Most Americans recognize that frivolous lawsuits are an unfortunate drag on our economy; tort litigation alone costs our economy of around $250 billion a year, and one poll last year found that “Nine in ten voters (89 percent) feel lawsuit abuse is a problem.” Our legal system is rife with examples of frivolous lawsuits, such as Lindsay Lohan’s $100 million lawsuit against E-Trade for its ad featuring a “milk-aholic” baby named Lindsay, which was settled. Apparently “Mean Girls” was enough of a modern-day classic to warrant protection for Ms. Lohan’s first name, you know, like Oprah and Madonna. Unfortunately, the fact that a corporation would rather settle such a frivolous claim than fight it encourages legal shakedowns; companies often settle unmerited lawsuits to avoid expensive litigation costs, maintain their innocence, and avoid the slight risk of an adverse outcome.
With that in mind, enter trial attorney Steven Donziger, the man behind a now two-decades-old lawsuit against Chevron. His lawsuit alleges that Texaco’s Ecuadorian oil drilling practices during the 1970s and 80s damaged his clients, Ecuadorian rainforest-dwellers. Chevron acquired Texaco in 2001, and assumed the liability for the lawsuit. The lawsuit was originally filed in 1993 in New York, but was transferred to an Ecuadorian court, which eventually issued a $19 billion judgment (later reduced to $8.5 billion) against Chevron in 2011.
This lawsuit has all of the elements of a legal shakedown: an astronomical payout, an easily caricatured rich defendant, explosive allegations, and lengthy litigation. Donziger has also done his part to facilitate the shakedown, publicly expressing his (unwarranted) fear that Chevron would buy the verdict — acting like Ecuador’s legal system is like Las Vegas, where anything can fly, except the rule of law and the truth.
Thankfully – both for Chevron’s sake and in the interest of reducing future frivolous and fraudulent lawsuits – Chevron has not folded. After an Ecuadorian court’s ruling against Chevron, Chevron filed a RICO case against the lawyers behind the case, alleging “fraud, extortion and other misconduct.”
The trial, with closing arguments last week, has shown that Donziger is most certainly not wearing the white hat. He seems to have let his greed and delusions about “big oil” and Ecuador-Vegas get in the way of ethical lawyering. As NRO’s Jack Fowler put it, Chevron’s opponents’ “preferred green has Ben Franklin’s picture on it.” Here are a few of Donziger’s greatest hits:
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Fraud: 9 U.S. courts have examined the case against Chevron, and concluded that the company was the victim of fraud. One court concluded that what has happened “would in fact be considered fraud by any court.”
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Rigging scientific reports: during the trial, Donziger admitted that he met privately with Stratus Consulting and paid them to provide evidence that was incorrectly passed off as the work of Richard Cabrera, a court-appointed expert. He also admitted to altering this report before it reached the court. Attorney Jeff Shinder, who was involved with the case for the plaintiffs, left the case after learning about their rigging of the “scientific” evidence.
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Bribing and threatening judges: one of the six judges that had been on the case was involved with a “sex scandal,” and plaintiffs tried to abuse that fact, drafting a complaint against the judge for sexual harassment, and telling him that they would file the complaint if they did not get their way. An ex-Ecuadorian judge, Alberto Guerra, alleges that he went so far as to broker a deal for Ecuadorian judge, Nicolás Zambrano, who wrote the final judgment. Under the deal, plaintiffs’ attorneys would ghostwrite Zambrano’s final judgment, so long as Zambrano got a $500,000 cut from plaintiffs’ winnings. Significant evidence suggests that this deal took place. When Zambrano was questioned about the ghostwriting allegations, he couldn’t recall key details of the judgment, including both a key scientific study and an essential legal theory of causation from his judgment, along with what his judgment described as “the most powerful carcinogenic agent’ allegedly associated with oil contamination in the rainforest.”
The final outcome of Chevron’s RICO lawsuit against Donziger, et. al. is still unknown. Hopefully, however, this trial has shown that other courts should not enforce this deeply problematic Ecuadorian judgment against Chevron anywhere else. And in the future, Chevron’s efforts should make clear that lawyers searching for an easy payout should think twice before attempting a legal shakedown, even if they think that their deep-pocketed opponent can be easily caricatured.