Lawyer Accuses Federal Judge of Bias for Chevron

     MANHATTAN (CN) - A lawyer whom Chevron accuses of violating anti-racketeering law says the federal judge assigned to the case against him is biased and even encouraged Chevron to file the suit.
     Steven Donziger sees Chevron's RICO lawsuit as an obstacle in the way of an $18.2 billion verdict he helped secure for native Ecuadoreans who sought recovery for oil contamination in their country.
     Chevron has not been shy with its claims that Donziger, an American attorney who spearheaded the Ecuadoreans' lawsuit, used unethical tactics to achieve a big payout for the Ecuadoreans and tidy fee for his work on the case.
     Two weeks before the court in Lago Agrio, Ecuador, entered the $18.2 billion verdict for the Ecuadoreans, Chevron sued Donziger and several dozen other players in the Ecuadoreans's case for violating anti-racketeering law and trying to extort Chevron into a settlement.
     In preparation of filing that suit, Chevron conducted discovery in several courts across the country. U.S. District Judge Lewis Kaplan played a central role in the company's New York discovery hearings. As Chevron gathered evidence it says proves the Lago Agrio case is a fraud, Kaplan declined motions to quash subpoenas and rejected Donziger's contention for immunity as an attorney. The 2nd Circuit mostly affirmed those decisions on appeal, electing at times to limit the scope of Chevron's subpoenas.
     In a 17-page brief filed on Feb. 28, Donziger says Kaplan has demonstrated palpable animosity toward him, and notes that such animosity is documented in court transcripts and media coverage. He claims Chevron has been using Kaplan to "game the system" and avoid paying for environmental damages.
     Under the Lago Agrio decision, Chevron must pay $18.2 billion in damages to clean up decades of oil-drilling damage in the Amazon. A provision of the award says Chevron can shrink the penalty to about $9.5 billion by issuing a "public apology," but the company's attorney vowed at a recent hearing in New York that it would not take the Ecuadoreans up on their offer. Kaplan is still considering considering Chevron's request for an injunction that would block the judgment award.
     The underlying lawsuit sought additional relief for oil-drilling damage that the Ecuadoreans say was not covered by a $40 million settlement the country struck with Texaco in 1995. Texaco had drilled in Ecuador in the 1960s and then pulled up stakes and became a subsidiary of Chevron in 2001. For its part, Chevron says it has never drilled in Ecuador.
     As Texaco was settling claims with the government of Ecuador, a group Ecuadorean nationals filed suit against Texaco in New York federal court in 1993. In 2002, U.S. District Judge Saul Rakoff granted Chevron's motion to transfer the case to Ecuador, and the oil company agreed to honor the process and decisions of the Lago Agrio court.
     Donziger's brief says that Chevron filed the RICO suit to dodge that promise it made to Rakoff. Moreover, by failing to cite the original 1993 action, Donziger claims that Chevron conveniently omitted details that would have ensured the case found its way on Rakoff's calendar.
     "Chevron failed to disclose on the civil cover sheet the nine-year S.D.N.Y history of a case which was not only 'related,' but indeed was the very case whose judgment the instant action now seeks to invalidate," the brief states (emphasis in original).
     Chevron wanted the case steered to Kaplan, whom the company "perceives as sympathetic," Donziger claims.
     The brief reprints several choice remarks from the often quotable judge, gathered from transcripts and the judge's rulings. Kaplan referred to the Ecuadoreans' actions against Chevron as a "game" financed and sprung "from the imagination of American lawyers." "They start out in the U.S. to hit Chevron as big as they can," the memo quotes Kaplan as saying.
     Donziger also accuses Kaplan of having "encouraged" Chevron to file the original racketeering claims against Donziger. At a September hearing on one of Donizger's motions to quash Chevron's subpoena, Kaplan said, "Now, do the phrases Hobbs Act, extortion, RICO, have any bearing here?"
     "It is no wonder that Chevron would seek to have the instant action assigned to the very judge who invited and encouraged its instigation," the brief states.
     Donziger says the court transcripts show Kaplan supports Chevron's position in a key argument that any environmental damage since 1992 happened on the watch of Ecuador's state-run oil company, Petroecuador, absolving Chevron and Texaco of responsibility.
     Reporters covering the litigation have even picked up on Kaplan's apparent contempt for Donziger, according to the brief. It quotes an article from a Forbes reporter, who remarked last month that Donziger "seems to have drawn the distaste of Judge Kaplan" and backed away from the Ecuadoreans' case.
     Donziger also says that Kaplan appointed a special master with a Chevron "bias" to oversee the company's discovery. That special master was "hostile" toward Donziger, the brief states. The lawyer attached a six-page appendix about the special master's "biased" conduct during depositions.
     Donziger, who is now represented by the San Francisco-based firm Keker & Van Nest, seeks to have the case transferred back to Judge Rakoff.