-i- TO THE SUBROGATE PRESIDENT OF THE ... - Chevron

TO THE SUBROGATE PRESIDENT OF THE PROVINCIAL COURT OF JUSTICE OF
SUCUMBÍOS:
I, Dr. Adolfo Callejas Ribadeneira, counsel of record for CHEVRON
CORPORATION, in Summary Oral Proceeding No. 002-2003, filed against my client by
María Aguinda et al., considering the state of this case, appear and present the
following legal brief, in defense of the interests of my client.
As Your Honor is aware, my client continues to receive new evidence of plaintiffs’
fraud that affects the validity of this proceeding. I therefore reserve the right to
supplement this alegato with this evidence and respectfully request that no judgment be
entered until all such evidence has been received, investigated, and addressed by this
Court.
This legal brief covers the following topics as set out in the index below for your
convenience:
EXECUTIVE SUMMARY ................................................................................................ 1
I. This Court Has No Jurisdiction over Chevron ........................................... 4
II. These Proceedings Should Be Terminated, with the Entire
Complaint Dismissed, Because They Have Been Permeated by
Fraud ........................................................................................................ 5
III.
IV.
Chevron Has Been Denied Due Process and Its Constitutional
Rights ........................................................................................................ 7
Systematic Constitutional Violations and Substantial Procedural
Defects Render These Proceedings a Legal Nullity ................................ 11
V. The Plaintiffs Have No Viable Claim ....................................................... 12
VI.
VII.
The Jurisdiction of This Court Is Limited by the Claims Included by
the Plaintiffs in Their Complaint .............................................................. 15
The Plaintiffs Have Not Proven Essential Factual Elements of Their
Claim ....................................................................................................... 16
THE PLEADINGS AND PROCEEDINGS .................................................................... 20
I. The Complaint ........................................................................................ 20
II. The Answer to the Complaint .................................................................. 22
III. The Proceedings ................................................................................... 24
ARGUMENTS FOR THE DEFENSE ............................................................................ 24
CHAPTER I . THIS COURT HAS NO JURISDICTION OVER CHEVRON ................... 24
1.1 Chevron Never Operated in Ecuador ...................................................... 26
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1.2 Only Texaco Agreed to Submit to Ecuadorian Jurisdiction and
Chevron Is Not the Successor to Texaco ................................................ 26
1.3 Texaco Did Not Control TexPet’s Operations ......................................... 28
1.4 Even Texaco Did Not Consent to the Suit Filed by Plaintiffs ................... 29
1.5 The Court Has Improperly Exercised Jurisdiction over Chevron ............. 32
CHAPTER II . THESE PROCEEDINGS SHOULD BE TERMINATED BECAUSE
THEY HAVE BEEN PERMEATED BY FRAUD ................................................. 33
2.1 The Plaintiffs Submitted Fabricated Evidence to This Court ................... 34
2.2 The Cabrera Report Was Fraudulent and Deeply Flawed ...................... 38
2.2.1 Unimpeachable Evidence Demonstrates That the So-Called
“Independent Expert” Was Nothing More Than a Mouthpiece
for Plaintiffs ................................................................................ 38
2.2.2 The Fraudulent Nature of Mr. Cabrera’s Report Is Evident
from Its Many Flaws and Errors ................................................... 63
2.3 The Case Was Irremediably Tainted by Judge Núñez’s Rulings
Against Chevron ..................................................................................... 65
2.4 The Constitutional Guarantee of Due Process Demands That This
Case Be Dismissed................................................................................. 70
CHAPTER III . CHEVRON HAS BEEN DENIED DUE PROCESS AND ITS
CONSTITUTIONAL RIGHTS ............................................................................. 76
3.1 The August 2, 2010 Providencia and the Submissions It Authorized
Violate Due Process and Aggravate the Fraud That Has Pervaded
These Proceedings ................................................................................. 77
3.2 By Ignoring and Whitewashing the Plaintiffs’ Fraud, This Court Has
Exposed Its Bias ..................................................................................... 81
3.3 The Truncated and Unreliable Judicial-Inspection Process .................... 83
3.3.1 The Process for Judicial Inspections Established by This
Court Was Improperly Truncated ................................................. 83
3.3.2 The Biased and Unreliable Reports of Plaintiffs’ Nominated
Experts ................................................................................ 90
3.3.3 The Prejudicial Denial of Chevron’s Essential-Error Petitions ...... 93
3.4 Mr. Cabrera’s Appointment and Fieldwork Violated Due Process .......... 95
3.4.1 Mr. Cabrera’s Appointment Was Unlawful ................................... 95
3.4.2 Mr. Cabrera Had Multiple Conflicts of Interests That He
Failed to Disclose ......................................................................... 97
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3.4.3 Mr. Cabrera’s Fieldwork Was Non-Transparent and Violated
Scientific Protocol ......................................................................... 99
3.4.4 The Data Used in the Cabrera Report Is Incomplete,
Unreliable, and Invalid ................................................................ 101
3.4.5 Mr. Cabrera Exceeded the Scope of His Mandate and This
Court Refused to Allow His Deposition ...................................... 108
3.4.6 The Improper Refusal to Open Summary Proceedings for
Proving Material Errors in Mr. Cabrera’s Report ........................ 113
3.5 The Submissions of September 16, 2010, Fail to Resolve the Due
Process Violations That Plagued the Evidentiary Phases of This
Case and The Case in its Entirety ........................................................ 114
3.6 Further Evidence of Bias and A Rush to Judgment As a Means of
Cover-Up .............................................................................................. 117
3.7 The Plaintiffs Intend the Judgment to Be the Result of the Pressure
Exerted by them on the Court ............................................................... 120
3.8 This Case Has Been Prejudicially Influenced by the Government of
Ecuador ................................................................................................ 126
CHAPTER IV . SYSTEMATIC CONSTITUTIONAL VIOLATIONS AND
SUBSTANTIAL PROCEDURAL DEFECTS RENDER THESE
PROCEEDINGS A LEGAL NULLITY .............................................................. 138
4.1 Nullities Due to Violations of the Constitutional Right to Due
Process ................................................................................................. 140
4.2 Nullity Due to This Court’s Lack of Competence over Non-
Environmental Matters .......................................................................... 142
4.3 Nullity of the Complaint Due to Failure to Appear before the Court
Clerk by Those Who Do Not Know How to Read and Write, In
Order to Stamp their Fingerprints As Required By Law ........................ 145
4.4 Nullity Due to the Lack of Legal Capacity of the Plaintiffs’ Joint
Representative ...................................................................................... 146
4.4.1 Nullity for Lack of Legal Capacity of the Joint Counsel of
Record .............................................................................. 146
4.4.2 Nullity Due to Lack of Sufficient Authority to Relinquish the
Judicial Inspections For Lack of Authorization from Each of
the Plaintiffs .............................................................................. 147
4.5 All Acts of Judge Ordóñez in the Case Taken After August 26, 2010
Are Null and Void .................................................................................. 149
CHAPTER V . THE PLAINTIFFS HAVE NO VIABLE CLAIM ..................................... 150
5.1 Chevron Is Not Liable for the Alleged Actions of Its Subsidiaries ......... 151
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5.2 The Plaintiffs’ Complaint Is Barred by the Res Judicata Effect of the
Government Settlements ...................................................................... 151
5.2.1 The Municipal and Provincial Settlements ................................. 152
5.2.2 The Settlement with the Government of Ecuador and
Petroecuador ............................................................................. 155
5.2.3 The Government of Ecuador and the Local Governments
Acted on Behalf of Their Citizens ............................................... 157
5.2.4 The Settlement Agreements Signed with the Government of
Ecuador and the Local Governments Are Res Judicata ............. 160
5.3 The Plaintiffs’ Request for Damages Is Also Barred by the Principle
of Non-Retroactivity .............................................................................. 165
5.3.1 The Principle of Non-Retroactivity .............................................. 165
5.3.2 The Plaintiffs’ Claim for Damages Is Based upon the
Impermissible Retroactive Application of the EMA ..................... 166
5.3.2.1 Pre-1990 Causes of Action ................................... 167
5.3.2.2 Post-1990 Causes of Action ................................. 169
5.3.2.3 The Plaintiffs’ Request for Damages
Necessarily Is Premised upon the 1999 EMA ....... 170
5.3.3 The Cause of Action Granted by the EMA Constitutes a
Substantive Change in the Law and Thus Cannot Be Applied
Retroactively .............................................................................. 175
CHAPTER VI . THIS COURT IS LIMITED TO THE CLAIMS MADE BY THE
PLAINTIFFS .................................................................................................... 177
6.1 The Principle of Congruency ................................................................. 177
6.2 The Plaintiffs Asserted Specific and Limited Claims in Their
Complaint .............................................................................................. 180
6.3 Improper Attempts to Amend and Expand the Complaint in
Violation of the Code of Civil Procedure ............................................... 182
CHAPTER VII . THE PLAINTIFFS HAVE NOT PROVEN ESSENTIAL FACTUAL
ELEMENTS OF THEIR TORT CLAIM ............................................................. 190
7.1 The Plaintiffs Have Failed to Prove Negligence, Damage, and
Causation .............................................................................................. 190
7.2 Plaintiffs Have Failed to Prove Negligence or Intent ............................. 192
7.3 Plaintiffs Have Not Proven the Allegations of Damages Pled in
Their Complaint .................................................................................... 193
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7.3.1 Plaintiffs Have Failed to Prove That Chevron Is Responsible
for Environmental Remediation .................................................. 196
7.3.2 Plaintiffs Have Failed to Prove That Chevron Is Responsible
for Public Costs of Healthcare in the Oriente. ............................ 213
7.4 The Damages Sought by Plaintiffs Apart from Those Pled in the
Complaint Are Extra Petita and Unsupported by Both the Law and
the Evidence ......................................................................................... 215
7.4.1 There Is No Credible Evidence of Excessive Cancer Deaths
in the Oriente ............................................................................. 215
7.4.2 There Is No Credible Evidence That Chevron Is Liable for
Damage to Indigenous Territory and Culture ............................. 223
7.4.3 There Is No Credible Evidence of Natural Resource
Damages .............................................................................. 228
7.4.4 There Is No Credible Evidence That Would Require Chevron
to Pay for Improvements to Petroecuador’s Petroleum
Operations Infrastructure ........................................................... 231
7.4.5 There Is No Credible Evidence That Would Require Chevron
to Fund a New Potable Water System ....................................... 233
7.4.6 Any Request for Punitive Damages Based on an Unjust
Enrichment Theory Is Baseless .................................................. 236
7.5 The Plaintiffs Have Not Even Attempted to Link the Alleged Harms
or Threats of Harm to the Consortium’s Operations ............................. 248
7.6 Although Chevron Bears No Duty to Offer Evidence, It Has Proven
That the Plaintiffs’ Case Is Devoid of Merit ........................................... 252
7.7 Application of New Constitutional Provisions Is Improper and Would
Deny Chevron Due Process ................................................................. 253
PRAYER FOR RELIEF .............................................................................................. 255
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EXECUTIVE SUMMARY
For your quick reference, Mr. Subrogate President, outlined below are the most
fundamental legal exceptions and defenses, both procedural and substantive, which my
client has previously and timely raised with this Court using all available legal avenues
and which will be discussed in greater detail in the body of the brief:
First, and as detailed in Chapter I, the case should be dismissed for lack of
personal jurisdiction over Chevron Corporation (“Chevron”), which has been forced to
litigate this action against its will, and despite having consistently raised this defense at
all appropriate times. As Chevron’s answer to the complaint makes clear, there is no
theory under which Chevron, the sole defendant, can be held liable for the operations of
the Consortium between Petroecuador, Ecuador’s state-owned oil company, and
Texaco Petroleum Company (“TexPet”), a subsidiary of Texaco Inc. (“Texaco”).
Chevron had no connection with the Consortium and has never operated in Ecuador.
The stock of Texaco was not acquired by Chevron or its subsidiaries until eleven years
after TexPet ceased its operations in Ecuador. There was no merger, and Chevron,
Texaco, and TexPet have remained at all times separate and distinct corporate entities,
each with their own distinct legal existence, their own separate assets, and the full
capacity to independently acquire rights and incur obligations. These uncontradicted
facts legally preclude both the exercise of jurisdiction by this Court over Chevron and
the imposition of liability upon Chevron though judgment.
Second, and as detailed in Chapter II, this case should be terminated as a nullity
because its integrity has been irretrievably corrupted by fraud. The plaintiffs not only
filed a complaint with forged signatures and failed to comply with specific formalities that
the law requires for the validity thereof, but they also caused the fulfillment [sic] of
essential procedural conditions such as your own lack of jurisdiction, Mr. Subrogate
President; they also intentionally submitted fabricated expert reports that conflicted with
the conclusions actually reached by an expert, Dr. Charles Calmbacher; one of the
judges who heard this case was intimidated and extorted by the plaintiffs and their
representatives to accept the appointment of the purportedly “independent expert” to
perform the global expert assessment, whose report was in fact written by the plaintiffs,
their attorneys, paid consultants and affiliated activists, and is deeply flawed,
scientifically baseless, and biased; and one of the presiding judges was seen on video
being involved in a US$3 million bribery scheme premised upon a judgment against my
client. Much of this evidence comes from outtakes of the film Crude and other
discovery in the United States, which shows that plaintiffs were cognizant of their
wrongdoing and resorted to fraudulent tactics because of the admitted legal and factual
problems in their case. The plaintiffs’ attempted to wipe the slate clean by submitting a
new damages assessment at the tail-end of the trial pursuant to an ad hoc submission
that has no basis in Ecuadorian law, but this failed to cure, and in fact exacerbated, that
due-process violation. Although their new figure is, incredibly, even larger than the
fraudulent US$27 billion figure offered in their ghostwritten Cabrera Report, it is largely
based upon the same baseless and unreliable evidence and, therefore, merely recycles
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the arguments in the Cabrera Report, and marks a further audacious extension of their
fraud that is both legally and procedurally inept. At over US$113 billion, plaintiffs’ new
request is a libelous amount, nearly double Ecuador’s gross domestic product.
Depositions in the United States of the individuals whose reports were filed along with
plaintiffs’ new damages request confirm that those reports have no scientific value and
should be disregarded: the authors themselves have admitted to the severe limitations
in their work, including their lack of expertise, their failure to perform any independent
work, and their reliance upon untested assumptions. Depositions are currently being
taken in the United States of individuals who filed reports on behalf of the plaintiffs,
depositions that my client will be filing with this Court as they are obtained, because
they confirm that those reports have no scientific value and were obtained on a biased
basis by the plaintiffs and their representatives, and even by defrauding the authors.
Thus, the proceedings were completely permeated by fraud and corruption, in violation
of my client’s right to due process.
Third, and as detailed in Chapter III, this case has been marked by systematic
violations of due process that render the entire proceeding null and void. Through its
numerous biased and unfair rulings—including its refusal to investigate or even
acknowledge the fraudulent conduct—this Court has made clear that this case is not
governed by the rule of law. My client has been denied the most basic elements of due
process, such as the right to an impartial tribunal, the right to be heard in a timely
fashion, and the right to a defense. At the urging of the plaintiffs, this Court approved a
trial process that was anything but transparent, open, and even-handed: The everchanging
procedures adopted by the Court were tailored to the plaintiffs’ interests and
were intended to railroad a preordained judgment against Chevron, heedless of the
facts and in contravention of the law. Throughout the case, whenever something
related to the plaintiffs’ conduct could not be defended—including, most notably, the
unimpeachable evidence of their fraud—this Court simply ignored it and continued to
press ahead on the path of illegality and complicity. It is evident that this was a result of
the intense political and social pressure brought to bear on this case by the plaintiffs,
with even the Government of Ecuador publicly stating its interest in the final outcome.
