) (see e.g. Matter of Truong, 2 AD3d 27 [1st Dept 2003]).
And it also relied upon the testimony of Alberto Guerra, who later admitted that he was lying and was paid by Chevron to lie:
https://www.vice.com/en_us/article/neye7z/chevrons-star-witn....
>>The decision hinged on the testimony of an Ecuadorian judge named Alberto Guerra, who claimed that Donziger had bribed him during the original trial and that the decision against Chevron had been ghostwritten.
A lot of stuff happens in such places, but when you take on Chevron size companies, you better be squeaky clean. Hundreds of lawyers and PIs will find everything. Chevron can't bribe, but local lawyers and PIs no doubt can.
> To Donziger, who had already endured 19 days of depositions and given Chevron large portions of his case file, the request was beyond the pale, and he appealed it on the grounds that it would require him to violate his commitments to his clients. Still, Donziger said he’d turn over the devices if he lost the appeal.
He said he would obey the order if he lost the appeal. But the article doesn't say what happened to the appeal, is it ongoing, is it over, who won?
In any case, the criminal contempt is more recent, and stems from Chevron claiming that Donziger has been receiving a lot of money, primarily by selling "shares" in the judgement, ie, a law firm in Canada (or whatever) pays Donziger for the right to sue Chevron in Canada to try and collect. Donziger claimed he had not done so, and the judge in the case ordered him not to start. Chevron claimed he was still doing it (and apparently submitted some evidence to back this up). The the judge ordered Donziger to turn over records to demonstrate how much money he had and, in particular, if he was getting money by monetizing the fraudulent judgement he had obtained against Chevron (which would be against the judge's order).
Donziger has refused to turn over these records, which prompted criminal contempt charges, which he has now been convicted of. He can try appealing, but I'm not entirely sure under what grounds; Donziger's financial records would seem to be fair game (and it's pretty common for a court to ask for such records when someone is failing to pay a judgement against them), so...
> In March 2014, a United States district court judge ruled that the Ecuadorian plaintiff's lead US attorney, Steven Donziger, had used "corrupt means," including payment of almost US$300,000 in bribes, to obtain the 2011 court verdict in Ecuador. The judge did not rule on the underlying issue of environmental damages. While the US ruling does not affect the decision of the court in Ecuador, it has blocked efforts to collect damages from Chevron in US courts.[55][56] Donziger and the two Ecuadorian defendants appealed, and on August 8, 2016, the United States Court of Appeals for the Second Circuit affirmed the district court's judgment against them in all respects.
When he turned over the documents, it revealed "that the 2009 environmental report signed by a court-appointed expert had largely been written by an environmental consultancy company hired by the plaintiffs."
Wikipedia is not a great primary source (especially on subjects like this), but that bit comes from this New Yorker article, which seems trustworthy to me: https://newyorker.com/magazine/2012/01/09/reversal-of-fortun...
And if so, could this trick could be used to prevent an appeal and keep him under arrest indefinitely?
IANAL obviously, but very curious.
> Upon consideration of all of the evidence, including the credibility of the witnesses – though several of the most important declined to testify – the Court finds that Donziger began his involvement in this controversy with a desire to improve conditions in the area in which his Ecuadorian clients live. To be sure, he sought also to do well for himself while doing good for others, but there was nothing wrong with that. In the end, however, he and the Ecuadorian lawyers he led corrupted the Lago Agrio case. They submitted fraudulent evidence. They coerced one judge, first to use a court-appointed, supposedly impartial, “global expert” to make an overall damages assessment and, then, to appoint to that important role a man whom Donziger hand-picked and paid to “totally play ball” with the LAPs. They then paid a Colorado consulting firm secretly to write all or most of the global expert’s report, falsely presented the report as the work of the court-appointed and supposedly impartial expert, and told half-truths or worse to U.S. courts in attempts to prevent exposure of that and other wrongdoing. Ultimately, the LAP team wrote the Lago Agrio court’s Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment. If ever there were a case warranting equitable relief with respect to a judgment procured by fraud, this is it.
