Lago Agrio: Trial Ends with Unusual Own Goal

The trial of Chevron’s RICO claims against Steven Donziger and the Lago Agrio plaintiffs came to an end in New York last week. There’s a lot I could write about, but I’m going to focus on one issue that came up late in the trial and then give some thoughts about what’s next.

One of the points Chevron wants to prove is that the Lago Agrio judgment was the product of corruption, and in particular, that Donziger paid bribes to Judge Zambrano, via Judge Guerra, and that the plaintiffs, not the judge, ghostwrote the judgment. Donziger and the Lago Agrio Plaintiffs had a pretty good defense on the facts on the bribery issue: both Donziger and Zambrano denied that the bribes took place, and the witness who testified about the bribes, Judge Guerra, an admittedly corrupt judge who is being paid a good deal of money by Chevron, had little credibility, and it may be that Chevron’s evidence of corroboration is inadmissible, or that the evidence of corroboration is unpersuasive even if admissible because ultimately its authenticity depends on the testimony of Judge Guerra. The burden of proof in this trial is on Chevron, and Donziger and the Lago Agrio plaintiffs might have been best off simply arguing that Judge Kaplan should not credit Guerra’s testimony and that without it, Chevron could not prove its point.

Instead, and as it turns out, bizarrely, the LAPs and Donziger managed to give Chevron’s ghostwriting case more credence than it would have had had they just left well enough alone. They sought leave to call as a witness Milton Efrain Jaque Tarco, a young computer forensics person working for the police in Pichincha. 1 According to a declaration they filed in late October, Tarco was prepared to testify that an Ecuadoran prosecutor asked him to prepare a report analyzing Judge Zambrano’s computer. In particular, his assignment was to determine whether Zambrano’s computer contained a file that contained the text of the Lago Agrio judgment. Tarco claimed that he made forensic images of the hard drives on Zambrano’s two computers, which he identified by serial number, and that a document with only minimal variations from the judgment was indeed located on the hard drive of one of the two computers. He claimed that the metadata showed that the file was created on October 11, 2010, and that it was last edited on March 18, 2011 (shortly after the date of the judgment, in February 2011).

Roger Parloff, who has been following the trial closely, picks up the story from there. In his oral testimony, Judge Zambrano testified that he had written the judgment on the newer of his two computers:

Zambrano testified confidently and repeatedly that the Lago Agrio judgment had been typed entirely and solely on the newer of his two office desktop computers, a fact of which he said he was certain “because it was the more modern computer,” and also because his older computer had been removed from his office for maintenance during the time when he was composing the opinion.

Chevron pounced, and it arranged for its computer forensics experts to review Tarco’s full report (which the LAPs did not submit to the US court). Chevron was able to show, based on the serial numbers of the two computers, that the judgment file was on the older computer, not the newer computer, and more importantly, that it was actually created on January 21, 2011, shortly before the judgment was issued. He concluded that the report had been created on a third computer and then copied to Judge Zambrano’s computer, on which the internal clock had been back-dated to make it appear that the document was created earlier. Yikes!

According to Parloff’s account of the proceedings, Donziger and the LAPs didn’t have a strong response to the new evidence. Thus it seems more likely than it did before that in fact Judge Zambrano did not write the judgment. According to Tarco’s declaration, the judgment file was open for editing for 3,571 hours, or 148 days. If the document was created just a few weeks before the judgment was issued, then that doesn’t seem possible. This surely was not the kind of note the LAPs wanted to end the trial on.

What next? The received wisdom is that a judgment in favor of Chevron is a foregone conclusion. I’m not so sure. There are very good reasons to think that a private party such as Chevron cannot seek equitable relief in a RICO action. If Judge Kaplan agrees, then the case is over. In any case, the Second Circuit will get a crack at this question. Even if Judge Kaplan favors Donziger’s position on Chevron’s standing, he might still issue findings of fact and conclusions of law, as a matter of judicial efficiency in case the Second Circuit takes another view. In any event, the question will be what preclusive effect, if any, those findings should have in the foreign courts where the LAPs are seeking recognition of the Lago Agrio judgment.

Notes:

  1. I say “young” because Tarco’s declaration says: “I have experience in forensic information analysis since 2009.”

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.

3 thoughts on “Lago Agrio: Trial Ends with Unusual Own Goal

  1. An astute reader reminded me that Chevron has a common law fraud claim in addition to the RICO claim, and thus that even if the RICO claim fails, the case will not necessarily be over, as I wrote. I think this is right: I wished the fraud claim away, because as I have noted before, it’s a loopy kind of claim. Chevron didn’t rely on any fraudulent misstatement, and the claim rests on what Judge Kaplan thinks New York law allows—a claim for fraud without proof of reliance. I hope he’s not right about that, but if he is, then the case could still proceed without the RICO count.

    Another point I should add about questions that will arise if Chevron wins: will the Second Circuit countenance a permanent injunction against efforts to obtain recognition of the judgment in other jurisdictions, when it previously refused to countenance a preliminary injunction?

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