Fourth, and as detailed in Chapter IV, this proceeding contains numerous
“nullities” as defined under Ecuadorian law and, therefore, must be declared null and
void. This proceeding must especially be declared null because of the massive fraud
perpetrated by plaintiffs throughout the case. Additionally, this case has been marked
by other violations of due process and by omissions of substantial solemnities required
in every proceeding. These violations and omissions render the entire proceeding a
nullity, and any judgment that fails to so declare would itself be a nullity.
Fifth, and as detailed in Chapter V, the plaintiffs have no cause of action for the
relief that they seek, and this Court must therefore dismiss the complaint in toto. The
plaintiffs have neither alleged nor proven any individual injury, but instead have brought
public claims based upon alleged rights diffusely shared by all Ecuadorians. Identical
claims and suits were filed and subsequently settled with the effect of res judicata by the
central Ecuadorian Government and the local governments encompassing the former
concession area. These government authorities were clearly acting on behalf of the
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plaintiffs and those they purport, without basis, to represent. The plaintiffs cannot sue
Chevron for the same alleged harms yet again. In addition, these claims for alleged
damages to the environment and to public health are barred by the principle of nonretroactivity,
as they are premised upon a law that was not enacted until nearly a
decade after TexPet stopped operating in Ecuador. Further, the plaintiffs’ multi-billiondollar
claim for “unjust enrichment” impermissibly exceeds the scope of the complaint,
runs afoul of Ecuador’s bar against punitive damages, is based primarily upon
inapplicable foreign legal principles, and is intended as a transparent ploy to boost the
potential judgment ever-higher.
Sixth, and as detailed in Chapter VI, the vast majority of the damages now
claimed by plaintiffs are extra petita, and therefore barred by express provisions of
Ecuadorian law. Apart from a ten percent bounty, the plaintiffs’ complaint seeks only
the repair of alleged harms to the environment and improvements in public health. Yet
the plaintiffs (both directly and through their mouthpiece, Mr. Cabrera) have belatedly
demanded tens of billions of dollars in additional damages based on, for example,
alleged “excess” cancer deaths, alleged changes to indigenous cultures, and alleged
unfair profits. These additional allegations constitute an illegal attempt to modify the
complaint and are wholly unsubstantiated, and their inclusion is part of plaintiffs’ cynical
ploy to demand astronomical sums with the expectation that they will either coerce a
settlement or be reduced by this Court, thereby providing a veneer of due process to
this proceeding. Moreover, Chevron was never given an opportunity to defend itself with
respect to these new, untimely claims, filed after the issues in this case had been
established, since the complaint had already been answered. Principles of fair notice
and congruency limit the Court’s competence to deciding only those matters raised by
the plaintiffs in their complaint.
Seventh, and as detailed in Chapter VII, even if the plaintiffs had pled viable
claims, which is not the case, they have failed to prove them. Neither the testing
performed by plaintiffs’ nominated experts during the truncated judicial-inspection
process, nor the fraudulent report from Mr. Cabrera, nor the illegal last-minute damages
assessment submitted by the plaintiffs establishes any basis for allocating liability to
Chevron. From the first, plaintiffs’ evidence has been driven and manipulated by their
lawyers to create “expert” findings of significant contamination and large-scale damages,
not by the technical and impartial work of experts fairly analyzing environmental data
collected in accordance with scientific procedures. Thus, they falsified judicialinspection
reports and attempted to launder their consultants’ work as that of an
independent expert. Even if this fraud could somehow be ignored, the testing by the
plaintiffs’ nominated experts and Mr. Cabrera was inept, incomplete, and unreliable,
lacking any probative value, because the evidence was incomplete, both because my
client's allegations of essential error had not been ruled upon and because the
discrepancies between those reports and the reports filed by Chevron's nominated
experts had not been settled as required by law; moreover, the plaintiffs’ damages
assessment of September 16, 2010, at 5:15 p.m. added no new testing, sampling, or
evidence. Nothing the plaintiffs have offered refutes Chevron’s showing that TexPet’s
prior remediation met the requisite standards and that there is no significant risk to
human health at the remediated sites. Furthermore, plaintiffs cannot show any
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negligence where TexPet was directly overseen by the State and complied with extant
laws and regulations. And neither the report ghostwritten by the plaintiffs for Cabrera
nor the economic evaluation filed subsequently by the plaintiffs on September 16, 2010
at 5:15 p.m. made any effort to link the alleged damages to TexPet or ever accounted
for the fact that Petroecuador alone has operated in the former concession area for the
past twenty years. The results are damages estimates—US$27 billion according to the
Cabrera Report; an even more remarkable US$113 billion according to the plaintiffs—
that are wholly unsubstantiated.
I. This Court Has No Jurisdiction over Chevron
Chevron is not subject to jurisdiction of the courts and laws of Ecuador, and there
is no theory for holding it liable for the Consortium’s operations. Chevron has never
been domiciled in Ecuador, never operated here, was never licensed to conduct
operations here, never owned property here, never employed workers here, and has
never had any business contacts here. The plaintiffs’ allegations thus are not and
cannot be directed toward any activities that Chevron performed in Ecuador. Their
allegations exclusively concern TexPet’s participation with Petroecuador in a
Consortium, which ended in 1992.
The plaintiffs’ only argument on this point is their claim that Chevron “merged”
with Texaco in 2001. But that is simply false: Texaco merged with a Chevron subsidiary
named Keepep Inc., and, following that merger, Texaco remained an independent
corporation capable of being sued in its own right. Indisputable evidence in the record
demonstrates that Chevron, Texaco, and TexPet are all separately recognized legal
entities. Chevron did not merge with Texaco or assume the liabilities of Texaco—let
alone TexPet, the Texaco subsidiary that actually participated in the operations of the
Consortium. Chevron in 2001 became the indirect shareholder, not the legal successor,
of Texaco and TexPet. The plaintiffs cannot claim any confusion about this. Official
and contemporaneous public documents filed with U.S. and other government
authorities made clear that Chevron did not merge with Texaco, which became an
independent subsidiary. Despite the clear legal division between Chevron and Texaco,
Texaco avoided the possibility of doubt when it notified the plaintiffs and their attorneys
in 2002, after the transactions through which Texaco became an indirect Chevron
subsidiary but before this case was filed, that it had named agents in Ecuador having
authority to accept service of process and answer complaints. The plaintiffs, however,
elected to neither sue Texaco nor recognize the agents. And the plaintiffs have
presented neither evidence nor a plausible legal argument that Texaco or TexPet is
somehow the alter ego of Chevron. Consequently, there are no legal grounds
whatsoever for exerting jurisdiction over Chevron.
For the same reasons, Chevron cannot be held substantively liable for the
Consortium’s operations. Apart from their baseless attempt to treat Chevron and
Texaco as a singular merged entity, the plaintiffs offer no theory for holding Chevron
responsible for TexPet’s alleged acts in Ecuador. Indeed, they have not even
established how liability could have been imposed independently on Texaco, an entity
that indirectly owned TexPet’s fourth-level parent company at the time of the
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Consortium’s operations. As the U.S. district court found in the Aguinda case in New
York, which some of the same plaintiffs filed against Texaco in 1993 alleging individual
damages as a result of TexPet’s operations, there is no “material competent evidence of
meaningful Texaco involvement” with TexPet’s Ecuadorian operations. As such, there
is certainly no basis for imposing liability on Chevron, which had no relationship with
either Texaco or TexPet until well after the Consortium ended.
Despite the fact that Chevron raised these defenses at the outset of the case,
this Court refused to rule on them and has improperly exercised de facto jurisdiction
over Chevron for seven years. Chevron has thus been forced, under consistent protest
to the exercise of jurisdiction and at great expense, to argue the merits of the case. It is
far past time for this Court to declare that there are no grounds for asserting jurisdiction
over, or imposing liability upon, Chevron. This case can and should be decided on the
grounds presented above.
II.
These Proceedings Should Be Terminated, with the Entire Complaint
Dismissed, Because They Have Been Permeated by Fraud
In numerous respects, these proceedings have been tainted by fraudulent
conduct on the part of the plaintiffs and their attorneys, the plaintiffs' nominated experts
for the judicial inspections, the court-appointed “global” expert, and the judges presiding
over this case. Much of this evidence is captured on authenticated videotape, including
outtakes from the documentary Crude. Under these circumstances, no judgment
against Chevron is legally acceptable. The fraud perpetrated in this suit undermines the
integrity of these proceedings in their entirety and constitutes yet another violation of
Chevron’s due process rights.
New revelations that I have presented during these proceedings show that the
plaintiffs have perpetrated a fraud upon this Court, through the intentional submission of
fabricated evidence. One of the experts nominated by the plaintiffs, Dr. Charles
Calmbacher, testified under oath in a separate proceeding that the expert reports
submitted in his name were not his reports. He had not authorized them, and he did not
agree with their conclusions. Dr. Calmbacher found neither any threat to human health,
nor that the remediation performed by TexPet at the sites he reviewed was inadequate,
and he told the plaintiffs’ attorneys so. But in an act of outright fraud, the plaintiffs
submitted, in Dr. Calmbacher’s name, reports that claimed to find high levels of
contamination and insufficient remediation by TexPet at the same sites. These
revelations taint all of the other expert reports submitted by the plaintiffs during the
truncated judicial-inspection process (incomplete reports lacking probative value
because they are tainted with essential error, and these defects have not been cured as
required by law). Indeed, the plaintiffs’ American team leader, Steven Donziger, has
been recorded on film describing the plaintiffs’ evidence as nothing more than “smoke
and mirrors,” and “bullshit” for the Court and a “choreographed,” “good show” for the
media.
The fraud did not end with the premature conclusion of the judicial inspections.
Rather, the plaintiffs continued to mask the lack of evidence for their allegations, and
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they not only secretly conspired using intimidation and extortion against the judge at
that time, in order to secure the appointment of the supposedly "neutral and
independent" expert, Richard Cabrera, to perform the global expert assessment, but
they also secretly drafted the global report in question. The fix was in from the start:
outtakes from the documentary film Crude show Mr. Cabrera meeting with the plaintiffs’
representatives prior to his appointment to plan every aspect of the global expert report,
having secured the appointment through illicit ex parte meetings with Judge Yánez. As
the plaintiffs’ lead U.S. lawyer said on video, “the judge is going to appoint a guy in
Ecuador . . . but really, you know, we’ll be supporting him with the work—our people, E
Tech, whoever we choose to use.” The details of this illicit collaboration have been
confirmed through evidence obtained in judicial proceedings in the United States. Email
exchanges document how Mr. Cabrera’s report and annexes were drafted by Stratus, a
U.S. firm acting as a paid consultant to the plaintiffs, and affiliated activists working
under the direction of the plaintiffs’ attorneys. The main report and many of the
annexes were written in English, translated into Spanish, and then edited by plaintiffs’
attorneys, just in time to be filed under Mr. Cabrera’s signature. There is no evidence
that Mr. Cabrera wrote any part of his report, that he edited it, or did anything other than
sign it.
In addition, the costs of the surveys supposedly conducted of local
Ecuadorians—upon which the ghostwritten Cabrera Report relied in assessing billions
of dollars in damages—were not included in his work budget, and there is no doubt that
the surveys were administered and paid for by the designated beneficiary of any
judgment, the Amazon Defense Front (“Frente”). Video footage has come to light
showing the individuals who performed the survey were working closely with the
plaintiffs’ counsel and with other individuals involved in gathering “data” for it, even
before Mr. Cabrera had been appointed as an expert. Mr. Cabrera’s report was the
product of this unlawful collaboration with the plaintiffs, was written by their attorneys,
paid consultants, and affiliated activists, and was simply signed by the expert. It
therefore does not represent a neutral or independent effort to find the truth, and
plaintiffs’ paid consultants have internally acknowledged the report’s substantial
scientific flaws.
In a facile attempt to divert attention from their wrongdoing and salvage their
irreparably tainted case, the plaintiffs asked to “start over” with a set of party-submitted
damages assessments. Capitulating to the intense political pressure in this case,
Judge Ordóñez and Your Honor have steadfastly ignored the irrefutable evidence of
plaintiffs’ fraudulent misconduct and permitted plaintiffs to attempt to overcome their
fraud through their unlawful submission of September 16, 2010, at 5:15 p.m. But that
ad hoc filing is not competent evidence and does nothing to remedy the plaintiffs’
pervasive fraud. To the contrary, the plaintiffs’ brief of September 16, 2010 merely
resurrects the corrupted data and “findings” that they themselves prepared and to which
they previously tried to give credibility by filtration through the supposedly “independent”
expert, Mr. Cabrera. Their eleventh-hour submission is, accordingly, just as fraudulent,
baseless, and inept.
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In addition, the Court has before it audiovisual recordings demonstrating that
individuals from the Government are directly involved in managing the case and
obtaining a judgment against Chevron. The tapes also disclose a US$3 million bribery
scheme arising out of the preordained judgment against Chevron and apparently
involving the Presidency of the Republic, the plaintiffs, and Judge Juan Núñez. Despite
this proven bias, this Court has refused to nullify the orders that he had entered. Given
the import of some of those decisions—such as the denial of an essential-error hearing
on the Cabrera Report—this was a plain denial of justice.
As my client has repeatedly argued, in light of the unimpeachable evidence of
pervasive fraud, this Court has no choice but to nullify the proceedings and terminate
the case immediately. Given the pervasive fraud committed to the detriment of my
client, a judgment that does not entail in toto dismissal of the complaint could not
possibly be legally and morally issued consistent with due process. Plaintiffs’ attorneys
and backers must be severely punished and sanctioned, and any sanction short of
dismissal of the lawsuit and prosecution of the plaintiffs and their attorneys would
trivialize the plaintiffs’ incredible misconduct that I have demonstrated.
III.
Chevron Has Been Denied Due Process and Its Constitutional Rights
Due process is guided by certain immutable principles. Among them is the right
to an impartial and independent tribunal that ensures the validity and probity of all
evidence, the right to the timely and responsive resolution of key issues, and the right to
know all claims and evidence so that a meaningful defense can be presented. The
procedures adopted by this Court in this summary verbal proceeding, which constantly
changed according to the plaintiffs’ interests, have denied Chevron this right.
When Chevron unearthed and submitted to this Court incontrovertible evidence
of the fraud perpetrated by the plaintiffs' lawyers, this Court simply ignored them and
failed to take the measures necessary to protect my client's due-process rights or to
address the defects affecting the validity of these proceedings. There was no
investigation whatsoever into this egregious misconduct, demonstrating this Court’s
clear bias against my client and its refusal to abide by the rule of law. The plaintiffs’
lawyers were not sanctioned, and this case was allowed to proceed, on many occasions
in violation of legal precepts, on an even faster track than before. Notwithstanding the
pattern of malfeasance demonstrated by the plaintiffs and their lawyers, which was
intended to overcome their lack of credible evidence, this Court permitted them to try to
salvage their case and replace the tainted Cabrera Report and their falsified reports
using a contrived and novel procedural mechanism without basis in law, i.e., an "ad
hoc" legal brief.
This deus ex machina—an ad hoc filing on the eve of judgment, which allowed
the plaintiffs to submit a new global damages assessment—did not rely on any new
evidence, let alone any credible evidence. To the contrary, the plaintiffs’ assessment in
their brief filed September 16, 2010 at 5:15 p.m., was nothing more than an audacious
attempt to paper over their demonstrated misconduct. In that filing, plaintiffs demanded
over US$100 billion in additional damages, based solely on the same data that my client
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has repeatedly shown to be corrupted: the product of collusive, biased, and unscientific
testing and analysis. This has been confirmed by depositions in the United States of
the individuals who submitted reports that plaintiffs attached to their filing of September
16, 2010 at 5:15 p.m. in support of their damages figure. Under oath, those individuals
have made concessions showing that their reports cannot be relied upon to make any
damages calculations. In many cases, they simply assumed the validity of the Cabrera
Report, without having been made aware of its fraudulent preparation or Chevron’s
rebuttals of it. The authors also acknowledged severe limitations in their conclusions,
citing, among other things, the absence of experience, questionable methodologies, and
reliance upon unrealistic assumptions. I will continue to file this new and relevant
evidence with the Court as it becomes available.
