Chevron Sanctioned for Abusive Discovery Tactic

(CN) - Chevron must pay an Oregon-based nonprofit more than $32,000 for harassment during discovery related to an $18.2 billion judgment against the oil company for environmental damage in Ecuador, a federal judge ruled.

As Chevron fought a civil complaint in Lago Agrio, Ecuador, over its liability for environmental damage caused by oil drilling, Environmental Law Alliance Worldwide (ELAW) filed an amicus brief on behalf of the Ecuadorean plaintiffs.

The trial ultimately resulted in an $18.2 billion judgment against Chevron, which the oil giant is fighting tooth and nail.

One component of Chevron's litigation strategy involves widespread discovery to find evidence of fraud and extortion. But U.S. Magistrate Judge Thomas Coffin in Eugene, Ore., recently took issue with a subpoena Chevron served ELAW and its director, Bern Johnson.

"It is a reasonable conclusion that Chevron's subpoena for Johnson's deposition was, at least in part, meant to harass," Coffin wrote. "Johnson spent an entire day in deposition, part of which consisted of Chevron going through the list of 300+ people name-by-name asking after each if Johnson was familiar with the name. In short, after reviewing the record, I find that Chevron's conduct is sanctionable."

Lawyers for the Ecuadoreans have compared Chevron's broad discovery to a "carpet bombing," and their U.S. spokeswoman Karen Hinton said that the Nov. 30 sanctions vindicate these complaints.

"Judge Coffin should be lauded for calling out Chevron's continued abuse of the discovery process to distract attention from its environmental crimes in Ecuador," Hinton said. "A picture is emerging of lawyers at Gibson Dunn who were being paid by Chevron to bully a respected international environmental organization."

The Ecuadoreans' lead attorney, Pablo Fajardo, is a member of ELAW.

Days after the Nov. 30 sanction order, Chevron filed a motion to dismiss the remainder of its discovery requests. ELAW opposed the dismissal and plans to ask the court for more sanctions.

Despite the judge's rebuke, Chevron has not retreated from its position that discovery proceedings will uncover evidence of fraud committed by its Ecuadorean adversaries and their supporters, like ELAW. In fact, application of the crime-fraud exception has given Chevron wide latitude amid claims of privilege.

"What's been lost in the most recent conversation is that ELAW is advocating on behalf of those who have repeatedly engaged in blatant misconduct," spokesman Justin Higgs said in a statement. "As well, some of the most egregious examples of transgressions occurred when ELAW was hosting one of the plaintiffs' lawyers for a fellowship in Eugene, Oregon."

EDITOR'S NOTE: An earlier version of this article quoted a Chevron spokesman as saying that eight federal courts had found the Ecuadorean plaintiffs had committed fraud. In fact, the courts issued crime-fraud exception findings during discovery. Chevron's fraud allegations against the Ecuadorean plaintiffs remain unproven.

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