Do lobbyists win trials? Lessons from Chevron vs. Ecuador trial

May 31, 2014

NOTE: Images in this archived article have been removed.

Image Removed
Oil hand image via rainforestnetwork/flickr. Creative Commons 2.0 license.

What is the right side of the law? To be sure, this is not an easy question to answer, bound to create as many controversies as answers. In any case, one searching for answers should not look at the ongoing legal tussle going down between Chevron/Texaco and Ecuador, whose latest installment revolves around the fate of bigwig law firm Patton Boggs. But what is the trial all about?

The story of this trial spans some 20 odd years, played out in six countries and involving dozens of courts. In a nutshell, Texaco is accused of having dumped roughly 18 billion gallons of waste in the Amazonian jungle, after completing a 23-year operation in Ecuador. In 1993, a massive class action suit was filed against the company by 30,000 residents of the region, demanding that the company take responsibility for contaminating the environment. They claimed that Texaco had created a severe public health crisis, evidenced by the rampant number of birth defects and cancer cases registered among the indigenous people.

Initially, the case was brought before a US court, until Texaco praised the Ecuadorian legal system as independent, impartial and competent, persuading the American judge to relocate the case to Ecuador (see the trial transcripts here). Historically, the company had always prevailed before Ecuadoran Courts, even when it was up against the Government. As the trial proceeded, Chevron, which bought Texaco in 2001, mounted a media campaign criticizing Ecuador and pushing for a mistrial, alleging that the justice system lacked independence.

It turned out to be a resounding loss for Chevron. In February 2011, a lowly provincial judge from the town of Lago Agrio, Ecuador, recognized the company as guilty, forcing it to pay a record $18 billion in damages to the afflicted community. In a subsequent case, the Supreme Court of Ecuador recognized the validity of that decision but halved liabilities, to $9.5 billion.

Meanwhile, Chevron filed a civil-racketeering suit against the lead lawyer, Stephen Donziger, taking the case back to the US. This foray was backed up by a massive lobbying campaign, designed to further discredit the Ecuadorian judicial system and to change the focus of the narrative by portraying the victims of pollution as extortionists and felons. Chevron maintained that Donziger promised the Ecuadorian judge bribes of $500,000 to rule against the oil company, a charge he has denied.

The army of lobbyists and media consultants deployed around this case has finally got their money’s worth and, in March 2014, Chevron won the case. Judge Kaplan ruled that, while the region is polluted and Chevron “might bear some responsibility”, the Ecuadorian ruling was inadmissible, barring Donziger from requesting damages from the oil company in the US.

Chevron hailed the decision as a victory. In a snap, the case stopped being about the real, undeniable environmental damages left behind in the jungles of the Amazon, but about courtroom shenanigans.

Never mind the fact that the same judge accused of favoring the Ecuadorians testified that he also received significant funding from Chevron to testify in their favor, along with a 2-year, $12,000 per month allowance to move to the US after the trial.  Given these revelations, it is unclear why Judge Kaplan accepted this testimony without considering evidence related to Chevron’s misconduct.

Nor the fact that Chevron has hired a team of approximately 2000 lawyers, legal aids and investigators from 60 companies, spending up to $250 million per year on fees. Documents also point out that Chevron has used lobbying methods to persuade the State Department to suspend Ecuador’s trade advantages under the US trade policy.

After winning the trial against Donziger, Chevron focused his attention on extending the same charges to Patton Boggs, which was tasked with enforcing the original $9.5 billion ruling. A spokesman for the oil company said in late April ‘Chevron now looks forward to proving its claims against Patton Boggs and to hold it accountable for its role in perpetrating this scheme’.  On May 7th, Chevron triumphed by forcing Patton Boggs to settle the case in exchange for a $15 million payment. With this new defeat, Donziger’s chances to delivering justice to the Lago Agrio community have slimmed dramatically.

In the end, the scorched-earth campaign led by Chevron with the help of lobbyists has achieved one objective: it wrongfully discredited Ecuador’s justice system for the crime of imparting justice. Moreover, the ruling unjustifiably deprives every Ecuadorian judgment of recognition in the US, even if this case didn’t reveal any form of systemic, government-led interference in the national justice system.

When a high profile case such as this one stops being about real problems, focusing instead on ancillary issues, then that’s a disservice to justice. Chevron’s unorthodox lobbying tactics and courtroom theatrics seem to prove that the scales of justice tilt in the favor of those with deeper pockets. The indigenous people of the Amazon deserve better.

Pavlo is a  strategy and management consultant based in London. He mostly works with NGOs on issues such as human rights. Previously, he has been featured on Real Clear World and the Global Post.

Tags: communities, environmental damage, indigenous people, Social justice