Judge Benches Attorney as Trial|Approaches for Chevron & Ecuadoreans

MANHATTAN (CN) - Steven Donziger, an attorney who helped engineer an $18 billion environmental verdict against Chevron, may have as much "interest" in a trial to block that award as a baseball fan might have in the New York Mets, a federal judge said.

Though U.S. District Judge Lewis Kaplan booted Donziger and his attorneys off the starting lineup for the November trial, the 16-page opinion notes that the lawyers may get to pinch-hit - at the umpire's discretion.

This concession did little to mend the strained relationship that Donziger, and the dozens of Ecuadoreans he led in the lawsuit, have with Kaplan, who has twice refused to step down amid their claims that he is biased toward the oil giant.

"Judge Kaplan's ruling once again shows his deep-seated antagonism toward the Ecuadorian indigenous groups who have suffered for decades due to Chevron's reckless pollution of the Amazon," the Ecuadoreans' spokeswoman Karen Hinton told Courthouse News in an email. "His decision essentially allows their primary U.S. lawyer, Mr. Donziger, to put his toe into the courtroom but denies him anything close to a full opportunity to litigate these critical issues."

In 1993, Donziger led a group of Ecuadorean natives in a lawsuit against Texaco in Manhattan federal court for massive oil contamination in the Amazon.

Eight years later, Texaco - newly acquired by Chevron - claimed the American courts had no jurisdiction over the case, demanded its federal court dismissal and promised to abide by the findings of 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, attacked the foreign proceedings as fraudulent and claimed that Ecuador now lacked the previously lauded jurisdiction.

In February 2011, Chevron filed a lawsuit in Manhattan accusing Donziger of masterminding a conspiracy - with the aid of dozens of alleged co-conspirators - to extort billions of dollars.

The last charge of this complaint, Count 9, puts the Ecuadorean judicial system on trial, and seeks a judgment declaring its ruling illegitimate everywhere outside its borders.

Judge Kaplan already has granted initial relief through a temporary restraining order and preliminary injunction. He also granted Chevron's motion an early trial in November that could make the ban permanent.

The Washington D.C.-based law firm Patton Boggs, another firm with a stake in the Ecuadoreans' case, decried Kaplan's rulings as "judicial imperialism."

In late April, Chevron filed a new complaint that quietly dropped Donziger, and his heavy-hitting defense attorney John Keker, from the count that is going to trial.

Chevron recently lost a sex-discrimination suit to a woman represented by Keker, the Ecuadoreans' spokeswoman noted at the time.

Donziger, who blasted the "false and malicious" allegations against him, tried to reinsert himself and his attorneys into the trial in a memorandum filed weeks later.

"The Lago Agrio case, pending now for over eighteen years, has been a large part of Donziger's life's work, and he has a significant and direct economic stake in its outcome," the memo states.

On Tuesday, Kaplan ruled that Donziger may have no more interest than a sports fan has in his favorite team.

"[O]ne may have an abiding 'interest' in the New York Mets in the sense of having a desire to know all about them or hoping that they win baseball games," Kaplan wrote. "One may have an 'interest' also in the sense of owning equity in them. And there are other possibilities."

Donziger testified that he stands to collect "slightly less than a third of the overall recovery of attorneys' fees [of the Lago Agrio award], whatever that may be, if that comes to pass."

But Kaplan replied that Donziger is admitted to practice in New York, not Ecuador, and "contingent fees" cannot serve as a basis for intervention.

The facts of Donziger's case suit "permissive intervention," however, which allows a judge to determine the boundaries of intervention when a party "has a claim or defense that shares with the main action a common question of law or fact," Kaplan added.

For now, Donziger may cross-examine witnesses who allege that his fraud makes the award unenforceable. He can also object to interrogatories and document requests that may violate his evidentiary privilege.

Kaplan noted that Donziger may get to move the foul posts as he sees fit.

"The Court, however, retains flexibility over the scope of intervention to ensure that it does not unduly delay the resolution of the Count 9 Action or prejudice the parties," according to the opinion. "It stands ready to consider changes to this order, should circumstances warrant, as the matter proceeds."

Chevron's spokesman declined to comment at press time.

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