By David B. Rivkin Jr. and Andrew M. Grossman
For all the complaints about the American justice system — litigation is too expensive, too slow, too uncertain — it leads the world in the metric that matters most: uncovering the truth. That has been on particular display in a Manhattan courtroom.
On trial are crusading attorney Steven Donziger and his allies in a decades-long legal battle against the energy giant Chevron. Representing indigenous people in Ecuador’s Lago Agrio region, Donziger obtained an $18.2 billion judgment against Chevron in an Ecuadoran court for pollution that he attributed to drilling operations by Texaco, which Chevron acquired in 2001.
Chevron has long maintained that the Ecuadoran judgment was a fraud, part of a 20-year scheme to extort money. It filed suit in the United States in 2011, accusing Donziger of racketeering and seeking to block enforcement of the judgment.
What a trial it has been! In its first days in the U.S. District Court in Manhattan, the chief executive of a litigation-financing firm that invested $4 million into Donziger’s efforts to collect on the judgment testified that his company bailed when it became “deeply concerned about the mounting evidence of fraud and misconduct.”
That evidence, at the heart of Chevron’s case, is finally being aired. David Russell, an environmental consultant who provided key support in the Ecuadoran trial for Donziger’s sky-high damages claims, conceded in written testimony last month that his “cost estimate was wildly inaccurate and had no scientific data to back it up.” How did he arrive at the $6.11 billion figure that Donziger had trumpeted in court and in the media? It was based “largely on assumptions Donziger told me to use” — assumptions that Russell now says he considers bogus.
The Ecuadoran judge who presided over the case for nearly a year, Alberto Guerra, has testified that he later served as a crucial go-between for Donziger and the judge who took over the case, Nicolas Zambrano. According to Guerra, he and Zambrano reached out to both Chevron’s lawyers and Donziger’s team, offering to steer the case their way in exchange for cash. Chevron turned them down, he said, but Donziger’s side agreed to the scheme.
Guerra testified in writing that he met several times with Donziger and other lawyers for the plaintiffs at the Honey & Honey Restaurant in Quito to discuss particulars. They agreed that Guerra would move the case along briskly and ghostwrite orders for Zambrano in exchange for payments of $1,000 per month. Guerra has the deposit slips.
Guerra testified that as the Ecuadoran trial reached its final stages, he and Zambrano solicited an additional $500,000 to throw the case. Donziger initially balked at the price, Guerra said, but they soon reached a deal: Donziger’s team would draft the judgment, Guerra would clean up the legal reasoning and Zambrano would sign the final product. The money would come later, Guerra testified, after Donziger collected on the judgment. Donziger and Zambrano deny the charge, but Zambrano didn’t help matters much when, on the witness stand, he was unable to recall even the most basic facts about his decision.
And that, says Guerra, is how Donziger won a $19 billion judgment, which the lawyer is attempting to enforce in countries where Chevron has assets.
In most cases, this is where the story would end. The defendant would cut a deal to settle for a lesser sum or the plaintiff would manage to collect, at least in part.
But Chevron turned to U.S. courts to review what it believed was a miscarriage of justice. Relying on federal courts’ generous discovery procedures — which ensure that all parties have fair access to relevant evidence — the company uncovered a trove of materials confirming its suspicions.
One outtake from a film produced to support Donziger’s crusade against Chevron, which Chevron introduced in court, showed his team meeting with a supposedly impartial, court-appointed expert on damages to coach him on his testimony weeks before he appeared in court. In other outtakes, Donziger’s associates discuss the lack of evidence in support of their legal claims and their strategy to win through, in Donziger’s words, “pressure, intimidation and humiliation.”
In an e-mail read in testimony, Donziger describes his approach to his co-counsel in Ecuador: “If you repeat a lie a thousand times, it becomes the truth.”
Well, not in a U.S. courtroom, where judges swear by a code of ethics that requires impartiality and avoiding even the appearance of conflicts of interest.
As for Donziger, the New York Times reported that, in prepared testimony to be delivered next week, he concedes he “did make errors along the way,” including concealing his relationship with and payments to the court-appointed damages expert. He maintains that the case against him is legally unfounded.
If the Ecuadoran judgment is a prime example of justice gone wrong, this trial is a more powerful example of justice gone right. The fairness and neutrality of the U.S. justice system should not be taken for granted, especially when those features are lacking in many other places. This case is an occasion for Americans to be proud of our courts, our judges and our devotion to rule of law.
David B. Rivkin Jr. and Andrew M. Grossman practice law in the Washington office of BakerHostetler. Rivkin served in the Justice Department and the White House counsel’s office in the Reagan and George H.W. Bush administrations.