The “Amazon Chernobyl”

The largest oil-related human disaster in history began in 1964 when Texaco (now Chevron) discovered oil in Ecuador. Texaco was the exclusive operator of several oil fields within a 1,500 square mile area of the Amazon. The oil company ignored routine waste regulations, dumping some 16 billion gallons of toxic wastewater into rivers and pits, polluting groundwater and farm land. According to Amazon Watch, the refusal to abide by even minimal environmental regulations saved Texaco an estimated US$3 on every barrel of oil produced from 1964 to 1992 which yielded an estimated extra US$5 billion in revenue.

At the trial in Ecuador, judicial site inspections confirmed that approximately 900 illegal waste pits Chevron eventually abandoned in Ecuador, on average, contain 200 times the contamination allowed by U.S. and world standards. 

Texaco’s deliberate dumping of 16 billion gallons of toxic waste to save money is called the “Amazon Chernobyl” by locals and experts. There was zero regard for the pristine ecosystem of the Amazon or for the lives of the local people by Texaco or Chevron.

Steven Donziger files a lawsuit in New York against Texaco.

In 1993, Steven Donziger, with other lawyers, filed a lawsuit in the United States District Court in the Southern District of New York against Texaco on behalf of 30,000 victims of Texaco’s toxic oil waste dumping. The lawsuit was filed in New York because Texaco's headquarters was in New York in 1993. The decisions which led to the creation of the “Amazon Chernobyl” were made in New York.

Chevron moves the case to Ecuador on forum non conveniens grounds.

For approximately 10 years, Texaco (acquired by Chevron in 2001) fought to have the case moved to Ecuador. Chevron filed 14 affidavits swearing to honor Ecuador’s judicial system as competent and suitable to adjudge the case. In reality, Chevron believed it would never be held accountable in Ecuador. Ultimately, Chevron won the battle. The case was moved to Ecuador.

This new phase of the case began in 2003. The trial itself was held in the town of Lago Agrio; at the time it had a population of about ten thousand. The courthouse was housed in rented space in a shopping center. Plaintiffs in the class of affected people were both indigenous Amazon people and immigrants from other parts of

Ecuador.

The Donziger team wins the court case in Ecuador.

In 2011, after an eight-year trial, Donziger and his legal team won the court case in Ecuador. Judge Zambrano awarded Donziger’s Ecuadoran clients US$8.646 billion in actual damages and the same amount in punitive damages, for a total of US$17.292 billion, plus accumulating interest. The amount was eventually reduced on

appeal in Ecuador to US$9.5 billion, but it has been affirmed by 28 appellate judges from six appellate courts, including the Supreme Courts of both Ecuador and

Canada.

Chevron launches a “Kill the Messenger” strategy against Donziger.

Rather than accepting responsibility for, and fully compensating the victims of, the “Amazon Chernobyl” which it created, Chevron fled Ecuador. The oil company

launched a “Kill the Messenger” strategy against Donziger. “Our long-term strategy is to ‘demonize Donziger,’” Chevron wrote in an internal memo in 2009. According to court documents, Chevron, which has more than US$260 billion in assets, hired an estimated 2,000 lawyers from 60 law firms to carry out its campaign. The strategy was to shift the focus from the Ecuadorian court judgments and toxic oil waste dumping in Ecuador to Donziger by destroying him personally, professionally,

and financially.

Chevron retained the law firm Gibson, Dunn & Crutcher to file a civil RICO lawsuit for US$60 billion against Donziger and two Ecuadorian plaintiffs. Chevron wanted to portray Donziger as a felonious racketeer. The baseless lawsuit was filed in the same New York federal court the oil company for years had claimed was an inappropriate forum to hear the underlying pollution claims. Chevron then went jurist shopping for a judge who wasn’t as impartial as Ecuadorian Judge Zambrano. Chevron found the perfect judge to hear the case – the Honorable Lewis A. Kaplan. Kaplan had direct financial ties to Chevron and a long history of pro-corporate bias, including a years-long representation of the tobacco industry.

Chevron’s original RICO complaint contained claims for money damages, indisputably entitling Donziger to a jury trial under the Seventh Amendment. On the eve of trial, Chevron waived its claim for damages and proceeded only for injunctive relief. The result was a bench trial in which Judge Kaplan himself, without a jury, ruled on March 4, 2014 that Donziger had won the Ecuadorian judgment through a “pattern of racketeering activity” headlined by a finding that he had bribed Judge Zambrano to win the judgment. Judge Kaplan enjoined Donziger from profiting from the Ecuadorian judgment and subsequently ordered him to pay Chevron over US$800,000 in trial costs.