While recent events vividly illustrate the violation of my client’s rights, the truth is
that Chevron has been denied due process from the very inception of this trial. After the
plaintiffs filed their complaint, Chevron filed a number of fundamental legal defenses—
including the absence of jurisdiction and the failure to plead any viable cause of
action—that should have resulted in the Court dismissing the entire action immediately.
Yet instead of resolving those dispositive legal issues at that time, this Court ordered
the parties to commence the evidentiary process. Specifically, each side was to
nominate experts to conduct judicial inspections of 122 sites operated by the
Consortium to determine if environmental contamination was present and if the
remediation done by TexPet between 1995 and 1998 met the requisite standards. Any
disputes would be resolved by “settling” experts independently appointed by this Court.
Subsequently, an expert or experts on behalf of each party, selected from among those
who participated in the judicial inspections, was to act as expert for the expert
examination of all fields operated by TexPet as operator of the former Petroecuador-
Texaco Consortium and issue the related expert reports, through which they were to
determine the environmental condition of the sites, possible damages, causation, and
any necessary remediation. The global expert determination should have been based
upon the undisputed scientific data offered by the parties’ experts during the judicial
inspections and upon the settling experts’ resolution of divergent data.
This never happened. With less than half of the sites inspected, and with the
lone report by independent settling experts finding that there was no significant health
risk to humans at the Sacha-53 site, the plaintiffs’ lawyers succeeded in bringing the
judicial inspections to a premature end. They were permitted to “relinquish” 64 of the
site inspections and move immediately to a modified version of the global expert
determination in which a single “expert” would make all determinations concerning
contamination, causation, and remediation. This permitted the plaintiffs to evade their
burden of proving their claims and denied Chevron an open and transparent process in
which the plaintiffs’ evidence—which was tainted and unreliable in multiple respects—
would have been assessed by independent settling experts, as happened with the
Sacha-53 site. Notably, this Court granted this improper request after the plaintiffs
orchestrated a public protest accusing this Court of favoring a corporate foreigner over
indigenous Ecuadorians and after several Ecuadorians, including the manager of the
presidential election campaign of Rafael Correa, signed an amicus brief urging this
Court to expedite the litigation.
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With the judicial inspections prematurely terminated, this Court, after a
conspiracy by the plaintiffs that included intimidation and extortion of former Judge
Yánez, appointed Richard Cabrera to determine both the existence and cause of any
contamination throughout the former concession area. Mr. Cabrera’s work lacked
scientific validity. Despite the fact that it took the parties’ judicial-inspection experts
thirty months to perform testing at just forty-five sites during the judicial inspections,
Mr. Cabrera purported to assess environmental conditions throughout the entirety of the
former concession area in just nine months, spending only a few weeks in the field and
visiting less than fifteen percent of wells and production stations in the former
concession area. Although Mr. Cabrera purported to rely upon the testing from the
truncated judicial inspections, he was not empowered to act as a settling-expert at this
stage and, in all events, did not respond to Chevron’s objections to the plaintiffs’
sampling and testing methodologies or resolve the divergent conclusions that the
parties’ judicial-inspection experts had reached. His testing of environmental conditions
was thus plainly inadequate. And for reasons that are now clear, much of Mr. Cabrera’s
work was performed in secret, without prior notice to Chevron, and in violation of the
principle of disclosure of all evidence, thus preventing my client from meaningfully
defending itself.
Chevron accordingly argued that the expert report contained essential errors,
pointing out the manifest irregularities in Mr. Cabrera’s methodology, the absurdity of
the conclusions in the report submitted in his name, and his failure to produce essential
information about the sources upon which he purportedly relied, the data he collected,
and the team that assisted him. Yet Judge Núñez—who recused himself from the case
after audiovisual evidence surfaced indicating that he had prejudged Chevron’s liability
and was involved in a US$3 million bribery scheme—refused Chevron’s petition by
improperly treating it as a motion for clarification. In addition, Judge Núñez denied
Chevron its right to question Mr. Cabrera in a deposition. Chevron has thus been
denied the opportunity to review, and defend against, the purported basis for the
allegations contained in the report signed by Mr. Cabrera. These decisions still stand
despite Judge Núñez’s manifest bias against Chevron. The result: an unchallengeable
unilateral condemnation prepared by the plaintiffs and their attorneys, paid consultants
and affiliated activists, issued under the signature of a lone expert, containing
unscientific and unsubstantiated conclusions that reflect a patent bias against Chevron.
From the start, the acts of the various judges who have heard this case have
lacked the necessary objectivity, because they were subjected to unfair pressure both
by the plaintiffs and by the Government, which has an interest in the results of the trial,
which has affected the impartiality that they were required to have, as they were urged
to rush to a preordained judgment against my client. Among other things, the use of the
summary verbal procedure, the premature termination of the judicial inspections, and
the failure to appoint experts proposed by Chevron, all demonstrate a desire to railroad
a judgment against my client. With the judicial-inspection process cut short and
Mr. Cabrera’s work revealed as a collusive fraud, this Court, through an unfounded
ruling that lacks procedural value, gave the plaintiffs a third shot to “prove” their case,
with the so-called "legal brief" filed on September 16, 2010 at 5:15 p.m. That order was
aimed at assigning liability to Chevron notwithstanding, or even acknowledging,
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plaintiffs’ egregious and fraudulent misconduct in the first two processes. Shortly
thereafter, this Court issued autos para sentencia even as my client continues to
discover and submit new evidence of the plaintiffs’ fraudulent activities, misconduct and
bad faith.
This was not the fair process that Chevron was due, and it is a reflection of the
tremendous social and political pressure that has been brought to bear on this case. As
the plaintiffs’ lead U.S. attorney explained in an outtake from Crude, the plaintiffs’
strategy was always “to pressure the judge and the court,” including through high-level
political contacts involving “influential people who talk to the judge.” The current
Administration has not hesitated to sanction judges who rule against the Government’s
interests, and the Government’s interests in this case could not have been more clear.
Financially, a judgment against Chevron would benefit the Government not only by
pushing its environmental obligations onto a foreign oil company, but also by
transferring an enormous amount of money to Ecuador. Politically, this case has
already diverted attention and responsibility for environmental conditions away from
Petroecuador, which was the majority owner of the Consortium and is the sole operator
of the former concession area today. It has allowed the Government to place blame for
all social ills in the Ecuadorian Amazon on a long-departed U.S. oil company (TexPet).
Thus, President Correa and other Government officials have repeatedly offered their
public support for the plaintiffs while prejudging Chevron’s liability in the most strident
terms.
Indeed, there is evidence indicating that well before this lawsuit was filed, the
Government of Ecuador entered into a quid pro quo arrangement with the plaintiffs’
representatives under which the Government would support the plaintiffs in return for
the Government and Petroecuador being absolved of any liability. The plaintiffs’
attorney Cristóbal Bonifaz, the architect of the Lago Agrio complaint, told the Hoy
newspaper that “the plaintiffs and their attorneys have agreed—in legal documents—not
to sue the State should it be found that the State was jointly responsible with Texaco for
causing environmental damage.” In addition, in emails between the Attorney General’s
office and representatives for the plaintiffs in 2005, an attorney for the plaintiffs wrote of
“want[ing] the Government and the Attorney General to play for our side,” and
Ecuador’s Deputy Attorney General responded that the Government was “searching for
a way to nullify” the State’s settlement with TexPet, including by “criminally try[ing] those
who executed the contract.” While this collusion was hidden and even falsely denied for
years, President Correa has made no pretense of his support for the plaintiffs and his
denunciation of the “multi-national corporation.” As the Attorney General told a reporter
in 2008, “the Correa administration’s position in this case is clear: ‘The pollution is a
result of Chevron’s actions and not of Petroecuador.’” And the release of the outtakes
from Crude now confirm without doubt that the plaintiffs and the Government have long
been collaborating to try to nullify the settlements with TexPet and ensure a judgment
against Chevron.
As part of that agreement, the plaintiffs have worked with the Government to
secure the criminal prosecution of two Chevron attorneys on a bogus and ill-defined
claim of “fraud” relating to the State’s settlement with TexPet. The allegation of fraud
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had previously been investigated by the Prosecutor General’s Office, and two different
prosecutors general had recommended that the charges be dismissed. In addition, the
State had abandoned the same fraud allegation in related civil litigation in the Federal
Court for the Southern District of New York after having had the opportunity for
discovery. Nonetheless, President Correa publicly called for the prosecution of those
involved in the State’s settlement, and charges were thereafter brought by his new
Prosecutor General, Dr. Washington Pesántez, who had previously rejected the fraud
allegation in his capacity as District Prosecutor of Pichincha. It is thus clear that the
prosecution has no basis in fact or law, but rather was intended to fulfill the
Government’s part in its scheme with the plaintiffs’ representatives. As the U.S. State
Department has repeatedly warned, “[c]riminal complaints and arrest warrants against
foreign company officials have been used [in Ecuador] to pressure companies involved
in commercial disputes.” That admonition has particular force given that the Prosecutor
General has publicly stated that ninety percent of any judgment would go directly to the
Ecuadorian Government.
Evidence submitted by my client further demonstrates that any judgment in this
case would be the result of concerted pressure tactics on the Court, planned and
executed by the plaintiffs and their representatives. As the plaintiffs’ lawyer put it in one
of the Crude outtakes, “the only language that . . . this judge is gonna understand is one
of pressure, intimidation, and humiliation.” A decision based on external pressure,
rather than the law and the facts, violates basic principles of due process.
In sum, the evolving and ad hoc procedures adopted by this Court denied my
client due process and manifested a rush to a preordained judgment against Chevron.
From failing to promptly rule on Chevron’s dispositive defenses, to unlawfully alleviating
the plaintiffs of their burden of proof by improperly relinquishing the judicial inspections
that were requested and ordered, to ignoring, concealing, and absolving plaintiffs’ fraud,
to (twice) prematurely ordering autos para sentencia, this Court has denied Chevron its
due process rights. It is clear that this trial has been irremediably tainted by immense
political pressure resulting from the improper influence exerted by the Government in
this regard.
IV.
Systematic Constitutional Violations and Substantial Procedural Defects
Render These Proceedings a Legal Nullity
For many reasons discussed above, as well as others, this Court must declare
the entirety of these proceedings a legal nullity. Any judgment issued by this Court
under these circumstances would be null and void.
Above all, this case is a nullity the constitutional guarantee of due process has
been repeatedly violated and because substantial solemnities required in all
proceedings have been omitted. As discussed throughout this brief, Chevron’s rights
were violated by, among other things, this Court’s refusal to investigate and sanction
plaintiffs’ fraud; by the unlawful appointment of Mr. Cabrera; by the denial of the right to
initiate essential error summary proceedings; and by the failure to annul the rulings
issued by former Judge Yánez regarding the appointment of Mr. Cabrera and the failure
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to annul the rulings of Judge Núñez, despite evidence that implicates him in bribery
solicitation.
In addition, substantial solemnities required in all proceedings have been
disregarded. For example, there is no subject-matter jurisdiction because plaintiffs have
attempted to improperly join alleged claims arising under the Civil Code and the EMA in
a summary verbal proceeding. In addition, Judge Ordóñez was without competence to
issue orders, which still stand, because a recusal petition against him was pending at
the time. This petition has still not been ruled upon. Nullity must also be declared
because of the forging of the plaintiffs' signatures on the ratification of the complaint and
the appointment of Dr. Alberto Wray as joint counsel of record for the plaintiffs, and
because of the illegitimacy of attorney Pablo Fajardo as joint counsel of record, because
not all of the plaintiffs had agreed to be represented by him as their joint representative.
This not only affects the judge's jurisdiction over this case, but also renders null all of
Mr. Fajardo’s purported filings on behalf of the plaintiffs. The purported relinquishment
of the judicial inspections is null for the additional reason that it was not authorized by
each of the plaintiffs, since eight of them did not ratify that relinquishment, and because
that type of relinquishment, unlike in other law, is not provided for in Ecuadorian
procedural law, which again means that the record is incomplete. These various
violations demonstrate a remarkable disregard for Ecuadorian law and render these
proceedings entirely null.
V. The Plaintiffs Have No Viable Claim
Any cause of action for environmental remediation of the former concession area
by my client is barred by the releases that Texaco, TexPet, and their principals and
affiliates received from the State and the relevant municipalities and province
encompassing the former concession area. Before private individuals were authorized
under the 1999 Environmental Management Act (“EMA”) to seek damages for alleged
environmental harms, their communal rights were represented by the State and local
governments. In fact, the environmental rights of the forty-eight named plaintiffs—as
well as the unnamed thousands they purport to represent without basis—were
vindicated and then released by the relevant governments. The plaintiffs cannot
recover yet again for the same alleged injury, and their environmental claims are barred.
The four municipalities and the Provincial Council encompassing the former
concession area brought separate suits against TexPet in 1994. Acting in their
capacities as “small states . . . in each of their respective jurisdictions,” the
municipalities viewed these lawsuits as fulfilling their obligation to protect the health and
safety of their inhabitants and to assist the State in meeting its environmental
obligations to all Ecuadorian citizens. Like the complaint here, these lawsuits were
focused on alleged communal harms and sought to protect “the health of all citizens,
animals, species, flora, fauna, rivers, water sources and soil” and to recover money as
compensation for alleged “ecological damages” arising from the Consortium’s
operations. Each suit by the municipalities and the Provincial Council was legally
settled in 1996 on terms designed to “meet the interests of The Community and of its
citizens as to any claims they may have against TEXPET.” In return for the funding of
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certain social programs, the municipalities “exempt[ed], release[d], exonerate[d] and
relieve[d] forever” TexPet, its principals, and affiliates “from any responsibility, claim,
request, demand or complaint, be it past, present or future, for any and all reasons
related to” the Consortium’s operations. The province of Sucumbíos also signed a
settlement and granted a similar release. These agreements have the effect of res
judicata, and each of the forty-eight named plaintiffs and the “affected communities”
they purport to represent reside within—and were duly represented by—these
governments. Therefore, these settlement agreements have the effect of res judicata
with respect to the complaint in this case.
These releases supplemented a larger settlement between TexPet and the State
in 1995. That agreement expressly covers “causes of action under Article 19(2) of the
[1978] Political Constitution of the Republic of Ecuador,” which guaranteed all
Ecuadorians the “right to live in an environment free of contamination” and placed the
“duty [on] the State to assure this right and take responsibility for the protection of
nature.” This was confirmed by Ecuador’s U.S. Ambassador at the time, who explained
that the State—not the plaintiffs—was the sole “legal owner of the rivers, streams and
natural resources and all public lands where the oil producing operations involved in this
litigation are located,” and thus the sole “legal protector of the quality of the air, water,
atmosphere and environment within its frontiers.” The settlement specifically noted that
the scope of the remediation work for which TexPet was responsible as a minority
partner of the Consortium “t[ook] into consideration the inhabitants of the Oriente
region.” An official congressional report on the State’s settlement with TexPet explained
that its purpose was to “indemnify or alleviate the negative environmental effects
caused . . . to the Ecuadorian population living in [the] Amazonian region.” Thus, the
State and Petroecuador were acting on behalf of all Ecuadorians when they, in
exchange for substantial remedial work by TexPet, “release[d], acquit[ted] and forever
discharge[d]” Texaco and TexPet of “all the Government’s and Petroecuador’s
claims . . . for the Environmental Impact arising from the Operations of the Consortium.”
This settlement also has the effect of res judicata.
Because the national and local governments have vindicated the diffuse
environmental rights of Ecuadorians living in or near the former concession area, those
claims cannot be brought again by the plaintiffs here. As reflected in the carve-out
provision of the State’s settlement, the only claims that survived the settlements were
those for personal injury and individualized property damage—indeed, those were the
only private claims that existed at the time. But the plaintiffs, as noted, have neither
alleged nor proven individual injuries. They instead seek to vindicate the exact same
diffuse rights that were vindicated by the governments, which had already released
TexPet and its affiliates from those liabilities.
