Court Mulls Multibillion Verdict Facing Chevron

MANHATTAN (CN) - Chevron urged a federal judge on Friday to issue an injunction that would block a multibillion judgment the oil giant was ordered to pay in Ecuador for what the country has called the "world's worst oil disaster." The Ecuadorean plaintiffs say the judgment, which has not yet been translated into English, awarded them at least $8 billion, while Chevron claims the figure is actually $18.2 billion.

Chevron attorney Randy Mastro, of Gibson Dunn, says the judgment grants $864 million to the Amazon Defense Front, which was not a party to the action, and includes an $8.64 billion penalty if Chevron does not apologize. "Chevron is not apologizing," Mastro said.

One week before the court in Lago Agrio, Ecuador, issued the judgment on Feb. 14, U.S. District Judge Lewis Kaplan granted Chevron a temporary restraining order, still in effect through March 8, against the Ecuadoreans' collection efforts.

"The Sword of Damocles is not only hanging over our head, it's touching our foreheads," Mastro said.

Steven Hyman, an attorney for the Ecuadoreans, said he "cannot see numbers" as large as Chevron's earnings in 2009: $164 billion.

John Keker, who represents an American lawyer that spearheaded the Lago Agrio plaintiffs' lawsuit, said that the Ecuadorean appeals process will take six months, and he urged Kaplan to look "more realistically" about the abilities of the Ecuadorean plaintiffs to enforce a judgment against the oil giant.

"Chevron is not a widow or an orphan that cannot take care of its business," Keker said.

He also announced at the hearing that he plans to formally ask Kaplan to recuse himself from an anti-racketeering case Chevron filed on Feb. 1 against the players behind the Ecuadoreans' lawsuit.

Keker's client, Steven Donziger, is the primary target of the Chevron lawsuit. Chevron says Donziger used unethical tactics to help the Ecuadoreans secure an extortionate judgment. The oil company bolsters this argument with the findings of several judges, including Kaplan, who have ruled periodically for Chevron in the months-long discovery process.

The San Francisco-based attorney says Kaplan's quotations prove he has already taken sides and supports Chevron's position.

Keker, who just signed on to represent Donziger on Thursday, said that he has spent the last 24 hours being briefed about the case. He says he can already tell that the allegations of fraud against Donziger are overblown.

Despite Keker's late start on the case, Kaplan said Friday that the deadline has passed for the lawyer to file a response to the allegations against Donziger.

Quoting the State Department and independent assessments, Chevron's attorney argued that Kaplan must intervene because the Ecuadorean courts are corrupt. Chevron says that the reports of two court-appointed, independent experts in the Ecuadorean trial were ghostwritten by consultants Donziger hired.

Keker denies the allegation and says that the Ecuadorean judgment makes clear that the judge did not consider these reports in considering his verdicts.

In a teleconference on Tuesday, one of the Ecuadorean lawyers for the indigenous said that the judge considered more than 100 expert reports, more than 50 of which were authored by Chevron's experts.

Neither party has secured a certified English translation of the Ecuadorean judgment.

Kaplan pointed to film evidence Chevron has uncovered that captures Donziger saying Ecuadorean judges are corrupt and only respond to pressure.

Norman Siegel, a former director of the New York Civil Liberties Union, defended Donziger's remarks at Friday's hearing. He said that, as someone who has represented many First Amendment case, people like Donziger are "passionate" and "principled."

"They get caught up in the moment," Siegel said. "That's all theater."

Kaplan said that he is unfamiliar with Ecuadorean pleading law, to which Siegel countered with the Hebrew expression of congratulations.

"Mazel tov," Siegel said, adding that Kaplan should take the time to learn.

Keker urged Kaplan to reserve judgment until he has read an English translation of the Ecuadorean judgment.

Both parties have until Feb. 24 to submit expert reports that address what appellate remedies Chevron has in Ecuador and at what point a judgment becomes enforceable.

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