974 F.Supp.2d 362 (S.D.N.Y. 2014), 11 Civ. 0691 (LAK), Chevron Corp. v. Donziger

• Date: 04 March 2014
• Citation: 974 F.Supp.2d 362
• Docket Number: 11 Civ. 0691 (LAK)
• Parties: CHEVRON CORPORATION, Plaintiff, v. STEVEN DONZIGER, et al., Defendants
• Court: U.S. District Court — Southern District of New York

Page 362

974 F.Supp.2d 362 (S.D.N.Y. 2014)

CHEVRON CORPORATION, Plaintiff,

v.

STEVEN DONZIGER, et al., Defendants

No. 11 Civ. 0691 (LAK)

United States District Court, S.D. New York

March 4, 2014

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For Plaintiff: Randy M. Mastro, Andrea E. Neuman, Reed M. Brodsky, William E. Thompson, Anne Champion, GIBSON, DUNN & CRUTCHER, LLP.

For Amici Curiae: G. Robert Blakey, William J. and Dorothy K. O'Neill, Professor Emeritus, Notre Dame Law School.

For Steven Donziger and Steven R. Donziger & Associates LLP, Defendant: Richard H. Friedman, FRIEDMAN | RUBIN; Zoe Littlepage, Rainey C. Booth, LITTLEPAGE BOOTH; Steven Donziger.

For Hugo Gerardo Camacho Naranjo and Javier Piaguaje Payaguaje, Defendants: Julio C. Gomez, JULIO C. GOMEZ, ATTORNEY AT LAW LLC.

Lewis A. Kaplan, United States District Judge.

OPINION

Page 376

Table of Contents

Introduction

Facts

I. The Background

A. Texaco's Operations in Ecuador

B. Aguinda

1. The Principal Plaintiffs' Lawyers in Aguinda

a. Cristobal Bonifaz

b. Steven Donziger

c. Joseph Kohn

2. Key Events During Aguinda

a. Forum Non Conveniens -- The Aguinda Plaintiffs Attack

Ecuadorian Courts as Corrupt While Texaco Defends Them

b. The Start of the LAPs' Alliance With the ROE -- The LAPs

Agree Not to Sue PetroEcuador or the ROE

c. The Aguinda Plaintiffs Seek to Recuse, and Attack, Judge

Rakoff

d. The Environmental Management Act is Passed in Ecuador

e. Texaco Merges with a Chevron Subsidiary and Survives the

Merger

II. The Lago Agrio Litigation Begins

A. Donziger's Attitudes and Beliefs About the Ecuadorian Courts

and the Conduct of Lawyers in Ecuador

B. The Ecuadorian Judges

C. The LAPs' Team

1. The American Lawyers

2. The ADF, Selva Viva, and Luis Yanza

3. The Ecuadorian Lawyers

4. The Assembly

III. The Beginnings of Donziger's Pressure Campaign

A. Donziger's Strategy

B. Donziger's Public Relations Team and NGO Allies

1. The Public Relations and Lobbying Team

2. Amazon Watch

C. The Pressure Begins -- The LAPs' First Scientist and the $6 Billion

"Drive By" Damages Estimate

D. Donziger Touts Russell's "SWAG" and Other Misleading Descriptions

of Conditions in the Orienté to Put Pressure on Chevron

E. False and Misleading Representations to Incite Governmental Action

Against Chevron

F. Donziger's Attempt to Justify His Continued Use of Russell's

Disavowed Estimate is Unpersuasive

IV. The First Phase of the Lago Agrio Case -- The Judicial Inspections

A. The Process

B. The LAPs' Judicial Inspection Experts

C. The Calmbacher Episode

D. The LAP Lawyers Halt Testing for BTEX and GRO Because it Is

Yielding Unhelpful Results

E. Sacha-53 and the "Independent" Monitors -- Donziger, in His

Words, Goes Over to the "Dark Side" and Makes a

"Bargain With the Devil"

F. The Termination of the LAPs' Remaining Judicial Inspections and

the Genesis of the Global Assessment

1. The LAPs Coerce the Judge to Cancel the LAPs' Remaining Judicial

Inspections

2. Donziger Chooses Cabrera to be the Global Expert

V. The Second Phase of the Lago Agrio Case -- The Cabrera

"Global Expert" Report

A. The LAPs Secretly Plan the Cabrera Report -- The

March 3 and 4, 2007 Meetings

B. Donziger, Fajardo, and Yanza Put Together an "Army," Cabrera is

Sworn in, and the LAP Team Prepares His Work Plan

C. The Field Work

1. The LAP Team Pays Cabrera to Ensure that He Would "Totally Play

Ball"