Furthermore, the plaintiffs’ complaint cites numerous code and constitutional
provisions that were in force when TexPet ceased its role as operator in 1990, but none
provides a cause of action for the alleged damages to the environment and public
health that they are seeking here. The only cited basis for this type of relief is Article 43
of the EMA, as the plaintiffs acknowledge in their supplemental damages assessment
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filed on September 16, 2010 at 5:15 p.m. But that law was not enacted until 1999, and
it cannot lawfully be applied retroactively to conduct that ended in 1990.
The plaintiffs concede that the EMA cannot be applied retroactively, but argue
that their use of it is merely procedural. That is plainly incorrect—the EMA marks a
substantive and significant change in the law. The laws extant during TexPet’s
operations did not provide the relief requested by the plaintiffs. No claim for injunctive
relief can properly be asserted against Chevron, because only Petroecuador has control
over the land and activities at issue. Although the complaint cites provisions of the Civil
Code that authorize compensation for individualized harm to one’s person or property,
the plaintiffs have neither alleged nor proven any individual harm. The complaint also
cites constitutional and statutory provisions that allow the plaintiffs to report alleged
environmental contamination to the State and request that the State take action against
the alleged wrongdoer, but these provisions do not provide causes of action against
private parties for alleged damages caused to their community or collective rights.
Indeed, there was no law in effect prior to 1990 that authorized private plaintiffs to sue
for the remediation of environmental damages on behalf of all Ecuadorians. The
plaintiffs’ counsel in the New York Aguinda case admitted as much, disclaiming any
right to “seek[] damages for real property that they do not own.” Article 43 of the EMA
thus creates an entirely new cause of action, which is surely why the plaintiffs’ counsel
lobbied for its enactment.
Article 7 of the Ecuadorian Civil Code provides that laws are enacted “for the
future only” and “have no retroactive effect.” The creation of a new cause of action
marks a substantive, not procedural, change in the law that cannot be applied
retroactively. Parties must be able to arrange their affairs in light of existing laws
without the risk of being exposed to increased liabilities through the retroactive
application of new laws. The plaintiffs’ retroactive use of the EMA to request billions of
dollars in damages runs afoul of this fundamental precept.
Nor is there any viable legal basis for the plaintiffs’ demand, in their filing of
September 16, 2010, at 5:15 p.m., of nearly US$40 billion under an “unjust enrichment”
theory. In the first place, this claim does not appear in plaintiffs’ complaint. Moreover,
even if they had pled such claim, plaintiffs have not proven that my client was enriched,
much less unjustly enriched, by TexPet’s actions in the Oriente. Additionally,
Ecuadorian law is clear that plaintiffs cannot rely on an “unjust enrichment” theory
where there are specific legal bases for recovery—as there surely are for damage to the
environment. Implicitly conceding the frivolous nature of their request, the plaintiffs
invoke inapplicable principles of foreign law, such as the U.S. concept of punitive
damages. Plaintiffs must resort to citing U.S. law because the concept of punitive
damages does not exist in Ecuador. But awarding such damages on the facts of this
case would be ludicrous in any country, given that TexPet always abided by governing
legal requirements during its operations in the Oriente. This request doubtless
represents yet another example of the plaintiffs’ attorneys’ cynical ploy—to which they
admit in outtakes from the documentary Crude—to ask for damages in astronomical
amounts so that if the Court awards less, it will appear as if Chevron was given a fair
and just trial.
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VI.
The Jurisdiction of This Court Is Limited by the Claims Included by the
Plaintiffs in Their Complaint
Chapter VI of the plaintiffs’ complaint seeks (i) removal of alleged contaminating
elements that purportedly threaten the environment, such as removal of debris and
allegedly contaminating materials in oil pits; (ii) damages payable to the Frente to repair
alleged environmental damages and to monitor the health of nearby residents; and (iii) a
payment equaling ten percent of the damages awarded for remediation, also paid to the
Frente. The first request, presumably based upon Article 2236 of the Civil Code, is
preventative and injunctive. It does not allege any injury or request any damages, but
rather seeks to remove alleged threats to the environment before they cause injury.
The second and third requests, expressly based upon Article 43 of the EMA, seek
damages and a bounty not for any injury suffered by the forty-eight named plaintiffs or
their property, but rather for alleged environmental damages to concession lands they
do not own. Nowhere in their complaint do the plaintiffs allege any personal injuries, nor
do they seek redress for any specific injuries to the allegedly “affected communities.”
Both Mr. Cabrera’s ghostwritten report and the plaintiffs’ attempt to rehabilitate
that report in their ad hoc damages assessment of September 16, 2010 at 5:15 p.m.,
exceed the scope of the complaint and would effectively amend it, awarding the
plaintiffs billions of dollars in damages that they never sought. Under Article 834 of the
Code of Civil Procedure, “[o]nce the lawsuit has been filed, the plaintiff may not amend
it.” The Cabrera Report violated this rule—as well as this Court’s mandate—by going
well beyond the complaint’s requests for environmental remediation and improvements
to public health. And the plaintiffs repeated this violation—and went outrageously
further—in their last-ditch damages assessment on September 16, 2010, at 5:15 p.m.
For example, plaintiffs (through Mr. Cabrera) made the incendiary, but wholly
unsubstantiated, claim that US$9.5 billion should be paid for “excess” cancer deaths in
the Oriente. In their damages assessment, the plaintiffs build on that baseless
foundation, demanding the incredible sum of nearly US$70 billion for those unproven
deaths and even hypothetical future deaths of non-parties. Mr. Cabrera’s report also
included the payment of US$8.4 billion for “unfair profits” TexPet allegedly earned, a
civil and penal levy unknown to Ecuadorian law that the plaintiffs never requested. In
their September 16, 2010 filing, the plaintiffs boost that extra petita figure to almost
US$40 billion. And Mr. Cabrera’s fraudulent report allocated nearly a billion dollars to
improve Petroecuador’s infrastructure and to create a husbandry farm for indigenous
populations, again with the plaintiffs following along and pushing even further in their
September 16, 2010 assessment at 5:15 p.m., which is nothing more than a publicrelations
stunt.
These estimates lack any relationship to reality or to the specific environmental
issues raised in the complaint. They are the product of the plaintiffs’ attempt to
attribute—through fraud, the use of unsupported suppositions, and speculation—
virtually every social ill in the Oriente today to the minority partner of the Consortium,
whose operations ended on June 6, 1992. As noted above, these claims were never
part of the claims in the complaint, and therefore, it is neither legal nor proper to claim,
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after the conclusion of the evidentiary period, that my client must defend itself against
these accusations and/or satisfy these claims.
Your Honor, as such, may not consider any relief beyond that requested in the
plaintiffs’ complaint. The inclusion of anything else is extra petita and therefore barred,
because Ecuadorian procedural law and due process prohibit the judge from
considering matters not presented to him. The plaintiffs clearly knew as much; they
admit in Crude outtakes that they cannot lawfully obtain “anything more than what has
been petitioned in the lawsuit.”
VII.
The Plaintiffs Have Not Proven Essential Factual Elements of Their Claim
Even if the plaintiffs' claim for alleged generalized damage to the environment
had been legally and legitimately valid, they have not proven the elements of their tort
claim: (i) negligence, (ii) damage, and (iii) a causal nexus between my client’s conduct
and the alleged damage. Here, no competent evidence supports the plaintiffs’
sweeping allegations. To the contrary, on every element of their claim, all of the
credible evidence contradicts them.
Negligence: The plaintiffs have not established TexPet’s negligence.
Throughout the Consortium, TexPet’s operations complied with all applicable
Ecuadorian laws and standards. All of TexPet’s work—including its environmental
remediation in the former concession area—was overseen and approved by the
Republic of Ecuador, and its operations complied with international oil-industry
standards at the time. The principle of non-retroactivity, enshrined in Ecuadorian
legislation, precludes any attempt to hold Chevron to substantive standards enacted
after TexPet left Ecuador.
Damage: The plaintiffs have not proven the damages they allege. Irrespective
of the plaintiffs’ specific claims, it is clear that none of their evidence can be trusted.
The plaintiffs pressured experts and submitted at least two falsified reports during the
judicial-inspection phase, and Mr. Cabrera’s global assessment has now been shown to
have been nothing more than the plaintiffs’ fraud, a vehicle for them to submit the
arguments of their lawyers and U.S. consultants cloaked as expert “evidence.” Their
resort to fraud speaks volumes about plaintiffs’ evidence, which is unreliable on its own
terms. During the judicial-inspection process, the plaintiffs-nominated experts failed to
abide by the very protocols that the plaintiffs once agreed were necessary to produce
reliable evidence. For example, much of their sample testing was done at the thenunaccredited
HAVOC laboratory, and the plaintiffs even conducted some testing in their
technical team’s own hotel room. The supposed global assessment was no better:
Mr. Cabrera took only a handful of samples at forty-five of the 335 well and 19
production sites in the former concession area; half of his sampling was done in secret
so that Chevron could not observe and object to his methodology; and over a quarter of
his samples were discarded in the field.
The plaintiffs’ filing of September 16, 2010 at 5:15 p.m., which contains the "legal
brief" with their criteria for evaluating the damages, whereby they attempt to salvage the
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fabricated evidence filed by way of the Cabrera Report, is entitled to no weight under
Ecuadorian law, solves none of these problems, and is merely an extension of the
plaintiffs’ fraudulent conduct. It rests entirely on the same data from the judicial
inspections and the “global” report that have been shown to be fraudulent, unreliable
and incomplete. This has been admitted by the authors themselves in recent
depositions. But no matter how they try to package it, plaintiffs’ flawed evidence cannot
prove their only two pled claims for which they now request damages: (i) soil and
groundwater remediation, and (ii) healthcare costs.
The plaintiffs’ evidence of soil and groundwater contamination, much of it
fraudulent, cannot establish any cognizable claim against Chevron. Audits conducted at
the end of the Consortium indicated limited environmental impact, and TexPet
successfully remediated its share of this limited impact in cooperation with the
Ecuadorian Government. With only one exception, the soil tests conducted by all the
experts in the judicial-inspection phase show no exceedance of the criteria set forth in
the settlement agreement executed with the Republic of Ecuador in 1995. Both the
settling experts appointed in this case and peer-reviewed studies support this
conclusion. Additionally, a comprehensive risk evaluation indicates that groundwater in
the former concession area does not pose any petroleum-related health risks to local
residents or workers. The plaintiffs cannot rebut these facts with Mr. Cabrera’s
fraudulent report, which was actually the plaintiffs’ own admittedly unscientific work
product passed off as “evidence.”
Regardless, any further remediation in the former concession area is the
responsibility of Petroecuador. The Ecuadorian State has recognized this responsibility
through PEPDA, now called UMR, a government program that remediates sites for
which Petroecuador was responsible in the former concession area. At an average
remediation cost of US$85,000 per site, the PEPDA/UMR remediation makes clear that
the damage request in the Cabrera Report, an average of US$3.08 million per site for
remediation, is absurd. Although the plaintiffs later reduced their damage request to
between US$487 million to US$949 million in their September 16, 2010 submission,
even this reduced figure is still based on (i) the fraudulent data of Mr. Cabrera, (ii)
inapplicable remedial standards, (iii) an overestimation of the pits and soil volume
requiring remediation, and (iv) an overestimate of the unit cost of remediation.
The plaintiffs’ public health claims—the only other claim pled in the complaint—
are equally unsupported. While such claims would ordinarily seek to vindicate the
individual rights that belong to residents of the allegedly affected communities, no
individualized proof has been offered of any harm or threat of harm to the health of such
residents. The plaintiffs have not identified a single specific individual suffering from
health problems. This fatal defect aside, there is no reliable scientific evidence showing
that any alleged adverse health impacts are attributable to petroleum activities. In fact,
the health studies and health surveys claiming to find a causal link between various
ailments and petroleum operations are riddled with methodological errors and biases
and cannot form the basis of an inference of causation. Furthermore, the plaintiffs’
proposed plans to institute a healthcare program to compensate for the purported health
impacts is logically unsound: Among other things, it ignores that many of the health
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conditions in the Amazon region relate to socioeconomic issues, such as malnutrition,
sanitation, lack of prenatal care, and other factors unrelated to petroleum operations and
that are common to all of rural Ecuador. The plaintiffs request for US$1.4 billion on this
basis is therefore without merit.
Aside from these claims for remediation and healthcare costs, all the plaintiffs’
other damage claims—totaling over US$100 billion—were not included in the plaintiffs’
original complaint. As such, these claims are extra petita, and this Court should reject
them on that basis alone. However, even if the plaintiffs had included these claims in
their complaint, they have no underlying merit.
The plaintiffs’ damage request of up to US$69.7 billion for excess cancer deaths
is meritless because no scientific evidence supports any conclusion that unidentified
third parties in the former concession area suffer from cancer attributable to petroleum
exposure. The studies upon which the plaintiffs rely suffer from a number of
methodological errors. Even ignoring these errors, none of the studies shows any
causal connection between cancer and petroleum activities. And because plaintiffs
have not proven any individual claims, they are forced to rely on the U.S.-based concept
of a “Value of a Statistical Life” for a “unit” value to calculate the damages for supposed
deaths. This valuation, however, is inappropriate because it ignores the economic
realities of Ecuador in general, and the Amazon in particular. And the plaintiffs identify
no theory under which they should be entitled to recover for the alleged cancer deaths
of third parties they do not represent.
The plaintiffs’ request for US$481.5 million for projects to recover indigenous
territory and culture is also devoid of merit. No scientific evidence demonstrates that
TexPet’s petroleum exploration and production activities in the former concession area
caused the purported harm to indigenous communities. Plaintiffs reach a contrary
conclusion only by disregarding research demonstrating that the alleged loss of
indigenous culture and deforestation is a direct result of education and colonization
programs promoted by the Ecuadorian Government. To the extent such impacts can be
attributed to the Consortium’s activities, those impacts were confined and negligible.
Thus, any change to the culture of indigenous communities is the direct result of official
policies of the Ecuadorian State—policies which my client had no role in formulating.
Moreover, cultural change is not uncommon among indigenous groups in the Amazon,
and indigenous populations have increased since 1955, and are growing at
approximately the same rate as Ecuador’s overall population.
Likewise, no evidence supports the plaintiffs’ US$1.697 billion damage request
for loss of ecosystem. The plaintiffs identify no specific ecological services lost as a
result of TexPet’s activities. The surveys on which the report attributed to Mr. Cabrera
and the plaintiffs’ expert rely cannot be used to place a value on allegedly lost
ecological services in the Northeast region of Ecuador for multiple reasons, not the least
of which is that not a single respondent in the surveys was from Ecuador. The plaintiffs
nevertheless attempt to calculate the purported decrease of these phantom services—
and do so without a baseline to measure against and over a greatly exaggerated area
that bears no relation to the area allegedly affected by the former concession’s
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operations. Both Mr. Cabrera and Lawrence Barnthouse, whom plaintiffs hired for their
filing of September 16, 2010 at 5:15 p.m., present irreparably flawed analyses, failing,
among other things, to take into account TexPet’s prior remediation, Petroecuador’s
activities since the end of the Consortium, or the fact that roads and wellpads were
legally permitted.
The recommendation, contained in the fraudulent Cabrera Report, of US$375
million of damages for improvements to Petroecuador’s petroleum operations
infrastructure is also meritless. While plaintiffs apparently abandoned this claim in their
filing of September 16, 2010 at 5:15 p.m., this request is patently absurd. Beginning in
1976, the Ecuadorian Government was the majority owner in the Consortium, determined
how the Consortium was operated, and had a decisive influence in its administration.
