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Chevron files principal brief in RICO appeal

By Kyla Asbury | Oct 21, 2014

NEW YORK (Legal Newsline) - Chevron has filed its principal brief in the appeal of a racketeering lawsuit filed against attorney Steven Donziger.

The district court found that Donziger organized a complex and massive conspiracy with the goal of coercing Chevron Corporation to pay him and his associates vast sums of money, according to the Oct. 1 document filed in the U.S. Court of Appeals for the Second Circuit. That vast sum was a $19 billion judgment reached in a pollution lawsuit against Chevron in Ecuador, though a U.S. court has found it unenforceable.

District Judge Lewis Kaplan has found that Donziger obtained the verdict with a racketeering scheme.

"After a lengthy trial and meticulous findings, the district court determined that Donziger committed extortion, wire fraud, money laundering, bribery of foreign officials, witness tampering, and obstruction of justice," the brief states. "In aid of this enterprise, he and his associates procured a fraudulent judgment against Chevron in an Ecuadorian court."

Chevron claims Donziger and his associates did so by fabricating evidence, pressuring experts to falsify reports, intimidating judges, bribing and ghostwriting the report of a supposedly neutral court expert and then ghostwriting the court’s final judgment in their own favor and bribing the judge to file it as his own.

Donziger promoted these falsehoods to federal and state authorities, Chevron shareholders, the press and other audiences, according to the brief, and, to cover up this wrongdoing, Donziger lied to federal courts around the United States and encouraged his associates to do the same.

"Based on these extensive factual findings, the district court held that Donziger violated the federal RICO statute," the brief states. "The court also held that '[t]he decision in the Lago Agrio case was obtained by corrupt means' rise to an independent action against both Donziger and the Lago Agrio plaintiff appellants for relief from the fraudulent judgment."

Chevron claims the court concluded that "[t]he defendants here may not be allowed to benefit from that [conduct] in any way." To that end, it enjoined appellants from seeking to enforce the Lago Agrio judgment in the United States and imposed a constructive trust on any profits derived from the judgment.

"Any notion that a party can lawfully bribe and then dictate the work product of a supposedly independent court expert is outrageous — which is why Donziger and his associates went to such lengths to hide their dealings with Cabrera in the first place," the brief states. "As the district court explained: 'The wrongful actions of Donziger and his Ecuadorian legal team would be offensive to the laws of any nation that aspires to the rule of law, including Ecuador — and they knew it.'"

Chevron claims even Donziger’s Ecuadorian co-counsel admitted in an internal email that "all of us...might go to jail" over what they did here.

Chevron initially filed its action in 2011 in the U.S. District Court for the Southern District of New York.

Chevron alleged causes of action against Donziger and his associates for violations of RICO, conspiracy to violate RICO, fraud, tortious interference with contract, trespass to chattels, unjust enrichment, civil conspiracy, violations of New York Judiciary Law Section 487 and declaratory judgment.

On March 4, the district court returned its decision, finding Donziger liable under RICO for injuring Chevron through a pattern of racketeering. It granted Chevron equitable relief pursuant to both the RICO claim and an independent action for relief from the fraudulently procured Lago Agrio judgment.

Chevron said in a statement that Donziger and his associates were found by a U.S. federal court to have committed extortion, mail and wire fraud, money laundering, bribery of foreign officials, witness tampering and obstruction of justice.

"Each of these findings was supported by overwhelming evidence that Donziger and his associates do not attempt to challenge," the statement said. "Instead, to draw attention away from their fraudulent conduct, they raise a host of allegations that are untrue, unsupported by the record, and irrelevant to the case. The district court's comprehensive opinion conclusively documented the massive fraud committed in this case, the court's legal analysis is sound, and the relief granted by the court appropriately prevents the perpetrators from profiting from their misdeeds."

Karen Hinton, a spokesperson for Donziger, said injunctive relief under RICO is only one of many obstacles that Chevron must overcome for the district court's flawed decision to stand.

"There is also Chevron's lack of standing, lack of jurisdiction and violation of international comity among other issues," Hinton said. "On the RICO issue, the overwhelming weight of legal authority in this country -- including that of the United States government -- is against Chevron's position."

Hinton said the amicus briefs that Chevron has filed also ignore the overwhelming scientific evidence relief on by the Ecuadorian court system to find the company liable for dumping toxic oil waste into the rainforest.

"That decision was affirmed by eight separate appellate judges, all of whom rejected Chevron's claims of fraud," Hinton said. "We are confident a searching inquiry by the Second Circuit will result in a swift reversal of Judge Kaplan. In the meantime, the affected communities will continue to lawfully pursue Chevron's assets to force the company to pay what it owes to the people of Ecuador."

Chevron is represented by Theodore B. Olson, William E. Thomson, Randy M. Mastro and Andrea E. Neuman of Gibson, Dunn & Crutcher LLP.

Donziger is represented by Richard H. Friedman of Friedman & Rubin.

U.S. Court of Appeals for the Second Circuit case number: 14-826

From Legal Newsline: Kyla Asbury can be reached at

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