At the time of Donziger’s trial, no federal appellate court had held that a private plaintiff (here, a corporation with nearly unlimited resources) could prosecute a

defendant to a judge sitting without a jury for having committed a “pattern of racketeering activity” consisting of enumerated felonies. Donziger’s case made

new, unprecedented law.

Chevron’s star witness simply lies under oath.

Chevron’s star witness was Alberto Guerra who testified that the Lago Agrio Plaintiffs’ representatives bribed Judge Zambrano, the presiding

Ecuadorian judge, in exchange for the opportunity to ghostwrite a judgment in their clients’ favor. Chevron offered no other witness, nor did it offer any

physical evidence, to corroborate the notion that there was any bribe. In fact, Chevron’s evidence did not corroborate the notion that the Lago Agrio Plaintiffs

“ghostwrote” the Ecuadorian judgment.

Guerra, a disgraced former Ecuadorian judge who had been removed from the bench for accepting bribes, later recanted the key points of his testimony against Donziger and acknowledged he gave false testimony in exchange for receiving at least US$2 million in cash and other benefits from Chevron. Guerra had been coached for 53 days by Chevron’s lawyers before he took the stand.

When confronted with post-trial evidence of Guerra’s perjury, Judge Kaplan was himself not willing to stand behind the bribery finding, which he conceded was “critically” based on Guerra’s testimony.

Prior to having costs imposed on him after his RICO trial, Donziger discovered new post-trial evidence of Guerra’s perjury and brought it to Judge Kaplan’s attention. In his February 28, 2018 order imposing costs, Judge Kaplan expressly refused to consider the evidence.

Guerra’s false testimony in the RICO case had been successfully used to demonize Donziger and block enforcement of the Ecuadorian ruling against Chevron.

Chevron’s court contrives a criminal contempt charge against Donziger.

When Guerra recanted his testimony, Chevron was concerned that its demonization campaign against Donziger would start to unravel. Judge Kaplan addressed Chevron’s concern by doing something that appears unprecedented in U.S. history. Kaplan ordered Donziger to turn over his computer and other electronic devices to Chevron (all of which contained troves of privileged communications) for inspection. As Donziger’s attorneys explain, this was perhaps the most brazen

and comprehensive violation of privilege in the history of civil litigation. Kaplan knew that Donziger would appeal the order, citing his ethical obligations to protect attorney-client privilege. While Donziger’s appeal was pending, Kaplan charged him with criminal contempt of court.

Judge Kaplan appoints private prosecutors.

On July 30, 2019, after the U.S. Attorney for the S.D.N.Y. declined to pursue the charges, Kaplan appointed Rita M. Glavin, Brian Maloney, and Sareen Armani, attorneys in the private law firm Seward & Kissel, to prosecute Donziger on the criminal contempt charges. A judge-appointed private prosecution for criminal contempt is extremely rare. Kaplan’s order states, “….these attorneys shall have the same power to investigate, gather evidence and present it to the Court as could any other government prosecutor, including, without limitation….” The selection of Seward & Kissel was not random; the firm had (and has) a flagrant conflict of interest in that it represented Chevron and other oil and gas majors.

Judge Kaplan also ignored a standard rule of the S.D.N.Y. requiring the random assignment of criminal cases and instead personally chose his long-time colleague Loretta Preska to preside over the misdemeanor criminal contempt trial while at the same time refusing to recuse himself. But Preska was also conflicted: she is a

major leader of the corporate-funded Federalist Society, of which Chevron is a major donor. None of these conflicts were disclosed by either judge.

Judge Preska denied Donziger a jury and locked him up in pre-trial detention for over two years. On October 1, 2021, Judge Preska sentenced him to an additional six

months in prison. Donziger reported to FCI Danbury on October 27, 2021. He was furloughed on December 9, 2021 to serve the rest of his sentence at home.

On August 13, 2020, Donziger was disbarred, retroactive to the date of his July 10, 2018 suspension. He has served the longest sentence for any lawyer for any misdemeanor offense in U.S. history – as of March 3, 2022, a total of 940 days between federal prison, house arrest and being sent to a half-way house. His sentence expires on April 25, 2022.

Donziger’s only “crime” was having the audacity to try to hold Chevron Corp. accountable for creating the “Amazon Chernobyl” disaster.

Judges Kaplan and Preska have made a mockery of our justice system.

Regrettably, the Chevron Corp. v. Donziger et al. case is not an anomaly. In Part 2, we will examine how, over the past 50 years, corporations have captured the U.S. federal judicial system.