Subsequently, the Permanent Court of Arbitration in the Hague found that the Chevron judgment was procured by fraud and should not be enforced: https://www.forbes.com/sites/michaelkrauss/2019/04/14/dutch-...
> And last week, on April 12, 2019, the Dutch Supreme Court upheld the Court of Appeal’s decision. Last week's decision means that the five arbitral awards are no longer subject to challenge. This includes the BIT Tribunal's interim awards ordering Ecuador to “take all measures necessary” to prevent or suspend enforcement of the Lago Agrio Judgment worldwide and declaring Ecuador in breach of international law for having failed to voluntarily do so.
"Skip the narrative and go straight to".. the opinion of a single judge whom evidence suggests is biased in favor of Chevron.
There is zero evidence suggesting he is "biased in favor of Chevron." Donzinger's self-serving assertions are not evidence. Donzinger has repeatedly petitioned the Second Circuit Court of Appeals, the appellate court that oversees the trial court here, to have the judge recused. The Second Circuit has repeatedly rejected those requests. And the Second Circuit, through a panel of three judges, affirmed the order I linked to: https://fcpablog.com/2016/08/11/second-circuit-upholds-rico-...
> Chevron has hired private investigators to track Donziger, created a publication[1] to smear him, and put together a legal team of hundreds of lawyers from 60 firms, who have successfully pursued an extraordinary campaign against him.
[1] this is a link to the Amazonpost.com.
So,is it really set up and run by Chevron for the purpose of discrediting?
www.theamazonpost.com/wp-content/uploads/Chevron-Ecuador-Opinion-3.4.14.pdf
I'm not saying the documents aren't legit (I don't know). But it's clearly a link to that site.
(Yes the link goes to a court opinion, just remarking on the host itself.)
> In 2015, when Guerra testified in an international arbitration proceeding, he admitted that he had lied and changed his story multiple times
Is that not referring to the same international arbitration proceeding you mentioned?
I have to conclude that the article is telling only one side of the story. That's OK I guess, but people need to stay aware of it and refrain from forming an opinion without more information.
to receive US aid you have to essentially give carte blanche to US corporations to raid and rape your country and its people as they please.
EDIT: essentially the hague court is enforcing the heinous practice of forcing the prioritization of corporate profits over country's sovereignty, and the wellbeing of its citizenry and envrionment
you would be surprised as to how many people would assume that they would still be able to hold a corporation to account if they completely make a country unlivable and kill citizens. these treaties are morally wrong and make it legal for corporations to destroy the habitibility of a piece of land and kill its inhabitants if it is profitable to them
I'm not aware of any provisions in these treaties that permit killing.
"An estimated 18 billion gallons of produced water has been diverted into some 880 unlined open pits, causing severe contamination of streams and rivers relied on by local inhabitants for their drinking water, bathing and fishing. Moreover, 650,000 barrels of crude oil have been spilled directly in the jungles and pathways.[14][15][19] The produced water contained polycyclic aromatic hydrocarbons at levels many times higher than permitted in the US, where produced water was typically re-injected underground since at least the 1970s.[14] Given the magnitude of the contamination and its lasting impact many environmentalists claim it is the worst oil-related disaster in the world, the amount of crude and toxic waste dumped by Texaco allegedly being 30 times the one spilled in the Exxon Valdez oil spill."
https://en.wikipedia.org/wiki/Lago_Agrio_oil_field#Pollution
Also, for many third world countries it does seem quite clear that simply setting the labor law and environmental law protections equal to first world standards would be a stupid policy harmful to their citizens; simple poverty kills and harms much more people in a much more direct way, and becoming a place for outsourcing is a net benefit to their population in the end; proper protection is a luxury that their society can't (yet) afford because they have to fulfil their core needs first even if that costs some lives due to pollution or exploitative labor. At some point they'll want to toughen up these restrictions (as China is doing now), but it's not because the lax restrictions were wrong or a regrettable mistake, it's only because the conditions have changed, they're richer, and now they can afford to be more picky about these issues. It's a tough choice to make this balance well, but it's not something that someone else can decide for them, the national governments are the ones that should be making this choice - unless they're totalitarian dictatorships, in which case the people should be given the say, but they won't without a potentially bloody coup.
