Chevron Corp. v. Donziger, 11 Civ. 0691(LAK).

• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
• Writing for the Court: LEWIS A. KAPLAN
• Citation: 974 F.Supp.2d 362
• Parties: CHEVRON CORPORATION, Plaintiff, v. Steven DONZIGER, et al., Defendants.
• Docket Number: No. 11 Civ. 0691(LAK).,11 Civ. 0691(LAK).
• Decision Date: 04 March 2014

974 F.Supp.2d 362

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.

[974 F.Supp.2d 376]

Randy M. Mastro, Andrea E. Neuman, Reed M. Brodsky, William E. Thompson, Anne Champion, Gibson, Dunn & Crutcher, LLP, for Plaintiff.

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

Richard H. Friedman, Friedman & Rubin, Zoe Littlepage, Rainey C. Booth, Littlepage Booth, Steven Donziger, for Defendant Steven Donziger and Steven R. Donziger & Associates LLP.

Julio C. Gomez, Julio C. Gomez, Attorney at Law LLC for Defendants Hugo Gerardo Camacho Naranjo and Javier Piaguaje Payaguaje.

OPINION
LEWIS A. KAPLAN, District Judge.

[1-105] Editor Note: The paragraphs related to headnotes 1–105 are found on the supplemental pieces of this opinion on Westlaw. Part 1 is 2014 WL 815553; Part 2 is 2014 WL 815613; Part 3 is 2014 WL 815715; Part 4 is 2014 WL 815869 [Headnotes 1–2]; Part 5 is 2014 WL 815923 [Headnotes 3–51]; Part 6 is 2014 WL 815961 [Headnotes 52–87]; Part 7 is 2014 WL 816086 [Headnotes 88–105]

Table of Contents

Introduction	383
Facts	386

I. The Background
386

A.	Texaco's Operations in Ecuador	386
B.	Aguinda	387

1.
The Principal Plaintiffs' Lawyers in Aguinda
387

a.	Cristobal Bonifaz	387
b.	Steven Donziger	388
c.	Joseph Kohn	388

2.
Key Events During Aguinda
389

a.	Forum Non Conveniens—The Aguinda Plaintiffs Attack Ecuadorian Courts as Corrupt While Texaco Defends Them	389
b.	The Start of the LAPs' Alliance With the ROE—The LAPs Agree Not to Sue PetroEcuador or the ROE	390
c.	The Aguinda Plaintiffs Seek to Recuse, and Attack, Judge Rakoff	390
d.	The Environmental Management Act is Passed in Ecuador	391
e.	Texaco Merges with a Chevron Subsidiary and Survives the Merger	391

II. The Lago Agrio Litigation Begins
391

A.	Donziger's Attitudes and Beliefs About the Ecuadorian Courts and the Conduct of Lawyers in Ecuador	392
B.	The Ecuadorian Judges	394
C.	The LAPs' Team	395

1.	The American Lawyers	395
2.	The ADF, Selva Viva, and Luis Yanza	398
3.	The Ecuadorian Lawyers	399
4.	The Assembly	401

III. The Beginnings of Donziger's Pressure Campaign
401

A.	Donziger's Strategy	401
B.	Donziger's Public Relations Team and NGO Allies	403

1.	The Public Relations and Lobbying Team	403
2.	Amazon Watch	404

C.	The Pressure Begins—The LAPs' First Scientist and the $6 Billion “Drive By” Damages Estimate	406
D.	Donziger Touts Russell's “SWAG” and Other Misleading Descriptions of Conditions in the Orienté to Put Pressure on Chevron	407
E.	False and Misleading Representations to Incite Governmental Action Against Chevron	407
F.	Donziger's Attempt to Justify His Continued Use of Russell's Disavowed Estimate is Unpersuasive	410

