MANHATTAN (CN) - A federal judge affirmed that he alone will preside over Chevron's lawsuit to invalidate a $19 billion judgment it faces for oil contamination in Ecuador.
In 2011, a court in the rainforest region of Lago Agrio ordered Chevron to pay billions to repair environmental damage and public health in a petroleum-soaked region of Amazon, 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 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.
Under federal anti-racketeering law, victory for Chevron in New York would have forced their Donziger et al. to pay three times the amount of the alleged fraud - roughly $57 billion.
Chevron would have been hard pressed to recover such an award, however, and it would have given Chevron's courtroom opponents the right to a jury trial. It dropped its damages claim weeks ago, adding in a footnote that it could revisit such claims later.
Donziger, who is defending himself pro se, fired back Friday with a 14-page memo casting the maneuver as a bid to make Chevron's "worst nightmare - a jury of ordinary Americans sitting in judgment of its trumped-up claims in this case - disappear." He argued that he retained a Seventh Amendment right to a jury trial because the oil giant never dropped its damages claim, and because it called him a "criminal" in open court and public fora.
"It would amount to a travesty of justice to deny me and my clients a jury trial in what is essentially a private prosecution funded by corporate largesse," he wrote.
The memo again hurled accusations of bias at U.S. District Judge Lewis Kaplan, whom the Ecuadoreans have repeatedly and unsuccessfully tried to force off the case.
"Without as much as an evidentiary hearing, the court freely characterized me as a 'field general' and public relations flak, 'orchestrating a campaign to intimidate the Ecuadorian judiciary' and going 'far beyond the rendition of professional legal services,'" Donziger wrote. "The court went so far as to suggesting I had 'criminal' exposure without as much as considering responsive pleadings that it deemed waived after denying me time to get counsel. The current maneuver, seeking to have Your Honor (with all his documented biases readily obvious) try this case without the protection afforded by a jury, no doubt plotted a long time ago by Chevron lawyers without notifying the court or adversary counsel, offends the basic notions of fair play and due process that undergird our judicial system." (Parentheses in original.)
The 2nd Circuit twice rejected motions to recuse Judge Kaplan for bias, though it once issued a ruling that overturned two of his orders.
Kaplan would not waver Monday on the bench trial scheduled for Oct. 15.
"Cases seeking only injunctions, imposition of constructive trusts, and disgorgement - including RICO cases based on alleged mail and wire fraud seeking only such relief - all are purely equitable and carry no right to trial by jury," he wrote. "Chevron unequivocally has surrendered any claim to money damages as well as to any other relief that is not equitable in nature. That too is an end to the matter."
Though Kaplan noted that the issue of his impartiality was "beside the point," he nevertheless pointed in a footnote to a 2nd Circuit opinion from 2010 that said he had handled certain discovery matters in an "exemplary manner."
Kaplan then returned to the jury issue.
"Insofar as is relevant to this case, the availability of trial by jury depends on one thing alone - whether the Seventh Amendment to the United States Constitution requires it," the order states. "The law is clear - it does not."
Without a money damage claim, "trial by jury is available only if the parties and the trial judge all agree to it," Kaplan added.
Responding to the ruling, Chevron spokesman Morgan Crinklaw said, "Chevron is looking forward to holding Steven Donziger and his co-conspirators accountable for orchestrating and executing a fraudulent extortion scheme against the company."
Christopher Gowen, a spokesman for Donziger and the Ecuadorean defendants, meanwhile called the decision a "clear abuse of power."
"This critical decision made only days before trial virtually guarantees Chevron its desired outcome from a judge who already has decided all key issues in case before evidence has been presented," Gowen said in a statement. "While Mr. Donziger and his clients will continue to fight to make a proper record for the court of appeals, there is simply no way they can get a fair trial before Judge Kaplan. This decision also guarantees that Judge Kaplan's expected finding of 'liability' against Mr. Donziger and the Ecuadoreans will have no legitimacy in courts around the world who ultimately will determine whether Chevron pays the Ecuador judgment."
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