The decision by the appellate court to hear the arguments is bad news for Kaplan, who already has been overturned once by the Second Circuit for imposing an unprecedented “global injunction” that purported to prohibit indigenous and farmer communities in Ecuador from enforcing a judgment from their own courts anywhere in the world. Kaplan had become the target of worldwide derision for trying to dictate rulings to the courts of other countries. (See press release here.)
The Ecuadorians say Kaplan’s efforts to orchestrate a show trial warrant the reassignment of the case, as documented by this previous posting on The Chevron Pit.
Chevron is using the remaining fraud counts it filed against the Ecuadorians and their counsel to try to chill fundamental human rights advocacy that attempts to hold the oil giant accountable for its discharge of billions of gallons of toxic waste into the Amazon, as found by an Ecuadorian court based on overwhelming scientific evidence. Steven Donziger, a longtime American lawyer for the communities, has countersued Chevron for lying and engaging in fraud to cover up its misconduct. (See Donziger’s counterclaims here.)
Chevron suffered a major setback recently when a California judge ruled that the environmental group Amazon Watch – known as Chevron’s “sharpest critic” – was engaged in First Amendment-protected activity when it criticized the company for its refusal to clean up its contamination in Ecuador. Chevron had tried to subpoena the group’s documents, claiming its advocacy was part of an improper pressure campaign. (See an article explaining the decision here.)
The Ecuadorians, meanwhile, have denied Chevron’s outrageous charges. The company is desperate to distract attention from advancing seizure lawsuits targeting billions of dollars of assets in Canada, Brazil, and Argentina – with more such actions to come, according to lawyers for the communities.
Kaplan had shocked legal observers with his rants and prejudicial statements from the bench about Ecuador, a longtime U.S. ally where Chevron itself has won multiple lawsuits against the country’s state-owned oil company. He derided Ecuador’s government and judiciary. He refused to recognize the fundamental humanity of the impoverished indigenous victims, referring to them as the "so-called plaintiffs" and urging Chevron to file a racketeering and extortion case. See this previous Chevron Pit.
To top it all off, Chevron lawyer Randy Mastro literally was laughed out of court when he couldn’t answer fundamental questions before the appellate panel. See here. Mastro’s effort to protect Kaplan was an utter failure.
Kaplan’s tendency to engage in judicial imperialism has once again reared its ugly head. He is now setting up Chevron’s so-called “RICO” case as nothing more than a show trial, stripping the ability of the plaintiffs to put on evidence of Chevron’s toxic dumping and fraudulent cover-up while purporting to rule (in defiance of the earlier Second Circuit order) on the legitimacy of Ecuador’s judiciary.
That’s the same judiciary that Chevron praised when it fought for ten years to venue the trial there after the Ecuadorians originally filed the case in New York.
A trial by jury has been set by Kaplan for October 15th. But we say that neither Chevron nor Kaplan really have the guts to risk a full-blown trial before a jury where the truth can come out. Kaplan and Chevron will try to figure out a way to prevent jurors from hearing the case – possibly by dropping monetary claims for damages, thereby allowing a bench trial. If jurors do hear the case, Kaplan won’t let the Ecuadorians put on evidence of Chevron’s crimes and fraudulent cover-up.
But wait – isn’t a bench trial by Kaplan what the Second Circuit vacated the first time?
Kaplan and Chevron are now operating from a smaller and smaller box, with their options to impede a final recovery constricting almost weekly. Meanwhile, Mastro and his team of 114 lawyers at Gibson Dunn & Crutcher are on a roller coaster ride of unprecedented billing excess, subsidized by Chevron shareholders who themselves are being duped by Chevron management, as this devastating report by securities lawyer Graham Erion points out.
Gibson Dunn lawyers are laughing all the way to the bank while piling up a string of setbacks for their client, whose management is either too obtuse or personally conflicted to understand the peril they are facing.
In their petition, the Ecuadorians argue that in the earlier reversal the appellate court found that Kaplan did not have jurisdiction to rule on the Ecuador judgment unless the Ecuadorians sought to enforce the judgment in a New York court -- a legal move that the Ecuadorians have not taken and have said they will not take. Yet Kaplan continues to claim in various rulings he can still so dictate, in defiance of the appellate court.
We remind Judge Kaplan of the words written by the Second Circuit in 2011:
“The (Ecuadorians) hold a judgment from an Ecuadorian court. They may seek to enforce that judgment in any country in the world where Chevron has assets. There is no indication that they will select New York as one of the jurisdictions in which they will undertake enforcement efforts . . . . It is unclear what is to be gained by provoking a decision about the effect in New York of a foreign judgment that may never be presented in New York. If such an advisory opinion were available, any losing party in litigation anywhere in the world with assets in New York could seek to litigate the validity of the foreign judgment in this jurisdiction. . . . Chevron can present its defense to the recognition and enforcement of the Ecuadorian judgment in New York if, as and when the (Ecuadorians) seek to enforce their judgment in New York.”"