IV. The First Phase of the Lago Agrio Case—The Judicial Inspections
411

A.	The Process	411
B.	The LAPs' Judicial Inspection Experts	412
C.	The Calmbacher Episode	412
D.	The LAP Lawyers Halt Testing for BTEX and GRO Because it Is Yielding Unhelpful Results	414
E.	Sacha–53 and the “Independent” Monitors—Donziger, in His Words, Goes Over to the “Dark Side” and Makes a “Bargain With the Devil”	416
F.	The Termination of the LAPs' Remaining Judicial Inspections and the Genesis of the Global Assessment	419

1.	The LAPs Coerce the Judge to Cancel the LAPs' Remaining Judicial Inspections	420
2.	Donziger Chooses Cabrera to be the Global Expert	422

V. The Second Phase of the Lago Agrio Case—The Cabrera “Global Expert” Report
425

A.	The LAPs Secretly Plan the Cabrera Report—The March 3 and 4, 2007 Meetings	425
B.	Donziger, Fajardo, and Yanza Put Together an “Army,” Cabrera is Sworn in, and the LAP Team Prepares His Work Plan	428
C.	The Field Work	430

1.	The LAP Team Pays Cabrera to Ensure that He Would “Totally Play Ball”	431
2.	The LAP Team Provides Cabrera with Administrative “Support” and Controls his Field Work	435

D.	Donziger Attempts to Deceive Judge Sand About Cabrera's Independence	437
E.	Stratus Secretly Writes Most of the Report	439
F.	Stratus Criticizes its Own Report to Enhance the False Image of Cabrera's Independence	443
G.	Donziger's Explanation	446

VI.	The Pressure Campaign Continues—The LAP Team Turns Up the Heat By Pressing for Indictment of Former Texaco Lawyers	448
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	452

A.	Donziger's Assumption that What Happens in Ecuador, Stays in Ecuador	452
B.	The Release of Crude	453
C.	The Section 1782 Proceedings	455

1.
The Section 1782 Action Against Stratus—Denver Counsel Withdraw and Donziger and Fajardo Seek to Obstruct Justice Before the Federal Court
455

a.	Donziger Retains U.S. Counsel to Represent the LAPs in Denver	455
b.	Beltman Discloses the Truth to Shinder—Denver Counsel Withdraw	457
c.	Fajardo Submits a Misleading Affidavit in Denver and Elsewhere	460

2.	The New York 1782 Proceedings—Berlinger and Donziger	464
3.	The LAP Team Sought to Deceive This Court in the Berlinger 1782 Proceeding	464

D.
Donziger Deceives Kohn, Refuses His Demand for an Investigation of the Facts With Respect to Cabrera, and Precipitates a Final Break
465

1.	Donziger Misrepresented to and Concealed From Kohn Important Information Regarding Cabrera and Stratus	466
2.	Donziger Deceives Kohn About the “Secret” Account	467
3.	Donziger Refuses to Cooperate With Kohn's Demand for an Investigation Independent of Donziger	467
4.	Kohn Cuts Off Funding	470
5.	Defendants' Response to Kohn's Testimony	473

E.
The Search for New Funding—Patton Boggs, the Invictus Strategy, and Burford
474

1.	Patton Boggs Is Retained, Develops the Enforcement Strategy, and Obtains Funding from Burford	474
2.	The Invictus Strategy	476

F.	Fajardo Obtains a Broader Power of Attorney, and Donziger and Fajardo Enter Into Their First Written Retention Agreements with the LAPs	477
G.	Burford Terminates the Funding Agreement	478
H.	Donziger and Patton Boggs Try to Fix the Cabrera Problem—the Cleansing Experts	479

VIII.
The Judgment
481

A.	Its Contents	481
B.	Chevron's Ghostwriting and Bribery Claims	482

IX.
The LAPs Wrote the Judgment
483

A.
Zambrano Was Not the Author
483

1.	Zambrano Was Unfamiliar With Key Aspects of the Judgment He Signed	483
2.	Zambrano's Account of the Preparation of the Judgment Was Self Contradictory and Implausible	485
3.	Zambrano's Testimony as to the Computer on Which He Claimed the Judgment Was Entered Was Inconsistent With the Evidence	488
4.	Zambrano's Self Interest	489

