Ecuador Internacional

Panel Sparks Ethics Debate in Chevron-Ecuador Litigation

The Am Law Daily - Emily Barker 06/02/2015

Even without controversial plaintiffs attorney Steven Donziger in the room, both sides in the heated battle between Chevron and Ecuadorean litigants came out swinging during a legal ethics panel at LegalTech New York on Thursday.

The panel included Chevron counsel Reed Brodsky of Gibson, Dunn & Crutcher and Karen Hinton, who has been a spokeswoman for the Ecuadorean plaintiffs. They traded civil but forceful jabs over the conduct of plaintiffs counsel Donziger in litigation that resulted in a $19 billion judgment against Chevron and a racketeering judgment against Donziger.

Donziger had been scheduled to participate in the panel but withdrew the night before, citing concerns about the composition and format of the panel as well as pending litigation.

While most of the claims have been aired before, in court and in the media, the panel discussion provided a close-up of the hard-fought case, which began when Ecuadorean plaintiffs sued Chevron over alleged pollution from oil drilling. Although they won in the Ecuadorean courts, Chevron contends that the victory is tainted by fraud; after an aggressive discovery campaign, the oil giant successfully sued Donziger and other members of the plaintiffs team in federal district court in Manhattan under the Racketeering Influenced and Corrupt Organizations Act, seeking to block enforcement of the judgment. That decision is currently under appeal to the U.S. Court of Appeals for the Second Circuit.

At the LegalTech panel, Brodsky based much of his initial presentation on U.S. District Judge Lewis Kaplan’s 2014 ruling that found Donziger had committed fraud on the Ecuadorean court and led a racketeering enterprise that committed fraud, extortion, witness tampering, and obstruction of justice. Among other things, Brodsky said, the plaintiffs team had bribed an Ecuadorean judge and ghost-written the $19 billion judgment (later reduced by an Ecuadorean appellate court to $9.5 billion).

Brodsky described the discovery process of finding documents that matched part of the final judgment on Donziger’s hard drive, complete with typos that also turned up in the judgment.

“I don’t have to tell you how powerful that can be in demonstrating evidence of fraud,” Brodsky said.

In rebuttal, Hinton read a statement by Donziger calling Kaplan’s decision “factually and logically flawed.”

“Knowing how Chevron litigates, I can also say with confidence that virtually everything you just heard Mr. Brodsky say is either false, misleading or omits critical context,” Hinton read from Donziger’s statement. She also argued that Chevron had ethical lapses of its own that included paying witnesses and swapping clean water samples for dirty ones.

Also on the panel were two journalists who have covered the case in recent books: Bloomberg Businessweek’s Paul Barrett, author of “Law of the Jungle,” and The American Lawyer’s Michael D. Goldhaber, author of “Crude Awakening.” Both were strongly critical of Donziger.

“A lawsuit is not a revolution,” Barrett said. “In court you don’t get to make up the facts the way you do at a political rally.”

Goldhaber said that he hoped that Donziger would face bar discipline. “I do think it would be a terrible disgrace if no disciplinary proceedings are ever brought, because we need to send a message that you do not check your ethics at JFK if you’re a lawyer and you fly overseas,” he said.

The discussion was by turns serious, funny and impassioned. Hinton showed glimpses of wry humor in confronting the charges against her side. “I’m one of the coconspirators that Mr. Brodsky referred to,” she said in introducing herself. Her delivery earned some applause from the crowd of several hundred at LegalTech, a three-day trade show in New York City about legal technology that ended Thursday.

But the photographs she showed during her presentation—pictures of Ecuadorean citizens with deformities and wastewater pits in Ecuador tainted with oil—drew a protest from Gibson Dunn’s Brodsky. “You are exploiting poor people who are suffering,” he said. “That’s outrageous.”

Barrett said that the upcoming Second Circuit appeal would be “fascinating”—although it will probably turn on issues of law rather than fact. He predicted that the Second Circuit would not overturn Kaplan’s findings about Donziger’s conduct. “I’m quite confident the Second Circuit is not going to second-guess the facts,” Barrett said.

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