MANHATTAN (CN) - A federal judge granted Chevron a restraining order Tuesday against the ongoing $113 billion environmental lawsuit that the oil giant faces in Ecuador. An Ecuadorian judge has not yet entered a judgment in the case, but Tuesday's ruling would block the plaintiffs suing Chevron from collecting on any future verdict.
"To issue this relief in advance of a judgment is certainly unusual," U.S. District Judge Lewis Kaplan said at the hearing. "The plaintiffs have announced a strategy to cause as much disruption as possible. ... I am persuaded that the likelihood of irreparable injury is quite high."
Dozens of Ecuadorian natives have spent years trying to pin down Chevron for allegedly perpetrating the "world's worst oil disaster" on their land and causing "ongoing contamination that is harming the environment and human health to this day," their spokeswoman Karen Hinton has said.
The scope of that damage is chronicled in director Joseph Berlinger's 2009 documentary "Crude," which details how oil production has devastated the rainforest community while providing an intimate look at the players behind the lawsuit.
Chevron recently concluded discovery involving hundreds of outtakes from that film, which the company says shows evidence of massive fraud. Last week, Chevron filed a federal action against several dozen entities involved in the lawsuit, accusing them of violating anti-racketeering laws.
In a hearing before Judge Kaplan on Tuesday, Chevron attorney Randy Mastro of Gibson Dunn said that the lawsuit was a "shakedown" tainted by "fraud," whose likely outcome would represent "the grossest miscarriage of justice to happen to a United States company."
Mastro showed snippets of taped depositions in which the American attorney who spearheaded the lawsuit in Lago Agrio, Ecuador, Steven Donziger, apparently admits to having a consulting firm ghostwrite the report signed by the Ecuadorian court-appointed, independent expert, Richard Cabrera. In recent weeks, Kaplan has cracked down on Donziger to force him to comply with Chevron's subpoenas.
Mastro showed a deposition taped in late December in which Donziger said, "I know that [Cabrera] adopted pretty much verbatim what had been provided to him."
Another tape showed Donziger acknowledging that the Ecuadorian lawyers said that criminal prosecution for their misconduct "was a concern."
After the tape ended, Mastro said that it was "more than a concern," and an attorney for the Ecuadorians suing Chevron, Julio Marcelo Prieto Méndez, wrote an e-mail saying, "All our attorneys can end up in jail."
Representatives for those involved in the lawsuit have said the Ecuadorians' lawyers, like Prieto, face constant persecution for carrying out their work. In a June 2006 statement, the Amazon Defense Coalition said that Prieto's office had been broken into a month earlier, and the Ecuadorian police had not investigated the matter.
Mastro said that the Ecuadorian plaintiffs tried to conceal the true authorship of the Cabrera report.
Attorney Joseph Kohn, who withdrew from the case after these claims were made public, wrote Donziger a letter blasting his "utter stupidity, arrogance and conceit" in inviting an American film crew to tape apparently corrupt activity, Mastro said.
Kohn wrote that Donziger's actions "jeopardized the entire case," Mastro said.
Washington D.C.-based firm Patton Boggs authored a document called "Invictus," strategizing how the Ecuadorian plaintiffs could strategize a settlement in the event of a judgment in their favor by filing lawsuits in more than 100 countries, Mastro said.
Donziger boasted in a press release for Amazon Watch that "this could be one of the biggest forced seizure actions in history" of Chevron's assets and boats throughout the world, Mastro said.
Donziger declined to respond to Mastro's remarks.
"As much as I would like to, I do not feel comfortable responding without my attorney," Donziger said.
Kaplan quickly undermined the non-comment, stating: "Just so the record is clear, Steven Donziger is an attorney licensed to practice in New York."
The Ecuadorians' new attorney, Sheldon Elsen of Orans Elsen Lupert & Brown, quickly disassociated himself from Donziger.
Elsen said Donziger may be a "liar and a thief," but he is not his client.
"My clients are a bunch of peasants in Ecuador," Elsen said. "My clients had their lands wrecked by pollution."
Whatever Donziger did, Chevron does "not have the law on their side," Elsen said.
Elson asked Kaplan to "follow the law regardless of what you think of the party," as he did during the trial of former Guantanamo detainee Ahmed Ghailani.
(Kaplan recently sentenced Ghailani to life in prison for his role in the 1998 bombings of two U.S. Embassies in East Africa. Before that terror trial, Kaplan barred a key government witness that prosecutors learned about through torture.)
In this case, Elsen said that New York does not legally have jurisdiction over a case in Ecuador.
Kaplan replied that their attorney has an office in New York.
"Your clients have an agent in New York," Kaplan said. "His name is Steven Danziger."
Chevron has said that Donziger solicited the attentions of a documentary film crew and the Attorney General in New York in a bid to mount pressure on Chevron and draw out a hefty settlement. Donziger may not have acted as attorney for the Lago Agrio plaintiffs, but Mastro said he did act as "ringleader" of the "scheme."
"That's the game here," Mastro said.
Elsen countered that "Chevron's game is to leave these peasants'... land ruined."
Kaplan would not be drawn into a good-versus-evil argument.
"Nobody here was born yesterday," Kaplan said. "Cases, when they are settled, are settled because of leverage. ... [There is] nothing wrong with considering bargaining power, but we have several other things at work here."
Kaplan said he would grant the injunction based on the "threat of irreparable injury" to Chevron and "public interest" in protecting a company of "considerable importance to our economy."
He added that Donziger planned "helter skelter disruption for the sake of disruption."
Elsen said he planned an "immediate appeal" of the ruling.
A spokesman for Chevron said he pleased with Kaplan's ruling Tuesday.
"Chevron also continues to seek protection from the international arbitration panel in the Hague against enforcement of the fraudulent judgment that appears to be coming soon in Ecuador," spokesman Kent Robertson said in a statement. "Only the government of Ecuador, however, can take the necessary steps to bring an end to the fraud that is being perpetrated in its court system. Chevron hopes that the government of Ecuador will pay attention to the shocking evidence of fraud that is continuing to emerge."
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