And since 1992, Petroecuador has been the sole operator of the former concession area
and the exclusive owner of the oilfield equipment. As part of the settlement and
exoneration signed with the Ecuadorian Government and Petroecuador, TexPet already
paid for equipment upgrades allocated to TexPet as part of its responsibilities for the
Consortium’s liabilities. There is therefore no basis to order Chevron to pay for
improvements that are rightfully the responsibility of Petroecuador and the State and
certainly no basis for writing that check to plaintiffs. Furthermore, plaintiffs’ consultants
included costs for sites that they knew were outside the concession and were operated
exclusively by Petroecuador.
The plaintiffs’ request for US$541.5 million in damages to construct drinking
water systems is mystifying. Based on the results of over 7,000 analyses from 253
drinking water sampling events in the Oriente region, there is no indication of public
health concerns related to drinking water as a result of petroleum exploration and
production activities in the former concession area. The data show that petroleumrelated
contamination is not an issue, and there is no evidence of related public health
concerns associated with petroleum exploration or production. Mr. Cabrera did not
collect a single sample of drinking water, and the new report submitted by the plaintiffs
contains no new data and is deeply flawed. Thus, there is no need for a new potable
water system in the Oriente region financed by Chevron because there simply are no
impacts to water resources as a result of TexPet’s operations in the former concession
area. The Ecuadorian Government agrees, finding through studies it has sponsored
that there is no need to replace the existing water supply system.
Finally, even if an unjust enrichment claim were contemplated by Ecuadorian law,
could be properly heard by this Court and were included in the plaintiffs’ complaint, the
US$37.86 billion claim is wholly without merit. First, TexPet’s operations never violated
the extant regulatory standards of Ecuador or international norms. Second, since
TexPet already undertook remediation, any compensation to the plaintiffs for unjust
enrichment would be to ask the company to pay twice for the same alleged
environmental damage. Third, the unjust enrichment damages requested by both the
plaintiffs in their September 16, 2010 submission and Mr. Cabrera suffer from the same
fatal mistakes. Both are based on data gathered in the expert report of Mr. Cabrera,
which is tainted by fraud and unreliable. Fourth, even if TexPet did derive unfair profits
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during Consortium operations, Chevron is not the successor of TexPet in any way
whatsoever, and it cannot be held liable for TexPet’s actions.
Causation: There is no proof linking the injuries plaintiffs allege to TexPet’s
actions as operator of the Consortium, conduct which ended twenty years ago. The
former concession area has been actively operated by Petroecuador alone since 1992,
during which time it has drilled more than 400 new wells, constructed hundreds of new
pits, routinely discharged produced water until 2006, and caused thousands of oil spills.
Yet Mr. Cabrera ignored this Court’s instructions to specify and chronologically trace
any damages to pre- and post-Consortium activities. This defect is fatal to the plaintiffs’
claims regarding any link between the alleged environmental impact and TexPet’s
activities. And that omission cannot be rectified by the preposterous legal theory
offered by the Cabrera Report, which posited that Chevron is responsible for the
volitional acts of Petroecuador over the past seventeen years. Under the Cabrera
Report’s twisted analysis, an oil spill by Petroecuador in 2007 was the responsibility of
Chevron, whose liability for operations wholly outside of its control apparently continues
even today. As one of the plaintiffs’ Ecuadorian attorneys says in a Crude clip, it is
“inconceivable to me that we can blame Texaco for everything that Petroecuador has
been doing to this date.”
In sum, plaintiffs have not proven any of the three elements of their claim. Any
eleventh-hour argument that the plaintiffs need not prove their case because Chevron
bears the burden of proof would so fundamentally violate my clients due process rights
that this trial would have to be declared null and void.
THE PLEADINGS AND PROCEEDINGS
This lawsuit is governed by a litigant-driven procedural system as opposed to a
court-driven inquisitorial system, and the plaintiff bears the burden of proof, which is the
opposite of the inquisitorial system, where the court moves the case forward. Thus, only
those claims raised by the parties in the complaint and the answer may be considered
by you, Mr. Acting President, in resolving the case. Article 273 of the Code of Civil
Procedure adopts this mandatory principle: “The judgment shall resolve only the matters
at issue in the lawsuit . . . .” In addressing this notion of “procedural congruency,” case
law and legal authors agree that the judge, when ruling on the disputed matter, may not
consider facts or issues not put forth when the issues were defined and proven by the
parties. Going beyond what was requested results in a judgment that violates the
principle of procedural “congruency,” which requires an identity between what is
decided and the claims brought by the parties. It is important, therefore, to be clear as
to the exact matters that were at issue at the commencement of this lawsuit, as the
judgment rendered may address only those points. Any deviation from the scope of the
initial pleadings violates the principles of due process, congruency, and legal certainty.
I. The Complaint
The complaint was filed by forty-eight Ecuadorians, solely against
“ChevronTexaco Corporation.” It alleges that TexPet, a corporate entity that is not party
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to this case and was not affiliated with Chevron in any way during the period of allegedly
offending conduct, negligently employed certain alleged “methods and procedures”
while acting as operator of the Petroecuador-Texaco Consortium ("Consortium") from
1964 to 1990, under a concession for the exploration and production of hydrocarbons in
the Oriente region of Ecuador, which “caused environmental damage, health damage
among the inhabitants, and produced patrimony loss.” 1
1. The Relief Sought: The prayer for relief put forth in the complaint seeks (i) the
elimination or removal of alleged contaminating elements that purportedly now
threaten the environment and health of the inhabitants; 2 (ii) payment to the
Frente of an amount, determined by an expert, needed to remediate alleged
environmental damage; 3 and (iii) payment to the Frente of ten percent of the
amount awarded for remediation, plus the cost of the lawsuit and the value of the
time and efforts employed in litigating it. 4
2. The Legal Grounds: The complaint purports to be based on Articles “2241 and
2256 of the Civil Code” (currently Articles 2214 and 2229); on “Article 15 of
Agreement 169 of the International Labor Organization”; on “number 6 of Article
23 of the Constitution [of 1998]” (in force in 2003), concordant with Article 86 of
the same Constitution; on “Article 2260 of the Civil Code” (currently Article 2236);
on “Article 41 of the Environmental Management Law (Law 99-37, Official
Gazette 245 of July 30, 1999) . . . and on Article 43 of the same Law.” 5 Based
upon the particular relief requested by the plaintiffs in their complaint, and as
admitted in their September 16 filing, it is clear that the EMA provides the sole
legal basis for their claims.
3. The Parties: Plaintiffs purport to be suing as representatives of certain allegedly
“affected communities” to protect their “collective” rights to a clean environment. 6
Thus, plaintiffs’ claims are premised not upon any individual injury, but rather
upon the diffuse environmental rights of all Ecuadorian citizens. The plaintiffs
claim that TexPet perpetrated the alleged acts, and that Texaco, which is a third
party not being sued, is liable for TexPet’s alleged “acts and omissions” because
it was TexPet’s corporate principal. 7 The complaint further claims that Texaco’s
1 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 73v-74v.
2 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79.
3 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 80.
4 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 80.
5 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 78v-79.
6 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 78v-79.
7 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 78v.
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alleged liability and obligations were “transferred” to ChevronTexaco Corporation
through a corporate “merger” that occurred in 2001. 8
4. The Amount: The complaint notes that “owing to the nature of the claim, the
amount has not yet been determined.” 9
II.
The Answer to the Complaint
In the Conciliation and Answer to the Complaint Hearing, Chevron, pursuant to
Article 835 of the Code of Civil Procedure, 10 asked the President of the Court to
consider as a preliminary matter that Chevron (under Article 835 of the Code of Civil
Procedure) 11 was improperly sued and, as a consequence, that the Court lacked
jurisdiction over it. 12 Chevron also raised the issue of personal jurisdiction as a principal
defense, as an alternative to its jurisdictional argument under Article 835. Chevron also
presented additional defenses and gave a detailed refutation of the complaint’s factual
and legal allegations and requests for relief. Chevron took these steps solely in order to
avoid default under Article 104 of the Code of Civil Procedure. 13 It did so without
waiving its preliminary objection and its primary defense based on the Court’s lack of
jurisdiction.
Chevron’s defenses, as presented in its answer to the complaint, can be summarized as
follows:
1. Lack of Jurisdiction: The Honorable Superior Court of Nueva Loja (currently the
Provincial Court of Sucumbíos) lacks competence and jurisdiction to hear and
decide the present case filed against Chevron. Neither Texaco nor TexPet was a
named party in the present case, and Chevron is not Texaco’s legal successor
8 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 78v.
9 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 80v.
10 Article 835 provides: "If no settlement can be obtained and the matter involves liquidation of
interests, fruits or damages ordered in a final and binding judgment establishing the grounds for the
liquidation and the manner in which it is to be carried out, the judge shall make the liquidation at the same
hearing or shall notify the parties to do so within the following three days, and the advice of an expert
(who shall be appointed by the judge and whose opinion shall be attached to the judgment) may be
obtained. When there are no issues of material fact, the judgment shall be issued immediately or within
the following three days."
11 Article 835 provides: "If no settlement can be obtained and the matter involves liquidation of
interests, fruits or damages ordered in a final and binding judgment establishing the grounds for the
liquidation and the manner in which it is to be carried out, the judge shall make the liquidation at the same
hearing or shall notify the parties to do so within the following three days, and the advice of an expert
(who shall be appointed by the judge and whose opinion shall be attached to the judgment) may be
obtained. When there are no issues of material fact, the judgment shall be issued immediately or within
the following three days."
12 Answer as Read into the Record § I, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67, 243.
13 Article 104 provides: “The defendant may amend his defenses and assert additional
substantive defenses before the evidentiary phase starts.”
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such that it can be legally responsible for the alleged acts or omissions of Texaco
or TexPet. 14
2. No Legitimate Defendant: Whatever the Court’s power over Chevron in the
jurisdictional sense, Chevron could not be held liable given the absence of any
connection between Chevron and the facts alleged in the complaint. Chevron
has neither caused the damage nor committed the acts alleged in plaintiffs’
complaint; has no legal obligation to remediate the alleged damage; is not liable
for acts of third parties (such as the Government, settlers, other operating
companies, large-scale agricultural producers, or Petroecuador); and is not
subject to any laws on which the plaintiffs base their complaint. 15
3. Improper Joinder of Claims: There is an improper joinder of claims under a
summary verbal procedure, to the extent that the plaintiffs putatively bring both
environmental claims and non-environmental claims, including claims under the
Civil Code. 16
4. Non-Retroactivity: All claims pled under the EMA are invalid because the acts
and omissions upon which they are based occurred before the enactment of that
law, which cannot be applied retroactively. 17
5. Prescription: To the extent that any civil claims were pled, they are barred by the
applicable statute of limitations pursuant to the provisions of Article 2259 of the
Civil Code. 18
6. Res Judicata: Texaco and TexPet had been legally released from any
responsibility for the alleged environmental damage by the Consortium
operations, and, as a current principal and affiliate of those companies, Chevron
is likewise absolved from liability for such damages by virtue of the res judicata
effect of the settlement agreements. 19 To the extent that plaintiffs are seeking
redress of contingent or future harm from alleged environmental conditions on
14 Answer as Read into the Record §§ I.1-I.4, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67,
243-43v.
15 Answer as Read into the Record §§ I.1-I.4, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67,
265.
16 Answer as Read into the Record § 2.C.1.1, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67,
262.
17 Answer as Read into the Record §§ II.C.1.2-1.3, filed Oct. 21, 2003 at 9:10 a.m., Record at
243-67, 262.
18 Answer as Read into the Record §§ II.C.2.1-2.2, filed Oct. 21, 2003 at 9:10 a.m., Record at
243-67, 263v; see also Article 2235 of the Civil Code (formerly Article 2259), which provides: “The causes
of action provided for in this chapter for damages or intentional misconduct are time barred in four years,
counted from the date on which the act was perpetrated.”
19 Answer as Read into the Record, §§ II.A.2.1, II.A.2.2.11, filed Oct. 21, 2003 at 9:10 a.m.,
Record at 243-67, 249v-50, 253.
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the basis of Article 2260 of the Civil Code (currently Article 2236 of the Civil
Code), those claims must proceed against the current operator and possessor of
the concession area (and one of the Releasees of TexPet)—state-owned
Petroecuador. 20
7. Propriety of the Consortium’s Operations: The operations of the Consortium
while TexPet was the operator complied with prevailing law and practices at the
time, and any alleged impact that oil exploration operations have had on the
lands in question were not caused by TexPet’s operations, but rather have been
caused by intervening actions of the Ecuadorian State (e.g., colonization and
deforestation) or the sole and subsequent operations of Petroecuador in those
lands. 21
III.
The Proceedings
The presiding judge declined to rule on Chevron’s motion to dismiss for lack of
jurisdiction and immediately ordered that the litigation continue under the summary
verbal procedure, and directed the parties to proceed to the evidentiary phase of the
case.
Since 2003, a record of nearly 200,000 pages has been amassed. Your Honor is
the sixth judge to preside over this case, and has done so for only eight months. Still
ongoing are defendant’s good faith efforts to unmask further evidence regarding
plaintiffs’ egregious bad faith misconduct during the evidentiary phase of this case,
including at least one example of them submitting fraudulent expert reports and several
instances of improper collusion with the purportedly “neutral” experts they nominated.
Given the size of the record, and the important processes still unfolding that
demonstrate the fraud in which the plaintiffs have engaged, it was improper for Your
Honor to have ordered autos para sentencia given that, in any event, due process,
prudence, and procedural rules demand acceptance and consideration of all evidence
relating to the plaintiffs’ fraudulent acts in this Court before entering any judgment.
ARGUMENTS FOR THE DEFENSE
CHAPTER I.
THIS COURT HAS NO JURISDICTION OVER CHEVRON
A scrupulous and diligent analysis of the evidence is required at the beginning of
the case where it is alleged that a foreign person is subject to the jurisdiction of the
Ecuadorian judicial system, as this affects the competency of the Court and the
wrongful assertion of jurisdiction could cause serious prejudice to the foreign person.
20 Answer as Read into the Record, § II.C.3, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67,
264v.
21 Answer as Read into the Record, § II.B.1.5, II.B.3.3, II.B.4.1, filed Oct. 21, 2003 at 9:10 a.m.,
Record at 243-67, 253v, 258-58v.
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Chevron expressly posited as a principal defense (pursuant to Articles 99 22 and 100 23 of
the Code of Civil Procedure) that the judges and courts of Ecuador lack jurisdiction and
competence 24 to hear the complaint for the following reasons. 25
22 “Art. 99.- There are two types of defenses, procedural and substantive. A procedural defense
stays or delays the resolution of the case; while a substantive defense entails the dismissal of the claim
subject matter of the complaint, in whole or in part.”
23 “Art. 100 (Ex 104) [Procedural defenses]. The most common procedural defenses relate to: (1)
the judge (e.g. lack of jurisdiction); (2) the plaintiff (e.g. lack of standing to sue, lack of legal capacity or
inadequate appointment); (3) the defendant (e.g. the guarantor’s right to force a creditor to sue the
principal debtor first and the guarantor’s right to have all remedies first exhausted against the principal
debtor); (4) the manner of pleading (e.g. including contradictory or incompatible claims); (5) the subject
matter of the complaint, such as defenses to a claim made before the relevant statutory or contractual
term has run; (6) the case or how it is to be heard (e.g. when consolidation is requested to avoid undue
division of the case or a different procedure is required).”
