Scalia/Reid And Chevron: Holiday Reflections On The Rule Of Law

My Torts exams (342 essay answers written by 57 students) are graded. I’m about to head out for a week’s vacation with my wife. (Upon my return I’ve got another batch of exams, from Legal Ethics, to grade before classes begin.) It’s a good time to release pent up frustration about two legal issues currently being bandied about in the press.

Forbes - Michael I. Krauss 15/12/2015

Photo: Forbes

Justice Scalia’s remarks about academic affirmative action are neither racist nor “extreme”

Assume your child was applying to college. If he or she is like my children, he may have “reach” schools, “target” schools and “safe” schools on his or her list. Suppose, however, that he or she receives an offer from a “super-super-reach” school, a school where virtually 100% of matriculants have higher SAT scores (or LSAT scores for law schools, etc.) than him or her. Do you think admission at such a school maximizes your child’s chances of success and of increased self-assurance? If you do, perhaps you don’t realize that SAT (or LSAT) are good predictors of academic success. You are setting your child up for a maximum chance of failure if you plunge him or her into a pool of more highly talented children. Once one realizes the relevance of SAT/LSAT/etc, “go to the best school at which you’re competitive” becomes sage advice to give to one’s child.

There is now sound academic support for this common-sense understanding. Affirmative action (here defined as the admission of academically (LSAT/SAT/GPA, etc.) uncompetitive applicants because of demographic factors unrelated to academic success) by definition creates a mismatch. A 2004 article in the Stanford Law Review conclusively demonstrated that racial affirmative action mismatched law students, leaving black students disproportionately congregated toward the bottom of their classes, both at elite schools and at lower-ranked schools.

How does relative failure affect black students’ self-esteem? How does it affect the perceptions of their non-black classmates? What pressure does black over-representation at the bottom of the class create, as regards grade inflation, “no-grading” policies, “minority studies” majors that minimize inter-racial competition, etc? To reiterate, this relative failure is not the result of racial inferiority, but of racial mismatching resulting from affirmative action. It is not racist to note that students with lower scores, whatever their race, tend to perform more poorly than students with higher scores.

As Columbia linguistics professor John McWhorter recently pointed out, at the University of California San Diego, the year before racial preferences were banned, “exactly one black student out of 3,268 freshmen made honors. A few years later, after students who previously had been “mismatched” to UC Berkeley were attending schools such as UC San Diego, one in five black freshmen were making honors, the same proportion as for whites. UCSD is a good school but not an Ivy school – mismatching higher up the ladder had led UCSD to admit its own cohort of mismatched students.

Reasonable people might disagree, I suppose, about whether such collateral damage is an acceptable price to pay for producing minorities with (barely passing) credentials from better schools than they would otherwise have been admitted to. Reasonable people might perhaps disagree about the constitutionality of such programs. But no one of good faith who has read about the issue can claim, as Senator Reid has just done, that Justice Scalia “endorsed racist ideas” when he wondered whether affirmative action beneficiaries would do better if they were at “slower-track” schools. Like Jack Webb, Justice Scalia was interested in the facts, just the facts, during the Supreme Court hearing. One of those facts is that affirmative action diminishes average black performance.

Ethical Justice that he is, Antonin Scalia has refrained from publicly commenting on Senator Reid’s defamation. Shame on the Senator for his sucker-punch. Mr. Reid, your efforts to bully into silence court members with whom you disagree diminishes the Rule of Law.

Chevron deserves Americans’ support for doggedly fighting off a fraudulent judgment obtained against it in 2011.

I have written about this awful saga before (check out several earlier Forbes postings using links on this page).

To refresh readers’ memories:

1. Texaco was a minority partner with the government of Ecuador in that country’s oil industry from 1964 to 1992. Ecuador received 93% of the joint venture’s profits during the 28 years.

2. At that point it sold its stake to Ecuador, accomplished its share of environmental cleanup of its work, and received a full and total discharge of any liability by the Ecuadorean government, which continued to exploit (and heavily pollute) its site.

3. Nine years later, Chevron took over Texaco. Meanwhile, New York attorney Stephen Donziger had assumed control over a lawsuit on behalf of 30,000 mostly aboriginal residents allegedly damaged by Texaco’s pollution. Obviously this lawsuit had to confront the release obtained by Texaco, that company’s remediation of its work, and Ecuador’s continuing and devastating exploitation of the field.

4. In 2011 an Ecuadorean court condemned Chevron to pay almost $19 billion in damages (an amount later cut in half on appeal). Chevron however had acquired proof that the Ecuadorean judgment had been, literally, purchased by Donziger, and in a civil RICO lawsuit the American corporation prevailed. Well-respected United States District Court Judge Lewis Kaplan concluded that Donziger had bribed, coerced and falsified his way to the Ecuadorean judgment, which had actually been ghost-written for bribed judge Nicolas Zambrano. A judicial colleague of Zambrano corroborated that he and Zambrano had been in the business of selling judgments for thirty years. The Wall Street Journal called the Ecuadorean suit against Texaco/Chevron the “legal fraud of the century,” though it is perhaps rivaled by Volkswagen’s 21at century antics (to be discussed in a column I’ll write in 2016).

Now, though, comes the claim that that judicial colleague of Zambrano, who had produced damning testimony against Ecuador, had himself lied in and been bribed for that testimony. For Chevron is currently suing Ecuador in international arbitration (where I believe Chevron will win many millions). Testifying in that arbitration, Alberto Guerra recently admitted that he had exaggerated the amounts he originally said he had been offered by Donziger, in order to gain the favor of Chevron (which has been paying his living expenses in the United States, in large part in order to ensure his safety). But anyone and everyone who has read Judge Kaplan’s District Court RICO decision knows that Alberto Guerra’s testimony was perhaps 1% of the case against Donziger and Ecuador — and most of Guerra’s testimony (including the receipt of regular sums from Donziger) has not been withdrawn. The evidence of a massive conspiracy against Texaco/Chevron is simply overwhelming.

Hollywood stars may feel good when they drip their hands in Ecuadorean oil (the linked picture is of Mia Farrow in 2014, fully 22 years after Ecuador alone began exploiting the site). Poor Ms. Farrow and her friends should realize that that oil isn’t Chevron’s or Texaco’s. Only after Donziger is sanctioned and Ecuador punished in arbitration will the international rule of law be vindicated.

Michael Krauss is Professor of Law at George Mason University, and a nationally known scholar of Tort Law and Legal Ethics. His home page is here.