Judge again asked to recuse self from case over Ecuador judgment

Jessica M. Karmasek Jun. 6, 2011, 1:21pm


NEW YORK (Legal Newsline) - A group of Ecuadorian plaintiffs, in court filings late last week, is seeking to stop oil giant Chevron Corp. from conducting discovery for a coming trial in November and is again asking for a federal judge's removal from the case.

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 disease and decimating indigenous groups. Damages were found to be up to $18 billion.

Chevron, which has vowed never to pay the judgment, then filed a racketeering lawsuit, alleging that the Ecuador suit 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.

Now, the Ecuadorians say the company is "renewing its strategy" to deplete their modest financial resources by issuing discovery requests in six federal courts and seeking thousands of documents for a November trial in which U.S. District Judge Lewis Kaplan, of the Southern District of New York, says he will determine whether Ecuador's judicial system meets international standards.

In their 12-page motion to stay discovery Thursday, the Ecuadorians noted that Chevron lawyer Randy Mastro -- to allegedly induce Kaplan to schedule a rapid trial -- told the judge on several occasions that Chevron would need "little or no discovery."

Yet, just last week, Mastro issued subpoenas comprising of more than 200 pages and almost 300 document requests, close to 50 pages of interrogatories, and several deposition notices filed in six different U.S. federal courts, the Ecuadorian plaintiffs said.

The company set a common return date on the subpoenas of June 3, just one day after the plaintiffs had been ordered to turn in their briefs to the Second Circuit Court of Appeals for the expedited appeal of Kaplan's decisions.

Karen Hinton, spokeswoman for the Ecuadorians, said in a statement that the tight time frame was done on purpose -- to make it virtually impossible to adequately contest them.

Also on Thursday, the Ecuadorians filed a separate 44-page writ of mandamus with the Second Circuit seeking Kaplan's removal from the case because of his "open contempt" for the plaintiffs and the Ecuadorian judicial system.

The plaintiffs' writ describes the judge as "Chevron's single greatest ally in its 18-year effort to evade liability" and says his actions "threaten the credibility of the United States federal justice system both at home and abroad."

"The world is closely watching this landmark case," lawyers for the Ecuadorians wrote. "And what the world sees is an American company that fought for nine years to wrest jurisdiction from the American courts in favor of litigating the case in Ecuador, only to come running back to the United States for a preordained, home-cooked bailout when things did not go as well as planned in Ecuador.

"Worse yet, it sees a federal district court that is not just willing, but apparently determined, to overlook the fact that (Chevron) just spent the last right years committing a series of outrageous abuses against the Ecuadorian court it swore to respect as it begged to move the case there."

This is the second time the Ecuadorians have tried to get Kaplan off the case.

In April, the Ecuadorian they filed a motion asking the judge to withdraw from Chevron's racketeering lawsuit. They alleged, among other things, that Kaplan has prejudged their case from the very beginning and that he has developed a "deep-seated antagonism" toward them, their counsel, the Ecuadorian government, the Ecuadorian trial court and the entire Ecuadorian judicial system.

Kaplan last month refused to recuse himself.

Also on Thursday, the Ecuadorians filed a 112-page brief before the Second Circuit to reverse Kaplan's preliminary injunction. It argues that the judge's attempts to try Ecuador's entire judicial system has no precedent and is an inappropriate exercise of judicial power that needs to be stayed.

They also filed a separate 81-page appeal from their long-time U.S. counsel, Steven Donziger. It explains how Kaplan allegedly orchestrated proceedings to deny Donziger the ability to put in evidence and voice his argument. The brief was submitted by lawyer John Keker.

Keker, who is defending Donziger, also was the attorney for prominent Mississippi attorney Richard "Dickie" Scruggs during two judicial bribery cases. Scruggs pleaded guilty to both and received 7 1/2 years in prison.

Federal prosecutors charged Scruggs with offering $50,000 to Lafayette County Circuit Judge Henry Lackey in exchange for a ruling compelling arbitration in a dispute over attorneys fees earned in Hurricane Katrina cases.

They also charged Scruggs, whose brother-in-law is former U.S. Sen. Trent Lott, with offering consideration for a federal judgeship to former Hinds County Circuit Court Judge Bobby DeLaughter. DeLaughter allegedly took the deal and entered a favorable ruling in a dispute over fees between Scruggs and his former business partners in asbestos litigation.

"Judge Kaplan is making decisions to ensure that Chevron will have no meaningful opposition in the so-called 'trial' of Ecuador's courts scheduled for later this year, which is a wholly inappropriate exercise of judicial power in any event," Hinton said.

"Kaplan is clearly trying to engineer a result on behalf of Chevron without considering the relevant evidence. If he could gain some perspective, he would probably call it a 'show trial' because increasingly that is what the proceeding in his courtroom looks like."

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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