- - Wednesday, March 5, 2014


Sometimes the facts trump greed, a defendant refuses to roll over and play dead, and a scam falls apart. That’s what happened when a New York lawyer devised a scheme to find a compliant judge and sue Chevron, the oil giant, and collect $9.5 billion for damaging an oil field in Ecuador 20 years ago.

U.S. District Court Judge Lewis A. Kaplan threw it all out Tuesday in Manhattan, remarking that the case was something “that normally comes only out of Hollywood.” Judge Kaplan required 500 pages of typescript to tell the story of what happened.

Steven Donziger, the Manhattan lawyer, rounded up plaintiffs for a class-action lawsuit against Chevron for the supposed environmental damage done 20 years ago at the Lago Agrio oil field in Ecuador by Texaco, a company later acquired by Chevron.

Mr. Donziger found an Ecuadorean judge who held Chevron liable for $18 billion in damages (which a court later cut in half). Mr. Donziger then sought to have the judgment enforced by a U.S. court. Instead of settling out of court like most corporate giants do, Chevron organized a legal counterattack to protect its rights.

Judge Kaplan explained in his decision that Mr. Donziger “and the Ecuadorean lawyers he led corrupted the Lago Agrio case. They submitted fraudulent evidence … . Ultimately, the [plaintiff’s] team wrote the Lago Agrio court’s judgment themselves and promised $500,000 to the Ecuadorean judge to rule in their favor and sign their judgment.”

Investors in the scheme poured millions into Mr. Donziger’s cause in return for a share of the expected multibillion-dollar jackpot. The cash bankrolled a political campaign team that set up front groups to create the illusion of a groundswell of support for institutional investors to “divest” from Chevron.

Mr. Donziger hired a former aide to Andrew Cuomo, now the governor of New York, who generated “interest by Andrew Cuomo in investigating Chevron for misleading shareholders,” as set out in Mr. Donziger’s emails. Chris Lehane, Bill Clinton’s opposition researcher, was hired to “inflict real economic pain on the company.”

Mr. Donziger paid for the documentary film “Crude,” exhibited at the Sundance Film Festival, portraying Chevron as a villain exploiting the rain forests.

Celebrities including Sting, Mia Farrow and Danny Glover cried pretty tears on behalf of the plaintiffs. The bad publicity was meant to persuade Chevron “to settle the lawsuit in the near future.”

But Chevron refused to play the game. Its lawyers used the discovery process to find gold on the cutting-room floor where “Crude” was edited. Mr. Donziger spoke a bit too candidly while the cameras were rolling.

“I once worked for a lawyer who said something I’ve never forgotten,” Mr. Donziger says in a discovered scrap of footage, or outtake. “He said, ‘Facts do not exist. Facts are created.’ And ever since that day, I realized how the law works.” Perhaps in Ecuador, but this time, not in Manhattan.

Chevron spent millions of its own on the decade-long court battle as a matter of principle, refusing to let the trial bar get away with extortion. Judge Kaplan’s findings make it likely that Mr. Donziger and his allies will even have to pay Chevron’s sizable legal bill.

The real story of what actually happened in Ecuador might make an entertaining movie.

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