Lago Agrio: Judge Guerra Revisited

There has been a juicy leak in the Lago Agrio case that raises more questions about Judge Kaplan’s findings that the Lago Agrio judgment was ghostwritten.

Let’s recall what the ghostwriting issue is about. In the RICO case, Chevron asserted that Judge Zambrano, the nominal author of the Lago Agrio judgment, didn’t write it. Rather, according to Chevron, the Lago Agrio plaintiffs bribed Judge Zambrano and another judge, Judge Guerra, and Judge Guerra, not Judge Zambrano, actually wrote the decision. The main evidence for the claim was Judge Guerra’s own testimony. But Judge Guerra’s testimony was, I have argued, difficult to credit for various reasons, not the least of which were the large payments Chevron made to him. Chevron tried to corroborate Judge Guerra’s testimony with documentary evidence, but for reasons I have given, I did not find the attempts at corroboration persuasive. Still, Judge Kaplan, who heard all the evidence and saw the witnesses including Judge Guerra and Judge Zambrano, found as a matter of fact that the judgment was ghostwritten, and given Judge Guerra’s testimony, his decision was pretty clearly defensible if not clearly correct.

The ghostwriting, if it happened, is important for a few reasons. The main reason, of course, is that if the judgment was ghostwritten as a result of a bribe the plaintiffs paid to the judge and his accomplice, then it was procured by fraud. Also, whereas other instances of wrongdoing, such as the ghostwritten Cabrera expert report, are really frauds on the Ecuadoran court, the ghostwritten judgment—if that’s what happened—would be a fraud by the Ecuadoran court, or at least by one or two corrupt judges in a court of first instance.

The LAPs and Donziger sought to rebut Judge Guerra’s testimony primarily through impeachment of Judge Guerra and through the testimony of Judge Zambrano, which everyone agrees did not go well. (Actually, I am not sure without doing some checking which party called Judge Zambrano as a witness; but the LAPs and Donziger did offer a written declaration from Judge Zambrano at an earlier stage in the RICO proceedings). They also sought leave to call a computer forensics witness who claimed he had examined Judge Zambrano’s computers, but his evidence turned out to undermine rather than support the case that Judge Zambrano was the author of the judgment.

In the investment treaty arbitration brought against it by Chevron, Ecuador has been able to do better than Donziger and the LAPs in many ways. Back in November, it was clear that Ecuador had some serious arguments about the judgment ghostwriting and Judge Guerra’s testimony; but the relevant portions of its brief were redacted, and so, as I noted at the time, “we can’t really know just how strong the arguments are here.”

Today, thanks to a leaked document first reported by Adam Klasfeld of Courthouse News, we can see behind some of the redactions and we now have some insight into Ecuador’s arguments:

[Chevron] convinced this Tribunal—over the Republic’s vociferous objection—to permit the extraordinary appropriation and analysis of the computers of an Ecuadorian judge. Yet, Judge Zambrano’s computers show exactly what ne would expect to see on the computer of the judge who worked for four months to write the Judgment. Forensic analysis reveals that the Microsoft Word document that became the Judgment: (1) was created on Judge Zambrano’s computer when he resumed jurisdiction over the Lago Agrio Litigation in October 2010; (2) was saved on Judge Zambrano’s computer hundreds of times; and (3) contained appropriately increasing amounts of Judgment text over the four-month period between October 11, 2010 and February 14, 2011. Additionally, the hard drives reveal that Judge Zambrano or his assistant conducted legal research and visited translation websites during the relevant timeframe. Finally, and most telling, the hard drives contain no evidence that a third party provided Judge Zambrano with any portion of the Judgment, nor that any document relevant to the case was opened from a USB device. Judge Zambrano’s computer hard drives bear out what should have been the presumption all along: He authored the Lago Agrio Judgment.

Ecuador’s lawyers also challenge Chevron’s reliance on Judge Zambrano’s testimony on new technical grounds. Chevron claimed that Judge Zambrano lied when he testified that he wrote the judgment using one computer rather than another, but, according to Ecuador, “even [Chevron’s] expert concedes that ‘the New Computer was configured to access files on the Old Computer over the computer network,’ meaning that ‘a user of the New Computer could open files stored on the Old Computer and work on them while sitting at the New Computer.'”

(Interested readers can read more of the details of the forensic analysis themselves beginning at paragraph 70 of the brief).

Where did the leaked brief come from? According to Klasfeld’s article, it came “from a source who obtained it from a contact inside Ecuador’s attorney general’s office. Both wanted to remain anonymous in light of the tribunal’s confidentiality order.” One the one hand, I hope Mr. Klasfeld is preparing for a § 1782 subpoena from lawyers at Gibson Dunn. On the other hand, Chevron spokesman Morgan Crinklaw told Klasfeld that the forensic report, and other forensic reports, had been “kept confidential at the republic of Ecuador’s request.” So perhaps Chevron won’t be in a position to raise a ruckus about the leak.

Ecuador’s evidence may, of course, have an effect on the outcome of the Chevron/Ecuador arbitration. But what about the RICO litigation? Is there a chance that the new developments could have an effect on the New York case?

The easy answer is “no.” The RICO case ended in a final judgment. The case is still on appeal to the Second Circuit, but the record on appeal does not include evidence not presented to the District Court.

