Judge Won’t Scale Back Chevron Discovery Order

MANHATTAN (CN) - Chevron can proceed with rigorous discovery as it heads for a trial to block an $18 billion judgment that indigenous Ecuadoreans won in their home country over oil-drilling devastation to the Amazon, a federal judge ruled.

The ruling does little to change the Ecuadoreans' bias perceptions about U.S. District Judge Lewis Kaplan, whom they have twice asked to step down. Kaplan has brushed off the accusations, leading to attempts at appeal now pending before the 2nd Circuit.

In a tumultuous 18-year case that shows few signs of resolution, Kaplan's handling of the case dates only to spring 2010.

As the government of Ecuador settled its charges against Texaco for $40 million in 1995, a group of indigenous natives were two years deep into a lawsuit against the oil company in Manhattan federal court. By 2001, Texaco convinced a federal judge that Ecuador had proper jurisdiction over the claims, and the complaint was dismissed.

Chevron then acquired Texaco, leading the Ecuadoreans to name the new proud parent as a defendant in its multibillion lawsuit out of Lago Agrio, Ecuador.

As that case wound down, Chevron claimed that the plaintiffs orchestrated a fraud on the Ecuadorean courts to extort billions, conspired with crooked elected officials, bribed a judge, tampered with independent expert reports, and cooked up bogus criminal charges against its attorneys.

Chevron brought some of these arguments to an international arbitration tribunal and back to Manhattan federal court. Kaplan caught the latter case in spring 2010 and has largely sided with Chevron in its bid for discovery - rejecting the claims of those who stand in Chevron's way and cite privileges afforded to reporters and attorneys.

By February 2011, the Lago Agrio court awarded the Ecuadorean plaintiffs $18.2 billion in damages, but Kaplan stayed the verdict with a temporary restraining order and preliminary injunction.

An early trial to block the award is now scheduled for November, and Kaplan has approved several of Chevron's pretrial motions - the latest of which sets up a new round of discovery request against Steven Donziger, an American attorney whom Chevron says threw his ethics to the wind with an eye toward his contingency fee.

Kaplan has not yet ruled on whether to allow Chevron's discovery requests against the Ecuadoreans, who describe the subpoenas for hundreds of documents as a "carpet bombing."

In a recent interview with Courthouse News, the Ecuadoreans' attorney James Tyrrell of Patton Boggs predicted that Kaplan would put off ruling on the Ecuadoreans' request to prevent them from appealing his denial.

"He can put his decision on the slow boat to China, while we die in the minefields of discovery," Tyrrell said.

Dubbing him "Chevron's greatest ally," the Ecuadoreans have unsuccessfully asked Kaplan twice to step down.

Sixteen professors from South Africa, Spain, Finland, Italy and the United States scolded Kaplan's actions in a recently filed amicus brief asking the 2nd Circuit to dissolve his injunction and dismiss Chevron's complaint.

"The action of a single American trial judge, essentially ordering the preclusion, in pre-emptive fashion, of all courts in the world outside of Ecuador from independently deciding the issues of recognition and enforcement is an extraordinary breach of comity," according to the brief, authored by Donald Anton of the Australian National University College of Law in Canberra.

Echoing the Ecuadoreans, the professors say that Kaplan should never have claimed jurisdiction over the case.

Kaplan, ironically, made a similar case in his most recent ruling. The judge called it "unlikely that the Court of Appeals has jurisdiction" to hear Donziger's appeal over a different decision that blocks him from participating in the November trial.

A 2nd Circuit hearing on the Ecuadoreans' appeal of preliminary injunction will occur on Sept. 12. If the appellate judges agree to hear Donziger's appeal, he will join on that date. The circuit will decide separately whether to hear arguments over the writ of mandamus.

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