24 “Article 1 of the Code of Civil Procedure gives the following definition of jurisdiction and
competence: 'Jurisdiction, i.e. the power to administer justice, consists of the public authority to judge and
to ensure enforcement of the judgment in a certain matter, an authority given to the magistrates and
judges established by law. Competence is the manner in which said authority is distributed among the
different Courts and tribunals according to territory, objects, persons and stages.’ Jurisdiction is a
government function, part of the sovereignty of the State that guarantees or takes measures to ensure the
law is respected. It is a complementary or additional activity of the legislative branch. It makes the
general, abstract mandate of the law specific and concrete. Jurisdiction is exercised through entities
having public authority. In view of the fact that one jurisdictional entity cannot handle all the cases filed in
the country, the Constitution and the law have created multiple entities, among which has been
distributed jurisdictional authority, precisely noting or limiting the scope of that authority, which is what is
meant by competence; therefore, jurisdiction is the authority, while competence is the limits of the scope
of the authority . . . . The Judge’s competence is a procedural requirement, i.e. a formal requirement for
legally beginning and continuing proceedings. According to our procedural legislation, it is a substantive
requirement, the omission of which annuls the proceedings if said violation influenced or could have
influenced the judgment in the case (Article 355 (currently Article 346); Article 358 (currently Article 349)
of the Code of Civil Procedure) . . . .” Angel Alarcón vs. Vìctor Platón, Cassation Ruling, Judgment of the
Supreme Court of Justice, First Civil and Commercial Division, Case 250-98, Mar. 23, 1998, Official
Gazette 319, May 18, 1998.
Article 76(3) of the current Constitution confirms that, under principle of due process, “[n]o one
may be tried or punished for an act or omission that was not defined in the law, at the time it is
committed, as a criminal, administrative or other violation, nor shall a penalty that is not provided for by
the Constitution or the law be imposed. People may only be tried before a judge or competent authority
and in compliance with the rules applicable to each procedure.”
“[T]he plea of lack of competence of the Judge hearing the case refers to a procedural
impediment that may also be considered a demurrer when admissible, and is one of a group of pleas that
refers ‘. . . just to the procedures or the proceedings, considering that the procedural requirements for
proceeding with the case are absent, but without attacking the merits of the matter or the substantive law
being cited’ (Devis Echandía, General Theory of Legal Process, Buenos Aires, Editorial Universidad,
1997, p. 231); . . . the competence of the Judge hearing the case is a procedural requirement for the
complaint, and is necessary ‘to open the case or the legal procedural relationship, which must be
examined by the Judge before admitting the complaint’ (id. at p. 276) . . . .” Santana Robledo vs.
Maldonado Jaramillo, Judgment of the Supreme Court of Justice, First Civil and Commercial Division, Feb.
27, 2002, Case 41-2002, published in Official Gazette 575, May 14, 2002.
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1.1 Chevron Never Operated in Ecuador
As was demonstrated during the proceedings, Chevron has never been
domiciled nor operated in Ecuador. 26 Moreover, Chevron was never part of the
Consortium nor did it have any relationship whatsoever with TexPet’s activities as the
operator of the Consortium. Those activities ended in 1990, over a decade before
Texaco became an indirect subsidiary of Chevron in 2001. 27 Plaintiffs have not and
could not present any evidence that Chevron was ever qualified to do business in
Ecuador, that it ever owned property here, that it ever employed workers here, or that it
otherwise did business here. 28 Rather, the evidence shows that Chevron was
incorporated in 1926 under the laws of the State of Delaware, U.S.A. 29 Accordingly, the
judges and courts of Ecuador lack jurisdiction and competence to hear this complaint
brought against Chevron.
1.2 Only Texaco Agreed to Submit to Ecuadorian Jurisdiction and Chevron Is
Not the Successor to Texaco
The Aguinda class action brought in New York by some of the plaintiffs in this
case was initiated solely and exclusively against Texaco Inc. That complaint was
dismissed on the doctrine of forum non conveniens, and Texaco alone agreed to submit
to Ecuadorian jurisdiction as a condition of dismissal. 30
(continued…)
25 See Chevron’s Power of Attorney, filed Oct. 14, 2003, Record at 196-241, 199; Answer as
Read into the Record § IV.1, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67, 265; see also Chevron’s
motion filed Dec. 20, 2010 at 5:50 p.m.
26 See Answer as Read into the Record § I.1, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67,
243; Superintendent of Companies Response to Request for Production (“RFP”), filed Apr. 30, 2004 at
4:15 p.m., Record at 7279, 7279.
27 See Answer as Read into the Record §§ I.1.5-6, filed Oct. 21, 2003 at 9:10 a.m., Record at
243-67, 244; see Agreement of Feb. 26, 1986 between Corporación Estatal Petrolera Ecuatoriana (CEPE)
and Texaco Petroleum Company Concerning the Operation of the Trans-Ecuadorian Pipeline, filed Apr.
27, 2004 at 2:40 p.m., Record at 7259-62.
28 See Affidavit of Frank Soler, dated Mar. 26, 2010 17-18, submitted as Annex 18 to
Chevron's Motion, filed Oct. 29, 2010 at 5:20 p.m.
29 See Certificate of Good Standing of ChevronTexaco Corporation, dated Aug. 7, 2003, attached
as Annex 7 to Chevron’s Motion filed October 15, 2003 at 5:10 p.m., Record at 196-241, 232-33, 236, ;
see also the Certificate of Good Standing of Chevron Corporation, dated Feb. 22, 2010, attached as
Exhibit 1 of Annex 18 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
30 See Aguinda v. Texaco Inc., 142 F. Supp. 2d 534 (S.D.N.Y. 2001), aff’d, 303 F.3d 470 (2d Cir.
2002), Record at 9465-610, 9521.
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The plaintiffs attempted to justify having sued Chevron, as opposed to Texaco,
by incorrectly stating that Chevron and Texaco had merged. 31 To the contrary, as
Chevron maintained in its answer and as a matter of indisputable corporate fact, the
only merger that took place was between Texaco and Keepep Inc., a subsidiary of
Chevron. 32 Texaco emerged from that merger as the surviving entity and became
thereby a Chevron subsidiary. 33 Chevron did not acquire any of Texaco’s assets or
liabilities, and Texaco remained—as before the acquisition transaction—incorporated
under the laws of the state of Delaware in the United States. 34 Texaco continues to
have its own assets and the full capacity to independently acquire rights and incur
obligations maintained on its own financial books and records. 35 That Texaco has the
capacity to be sued in its own right further demonstrates that plaintiffs’ suit against
Chevron cannot possibly be justified, particularly given that plaintiffs make no
allegations against Chevron itself, but instead assert that Chevron’s liability is solely
derivative. This runs counter to the fundamental principle, set forth in Article 1453 of the
Civil Code, that each person is liable for its own actions. Plaintiffs have presented no
legal or factual basis under U.S. or Ecuadorian law upon which this court might pierce
the corporate veil between Chevron and Texaco, and the plaintiffs have never even
attempted to do so. Similarly, plaintiffs have never shown that an alter ego relationship
between Chevron and Texaco existed or that the two companies were ever in privity
with one another. 36
31 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 75.
32 See Answer as Read into the Record § I.1.2, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67,
243v; Chevron’s Power of Attorney, filed Oct. 14, 2003, Record at 196-241, 230-31; Affidavit of Frank
Soler, dated Mar. 26, 2010 8, submitted as Annex 18 to Chevron's Motion, filed Oct. 29, 2010 at 5:20
p.m.
33 October 2001 United States Securities and Exchange Commission (“SEC”) filing, attached as
Annex A to Chevron's Second Rebuttal to the Barros Report, filed Jan. 29, 2010 at 3:30 p.m., Record at
166607-13, 166610 (the translation in Spanish is included at Record at 166759-67, 166764); November
2001 SEC filing, attached as Annex A to Chevron's Second Rebuttal to the Barros Report, filed Jan. 29,
2010 at 3:30 p.m., Record at 166633-75, 166641 (the translation into Spanish is included at Record at
166790-834, 166800); see also October 2000 Agreement and Plan of Merger, attached as Annex B to
Chevron's Second Rebuttal to the Barros Report, filed Jan. 29, 2010 at 3:30 p.m., Record at 166680-751;
Affidavit of Frank Soler, dated Mar. 26, 2010 8, submitted as Annex 18 to Chevron's Motion, filed Oct.
29, 2010 at 5:20 p.m.
34 Chevron’s Power of Attorney, filed Oct. 14, 2003, Record at 196-241, 222, 228, 236, 239;
Affidavit of Frank Soler, dated Mar. 26, 2010 4 and attached Exhibit 2, submitted as Annex 18 to
Chevron's Motion, filed Oct. 29, 2010 at 5:20 p.m.
35 Answer as Read into the Record § I.1.2, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67,
243v; Affidavit of Frank Soler, dated Mar. 26, 2010 4, 9, 15, 16 and attached Exhibit 2, submitted as
Annex 18 to Chevron's Motion, filed Oct. 29, 2010 at 5:20 p.m.
36 As such, any arguments stated in these lines are waived. In all events, Ecuadorian law is clear
that a corporation is distinct and separate from its shareholders, and a shareholder will only be held liable
for the corporation’s activities in rare circumstances, including clear and convincing evidence of fraud—an
exacting standard that plaintiffs have come nowhere close to meeting. See Arts. 568 and 1957 of the
Civil Code; Chupamar v. Diners Club, Judgment of the Supreme Court of Justice, First Civil and
Commercial Division, dated Mar. 21, 2001, No. 120-2001, published in R.O. 350, June 19, 2001.
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Plaintiffs allege that this corporate distinctiveness should be disregarded
because of allegedly ambiguous press releases concerning the survival of Texaco Inc.
after the acquisition of its stock by Chevron. 37 But the plaintiffs were clearly on notice
that Texaco Inc. remained an independent and separate corporation. After the merger
Texaco’s lawyers formally notified the plaintiffs’ lawyers that Texaco had designated an
“authorized agent for service of process for claims filed against Texaco in Ecuador.” 38
That, along with the publicly available and official documents concerning the acquisition,
clearly put plaintiffs on notice that Texaco continued to exist as a corporate entity
distinct from Chevron and could have been sued in this lawsuit. The plaintiffs ignored
the facts and instead chose to sue Chevron under the false pretense that Chevron is the
successor-in-interest to Texaco, 39 which is clearly not the case as a matter of law and
fact. 40 Indeed, plaintiffs’ erroneous allegation of a merger when they were on notice of
Texaco’s continued corporate existence constitutes an abuse of right, as they have
acted “without the diligence or care with which a reasonable man would exercise it.” 41
There being no merger, it is not possible under the law for Chevron to be liable for the
alleged conduct of Texaco or TexPet.
All of this is why, in private writings, Mr. Donziger criticized the plaintiffs’ former
counsel, Dr. Alberto Wray, for “suing the wrong party in the complaint,” 42 thus conceding
that Chevron is correct that this Court lacks jurisdiction over it.
1.3 Texaco Did Not Control TexPet’s Operations
Contrary to the plaintiffs’ allegation, Texaco never controlled the operations of
TexPet in Ecuador. 43 This argument was already fully litigated and rejected in the
Aguinda case in New York.
The Aguinda case in New York was brought by the same lawyers as this case.
Many of the plaintiffs were the same plaintiffs as in this case, and it was a putative class
37 Plaintiffs’ Motion, filed Jan. 11, 2008 at 5:00 p.m., Record at 133988-134005, 133991-133992.
38 October 11, 2002 Letter from King and Spalding, filed Oct. 19, 2004 at 4:05 p.m., Record at
10327-28 (the translation in Spanish is included in the Record at 10329); January 2, 2003 Letter from
King and Spalding, filed Oct. 19, 2004 at 4:05 p.m., Record at 10330-31.
39 See, e.g., Plaintiff’s Motion, filed Mar. 6, 2007 at 5:06 p.m., Record at 154650-651, 154650.
40 Affidavit of Frank Soler, dated Mar. 26, 2010 3-4, 6-9, 14-16, 18 and attached Exhibits 1 and
2, submitted as Annex 18 to Chevron's Motion, filed Oct. 29, 2010 at 5:20 p.m.
41 ALESSANDRI RODRÍGUEZ, Arturo, Tort Liability Under Chilean Civil Law, Legal of Chile,
2005, p. 193; see also Supreme Court of Justice, First Civil and Mercantile Division, Lawsuit 334, Official
Gazette 257, Aug. 18, 1999.
42 Diary of Steven Donziger, entry dated Jan. 24, 2006, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ00036246).
43 Answer as Read into the Record § I.8, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67, 244v;
Declaration of Lydia I. Beebe, Corporate Secretary of ChevronTexaco Corporation, submitted as part of
ChevronTexaco Corporation Power of Attorney, dated Aug. 13, 2003, attached as Annex 1 to Chevron’s
Motion filed October 15, 2003 at 5:10 p.m., Record at 196-241, 199-200, 202-203.
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action on behalf of 30,000 residents in the region. The New York case also is cited as a
factual precedent by the plaintiffs in their complaint in the present lawsuit. The judge in
the New York case rejected the argument that Texaco controlled the operations of
TexPet in Ecuador and concluded:
[T]he plaintiffs, after taking numerous depositions and
obtaining responses to no fewer than 81 document requests
and 143 interrogatories, were unable to adduce material
competent evidence of meaningful Texaco involvement in
the misconduct complained of—to the point that plaintiffs
essentially stipulated as much. 44
The record before the Court . . . clearly establishes that all of
the Consortium’s key activities, including the decisions and
practices here at issue, were managed, directed, and
conducted by Consortium employees in Ecuador. By
contrast, no one from Texaco or, indeed, anyone else
operating in the United States, made any material decisions
as to the Consortium’s activities and practices that are at
issue here. 45
The plaintiffs are precluded from relitigating this issue for a second time. Even if
the plaintiffs were permitted to relitigate the issue, which the defense does not condone,
the New York court’s conclusion was based upon exhaustive evidence, and given that
the plaintiffs have failed to present evidence in this lawsuit to refute what has been
resolved by the New York court, this Court should reject such an argument.
Texaco cannot be held liable for TexPet’s alleged acts in Ecuador, which acts (if
they occurred) Texaco did not control. And even if the plaintiffs could have held Texaco
liable, as demonstrated above, that liability could not be imposed upon Chevron, an
independent entity that was unrelated to both Texaco and TexPet at the time TexPet
operated in Ecuador. 46
1.4 Even Texaco Did Not Consent to the Suit Filed by Plaintiffs
Even if the plaintiffs had sued Texaco, rather than Chevron, they still would have
ignored the scope of Texaco’s consent to this Court’s jurisdiction. In Aguinda, Texaco
consented to be sued only “on the claims (or their Ecuadorian . . . equivalents) set forth
44 Aguinda v. Texaco Inc., 142 F. Supp. 2d 534 (S.D.N.Y. 2001) at 4, aff’d, 303 F.3d 470 (2d Cir.
2002), Record at 9465-610, 9524 (the translation appears in at Record at 152880-912, 152822-83).
45 Aguinda v. Texaco Inc., 142 F. Supp. 2d 534 (S.D.N.Y. 2001) at 31, aff’d, 303 F.3d 470 (2d Cir.
2002), Record at 9465-610, 9551 (the translation appears in at Record at 152880-912, 152901).
46 See Affidavit of Frank Soler, dated Mar. 26, 2010 3-5, 14, submitted as Annex 18 to
Chevron's Motion, filed Oct. 29, 2010 at 5:20 p.m.
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in the complaints in the[] U.S. action[].” 47 The claims in this case are asserted under
Ecuadorian law, 48 but they are not the Ecuadorian equivalent of the claims set forth in
the U.S. action.
Aguinda was a putative class action seeking primarily “damages for injury to [the
plaintiffs’] person[s] and property,” and the plaintiffs also sought “equitable relief to
remediate their environment.” 49 The plaintiffs in Aguinda expressly stated that they
were “not seeking damages for real property which they do not own.” 50 By contrast, the
complaint here does not seek damages for individualized injury to the plaintiffs’ persons
or property, but only seeks to vindicate a collective and diffuse right to a clean
environment free of contamination. 51 Under Ecuadorian law, “[d]iffuse interests” are
defined as “homogenous interests of an indivisible nature, the owners of which are
undetermined groups of individuals connected by common circumstances.” 52 Similarly,
Article 86 of the Constitution that was in effect when plaintiffs’ complaint was filed
described the right to live in a healthy environment as a collective, public-interest right. 53
But the Aguinda plaintiffs expressly conceded before the U.S. district court that there
was no Ecuadorian equivalent for claims asserting a diffuse right to environmental
remediation:
47 See Stipulation and Order at 2, Aguinda v. Texaco, Inc., No. 93-CV-7527 (S.D.N.Y. June 21,
2001), attached as Exhibit 33 to Chevron’s Motion, filed September 16, 2010 at 4:35 p.m.