I think you are being rather naive about this. A country is not a person. Individuals can be in charge with entirely different agenda's than what is the interest of the country. Corruptible officials who let themselves get bought by powerful corporations to gain personal wealth. Not for the benefit of their own country.
When the citizens realize they have been screwed over by a corrupt leader, who gained power in illegal or dubious means, should they have no recourse?
History is full of stories about these kinds of unequal deals. It is how colonialism started. Powerful western enterprises pressured weaker nations into unfavorable conditions.
It happens everywhere. As a Norwegian I know very well how powerful American oil companies tried to screw us over big time when found oil in the North Sea. What saved Norway was in fact that we had an extremely anti-capitalist government full of socialists which challenged them on everything. We also benefitted from having low levels of corruption. There was no government official these companies could buy to screw us over. That is the problem of corruption. It makes you very vulnerable.
We have documents alleging person X said Y, because of Z. Without any real first-hand knowledge, none of us actually know how reputable the justice system is in Ecuador, how plausible bribery is, or much at all. First hand, all we know is web-pages on the internet.
I think maybe it's best to take a step back from this specific case and ask "What policies could make bribery harder in general across the board?" Is there a way to build a system (e.g. justice-system, news-system) that results in less ambiguity?
Not true. We do know stuff. On one side, you have a decision of the Ecuadorean courts upholding the judgment. On the other side, you have decisions from the U.S. and the Netherlands saying that the judgment was procured by fraud. And you have decisions from Canada, Argentina, and Brazil that do not get into the fraud, but nonetheless declining to enforce the judgment.
Who do you believe?
All I know is what intermediaries (whom I've never met) say. The Ecuadorian judge says the American judge is lying, the American judge says the Ecuadorian judge is lying. I personally haven't looked at any evidence. And if I did, how could I personally know if it's valid?
You're caught-up and emotional in this one tiny thread which is insignificant. We should be talking about the larger problem.
For context on this decision. Some people worship corporations, and we should remember that those people value paper dollars over human lives.
More transparency called for here... let's have the judge's financials and phone records investigated by a special counsel.
The losers are the farmers who have to clean that mess up. A lot happened and we are back at the exact same problem.
Question: does any of what happened in Chevron vs Donziger really matter?
In my native Norway I know several cases of this. When it became possible to utilize hydro-electric power, British businessmen would travel around the country and get farmers owning waterfalls drunk. Then they would get them to sign contracts handing over the waterfall to them.
Same deal when Norway found oil. American oil companies tried hard to screw us over. They put in a lot of pressure and played dirty games. Fortunately our leader at the time Einar Gerhardsen was high skeptical of big capital and a self proclaimed democratic socialist.
They bid their time instead of getting sucked into a one sided deal. In fact the system we managed to put in place to fight big multinationals trying to exploit our resources impressed the Chinese. So I believe Deng Xiaoping sent a delegation to Norway. China had in the past suffered from companies from great western powers owning everything in China. The Chinese wanted to learn from us how we had manage to let in foreign capital and expertise while keeping national control.
So some of the systems in China with joint ventures etc was inspired by systems setup in Norwegian oil industry to protect Norwegian interests. Any small nation western or otherwise is vulnerable to exploitation by large rich nations.
Today China itself is frequently twisting our arm.
This judge needs to be thoroughly investigated on his connections to Chevron.
After a lengthy exploration of bribery, money laundering, and other corruption, Judge Kaplan concludes: “The decision in the Lago Agrio case was obtained by corrupt means. The defendants here may not be allowed to benefit from that in any way. The order entered today will prevent them from doing so.”
