Ecuadoreans May Face Sanction in Chevron Case

     MANHATTAN (CN) - Chevron demanded sanctions to force the release of documents that may help the oil giant contest an $18 billion judgment awarded to indigenous Ecuadoreans for environmental damage.
     The Ecuadoreans' spokeswoman Karen Hinton told Courthouse News that the maneuver is "without merit and an attempt to distract attention from the legal liability the company is facing for destroying the Ecuadorean rainforest."
     U.S. District Judge Lewis Kaplan signed the order on Tuesday, indicating that the Ecuadoreans may be held in contempt if they do not comply and turn over all responsive documents within one week.
     In 1993, a group of Ecuadorean natives sued Chevron's predecessor Texaco in Manhattan federal court, claiming Texaco dumped billions of gallons of toxic oil waste into the water supply of the Amazon, wrecking the environment and spreading disease.
     Eight years later, Texaco - newly acquired by Chevron - claimed the American courts had no jurisdiction over the case and successfully removed the case to a provincial court in Lago Agrio, Ecuador.
     Months before an Ecuadorean judge slapped it with a multibillion-dollar penalty, Chevron returned to the American courts and attacked the foreign proceedings as fraudulent.
     Throughout the many phases of litigation, Texaco and Chevron have blamed the state-owned Petroecuador for the spills while denying and downplaying the scope of the damage.
     Though the Lago Agrio court rejected those arguments, Chevron continues to fight the verdict on multiple fronts: through an appeal in Lago Agrio; an anti-racketeering lawsuit in Manhattan; and arbitration with the Ecuadorean government at The Hague.
     Most of the Ecuadoreans reject the jurisdiction of the U.S. courts as an affront to the autonomy of their country's judicial system, which they note was handpicked by their oil-drilling adversary.
     Nevertheless, a fight to block the award rages on in Manhattan.
     In March, Kaplan granted Chevron a preliminary injunction to block of collection of the award anywhere in the world, a directive the Ecuadoreans vowed to ignore in dozens of countries around the globe when the Ecuadorean appeals process runs its course. They have also repeatedly tried to recuse Judge Kaplan, who has issued several judgments unfavorable to their case. To date, Kaplan has set an early trial date to make the injunction permanent and granted Chevron broad discovery for that trial.
     Chevron complained Monday that the Lago Agrio plaintiffs have turned over a fraction of the sought-after documents.
     "To date, they have produced only 174 documents, totaling barely 1600 pages and consisting largely of press releases and other publicly-available materials," Chevron's brief states. "They have withheld - without logging - what must be many thousands of other responsive documents."
     Two days later, U.S. Magistrate Judge James C. Francis IV, assigned to sort out discovery for the trial, allowed Chevron to seek even more documents from three lawyers, including Joseph Kohn of the Pennsylvania-based law firm Kohn, Swift & Graf, whose subpoena the 3rd Circuit previously rejected.
     The Ecuadoreans have long argued that Chevron wants the wide discovery just to strain the Ecuadoreans' resources before trial.
     "Chevron now is trying to use U.S. courts to harass lawyers who represent the impoverished Ecuadorians trying to hold the company accountable," Hinton, their spokeswoman, said. "As the losses on the issues that really matter pile up for Chevron, the company's behavior has become even more abusive and unethical."
     Chevron now wants the court to give the Ecuadoreans an ultimatum.
     "The court would be well-justified in imposing harsh sanctions," the brief states. "At this stage, however, Chevron only requests that this court enter an order that gives Defendants one final opportunity, within one week, to produce all documents and information responsive to Chevron's requests and interrogatories and to face severe sanctions should they fail to comply."
     The trial on the enforceability of the $18.2 billion judgment is set for Nov. 14.