Lago Agrio: The Beltman Declaration

Ukiyo-e woodblock print of warrior about to perform seppukuI am skipping lunch today to find the time to post the declarations of the Stratus witnesses for you to read because when I took a quick look, I simply could not believe what I was reading. Let’s start with Douglas Beltman, the Executive VP of Stratus and one of its founders, who was in charge of the Lago Agrio engagement. The abjectness, the sheer length and detail of this potentially career-ending tale of woe, is hard to overstate. The Declaration has seventy-six paragraphs; I expected paragraph seventy-seven to read: “I humbly apologize for my failings as a human being and request permission to commit seppuku.” I don’t mean to be too hard on Mr. Beltman, as it must have taken some courage to write, even in return for the settlement with Chevron. But really, it is hard to see how he can go on as an expert witness after this.

Here are some highlights, or low points, really. It seems that from the beginning Beltman believed that “Cabrera lacked the skill, qualifications, and experience to conduct or review a multi-disciplinary environmental damages assessment himself.” (¶ 15). Beltman “prepared the first draft of substantial parts of the document that would be filed in the Lago Agrio Litigation” as the Cabrera report. He wrote the documents “in English, in Cabrera’s voice, and [he stated] in the first sentence that ‘[t]his report was written by Richard Cabrera.'” (¶ 23). Stratus or its subcontractors drafted eleven of the twenty-four annexes to the report. (¶ 25). He attributed authorship of the report and its annexes to Cabrera and others named by Donziger and Pablo Fajardo. (¶ 27). Donziger instructed Stratus to assume that “it was not necessary to allocate any of the responsibility to Petroecuador for the condition of any of the sites in the former concession area,” and Stratus played along even though it knew of the settlement between Texaco, Petroecuador, and Ecuador, and of Texaco’s agreement to remediate some of the sites. (¶ 33). Donziger instructed Stratus “to ignore the ongoing clean-up in the former concession area.” (¶ 34). Donziger instructed Status “to use [a] 100 ppm cleanum level for damage calculations knowing it woudl elevate the remediation cost estimates, and we followed his instructions.” (¶ 36). Stratus used the LAP’s “inventory” or 916 or 917 pits, without ever verifying that “the 916 or 917 pits showed on the inventory in fact existed.” (¶ 37).

In a bit of kabuki theater, Beltman, Donziger, Fajardo, Luis Yanza, Jen Peers, Maest, and Hinton, planned “comments on the Cabrera Report”, which noted “omissions” that “greatly favor the interests of the defendant.” (¶¶ 39-40). In other words, Stratus, Donziger et al. were creating the appearance of disagreeing with the report that Stratus itself had written!

Beltman sought the endorsement of “scientists and academics” for the report. But he “did not reveal [to the endorsers] Cabrera’s connection to the LAPs’ or Stratus’s role in drafting the Cabrera Report.” (¶ 58). Beltman also drafted comments endorsing the Cabrera Report at Donziger’s direction. donziger included language describing Cabrera as a “‘neutral expert’ equivalent to that of a United States ‘Special Master.'” Beltman went along with this even though he knew it was false. (¶ 59). The comments Beltman prepared stated “that the report was prepared by Cabrera.” (¶ 60).

And by the way, Beltman and Stratus disavow the reports and the science behind them.

Beltman tries to show that all of this was out of character. “Misattribution of authorship is not standard practice for Stratus.” (¶ 28). “I regret not being transparent with everyone I solicited comments from on the Cabrera Report regarding Stratus’s role in drafting the report.” (¶ 58). “I and Stratus deeply regret stating in the Stratus Comments that Cabrera was equivalent to a United States ‘Special Master.'” (¶ 60).

Stratus says it wanted to come clean as soon as it learned of Chevron’s § 1782 request in February 2010, but “Donziger and the LAPs’ counsel encouraged Stratus’s counsel to delay compliance with the issued subpoena, in ways that Stratus’s counsel did not feel were consistent with his ethical obligations. Absent intervention by Donziger and the LAPs’ US counsel, Stratus would have turned over to Chevron all documents in accordance with the schedule set forth in the Court proceeding.” (¶ 74). This seems like too little, too late.

As I wrote, this could be a career-ending Declaration for Beltman. Is it a case-ending declaration? I think not, in the short term. The LAPs will point to Stratus’s earlier deposition testimony and statements (I have not yet analyzed them) to show that there is an issue of fact here, and it seems to me they are obviously right on that score. So I don’t think that this Declaration changes the summary judgment calculus. And even if the LAPs are destined now to lose in New York, they were more or less destined to lose in New York already, absent intervention by the Second Circuit. The real question is: what effect will these declarations have in Ecuador, or in the countries where the LAPs are seeking recognition and enforcement? Is it possible the Ecuadoran court itself, in light of this Declaration, could reopen the judgment?

Photo credit: Waiapo

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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