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Local oil giant wins major environmental case under RICO statutes

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Local oil giant Chevron Corporation won a major environmental lawsuit against Steven Donziger and other lawyers who had previously won an $18 billion judgment against the company in 2011 for environmental damage in Ecuador. A U.S. District Court judge in New York ruled today that the Lago Agrio [Ecuador] judgement was obtained fraudulently and ordered that it could not be enforced anywhere in the United States as a result.

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In a statement following the decision Chevron said, "This ruling is a resounding victory for Chevron and our stockholders. It confirms that the Ecuadorian judgment against Chevron is a fraud and the product of a criminal enterprise. Steven Donziger and his associates can now be held accountable and will not be allowed to profit from their illegal acts. Any court that respects the rule of law will find the Lago Agrio judgment to be illegitimate and unenforceable."

The case stems from alleged contamination and harm to the environment and the indigenous people of Ecuador by oil operations conducted by Texaco over 20 years ago. Chevron subsequently purchased the stock of Texaco and was later sued by lawyers representing Ecuadorian groups that blamed Texaco for environmental damage and illnesses. This was done despite an agreement Texaco had with the Ecuadorian government before it left the country that concluded Texaco had completed all necessary remediation for its operations and would be absolved of all future liability.

Chevron is a major producer of oil and gas in Bakersfield and the San Joaquin Valley. The majority of its holdings there were acquired from Texaco in the early 2000s.

In issuing his decision, Judge Lewis A. Kaplan took care to note that he was not making a decision on the merits of whether or not Texaco had committed the environmental damage claimed. Rather, he noted that the judgement against Chevron had been obtained through bribery, falsehoods, and corruption of the Ecuadorian legal system.

Chevron has been fighting the judgement for years, and this most recent legal success utilized a tactic more often used against organized crime - the federal Racketeer Influenced and Corrupt Organizations Act , or RICO.

Emerging details of the case read like bad film noir, with tales of corrupt judges, bribes, computer intrigue, disdain for the Ecuadorian legal system, and falsification of data.

Indeed, in the decision itself, Judge Kaplan said, "This case is extraordinary. The facts are many and sometimes complex. They include things that normally come only out of Hollywood – coded emails among Donziger and his colleagues describing their private interactions with and machinations directed at judges and a court appointed expert, their payments to a supposedly neutral expert out of a secret account, a lawyer who invited a film crew to innumerable private strategy meetings and even to ex parte meetings with judges, an Ecuadorian judge who claims to have written the multibillion dollar decision but who was so inexperienced and uncomfortable with civil cases that he had someone else (a former judge who had been removed from the bench) draft some civil decisions for him, an 18-year old typist who supposedly did Internet research in American, English, and French law for the same judge, who knew only Spanish, and much more."

Kaplan went on to say that although Donziger sought to improve the conditions of his Ecuadorian clients, he and his Ecuadorian lawyers corrupted the case. He said, "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 [Lago Agro Plaintiffs]. 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."

Donziger had previously claimed that Judge Kaplan was biased toward him and had predicted that Kaplan would rule against him, as he stated in the accompanying video above, which was made before this latest decision.

For more information:

Judge Kaplan's Decision

Appendices to the decision

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