The Global Lawyer: Spinning the Chevron Trial

, The Litigation Daily

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The case of the century will be a bench trial.

On Monday, Chevron Corporation made it official by withdrawing its demand for money damages from Steven Donziger, the U.S. lawyer accused of rigging a $19 billion environmental judgment against the oil titan in Ecuador. As the Oct. 15 fraud trial approaches in Manhattan federal court, both sides are busy spinning Chevron's undemocratic move.

Chevron spokesman Morgan Crinklaw says the company simply had little to gain from seeking damages before a jury. When Chevron first sued Donziger and his camp, he argues, it was much likelier that the Ecuadorians would succeed quickly in collecting the verdict overseas (and Donziger would collect a contingency fee of up to $1 billion). What Chevron has always wanted above all, Crinklaw says, is a permanent injunction on enforcement. This makes some sense, but it conveniently leaves unsaid that Chevron had a lot to lose from going before a jury.

The Ecuadorians say they would've won before a jury, both on the merits of their underlying pollution case and on the merits of their fraud defense. According to plaintiffs' spokesman Christopher Gowen, Monday's development "shows that Chevron has blinked at a critical moment because they know the judgment in Ecuador is valid and based on overwhelming scientific evidence."

Donziger argues in a similar spirit: "Chevron is falsely accusing me and my colleagues of bribing a judge. We believe their sole witness who can testify to this fact [former Ecuadorian judge Alberto Guerra] was bribed by Chevron and is a proven liar. Chevron's case rests almost entirely on this man's credibility. Clearly, a jury of American citizens can better determine whether this man's claims are true than a single judge."

The astute legal analyst Roger Parloff agrees that a jury might favor the Ecuadorians on the merits—but that might say more about juries than the merits. "I have long wondered how Chevron could win this case in front of a jury, no matter how rock-crushing its proof," wrote Parloff. "Winning a jury trial would be a challenge for an oil giant suing a lawyer who portrays himself as a Robin Hood," and would call for "an extraordinary degree of compartmentalized analysis on the part of lay jurors."

I would go further than Parloff in two ways.

First, with Chevron spending hundreds of millions of dollars on 60 law firms and 2,000 legal professionals, I would bet the company found a spare dime for trial consultants. It's pure speculation, but I suspect that Chevron convened a mock jury, and it didn't like what the mock foreman had for breakfast.

Second, I will say overtly that a bench trial is in the interests of justice. I have already argued at length that the environmental case against Chevron is underwhelming and—more to the point—that the proof of misconduct by the Ecuadorians is overwhelming. I felt compelled to say so because the Ecuadorians and their lawyers are still racing to collect their verdict. I will not prejudge whether this misconduct amounts to fraud or racketeering by each defendant in the New York trial.

I will note that the central allegation in Chevron's first complaint (the secret ghostwriting of the main Ecuadorian damages report) is no longer really in dispute. In addition, U.S. District Judge Lewis Kaplan has found probable cause to conclude that the Ecuadorian judgment itself was ghostwritten, and Chevron has produced weighty proof of this misdeed even if Guerra's flawed testimony is ignored. Six federal courts have made a threshold finding, for discovery purposes, that the Ecuadorian plaintiffs committed a fraud. Indeed, one of them concluded back in 2010: "What has blatantly occurred in this matter would in fact be considered fraud by any court." The question is: Given a choice between a dirty oil company and destitute tribespeople, would it be considered fraud by any jury? Chevron lacked the nerve to find out.

I am saddened by the success that the Ecuadorian plaintiffs have had in shaping public opinion. I share the fear that they may have swayed a jury. I am proud to place my trust in legal reason.

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