48 See Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 78v-79.
49 See Plaintiffs’ Memorandum of Law in Opposition to Texaco’s Motion to Dismiss for Failure to
Join Indispensable Parties at 3, Aguinda v. Texaco, Inc., No. 93-CV-7527 (S.D.N.Y. Mar. 10, 1994),
attached as Exhibit 29 to Chevron’s Motion, filed September 16, 2010 at 4:35 p.m.; see also Plaintiffs’
Complaint in Aguinda v. Texaco, No. 93-CV-7527 (S.D.N.Y. Nov. 3, 1993), attached to Texaco Inc.’s
Response to RFP, filed Sept. 27, 2004 at 5:15 p.m., Record at 9465-511, 9466-67, 9501 (a Spanish
translation appears at Record at 164935-72, 164936-37, 164971.
50 See Plaintiffs’ Memorandum of Law in Opposition to Texaco’s Motion to Dismiss for Failure to
Join Indispensable Parties at 3, Aguinda v. Texaco, Inc., No. 93-CV-7527 (S.D.N.Y. Mar. 10, 1994),
attached as Exhibit 29 to Chevron’s Motion, filed September 16, 2010 at 4:35 p.m.
51 See Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79-80. Plaintiffs
U.S. team leader, Stephen Donziger, admits as much in outtakes from the documentary Crude. “[E]ven if
we win the case,” he says, “the people will never receive, as part of our lawsuit, compensation… from
Texaco for all their personal damages; their sicknesses, their illnesses, their economic losses, the poverty,
the emotional damage people feel . . . from losing family members… [U]nder Ecuadorian law, we can't
sue for that. We're only suing for clean up.” Transcript of Crude Outtakes, attached as Annex 8 to
Chevron’s Fourth Supplemental Motion for Terminating Sanctions, filed Dec. 22, 2010 at 5:45 p.m. (CRS
010-10-03).
52 Environmental Management Act, Glossary of Definitions. The Ecuadorian definition is
consistent with the definition used in other jurisdictions and in the legal scholarship. For example, Article
81 of the Consumer Code of Brazil defines “diffuse right” as the “trans-individual and indivisible right that
belongs to an undetermined group of persons who were not previously connected but are now connected
solely by factual circumstances in a specific situation.”
53 Art. 86, 1998 Constitution of Ecuador.
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[P]opular action, which can go forward only in cases
specifically written in the law, which must be filed with names
and not as representing a class or gender. . . . Among these
cases civil damage actions directed at seeking
compensation for negligence or intentional acts are not
included. 54
* * *
This [equitable] remedy cannot be achieved in Ecuadorian
Courts where class actions are impossible. 55
* * *
[C]ases resulting from environmental contamination [can] be
filed only with administrative agencies and not the courts . . . .
If administrative agencies do not act, plaintiffs can then only
bring an action against the Government of Ecuador and not
the party responsible for the damages. 56
The plaintiffs’ former counsel unambiguously informed the U.S. court that “no one
can bring an action in the name of another” in Ecuador, and that the Ecuadorian
“Constitution expressly forbids” a person from litigating “on behalf of the people.” 57 The
Ecuadorian Ambassador to the United Status agreed, representing that only the State
could maintain an action for alleged diffuse environmental harms, 58 and that it had
settled those claims vis-à-vis TexPet. 59
54 Affidavit of Alberto Wray (Mar. 8, 1994), attached as Annex 1-A to Chevron’s Motion to Dismiss,
filed Oct. 8, 2007 at 8:10 a.m., Record at 132946-54, 132947.
55 Appellant’s Brief in Aguinda v. Texaco, Inc., 303 F.3d 470 (2d Cir. 2002), Record at 123236-
309v, 123258.
56 Appellant’s Brief in Aguinda v. Texaco, Inc., 303 F.3d 470 (2d Cir. 2002), Record at 123236-
309v, 123261.
57 Affidavit of Alberto Wray (Mar. 8, 1994), attached as Annex 1-A to Chevron’s Motion to Dismiss,
filed Oct. 8, 2007 at 8:10 a.m., Record at 132946-54, 132947; see also Appellant’s Brief in Aguinda v.
Texaco, Inc., 303 F.3d 470 (2d Cir. 2002), Record at 123236-309v, 123259.
58 See Letter from Amb. E. Terán to Hon. J. Rakoff (June 10, 1996), attached as Annex 4 to
Chevron’s Motion to Dismiss, filed Oct. 8, 2007 at 8:10 a.m., Record at 132975-77, 132975 (affirming that
only the State could vindicate diffuse environmental rights as the “legal owner of the rivers, streams and
natural resources and all public lands where the oil producing operations involved in this litigation are
located”).
59 See Letter from Amb. I. Baki to Hon J. Rakoff (Nov. 11, 1998), attached to Chevron's
Evidentiary Request No. 21 for the SSF-07 Essential Error Petition, filed Apr. 15, 2010 at 4:50 p.m.,
Record at 170390 (the Spanish translation is included at Record at 170425) (stating that the Ecuadorian
State, by virtue of the 1995 and 1998 Agreements, had “absolved, liberated and forever freed TexPet, . . .
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If the plaintiffs had timely sued Texaco on claims covered by its consent to
Ecuadorian jurisdiction, then Texaco itself could have responded to the claims and met
the obligations of any legitimate and enforceable judgment against it. But the only
viable claims against TexPet after the government settlements, and the only claims
Texaco consented to defend against in Ecuador, were individual claims for personal
injury. Because the claims in this case are not the Ecuadorian equivalent of the claims
in the New York case, Texaco’s consent to jurisdiction would not apply even if plaintiffs
had sued Texaco. This Court would have no jurisdiction over Texaco to hear the claims
plaintiffs have attempted to assert in this case, even if it had been sued, in the same
way that this Court has no jurisdiction in this case over Chevron.
1.5 The Court Has Improperly Exercised Jurisdiction over Chevron
Both Ecuadorian law and general principles of due process hold that the judiciary
should resolve questions of jurisdiction and competence at the very beginning of the
lawsuit. 60 “Given that jurisdiction is a mandatory provision of law, it is necessary to
guarantee compliance with the provisions of law governing the same. . . . Jurisdiction
appears as a procedural prerequisite, because it is related to the necessary condition
for hearing and adjudicating litigation.” 61 From the outset, and despite the fact that the
principal evidence on this issue has been in the record since 2003, the Court failed to
rule on Chevron’s jurisdictional objections, and in the absence of such a ruling
improperly exercised de facto jurisdiction over Chevron, forcing it, despite its repeated
protests, to participate for more than six years in an expensive and improper lawsuit. 62
“[W]henever there is lack of jurisdiction in the acts of a judge, there is an exceeding of
one’s powers, and whenever there is an exceeding of one’s powers, there is
(continued…)
Texaco, . . . its employees, principal and subsidiaries of any claim or litigation by the Government of the
Republic of Ecuador concerning the obligations acquired by TexPet [in those agreements]”).
60 Article 129 of the Organic Code of the Judiciary provides: "In addition to the duties of any
judicial officer, the judges, have the following generic powers and duties:
9. At any stage of the proceedings, the judges that become aware that they have no
competence to hear the case on account of personal, territory or grade venue reasons,
should refrain from hearing it, without declaring invalid the process they will pass it to the
competent court or judge that should, from the point at which inhibition occurred, continue
hearing the case.
If the incompetence is due to the subject matter, he will declare it null and void and will
send the process to the competent court or judge for that would initiate the proceeding,
but the time between the filing of the lawsuit and the declaration of nullity will not be
computed in terms of the statute of limitations of the right or action."
61 VESCOVI, Enrique, General Theory of Legal Proceedings, TEMIS, Bogotá, 1999, pp. 147-148.
62 See, e.g., Chevron’s Motion to Dismiss, filed Oct. 8, 2007 at 8:10 a.m., Record at 132897-996,
132899-900, 132905-06, 132915-16.
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incompetence, legal doctrine and scholars say.” 63 Chevron was thus the victim of a
procedural abuse and fraud since plaintiffs should have never sued Chevron and since
this Court should have declared its lack of jurisdiction immediately, as confirmed in
Article 129(9) of the Organic Code of the Judiciary. By failing to take timely action, this
Court has shown its bias against my client and has become complicit in denying
Chevron due process. This Court must now dismiss for lack of jurisdiction over
Chevron.
CHAPTER II.
THESE PROCEEDINGS SHOULD BE TERMINATED BECAUSE THEY HAVE BEEN
PERMEATED BY FRAUD
Over the course of this trial, my client has presented unimpeachable evidence
revealing that plaintiffs’ counsel have brazenly corrupted these proceedings from their
inception. The plaintiffs' attorneys filed the complaint along with a document
supposedly ratifying it with at least 20 forged signatures, thus failing to comply with the
specific solemnity contemplated in Article 1010 of the Code of Civil Procedure with
respect to the plaintiffs who could not or did not know how to write, and the plaintiffs
also intentionally submitted forged evidence to prove their false allegations and
demands; colluded using intimidation and extortion to obtain the appointment of a
supposedly "independent expert," Mr. Cabrera, with whom they conspired, and actually
wrote his global expert report; and then tried to hide their wrongdoing. Subsequently,
after their fraud was made public, they obtained from the former Judge, Dr. Ordóñez, an
illegal order on August 2, 2010, at 9:00 a.m., allowing them to submit a contrived ad hoc
"legal brief" with their criteria for the damages evaluation, which they filed on September
16, 2010, at 5:15 p.m., in a last-minute attempt to rehabilitate this case and whitewash
their own fraud, by submitting an ad hoc filing addressing the global costs of
remediation, cannot begin to—and does not even try to—remove the taint from these
corrupt proceedings. The plaintiffs’ filing of September 16, 2010 at 5:15 p.m. simply
assumes, without any basis, the liability of Chevron and uses the same corrupted data
provided through Mr. Cabrera’s expert report to reach an even more outlandish
damages figure. In addition, one of the presiding judges in this case has been
implicated in an attempted bribery scheme, and another conspired with the plaintiffs’
attorneys in appointing Mr. Cabrera, in both cases destroying the integrity of the
proceedings as a whole. The only appropriate course of action for this Court is to
declare this case a nullity, as the entirety of the proceedings has been corrupted in
violation of due process as a result of the plaintiffs’ pattern of wrongdoing and abuse of
rights, which must not remain unsanctioned. See infra Chapter IV. 64
63 PEÑAHERRERA, Victor Manuel, Lesson In Practical Civil and Criminal Law, EDINO,
Guayaquil, 1992, p. 125.
64 As my client continues to receive and review further evidence of the plaintiffs’ fraud, it expressly
reserves the right to file this evidence with this Court, and reiterates its request that this Court refrain from
entering judgment until it has received and considered all such evidence.
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2.1 The Plaintiffs Submitted Fabricated Evidence to This Court
In March 2010, sworn testimony in the United States from one of the plaintiffs’
nominated experts, Dr. Charles W. Calmbacher, revealed that the two reports submitted
to this Court in his name—regarding the judicial inspection of the Sacha-94 and
Shushufindi-48 sites—were falsified documents that he had never seen, never
authorized, and never signed. 65 Those fabricated reports claimed that there was a high
level of contamination at those wellsites, that TexPet’s environmental remediation was
inadequate, and that it would cost tens of millions of dollars to clean the soil at these
sites once again. 66
Dr. Calmbacher, who testified under oath pursuant to a subpoena obtained by
Chevron in proceedings in the United States, explained that the fabricated reports
directly contradicted the conclusions he had actually reached. 67 In fact, Dr. Calmbacher
affirmed in his testimony that he never “f[oun]d that any of the sites that [he] inspected
had contamination of such an extent that it would endanger human health”; never
“f[oun]d that any of the sites that [he] inspected required any further remediation”; never
“conclude[d] that TexPet had failed to adequately remediate one of the sites”; and never
“conclude[d] that any particular site posed a risk to human health or the environment.” 68
Nor had Dr. Calmbacher ever “determine[d] the volume of soil that needed to be
remediated” or “determine[d] what the cost of remediating soil at any of the sites would
be.” 69
The plaintiffs’ agents, including Mr. Donziger, knew that the submitted expert
reports were falsified because Dr. Calmbacher personally relayed to them his actual
65 Official Transcript of Deposition of Dr. Charles W. Calmbacher at 112:1-8, 116:3-18, dated Mar.
29, 2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial Inspection
Reports, filed Apr. 14, 2010 at 3:42 p.m., Record at 168970-169158v, 169028, 169030 (the Spanish
translation is included at Record 169072-157, 169127b, 169129v).
66 Expert Report of Dr. Charles W. Calmbacher regarding Sacha-94, filed Feb. 14, 2005 at 9:00
a.m., Record at 46239-79, 46272-73; Expert Report of Dr. Charles W. Calmbacher regarding
Shushufindi-48, filed Mar. 8, 2005 at 12:00 p.m., Record at 52205-71, 52260-62.
67 Official Transcript of Deposition of Dr. Charles W. Calmbacher at 113:2-25, 117:6-20, dated
Mar. 29, 2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial Inspection
Reports, filed Apr. 14, 2010 at 3:42 p.m., Record at 168970-169158v, 169028v, 169030v (the Spanish
translation is included at Record at 169072-157, 169128, 169130) (Sacha-94 conclusions “are not
conclusions I made” and Shushufindi conclusions “are not conclusions I would have written” because they
are “false”).
68 Official Transcript of Deposition of Dr. Charles W. Calmbacher at 113:19-25, 115:19-24, dated
Mar. 29, 2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial Inspection
Reports, filed Apr. 14, 2010 at 3:42 p.m., Record at 168970-169158v, 169028v, 169029v (the Spanish
translation is included at Record at 169072-157, 169128, 169129).
69 Official Transcript of Deposition of Dr. Charles W. Calmbacher at 113:11-18, dated Mar. 29,
2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial Inspection Reports,
filed Apr. 14, 2010 at 3:42 p.m., Record at 168970-169158v, 169028v (the Spanish translation is included
at Record at 169072-157, 169128).
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conclusion, i.e., that he “did not see significant contamination that posed immediate
threat to the environment or to humans or wildlife around it.” 70 But the plaintiffs
apparently took Dr. Calmbacher’s signature from other documents, or from blank pages
which he signed, and attached it instead to reports with findings contrary to those of Dr.
Calmbacher. 71 To prevent Dr. Calmbacher from learning of their fraudulent actions, the
plaintiffs fired him and failed to notify him about this Court’s orders that he answer
Chevron’s supplemental questions about his expert reports. 72 Mr. Donziger later tried to
convince Dr. Calmbacher not to comply with the subpoena issued by the U.S. court, in
an effort to prevent the fraud from coming to light. 73
70 Official Transcript of Deposition of Dr. Charles W. Calmbacher at 114:22-115:2, 118:15-119:1,
dated Mar. 29, 2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial
Inspection Reports, filed Apr. 14, 2010 at 3:42 p.m., Record at 168970-169158v, 169029-29v, 169031-
31v (the Spanish translation is included at Record at 169072-157, 169128v-29v, 169130v-31).
71 Official Transcript of Deposition of Dr. Charles W. Calmbacher at 114:1-21, 116:3-117:20,
dated Mar. 29, 2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial
Inspection Reports, filed Apr. 14, 2010 at 3:42 p.m., Record at 168970-169158v, 169029, 169030-30v
(the Spanish translation is included at Record at 169072-157, 169128v, 169129v-30).
