NEW YORK (Legal Newsline) - A federal judge, in a memorandum opinion filed Monday, has refused to recuse himself from Chevron Corp.'s racketeering lawsuit involving a multibillion-dollar lawsuit against it in Ecuador.

Last month, a group of Ecuadorian plaintiffs suing Chevron filed a motion asking U.S. District Judge Lewis Kaplan to withdraw from the case.

The Ecuadorian plaintiffs, in their 40-page motion filed April 22, said the court has prejudged their case from the very beginning and that it 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 plaintiffs said 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.

Chevron's racketeering lawsuit 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 his 41-page response, Kaplan points to the timeliness of the recusal motion.

"The (Lago Agrio plaintiffs) Representatives protest in large part the court's remarks and rulings from the Section 1782 proceedings, which occurred months and, in some instances, approximately one year before this motion. Yet the LAP Representatives never moved to recuse the undersigned in those cases. Nor did they do so for nearly three months of litigation in this action," Kaplan wrote.

"Instead, they waited until after this court had ruled on the preliminary injunction and bifurcation motions in this case. In all the circumstances, this motion is untimely and, quite possibly, so untimely that the LAP Representatives impliedly have waived their right to seek recusal."

Moreover, he says, recusal typically is appropriate only in cases of bias or prejudice stemming from an extrajudicial source.

"Here, however, no one has contended that the court harbors a bias or prejudice stemming from such a source," he wrote. "Rather, the argument is based on colloquy between the court and counsel during arguments and substantive rulings."

Kaplan says the Ecuadorian plaintiffs' contention that the court's rulings give rise to an appearance of partiality is "baseless as well." The U.S. Supreme Court has been "abundantly clear," he says:

"Judicial rulings alone almost never constitute a valid basis for a bias or partiality motion. In and of themselves (i.e., apart from surrounding comments or accompanying opinion), they cannot possibly show reliance upon an extrajudicial source; and can only in the rarest circumstances evidence the degree of favoritism or antagonism required... when no extrajudicial source is involved."

Here, Kaplan says, there is no allegation of extrajudicial source. "And the rulings complained of, which in some cases are rather different than the LAP Representatives' distorted and misleading accounts of them, plainly do not fall within 'the rarest circumstances' in which they could evidence the requisite bias

or appearance of partiality. They therefore are proper grounds for appeal, not for recusal."

He added, "Disagreement or dissatisfaction with the court's rulings is not enough to succeed on this motion. An adversary system inherently has one side that wins and another that loses. If losses compromised the appearance of justice, this system would grind to a halt."

The judge said there is "no objective reason" to think that the court has been anything less than "entirely impartial."

"This court has considered this motion with the great care that it deserves," he concluded. "Informed persons, knowing and understanding all of the myriad and complex facts of these extensive proceedings, and putting aside the rhetoric and other devices deployed here by the LAP Representatives, readily would see that the court's rulings have been firmly grounded in the law and the evidence."

Karen Hinton, a spokeswoman for the Ecuadorian plaintiffs, said in a statement Tuesday that Kaplan's response was expected.

"We are disappointed but not the least bit surprised that Judge Kaplan has refused to recuse himself, even with meticulously documented evidence of his repeated bias against the Ecuadorian communities and their attorneys who have won a historic judgment against Chevron," she said.

"The Ecuadorian plaintiffs remain convinced that no reasonable observer could possibly be convinced that Judge Kaplan can preside over the case in a fair and unbiased manner given the record."

Kent Robertson, a spokesman for Chevron, said in a statement Tuesday, "The only party the Lago Agrio plaintiffs have to blame for their predicament is themselves. The trial in Ecuador has been irreparably tainted by the plaintiffs' fraud and no amount of lawyering can undo that fact."

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

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