B.
Evidence that the LAPs Wrote the Judgment
492

1.
The LAPs' “Fingerprints” Are All Over the Judgment
492

a.	The Fusion Memo, the Draft Alegato, the Index Summaries, the Clapp Report and the Fajardo Trust Email	492
b.	The Moodie Memo	493
c.	Selva Viva Database	495

2.	Defendants' Failure to Provide any Explanation for the Overlap	498
3.	Evidence that the LAPs Began Preparing the Judgment as Early as 2009	498

C.
Ultimate Findings on this Point—The LAPs Wrote the Judgment
501

X. How it All Began Guerra Ghostwrote Orders for Zambrano and the LAPs Paid Him
502

A.	The Guerra–Zambrano–Donziger Conflict	502
B.	Preliminary Observations on Credibility	504
C.	Guerra's Ghostwriting for Zambrano	505

1.	The Guerra–Zambrano Ghostwriting Deal—Unrelated Civil Cases	505
2.	Zambrano's First Tenure Presiding Over the Lago Agrio Case	507

a.	Guerra Reaches out to Chevron	507
b.	Following Chevron's Rejection, Guerra Makes a Deal With the LAPs	508
c.	Guerra Drafted Zambrano's Orders in the Chevron Case	508
d.	The LAP Team Paid Guerra for His Ghostwriting Services	509

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
511

XI. The Story Ends: The LAPs Bribed Zambrano to Allow Them to Write the Judgment and Issue It Under His Name
513

A.
Zambrano's Second Tenure Presiding Over the Lago Agrio Chevron Case The Accounts of the Three Witnesses at Trial
513

1.
Guerra
513

a.	Guerra's Account	513
b.	Assessing Guerra's Account	518

2.	Zambrano	520
3.	Donziger	521

a.	Donziger's Account	521
b.	Donziger's Credibility	522

B.	Chevron's Circumstantial Evidence Pertinent to the Alleged Bribery	526
C.	Other Circumstantial Evidence—The Fajardo December 2010–January 2011 Emails	528
D.	The Defendants' Evidence	531

1.	Donziger's Testimony, Even If True, Would Not Negate the Alleged Bribe	531
2.	Donziger's Approval Was Necessary for the Alleged Deal With Zambrano	531

a.	Donziger Controlled the LAP Team	531
b.	Donziger's Approval Was Necessary, and Given, for the 2009 Ghostwriting Deal with Guerra	533

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
533

XII. The Appeals
535

A.
The First Level Appeal
535

1.	The LAPs Contend that Chevron Set Up its Ghostwriting Claim	535
2.	The Appellate Panel Affirms the Judgment	537
3.	The Appellate Clarification Order	538

B.
The National Court of Justice Affirms the Judgment in All But One Respect
539

XIII. The Pressure Campaign Continues
540

A.	The Invictus Strategy Deployed—Attempts to Enforce the Lago Agrio Judgment	540
B.	The Purpose of All of These Efforts	542

Prior Proceedings in this Litigation	544
The Pleadings	544
The Amended Complaint	544
The Answers	544
Discovery and Motion Practice	545
Discovery and Discovery Sanctions	545
The Partial Summary Judgment Motions	545
Attempts to Recuse the Judge or Require Reassignment of the Case 302 The Trial	546
The Trial	546
Post–Trial Briefing	547
Discussion and Additional Findings	547

I. This Court Has Subject Matter Jurisdiction
548

A.	This Case Is Not Moot	549
B.	This Court Had Subject Matter Jurisdiction When the Action Was Brought	550
C.	The Court Would Have Subject Matter Jurisdiction Even on Defendants' Erroneous Premise	552

II. The Non–Statutory Claims for Equitable Relief With Respect to the Judgment
555

A.	Equitable Relief With Respect to Fraudulent Judgments Generally	555
B.	Fraud on the Court—Corruption and Coercion of Judges and Judicial Official	557

1.	The Bribery of Zambrano	558
2.	The Coercion of...