But of course there are grounds for seeking to reopen a final judgment. Among the grounds: “newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial” (FRCP 60(b)(2)), “fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party” (FRCP 60(b)(3)), or “any other reason that justifies relief” (FRCP 60(b)(6)). A motion for relief from a judgment on grounds of newly discovered evidence or fraud can be brought within a reasonable time but not more than a year after the entry of judgment; but that year has not yet run. A motion for relief under the catch-all provision for “any other reason that justifies relief” can be brought within a reasonable time, whether or not within a year of the judgment. I’m not going to give a primer on FRCP 60, but I think it will be important to know why the LAPs and Donziger didn’t make the kind of case Ecuador has apparently made in the arbitration. It seems, for example, that they may not have been aware that documents stored on one of Judge Zambrano’s computers could have been accessed from the other. And their forensic analysis seems quite cursory and not nearly as well-done as Ecuador’s. We might also ask whether the new information about the ghostwriting claim would make a difference to the outcome of the RICO case in light of the other main claim—the claim about the Cabrera report—which was very well proved at trial. It probably matters a lot to Ecuador to be able to show that the case was one of fraud on the Ecuadoran court rather than fraud by the Ecuadoran court, but I don’t see that it ought to matter as much to Donziger and the LAPs.

Donziger has argued that Chevron has an ethical duty to provide him with a copy of the forensic report. I have previously questioned the ethics of Chevron’s case on ghostwriting, and in particular its payments to Judge Guerra. But it’s not clear to me that Donziger is right. For one thing, Ecuador’s new expert report is apparently dated November 2014. It didn’t exist at the time of trial. I don’t know of any rule that requires a party to a civil action to turn over evidence, months after entry of judgment, that could have helped its opponent if it had existed and been offered in evidence during the trial.

I asked Chevron for comment, and in addition to sending me the statement that the company also gave to Courthouse News, the spokesman also pointed me to the relevant sections of Judge Kaplan’s decision. This is fair—Judge Kaplan did make extensive findings of fact on the authorship of the judgment. But some were based on the judge’s decision not to credit Judge Zambrano’s testimony, which as noted above I found concerning; some were based on the judge’s decision to credit Judge Guerra’s testimony, which again I found concerning; and some were based on the forensic evidence that Chevron offered at trial. And this is the rub. Chevron did produce some forensic evidence that circumstantially supported its case. But what I am wondering is whether that evidence stands up in light of the new report, or not. On that score, I think we will have to wait and see.

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.

8 thoughts on “Lago Agrio: Judge Guerra Revisited

  1. Dear Ted,

    Your “wait and see” conclusion about Chevron’s evidence on this point is well-advised. As you note, this leak was done in violation of a confidentiality order. Not surprisingly, the leak—from a party in litigation (Ecuador)—as entirely one-sided. That may give Chevron cause to seek a lifting of the confidentiality order. If the order is indeed lifted, we shall see what lies under the tent — Doug

    1. Thanks Doug. Of course we need to wait and see what the other side says. I will say, though, that the new report apparently makes some factual assertions that seem helpful to Ecuador and that I think it is fair to assume are true (because they are black-and-white kind of statements that a good expert wouldn’t make unless true). E.g., the fact (?) that someone saved versions of the judgment with ever-increasing amounts of text on Judge Zambrano’s computer is pretty helpful to the Ecuadorans’ case. It’s difficult for me to see Zambrano as someone sophisticated enough to create that kind of forensic evidence to throw investigators off his trail.

      1. Dear Ted,

        If the information Ecuador leaked did not lead you (and others) to draw that inference, they would not have leaked it. If it were all that compelling, why didn’t they also leak Chevron’s response? In any event, a balanced assessment can be made once we have the full forensic picture — Doug

  2. Dear Ted,

    While we wait to hear whether the order keeping the expert computer analyses confidential — an order requested by Ecuador, not by Chevron — will be lifted, I should point out an imprecision in your post on the Courthouse News story. You attribute to Chevron the claim that “Judge Guerra, not Judge Zambrano, actually wrote the decision.”

    That’s not quite right. Judge Guerra, called by Chevron as a witness, does not claim to have written the judgment. Rather, he testified that Judge Zambrano asked him to edit a draft of the judgment on (plaintiffs’ counsel) Pablo Fajardo’s computer, merely to “fine-tune and polish it so it would have a more legal framework.” (Guerra Declaration, Nov. 17, 2012, par. 25.) Guerra says he “worked on that document in Mr. Zambrano’s residence in Lago Agrio using Mr. Fajardo’s computer. … Mr. Zambrano explicitly asked me not to make copies nor leave traces of this document nor the changes I was making, outside of the file on which I worked.” (Id.)

    Guerra testified that, while polishing the draft, he “called Mr. Fajardo on his cell phone to ask him about some sections of the document that confused me. Mr. Fajardo told me not to worry and that he would e-mail me a memory aid to clarify my questions. Mr. Fajardo e-mailed me a document of around 10 to 12 pages titled ‘Memory Aid,’ with some information about the case.” (Id. par. 26.)

    “Overall,” Guerra adds, “I made very few changes to this document—mostly word changes due to personal preference—and the document I returned to Mr. Zambrano was not too different from the one the Plaintiffs had given him.” (Id. par. 27.)

    The upshot is that, if Guerra’s testimony is credible (as Judge Kaplan found it is), the misconduct in regard to the ghostwriting was not solely committed by the two former Ecuadorian judges. Guerra implicates at least one of plaintiffs’ counsel (Fajardo) in the misconduct. And given the extensive evidence that Donziger called the shots for plaintiffs’ legal team, it would be hard to believe that he was not also party to the ghostwriting.

    In this posture of the testimony, then, the forensic analyses of Zambrano’s computers may well shed some light. To date we have heard only Ecuador’s characterization of the forensic evidence. Perhaps we shall soon hear the other side.

    1. Fair enough, Doug, though the point doesn’t really go to the point of the post. The issue isn’t really whether Judge Guerra wrote the judgment; it’s whether Judge Zambrano wrote the judgment.

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