Cleaning up an environmental mess is one thing, but using lawyers in the global legal war between Chevron and those seeking to protect the Ecuadorian wilds has become a fierce range war between two of America’s biggest law firms, Gibson Dunn and Crutcher and Patton Boggs, as BusinessWeek reports.
The epic litigation over who ought to clean up oil pollution in the Ecuadorian rainforest is approaching a further grim anniversary, with no end in sight and no improvement on the ground in the jungle.
Nearly two years ago, in February 2011, a provincial trial court in the frontier oil town of Lago Agrio imposed a record-breaking $18.2 billion verdict against Chevron. The verdict concerned contamination that accompanied oil production by Texaco from the mid-1960s through 1990. Chevron, based in San Ramon, Calif., acquired Texaco in 2001 and with it, liability for the rainforest legacy.
Chevron has vowed it will never pay a dime of the judgment, which now exceeds $19 billion. The oil company, with no assets to speak of in Ecuador, claims that the plaintiffs’ lawyers, led by Steven Donziger of New York, obtained the enormous judgment by means of fabricated evidence and corrupt proceedings in Ecuador—allegations that Donziger denies. Rather than negotiate some kind of settlement, Chevron has launched a nuclear-force counterattack against Donziger in federal court in New York, which, in turn, has produced the ancillary battle between Gibson Dunn, Chevron’s lead law firm, and Patton Boggs, which entered the fray in 2010 on the plaintiffs’ side.
The only way to appreciate this Dickensian morass is to begin at the beginning. A group of American lawyers, including Donziger, filed suit in 1993 in New York on behalf of thousands of mestizo farmers and indigenous Indians. The American lawyers argued that their clients couldn’t get a fair trial in Ecuador, whose courts, they said, weren’t receptive to mass litigation and would be vulnerable to the political influence of the U.S. oil industry.
Texaco fought the U.S. lawsuit for nine years on jurisdictional grounds, insisting that Ecuador’s courts were adequate. Eventually, the oil company prevailed, the U.S. case was dismissed, and executives at Chevron, the new acquirer of Texaco, assumed they were done with Ecuador. On the last point, they were wrong.
Donziger, a solo practitioner of Herculean tenacity, refiled the case in Lago Agrio in 2003. The oil company got what it asked for: a trial closer to the site of the alleged wrongdoing. The trial, however, did not go as Chevron would have liked.
The Lago Agrio court rejected the company’s several defenses: that it had cleaned up a portion of the polluted sites in exchange for a 1998 liability release from the government of Ecuador; that the remaining pollution wasn’t really so bad; that whatever pollution existed was actually attributable to Petroecuador, the national oil company that took over the oil fields; and that regardless of who was responsible for the situation in the jungle, Donziger had failed to produce hard scientific proof connecting the contamination to human illness.