MANHATTAN (CN) - An American attorney who helped organize a $113 billion environmental lawsuit against Chevron in Ecuador must comply with Chevron's subpoena, a federal judge ruled Wednesday.
The order is the latest in a series of blows, dealt in American courts, to the Ecuadorian lawsuit over alleged environmental contamination Texaco caused during 30 years of drilling in the country.
Texaco and Ecuador reached a settlement in the 1990s, before Chevron acquired Texaco as a subsidiary in 2001, and the current lawsuit was filed in Ecuador in 2003.
Chevron has filed several subpoenas all over the country in search of evidence that could prove misconduct is pervasive in Ecuador, and that Chevron has not had a fair trial.
Chevron calls Steven Donziger the mastermind behind the lawsuit and says outtakes from the 2009 documentary "Crude" prove that Donziger is fighting dirty.
U.S. District Judge Lewis Kaplan wrote that Chevron is entitled to additional discovery because the "extraordinarily revealing" outtakes hint that the Donziger played a role in crafting the damages assessment, which was supposed to have been created by a neutral and impartial expert.
"The outtakes, however, contain substantial evidence that Donziger and others (1) were involved in ex parte contacts with the court to obtain appointment of the expert, (2) met secretly with the supposedly neutral and impartial expert prior to his appointment and outlined a detailed work plan for the plaintiffs' own consultants, and (3) wrote some or all of the expert's final report that was submitted to the Lago Agrio court and the Prosecutor General's Office, supposedly as the neutral and independent product of the expert," according to the ruling.
Kaplan said Donziger's conduct may have also played a role in the criminal prosecution of two Ecuadorian lawyers for Chevron.
"These same charges were dropped several years ago after Ecuadorian prosecutors concluded that there was no basis for criminal liability," Kaplan wrote. "The outtakes, however, depict Donziger, along with others acting for the Lago Agrio plaintiffs, describing their campaign for a renewed criminal investigation of the same allegations."
Building a criminal case against Chevron lawyers added pressure on Chevron and helped Donziger undermine a 1995 settlement that Ecuador reached with Texaco, according to the ruling.
"The prosecutor general changed course and reopened the criminal investigation in light of new evidence within days of the completion of the ostensibly neutral and impartial 'global assessment' for the civil litigation," Kaplan wrote.
"In these circumstances, the outtakes and other evidence demonstrate at least a significant need for the discovery sought by the individual petitioners and Chevron -- discovery concerning ... the role of the Lago Agrio plaintiffs in selecting and procuring the appointment of the expert, in writing his report, and in procuring the reopening of criminal charges against the individual petitioners," Kaplan continued. "The likely relevance of the discovery sought is high."
In their arguments to quash Chevron's subpoena, Donziger and the Lago Agrio claimed that the oil company is not entitled to discovery from opposing counsel, that the subpoenas are overbroad and unduly burdensome, and that the information Chevron seeks is privileged.
Kaplan said the relevance of discovery is "even clearer" than in the case Chevron made for looking at "Crude" outtakes, which Kaplan also granted.
Regarding deposition from adverse counsel, Kaplan said the "principle has no bearing" on the individual petitioners who are trying to fend off the threat of criminal prosecution.
"While Donziger appears to have had quite a bit to do with instigating that matter, he does not represent the Republic of Ecuador," the judge wrote. "Nor are the individual petitioners parties in the Lago Agrio litigation. The rationale underlying the principle that discovery by one litigant from the attorney for the litigant's adversary is discouraged therefore does not apply to the individual petitioners."
Kaplan said the adverse counsel argument does not apply to Chevron, either, because "Donziger's role at least in major respects is that of a political operative, not a lawyer."
"His principal functions have included lobbying, media and press relations, and politics," Kaplan wrote. "He has acknowledged in the outtakes that the purported civil litigation in Ecuador 'is not a legal case. It's a political battle' in which '[w]e need to get the politics in order in a country that doesn't favor people from the rainforest.'"
Kaplan said there is little risk of encountering privileged material, because the subpoenas involve Donziger's interactions with third parties, including the court-appointed expert and Ecuadorian government officials.
Donziger has waived his right to privilege by not filing a log, but Kaplan wrote in a footnote that he may relieve Donziger of the waiver if he files a complete privilege log by Oct. 29.
Kaplan also said he cannot determine whether complying with the subpoena is unduly burdensome, as Donziger has not tried to "quantify the amount of time or effort that would be required."
"In any case, any burden on Donziger must be counterbalanced against the need for the documents, which is very great indeed," the judge wrote. "In these circumstances, the court is not prepared to find that any burden would be undue. Nor is the Court satisfied that the subpoenas are overbroad, especially given the highly relevant nature of the material sought."
Bruce Kaplan with Friedman Kaplan, who represented Donziger at the September hearing, said he could not comment about a matter before the court.
Chevron said it is pleased with order.
"Chevron is confident that the evidence obtained in this process will provide additional proof of the fraud and corruption perpetrated by Mr. Donziger and his associates in the trial against Chevron in Ecuador," according to a company statement. "The company expects that the court ordered discovery from Mr. Donziger will further expose the pattern of fraud that has been revealed in recent months."
Karen Hinton, on behalf of the Amazon Defense Fund, disagreed with Kaplan's decision.
"In truth, Chevron's allegation of fraud against U.S. counsel is itself a fraud -- one of many the company has perpetrated on the courts and the public," she said. "The oil giant is obviously trying to cover up almost 50 years of misconduct that has devastated indigenous and farmer communities in Ecuador's Amazon. Chevron now seeks to use its false allegations to pry open all private communications between lawyers and their clients for the entire 17-year duration of this litigation."
She added that prominent experts have confirmed Chevron's "devastation of Ecuador's rain forest" and have estimated that the company "could be liable for $40 billion to $113 billion in damages to the environment and human health."