Ecuador plaintiffs want judge off Chevron's RICO suit

Jessica M. Karmasek Apr. 27, 2011, 1:24pm


NEW YORK (Legal Newsline) - A group of Ecuadorian plaintiffs suing Chevron Corp. have filed a motion asking U.S. District Judge Lewis Kaplan to recuse himself from the company's racketeering lawsuit.

In their 40-page motion filed Friday, they are also seeking a ruling on the enforceability of the $18 billion Ecuadorian judgment against the oil giant for its alleged contamination of the country.

The Ecuadorian plaintiffs say the court has prejudged their case from the very beginning.

They write that during the court's adjudication of four applications for discovery, it reached "prejudicial and untenable conclusions" without a trial or an evidentiary hearing, but instead based only on ex parte applications for discovery containing "nothing more than Chevron's carefully selected submissions and misleading editorializations."

They say the court has "made clear" that their case is "nothing but a fiction," a scheme fabricated by their counsel "to hit Chevron as big as they can."

The Ecuadorian plaintiffs say the court has developed a "deep-seated antagonism" toward them, their counsel, the merits of their claims, the government of Ecuador, the Ecuadorian trial court and the entire Ecuadorian judicial system.

"Egged on by Chevron, the Court repeatedly waded into issues irrelevant to the collateral discovery proceedings before it and formed opinions on the merits of the claims and defenses in an action litigated in Ecuador for over eight years -- all without the benefit of the 200,000 page trial record from that court," they wrote in their motion.

In February, after an eight-year trial, an Ecuadorian court found Chevron liable for dumping billions of gallons of toxic waste into the Amazon, causing an outbreak of cancer and decimating indigenous groups. Damages were found to be up to $18 billion.

The Ecuadorian plaintiffs allege that the court entered its preliminary injunction based on "little more than (its) preconceived notions and uniformly negative inferences," and disregarded the Ecuadorian court's 188-page judgment.

Kaplan granted Chevron's motion for a preliminary injunction on March 7. The order aims to prevent the plaintiffs and their counsel from taking any steps to enforce the legal judgment against the company.

The court, the group of plaintiffs say, has gone even further.

First, it bifurcated Chevron's ninth claim of relief, thus "maximizing the risk" that the plaintiffs will be deprived of their Seventh Amendment rights, they argue.

Chevron, in a memorandum filed March 14, sought bifurcation on its request for a declaratory judgment that the Ecuadorian court's multibillion-dollar judgment against it is "non-recognizable" and "unenforceable." Kaplan granted the company's motion on April 15. The other trial will focus on the company's racketeering claims.

Chevron's RICO suit alleges that the Ecuador lawsuit has been used to threaten the oil company, mislead U.S. government officials, and harass and intimidate its employees -- all to extort a financial settlement from Chevron.

In their motion to recuse, the plaintiffs also point to Kaplan's denial of a stay of the preliminary injunction pending appeal. The judge filed the 10-page memorandum and order April 6, saying the Lago Agrio plaintiffs "are not likely to prevail on appeal."

The plaintiffs say that, in Kaplan's denial of their stay, the court "once again adopted in whole cloth a Chevron conspiracy theory." That is, that the plaintiffs' desire for legal counsel is nothing more than an elaborate ruse to violate the injunction.

"This conclusion is unsupported by any evidence, rooted in speculation, and amounts to a personal attack on the Ecuadorian Plaintiffs' counsel," the group of plaintiffs wrote.

"Any objective observer would conclude that this Court has exhibited at least an appearance of partiality."

The plaintiffs are asking that Kaplan recuse himself from the matter and order its random reassignment to another district judge.

Kent Robertson, a spokesman for Chevron, said in response, "The Second Circuit found once before that all parties have been well served by Judge Kaplan's stewardship. There's no reason to believe that has changed."

According to an order by Kaplan, filed Monday, all papers in opposition to the Ecuadorian plaintiffs' motion to recuse must be served or filed electronically on or before 4 p.m. May 2. Any reply papers must be served or filed electronically on or before 4 p.m. May 4, he wrote.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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