2. The LAP Team Provides Cabrera with Administrative "Support" and

Controls his Field Work

D. Donziger Attempts to Deceive Judge Sand About Cabrera's

Independence

E. Stratus Secretly Writes Most of the Report

F. Stratus Criticizes its Own Report to Enhance the False Image of

Cabrera's Independence

G. Donziger's Explanation

VI. The Pressure Campaign Continues -- The LAP Team Turns

Up the Heat By Pressing for Indictment of Former Texaco Lawyers

VII. The Third Phase of the Lago Agrio Case -- 2009-2010:

Evidence of the Cabrera Fraud Begins to Come Out, Kohn Leaves the

Case, New Financing Is Found, and the Case Proceeds in Lago Agrio

A. Donziger's Assumption that What Happens in Ecuador,

Stays in Ecuador

B. The Release of Crude

C. The Section 1782 Proceedings

1. The Section 1782 Action Against Stratus -- Denver Counsel

Withdraw and Donziger and Fajardo Seek to Obstruct Justice Before

the Federal Court

a. Donziger Retains U.S. Counsel to Represent the LAPs in

Denver

b. Beltman Discloses the Truth to Shinder -- Denver Counsel

Withdraw

c. Fajardo Submits a Misleading Affidavit in Denver and

Elsewhere

2. The New York 1782 Proceedings -- Berlinger and Donziger

3. The LAP Team Sought to Deceive This Court in the Berlinger 1782

Proceeding

D. Donziger Deceives Kohn, Refuses His Demand for an Investigation

of the Facts With Respect to Cabrera, and Precipitates a Final Break

1. Donziger Misrepresented to and Concealed From Kohn Important

Information Regarding Cabrera and Stratus

2. Donziger Deceives Kohn About the "Secret" Account

3. Donziger Refuses to Cooperate With Kohn's Demand for an

Investigation Independent of Donziger

4. Kohn Cuts Off Funding

5. Defendants' Response to Kohn's Testimony

E. The Search for New Funding -- Patton Boggs, the Invictus Strategy,

and Burford

1. Patton Boggs Is Retained, Develops the Enforcement Strategy, and

Obtains Funding from Burford

2. The Invictus Strategy

F. Fajardo Obtains a Broader Power of Attorney, and Donziger and

Fajardo Enter Into Their First Written Retention Agreements

with the LAPs

G. Burford Terminates the Funding Agreement

H. Donziger and Patton Boggs Try to Fix the Cabrera Problem -- the

Cleansing Experts

VIII. The Judgment

A. Its Contents

B. Chevron's Ghostwriting and Bribery Claims

IX. The LAPs Wrote the Judgment

A. Zambrano Was Not the Author

1. Zambrano Was Unfamiliar With Key Aspects of the Judgment He

Signed

2. Zambrano's Account of the Preparation of the Judgment Was Self

Contradictory and Implausible

3. Zambrano's Testimony as to the Computer on Which He Claimed the

Judgment Was Entered Was Inconsistent With the Evidence

4. Zambrano's Self Interest

B. Evidence that the LAPs Wrote the Judgment

1. The LAPs' "Fingerprints" Are All Over the Judgment

a. The Fusion Memo, the Draft Alegato, the Index Summaries,

the Clapp Report and the Fajardo Trust Email

b. The Moodie Memo

c. Selva Viva Database

2. Defendants' Failure to Provide any Explanation for the Overlap

3. Evidence that the LAPs Began Preparing the Judgment as Early as

2009

C. Ultimate Findings on this Point -- The LAPs Wrote the Judgment

X. How it All Began: Guerra Ghostwrote Orders

for Zambrano and the LAPs Paid Him

A. The Guerra-Zambrano-Donziger Conflict

B. Preliminary Observations on Credibility

C. Guerra's Ghostwriting for Zambrano

1. The Guerra-Zambrano Ghostwriting Deal -- Unrelated Civil Cases

2. Zambrano's First Tenure Presiding Over the Lago Agrio Case

a. Guerra Reaches out to Chevron

b. Following Chevron's Rejection, Guerra Makes a Deal With

the LAPs

c. Guerra Drafted Zambrano's Orders in the Chevron Case

d. The LAP Team Paid Guerra for His Ghostwriting Services

D. Ultimate Findings on This Point -- Guerra Was Zambrano's Paid

Ghostwriter in Civil Cases and Was Paid By Donziger and the LAPs To

Write Some of Zambrano's Orders in the Chevron Case

XI. The Story Ends: The LAPs Bribed Zambrano to Allow

Them to Write the Judgment and Issue It Under His Name

A. Zambrano's Second Tenure Presiding Over the Lago Agrio Chevron

Case: The Accounts of the Three Witnesses at Trial

1. Guerra

a. Guerra's Account

b. Assessing Guerra's Account

2. Zambrano

3. Donziger

a. Donziger's Account

b. Donziger's Credibility

B. Chevron's Circumstantial Evidence Pertinent to the Alleged Bribery

C. Other Circumstantial Evidence -- The Fajardo December

2010-January 2011 Emails

D. The Defendants' Evidence

1. Donziger's Testimony, Even If True, Would Not Negate the Alleged

Bribe

2. Donziger's Approval Was Necessary for the Alleged Deal With

Zambrano

a. Donziger Controlled the LAP Team

b. Donziger's Approval Was Necessary, and Given, for the 2009

Ghostwriting Deal with Guerra

E. Ultimate Findings on this Point -- Fajardo, with Donziger's

Approval, Promised Zambrano $500,000 of the Judgment Proceeds to

Decide the Case for the LAPs and Sign a Judgment They Prepared

XII. The Appeals

A. The First Level Appeal

1. The LAPs Contend that Chevron Set Up its Ghostwriting Claim

2. The Appellate Panel Affirms the Judgment

3. The Appellate Clarification Order

B. The National Court of Justice Affirms the Judgment in All But

One Respect XIII The Pressure Campaign Continues

A. The Invictus Strategy Deployed -- Attempts to Enforce the

Lago

...