[1] https://www.nationalreview.com/2018/10/chevron-case-shakedow...
money rules society, and legality works for money; at the sime time, money as a system is encoded and enforced by the legal system.
we have built a civilization/socity which has trapped us. the matrix is not made out of computers but of corporate institutions. by this point most corporations of this magnitude are pretty much autonomous, neither their shareholders nor the justice systems can reign them in.
My take away is that I should somehow make them better but I don't understand why some get downvotes.
maybe I make big and unjustified logical jumps? maybe I'm to paranoid? in any case I think way too much...
some examples: https://news.ycombinator.com/item?id=21851332 https://news.ycombinator.com/item?id=21536936 https://news.ycombinator.com/item?id=20175491 (this is a taboo topic, always thread carefuly near those)
and one in which I did 'it' correctly, but it took like 20 minutes to write: https://news.ycombinator.com/item?id=20991015
another "good" one https://news.ycombinator.com/item?id=18603793
Of note, he could simply turn over his phone and this would end. There is no assertion here that he is protecting some witness from harm. The fact that he is unwilling to do that should give us some pause.
Even if the truth is more murky than presented in this article. He may have needed to contact shady people as part of his work and this could clearly be used to smear him.
Of course, the article could be a gross misrepresentation of the truth but a quick google search reveals that the feud between Chevron and Donziger has been widely reported and lasted more than 20 years. The fact that he is unwilling to hand over his phone is just the latest salvo in a long battle.
I mean we are not asked to believe anything crazy here. A company made enormous environmental damage. Is that premise hard to believe? Next they refused to pay or invent excuses? Again nothing odd about that.
Some lawyer takes up the case and wins. Again nothing out of the ordinary. The company fights him tooth and nail. Nothing weird thus far.
What is novel is really just the extent to which they have gone to smear him and destroy him. That they are motivated to do this is not strange at all.
Absolutely nothing immoral about that. Having been wronged, Chevron is morally entitled to do absolutely anything short of illegality against this creep.
In Forbes there is a contributer "Michael I. Krauss" who subscribes openly and fully to the view that Chevron is innocent, that any pollution is due to the Ecuadorian petrol company and that Donziger is a crook [1] who fixed the trial through bribery. This blog post (one day later) by Clyde Osborne also takes Chrevon's side [2]. Weirdly both articles use the similar phrase
"If I were a legal journalist, I would track down Mr. Donziger's legal ethics professor at Harvard. I would ask that professor what he or she thinks of his or her former student. Harvard might want to create a seminar about the Lago Agrio case. Note to HLS's Associate Dean: I would be delighted to teach that seminar. It would be a great case study about how not to practice law."
and
"If I had been a felony journalist, I might track down Mr. Donziger’s felony ethics professor at Harvard. I would ask that professor what he or she thinks of his or her former pupil. Harvard might want to create a seminar about the Lago Agrio case. Note to HLS’s Associate Dean: I might be overjoyed to educate that seminar. It would be a tremendous case observe how now not to practice law."
That's a bit weird. Ironically today's article did speak to Charles Nesson, an attorney and Harvard Law School professor who takes Donziger's side and even "teaches Donziger's case in his “Fair Trial” course, using it as an example of a decidedly unfair trial." This other publication also seems to be more aligned with Donziger [3].
This is clearly a divisive issue with 9 billion dollars at stake for Chevron and millions at stake for Donziger (Chevron demanded a few years ago that he pay for all of their legal fees and he was fined for comtempt of court too) and so I'm not sure how much you could trust any reports unless you put a lot of time into studying this issue in depth. There's so much money swilling around and both sides have accused the other of running misleading publicity campaigns through to outright propaganda.
To me it still seems like a massively unequal fight though and demonstrates that a sufficiently funded corporation can crush most people legally if they wish to. Legal costs are simply too expensive for most individuals.
[1] https://www.forbes.com/sites/michaelkrauss/2019/07/17/suspen... [2] https://lawcer.com/2019/07/18/suspended-ex-attorney-steven-d... [3] https://www.law.com/dailybusinessreview/2019/10/18/chevron-m...