Lago Agrio: Day 2

Readers, I trust you understand that my coverage of the trial is incomplete. Because I only have access to the witness statements (i.e., to what would be the testimony of Chevron’s witnesses on direct examination) and not to the cross-examination, I am only able to report on half of the goings-on. I’m looking into ways to get access to the substance of the cross-examination, but I wanted to make sure that everyone was on the same page about what I am and am not able to write about. Others (for example, Roger Parloff) who are in the courtroom can provide some more detail on such matters. With that out of the way …

Yesterday Chevron offered the witness statement of Christopher Bogart, the CEO of Burford Capital. Bogart basically retells the story he told in his earlier declaration. There are some interesting new tidbits in it, for instance Bogart’s account of James Tyrell’s opinion of Donziger, but I’m not going to dwell on this. Instead, I want to turn right away to the really interesting new witness statement: the statement of David L. Russell of Global Environmental Operations, Inc., one of the expert witnesses the LAPs hired in connection with the Lago Agrio litigation. I haven’t written about Russell before, but as others have reported, he’s been a factor in the case for a while.

Now, Russell doesn’t come out of this looking too great himself. Here’s his story. Donziger hired Russell in 2003. He traveled to Ecuador in the fall of 2003 in order to prepare a cost estimate to remediate oil contamination. The trip seemed a little haphazard: Russel says that he “stopped and walked around” at some sites; he “drove by in our van” at other sites; and that he did no soil or water sample analysis and was provided with no environmental data. Donziger told him to assume that Chevron was responsible for the remediation of many sites and stations. (Parenthetically, this seems okay to me. Russell was a damages expert, not a liability expert. It’s reasonable for the lawyer to provide assumptions to the expert about liability). I say that Russell doesn’t come out of this looking to great because if what he described is all that he did, he hardly seems to have been in a position to make an estimate of the cost of remediation, even granting that this was just an estimate and not expert opinion testimony. But then, I’m no environmental expert, so maybe I’m wrong about this.

In any case, after his travels around the region, Russell began to put together his estimate. Donziger told him he wanted a “really big number.” (Again, this seems okay to me. Of course the plaintiff’s lawyer wants the biggest number the expert can justify). Donziger told Russell “that everything was from Chevron and that I should just assume that there was contamination.” Based on the assumptions Donziger asked him to use regarding the environmental damage that existed and his observations during the trip, he developed an estimate of $6.114 billion.

But within a year, Russell says, he “came to learn that my cost estimate was wildly inaccurate and had no scientific data to back it up.” Really? Again, I could be wrong here, but I can’t understand how an expert realizes, a year after giving a cost estimate, that no scientific data support his estimate.

Donziger and groups affiliated with the LAPs publicized the $6 billion remediation estimate in various media. “I was increasingly concerned,” Russell says, “that being publicly connected with this cost estimate would hurt my professional reputation, because the estimate was so clearly and significantly exaggerated.” He told Donziger in late 2004 and early 2005 to stop using the estimate, but he discovered that Donziger continued to use it, and so in 2006 he sent a letter telling Donziger to “cease and desist” from using the estimate. He described his estimate as a “ticking time bomb which will come back to bite you, and very badly if anyone attempts due diligence on it.” Yikes! But, according to Russell, Donziger and others continued to cite the estimate publicly for years. (Now assuming the estimate was bogus, and that Donziger or others knew it, of course they shouldn’t have been citing it. But it’s relevant, I think, that most of the instances Chevron notes were PR statements of one kind or another, and it’s not as bad to send out bogus press statements as it would be, for example, to submit false expert reports to a court. I’m just saying).

Russell deals with one other interesting nugget. Do you remember Charles Calmbacher? He was the LAP environmental expert who testified that he was not the author of a report that the LAPs had submitted to the Ecuadoran court over his signature. Russell sheds some light on this (¶ 29):

In connection with sending Donziger the signed reports, I remember Donziger told me that he wanted Dr. Calmbacher to send blank signature pages with Dr. Calmbacher’s signature on them. Based on what Donziger told me, I understood that the blank signature pages were necessary in case Donziger and his team had to make minor modifications, such as correcting typographical or formatting errors, and then reprint the reports.

Russell doesn’t connect the dots, but it’s reasonable to think that Chevron is laying the groundwork here for an argument about the Calmbacher issue.

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.

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