Evidence Limit for Foes of Chevron Bodes Odd Trial

MANHATTAN (CN) - A discovery violation days before a trial to nullify a $19 billion judgment for oil pollution in the Amazon will torpedo certain evidence from Chevron's court opponents, a federal judge said.

In 2011, a court in Lago Agrio, Ecuador, ordered Chevron to pay billions to repair environmental damage and public health issues in a petroleum-soaked region of that rainforest region, where its predecessor Texaco drilled for decades.

Chevron claimed that U.S.-based lawyers who spearheaded the trial in Ecuador corrupted the case by bribing a judge, ghostwriting the judgment and fixing the scientific studies. The company skewered attorney Steven Donziger in particular, as well as his co-counsel and his indigenous clients, in a federal complaint filed in Manhattan days before the Ecuadorean ruling.

Though litigation has spanned two decades, three continents and several U.S. judicial districts, Chevron has insisted that stonewalling by lawyers and activists for the Ecuadoreans stymied its evidence collection in the New York case.

Chevron spokesman Morgan Crinklaw declined to comment specifically on the nature or significance of the company's requests, instead referring to its public filing.

"It is difficult to answer your questions, given that we have not yet had them produced," he said.

The Ecuadoreans have contended that the discovery requests violated their country's laws, and they sought and received an injunction back at home prohibiting them from turning over these particular goods to Chevron.

Slamming those actions as a discovery violation Thursday, U.S. District Judge Lewis Kaplan put a crimp in the evidence Donziger and his colleagues can present to defend themselves.

In a 107-page opinion, he noted that the claims of sovereignty have "not stopped these defendants ... from submitting documents in this case that they obtained from their Ecuadorian lawyers when it suited their purposes - in one case just days after denying that they had control over the documents submitted and claiming they could not produce them to Chevron."

Chevron had wanted Kaplan to impose sanctions that would have had the practical effect of ending the case in their favor, but the judge took a more nebulous route.

Finding that Donziger et al.'s "selective disclosure of evidence favorable to their case most certainly has prejudiced Chevron and has provided defendants with a tactical advantage," Kaplan said he would respond at trial by ruling "on the admissibility of any such materials on a document-by-document basis if, as, and when defendants attempt to introduce them."

"In doing so, it may exclude all or some such documents as a sanction irrespective of whether they otherwise would have been admissible," Kaplan continued.

During a phone conference, Donziger's new attorney Zoe Littlepage said: "I've never seen a sanctions order like this in my entire legal career."

The 23-year veteran attorney added that such an order will give Kaplan "complete power over the entire case" and the discretion to determine "what part of the case he wants to hear and does not want to hear."

Recently, Kaplan affirmed that he will be hearing the case from the bench in a decision that said Donziger and his colleagues do not have a right to a jury trial.

That means that the lawyers for the Ecuadoreans will be facing off against a judge whom they have repeatedly accused of bias and have unsuccessfully tried to recuse multiple times.

Littlepage said that the upcoming case also will look odd because of Judge Kaplan's decision to streamline the trial by having witnesses offer testimony by written filings instead of direct examination. She conceded that there was precedent for such courtroom procedure, but she called it "unusual for a case of this nature."

Even with these measures, she anticipated that trial could run more than three weeks.

She said it is also an open question about whether Kaplan will admit evidence about the pollution that Texaco allegedly wrought in Ecuador.

Chevron, however, will have the opportunity to attack the basis for the evidence that the Ecuadoreans presented in Lago Agrio, particularly those produced by the Colorado-based scientific firm Stratus Consulting. Executives for that firm renounced their original studies blaming Texaco for oil devastation, signing up as Chevron witnesses to testify Donziger tainted the work.

Littlepage added that the practical significance of the ruling Chevron seeks, a judgment finding the $19 billion award unenforceable because of fraud, is also hazy.

Chevron says that Judge Kaplan's findings of fact will help them fight off ongoing enforcement actions in Canada, Brazil and Argentina. The Ecuadoreans counter that they will appeal any ruling against them to the 2nd Circuit, which previously told Kaplan that he does not have the authority to tell other countries which awards they should or should not respect.

"We have no idea what the trial will look like," Littlepage said.

The highly anticipated, if elusive, trial begins after the long weekend on Tuesday.

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