Lago Agrio: Day 1

The Lago Agrio RICO trial got under way today in New York. Reuters has a pretty good summary. To the defendants’ dismay, Judge Kaplan is using a procedure that is not uncommon these days in bench trials: parties offer the direct testimony of their witnesses in affidavits, and the witnesses are then subject to live cross-examination. 1 So while we don’t have a transcript of testimony to report on today, we do have the first witness statement, the statement of Ricardo Reis Veiga, a senior Chevron in-house lawyer.

There is an interesting twist to the chronology of the witness statement. According to Veiga, the Ecuadoran government began persecuting him by bringing false criminal charges in 2003. (¶ 66). But Veiga also notes that President Correa didn’t come to power until 2006. (¶ 85). Here at Letters Blogatory, Chevron advocate Doug Cassel has dated the deterioration of the Ecuadoran judiciary from 2004. How can we make sense of this chronology? It seems to me that it may be at odds with one of Chevron’s themes, namely that at an early date Ecuador had an excellent judiciary that provided due process to litigants, but that sometime after the forum non conveniens dismissal—perhaps in 2004 according to Cassel—things turned bad in ways that Chevron could not have foreseen. If things were bad in 2003, then maybe things were bad before 2003, and maybe the case that Chevron should be deemed to have assumed the risk of unfavorable political developments in Ecuador is stronger than it seemed until now. The assumption of the risk argument is important to an argument I made a while ago but that no one on either side of the case seems to agree with: assuming there was fraud in the Ecuadoran proceedings, and leaving aside the role of the stipulation Chevron entered into as a condition of obtaining the forum non conveniens dismissal, there should be some kind of estoppel that prevents a party in Chevron’s situation from arguing that the courts of the state where the case was sent are systematically inadequate. I say that the argument may be stronger than it seemed because the strongest counter to the argument seemed to be an argument about the relevance of changed conditions in the foreign country. If conditions haven’t changed so dramatically, then that point seems weaker. But enough about my pet theory.

Here are a few other interesting tidbits from the statement.

  • According to Veiga, Hugo Camacho, one of the Lago Agrio plaintiffs, was at the time president of the town of Pimampiro, in Ecuador’s Napo province. Camacho wrote a letter to Texaco’s CEO, Peter Bijur, in 1997 “expressing ‘real gratefulness’ to Texaco for ‘the environmental remediation work performed,’ which ‘produced such a positive outcome for the local population.'”
  • Veiga says he was present with Richard Cabrera during some of his inspections of contaminated sites. “During some of the inspections that I attended, I witnessed Cabrera discard selected soil samples. When one of Chevron’s lawyers asked Cabrera why he was selectively discarding samples, Cabrera replied that his duty was to ‘find contamination.'” Cabrera “would put up yellow ‘police investigation’ tape around his work area. The Lago Agrio plaintiffs’ allies often would be on the other side of the tape assisting Cabrera. But Chevron’s experts and lawyers were not allowed anywhere near Cabrera, typically having to stay on the other side of the tape.”
  • Veiga, recounting some motion practice in Judge Sand’s court in New York during Ecuador’s claim of fraud against Chevron, points to some excerpts from Donziger’s diary. After Donziger had to withdraw a claim that lacked merit, he wrote: “This backs up my litigation strategy of filing losing motions to create leverage.” This sounds to me like an excerpt of what I imagine Ted Cruz is writing in his diary these days!

Notes:

  1. I am not a fan of this procedure, but that’s another story.

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 2d ed. 2016), 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.

2 thoughts on “Lago Agrio: Day 1

  1. Dear Ted,

    I do not believe I dated 2004 as the year the Ecuadorian judiciary turned bad. It was never very good. But as you know, the standards of adequacy of a foreign judiciary, for purposes of a forum non conveniens transfer, were never very high. What happened in 2004 was not that Ecuador’s judiciary turned bad, but rather that it became a disaster — which it remains to this day — doug

    1. Thanks Doug! I hope my comment wasn’t unfair. Here is the sentence from your post that I had in mind: “I know of no one at the time who foresaw or predicted anything like the collapse of Ecuadorian judicial independence that began in 2004 and continues to the present.” But I take your point about your view that the courts were bad before, just not so bad that their judgments should categorically not be recognized. I think it’s fair to say that wasn’t Chevron’s position at the FNC stage, though.

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