Lago Agrio: Magistrate Judge Recommends Dismissal of Donziger’s Counterclaims Against Chevron

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Boston Is More United Than Ever
Back in August, I reported on Donziger’s counterclaims against Chevron in the New York case. The magistrate judge has now recommended that Judge Kaplan dismiss the counterclaims in their entirety.

Here was my description of the counterclaims for my prior post:

Donziger begins with a retelling of the history of the Lago Agrio case from the initial rounds in New York to the moment in 2009 when, according to Donziger, Chevron realized it “could not hope to prevail on the merits given all of the evidence in the record regarding Texaco’s misconduct and the resulting environmental harm.” Donziger says Chevron set out to

weave a false and misleading narrative of fraud, collusion and corruption in connection with the Lago Agrio Litigation, and then propagate this fraudulent narrative through a massive public relations, lobbying, and collateral litigation campaign, in hopes of persuading the recipients of its false and misleading representations that the Lago Agrio Litigation was simply a part of “a disturbing phenomenon” of “U.S.-based plaintiffs’ lawyers colluding with corrupt foreign courts to fabricate whopping civil judgments against American companies, and then using the bogus judgments to try to coerce a big settlement.”

And Chevron sought to make Donziger

the principal protagonist in its fraudulent narrative in hopes of persuading the world that Donziger “orchestrate[ed] corruption, with the goal of obtaining a fraudulent multi-billion dollar judgment against Chevron” and that he was “at the center of a decades-long $27.3 billion fraud[.]”

Then comes the bill of particulars.

  • Chevron made clandestine recordings of Judge Juan Nuñez and claimed that the video showed judicial corruption. The video recording led to Judge Nuñez’s recusal. But in fact, the video did not show corruption at all—it was only Chevron’s misrepresentations about what had happened that led to the recusal. And Chevron, according to Donziger, lied about the two men, Borja and Hansen, who made the video of Judge Nuñez. In fact, he claims, they were paid Chevron agents.
  • Chevron misrepresented the facts of the environmental harm that resulted from Texaco’s operations in Ecuador. Donziger cites various press releases Chevron has published and then reprises some of the evidence of the environmental contamination from the Ecuadoran litigation.
  • Chevron misrepresented the testimony of the plaintiffs’ experts and the statements of one of the plaintiffs’ lawyers, Pablo Fajardo, on the Chevron website and elsewhere.
  • Chevron misrepresented the plaintiffs’ ex parte contacts with the supposedly independent court-appointed expert, Richard Cabrera.
  • Chevron misrepresented the Crude outtakes.
  • Chevron misrepresented the facts concerning the authorship of the Ecuadoran judgment. It alleged, falsely, that Donziger was involved in “ghostwriting” the judgment.

The claims for “attempted civil extortion” and “duress” are not recognized as torts under New York law, and therefore they had to be dismissed if New York law governed. The judge found that New York law did govern, because Donziger suffered his alleged injuries in New York, and much of the alleged misconduct was related to the New York litigation and therefore took place in New York.

The claim for fraud failed because Donziger had not alleged a misrepresentation of fact, but only a “nonactionable interpretation of evidence on the part of Chevron.” The magistrate judge was influenced by Judge Kaplan’s earlier finding that Chevron was entitled to summary judgment on the question whether Donziger and other of the defendants were guilty of fraud in connection with the Ecuadoran litigation, e.g., in submission of the “Cabrera” report.

Photo credit: National Park Service

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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