72 Official Transcript of Deposition of Dr. Charles W. Calmbacher at 11:22-25, 69:7-11, dated Mar.
29, 2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial Inspection
Reports, filed Apr. 14, 2010 at 3:42 p.m., Record at 168970-169158v, 168977v, 169003v (the Spanish
translation is included at Record at 169072-157, 169077, 169103).
73 Official Transcript of Deposition of Dr. Charles W. Calmbacher at 144:14-146:7, dated Mar. 29,
2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial Inspection Reports,
filed Apr. 14, 2010 at 3:42 p.m., Record at 168970-169158v, 169044-45 (the Spanish translation is
included at Record at 169072-157, 169143v-44v).
Dr. Calmbacher’s testimony that
Mr. Donziger “exert[ed] … control over the plaintiffs’ experts in the litigation.” See Official Transcript of
Deposition of Dr. Charles W. Calmbacher, dated Mar. 29, 2010, at 92:18 - 94:17 & Ex. 7, attached as
Annex 5 to Chevron’s Motion filed Apr. 14, 2010 at 3:42 p.m., Record at 169072-158, 169083v (the
English original is in the Record at 168970-169071v, 168984).
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As Dr. Calmbacher’s testimony indicates, the plaintiffs submitted to the court
“Calmbacher” reports that he did not agree with and did not sign. Plaintiffs’
malfeasance is further magnified by the fact that Dr. Calmbacher expressly warned
Mr. Donziger not to alter his reports:
"It has also been stressed to me that it is highly unusual for a perito to
allow others to contribute to the writing of a report. Comments or review is
acceptable, but the perito's opinion and findings are final. I therefore have
and feel no obligation to allow your team of textile engineers and
associated crones to review or edit my reports. I am assured, as perito of
the court, that I am completely within my rights to write and submit my
report independent of those who have nominated me for appointment as
perito. My sole obligation is to tell the truth, as I see it, to the court, no
matter the consequences for either party." 79
The submission of falsified expert reports is an outrageous act of fraud and bad
faith and a corruption of these proceedings. It discredits not only the two reports
submitted in Dr. Calmbacher’s name, but also all of the other evidence submitted by the
experts nominated by the plaintiffs for the judicial inspections, which are tainted with
defects of their own.
In fact, there is an additional reason to believe that other reports submitted by
experts proposed by the plaintiffs were similarly fraudulent. Outtakes from the
documentary Crude, a film recorded at the request of plaintiffs’ attorneys, show
Mr. Donziger plotting to fraudulently manufacture scientific evidence for Mr. Cabrera’s
Report. In the footage, experts from the plaintiffs’ technical team advise Mr. Donziger
that there is no evidence regarding the extent of groundwater contamination. 80
Mr. Donziger dismisses their concerns, saying, “Hold on a second, you know, this is
Ecuador. You can say whatever you want and at the end of the day, there’s a thousand
people around the courthouse, you’re going to get what you want . . . . this is all for the
79 E-mail from Charles Calmbacher to Steven Donziger and David Russell, dated October 24,
2004 at 11:23 a.m., attached as Annex 2 to Chevron’s Second Supplemental Motion for Terminating
Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (DONZ0002422).
80 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m. (CRS 195-05-01).
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Court just a bunch of smoke and mirrors and bullshit.” 81 He goes on to say, “[w]e have
enough, to get money, to win . . . we can do it, anything we want.” 82 When a consultant
nevertheless continues to explain that “there is not enough information on that ground
water” and that “the one hole in the remediation is the water,” Mr. Donziger says, “I got
to make a point to these guys [the experts], but I can’t get this on camera,” and the clip
ends. 83 This reflects an unmistakable pattern of behavior with respect to the work of the
experts nominated by the plaintiffs: From the first, plaintiffs’ evidence has been driven
by lawyers demanding expert findings of significant contamination and large damages,
not by experts fairly analyzing data collected in accordance with the scientific process.
Mr. Donziger candidly admitted in a memorandum to his “case team” that “[t]he goal of
the inspections [was] to win the legal case, not to produce an independent scientific
report.” 84 Indeed, as Dr. Calmbacher testified, Mr. Donziger “instructed” the experts to
find contamination. 85 To ensure that they did, Mr. Donziger further mandated in a
memorandum to the plaintiffs’ technical team that all expert opinions be filtered through
a team based out of plaintiffs’ counsel’s office, where a lawyer would help write and edit
the experts' reports. 86 The fact that plaintiffs’ evidence has been pre-cooked is seen in
their use of unaccredited and makeshift laboratories, their utter lack of transparency,
and their production of work that cannot be tested or replicated (traceability). This
appalling display of disregard for the judicial process, coupled with the fraudulent
reports submitted in Dr. Calmbacher’s name, shows that the plaintiffs cannot support
their accusations and the claims in their complaint with scientific proof, and also
illustrates the unethical and illegal lengths they will go to in order to manufacture a case
against my client. 87 It reflects Mr. Donziger’s admission that the judicial inspections
81 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m. (CRS-195-05-01).
82 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m. (CRS-195-05-01).
83 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m. (CRS-195-05-01).
84 See E-mail from Steven Donziger to the legal team on the case Ecuador v. Texaco, dated Sept.
9, 2004 at 11:21 a.m., attached as Annex 2 to Chevron’s Second Supplemental Motion for Terminating
Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (DONZ00022695).
85
See Official Transcript of Deposition of Dr. Charles W. Calmbacher at 52:13-18, dated Mar. 29,
2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial Inspection Reports,
filed Apr. 14, 2010 at 3:42 p.m., Record at 168998 (the Spanish translation is included in Record at
169097v).
86
See Official Transcript of Deposition of Dr. Charles W. Calmbacher at 92:18 - 94:17 & Ex. 7,
dated Mar. 29, 2010, attached as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial
Inspection Reports, filed Apr. 14, 2010 at 3:42 p.m., Record at 169018-19 (the Spanish translation is
included in Record at 169117v-18v).
87 The plaintiffs also modified at least one judicial inspection site, Sacha-6, prior to the inspection
to prepare it for their own purposes. See Judicial Inspection Acta for Sacha-6, filed Aug. 18, 2004 at 9:10
a.m., Record at 8703-30, 8703; see also Chevron’s Motion regarding Judicial Inspection of Sacha-6, filed
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were “choreographed”; just “a good show” for the media. 88 According to Mr. Donziger,
the entire inspection process was “all about politics and arguing and bullshit and
show.” 89 Mr. Donziger expressed the “need to make facts . . . that help us” even though
“the facts that we need don't always exist.” 90 Nonetheless, according to Mr. Donziger,
the lawyers “have to get the right facts. And if they don’t exist in an obvious way, you
got to go figure out how to make 'em. Otherwise, you're gonna lose.” 91
In light of this evidence that the plaintiffs fraudulently tainted the judicialinspection
process of this case, none of the data gathered during that phase can be
relied upon by this Court, whether directly, or indirectly through the submission ordered
in the illegal order of August 2, 2010, at 9:00 a.m. and filed by the plaintiffs on
September 16, 2010, at 5:15 p.m. which rests in large part upon that data. See infra
§ 3.1.
2.2 The Cabrera Report Was Fraudulent and Deeply Flawed
2.2.1 Unimpeachable Evidence Demonstrates That the So-Called “Independent
Expert” Was Nothing More Than a Mouthpiece for Plaintiffs
As early as September 2004, Mr. Donziger brought up the “‘elephant in the
room,’” namely, “how we are going to end the inspections, and when we can start/finish
the global peritaje.” 92
(continued…)
Aug. 17, 2004 at 5:30 p.m., Record at 8446-58, 8446-50, 8454-58 (attaching photographs of the
preparation of the site by the plaintiffs).
88 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 069-02-03). Mr. Donziger goes on to say that the judicial inspections were nothing more
than "marketing." The idea was simply to "to get people to attend.” Id. In his mind, “these inspections . . .
ha[d] nothing to do with the trial anymore” and that “legally, they're almost irrelevant.” Id. Similarly, when
preparing to cross examine Ricardo Reis Veiga, the attorney who executed the remediation agreements,
Mr. Donziger admitted that his intent was not to “obtain information.” “This is a show. It’s theatrics . . . .
For the media. For the judge. To screw Reis Veiga.” Transcript of Crude Outtakes, attached as Annex 3
to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m.
(CRS 071-03-02).
89 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 069-02-03).
90 Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Second Supplemental Motion
for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 375-00-05).
91 Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Second Supplemental Motion
for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 375-00-05).
92 E-mail from Charles Calmbacher to Steven Donziger, dated Sep. 28, 2004 at 12:42 p.m., at p.
2, attached as Annex 2 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m. (DONZ00022762).
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Indeed,
Mr. Donziger confirmed to Crude filmmaker Michael Bonfiglio in November 2005 that
“for reasons I don’t care to get into, it is highly doubtful we will do all 122 inspections.” 95
As Your Honor is aware, the plaintiffs got their wish.
The judicial-inspection process was, by request of the plaintiffs, wrongfully
truncated—before the settling experts had a chance to resolve the discordances
between the reports of the party-nominated experts, and after those settling experts
largely agreed with the determinations made by the experts nominated by Chevron
about the one site on which they reported, Sacha-53. 96 See infra § 3.3. After the report
by the settling experts regarding the judicial inspection of the Sacha-53 site reached a
result unfavorable to the plaintiffs, 97 the plaintiffs’ lawyers succeeded not only in
relinquishing sixty-four of the judicial inspections they had originally requested, but also
in obtaining the appointment of a single expert, instead of the experts nominated by
both parties, to perform the global assessment of all the fields operated by the
Consortium. 98 The Court agreed to the plaintiffs’ request to replace the judicial
inspections with a global-assessment process, to be led by the mining engineer,
Richard Cabrera. (Mr. Cabrera was not, however, nominated by the plaintiffs; he was
purportedly chosen at random by the presiding judge.) This marked the complete
breakdown of the process in this case. The judicial-inspection process leading to the
Sacha-53 report allowed the parties to present their own evidence and contradict the
other party’s evidence at each of the designated sites; to challenge the science and
conclusions of the other side; and to have discordances in the reports of the partynominated
experts resolved by independent settling experts nominated by the Court,
consistent with Articles 258 and 259 of the Code of Civil Procedure. With the
appointment of Mr. Cabrera, this Court turned the process over to a single expert, who,
95 E-mail from Steven Donziger to Michael Bonfiglio, dated November 8, 2006 at 3:00 p.m.,
attached as Annex 4 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m. (MB-STIP00015491).
685, 92522.
92522.
96 See Settling Experts’ Report on Sacha-53, filed Feb. 1, 2006 at 5:00 p.m., Record at 92492-
97 Settling Experts’ Report on Sacha-53, filed Feb. 1, 2006 at 5:00 p.m., Record at 92492-685,
98 Plaintiffs’ Motion regarding Relinquishment of Judicial Inspections, filed July 21, 2006 at 9:10
a.m., Record at 116431-35, 116434, Plaintiffs’ Motion, filed Dec. 4, 2006 at 5:20 p.m., Record at 123454-
55.
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in working clandestinely and in collusion with the plaintiffs, denied my client the right to
defend itself. The fraud that has become this case was a direct result of this Court’s
unlawful decision to upend the original process, which, being based upon the
examination of specific sites that were to be evaluated on a site-by-site basis by settling
experts, held at least some promise of producing credible results.
Documents show that the appointment of Mr. Cabrera was planned by the
plaintiffs, who from the start sought to ensure the appointment of an expert who would
be susceptible to their control. On July 25, 2006, when Mr. Fajardo argued that the
plaintiffs should “agree to one perito, to get rid of the dirimente issue,” Mr. Donziger
wondered in his diary: “But how can we control this perito” 99 He soon devised a way
to guarantee such control. The plaintiffs’ November 2006 plan for the global expert
report called for plaintiffs’ team to define the report’s methodology, structure, and
components and to apply political pressure on the court and attorney general. 100
Mr. Donziger personally interviewed potential candidates for the position. On December
16, 2006, he had “a one hour interview” with Fernando Reyes, a prospective global
expert, to do “a hard vet,” and specifically to ask Reyes “if he could be comfortable
slamming [Texaco] with a 10 b[illion] judgment.” 101 Two months later, on February 12,
2007, Mr. Donziger wrote that Mr. Cabrera was one of two real possibilities for the
global expert position, and recorded that he had “met with Richard and Reyes on Sat
afternoon in the Hotel Quito.” 102 Mr. Donziger’s vision involved ”using E-tech to give
[the expert] cover, but he has to totally play ball with us and let us take the lead while
projecting the image that he is working for the court.” 103
Once Mr. Donziger had decided upon Mr. Cabrera as the global expert who
would conform to that vision, the plaintiffs imposed heavy and illegal pressure on the
presiding judge, until Mr. Fajardo was “100% sure the judge would appoint
[Cabrera].” 104 Among other things, the plaintiffs engaged in blackmail: They “wrote up
a complaint against Yanez, but never filed it, while letting him know we might file it if he
99 Diary of Steven Donziger, entry dated Jul. 25, 2006, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30p.m., at 41(DONZ00027256).
100 Annex 1 to Chevron’s Fourth Supplemental Motion for Terminating Sanctions, filed Dec. 22,
2010 at 5:45 p.m. (DONZ00037146).
101 Diary of Steven Donziger, entry dated Dec. 16, 2006, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m., at 22 (DONZ00027256).
102 Diary of Steven Donziger, entry dated Feb. 12, 2007, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m., at 13 (DONZ00027256);
see also Diary of Steven Donziger, entry dated Feb. 27, 2007, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m., at 8 (DONZ00027256)
(recording meeting between Mr. Donziger and “Fernando, Luis, Pablo and Richard” at which Mr. Donziger
“[e]xplained everything”).
103 Diary of Steven Donziger, entry dated Dec. 16, 2006, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m., at 22 (DONZ00027256).
104 Diary of Steven Donziger, entry dated Feb. 27, 2007, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m., at 8 (DONZ00027256).
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does not adhere to the law and what we need.” 105 Outtakes from the documentary
Crude also reference a series of clandestine, collusive, and ex parte meetings during
which plaintiffs’ representatives successfully pressure Judge Yánez to appoint
Mr. Cabrera. 106 One meeting is actually captured on camera. 107 Even Mr. Donziger has
admitted that the judge “never would have done [the appointment] had we not really
pushed him” at those meetings. 108 (During one of those meetings, Judge Yánez
violated his obligation of impartiality and acted in the plaintiffs’ favor by actually
suggesting that it would be effective, as a “symbolic thing . . .from a publicity point of
view,” to swear in Mr. Cabrera at “one of the affected wells or a station.” 109 On account
of his evident partiality, as reflected by his provision of public-relations advice to
plaintiffs, all of Judge Yánez’s orders—including the appointment of Mr. Cabrera—must
be declared null and void. 110 ) This is how, having obtained their desired appointment,
the plaintiffs schemed to corrupt this global expert-assessment process from the very
start.
The global assessment process was intended to be a neutral process conducted
by independent experts. However, as stated by one of plaintiffs' consultants, it ended
up “being a project that's . . . designed to benefit the . . . plaintiffs.” 111 Although this filing,
for ease of reference, will continue to refer to the “Cabrera” Report or the work of Mr.
Cabrera, those are misnomers: Mr. Cabrera acted neither impartially nor independently.
105 Diary of Steven Donziger, entry dated Sept. 13, 2006, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m., at 39 (DONZ00027256);
see also E-mail from Steven Donziger to Joseph Kohn, dated Jul. 26, 2006 at 4:22 p.m., attached as
Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30
p.m., at 1 (DONZ00023182) (“The judge, who is on his heels from the charges of trading jobs for sex in
the court, said he is going to accept our request to withdraw the rest of the inspections save the four we
still want to do. This follows our press conference Monday . . . . The judge also I believe wants to
forestall the filing of a complaint against him by us, which we have prepared but not yet filed.”).
106 See Transcript of Crude Outtakes, attached as Exhibit 5 to Chevron’s Supplemental Motion for
Terminating Sanctions, filed Sept. 14, 2010 at 11:10 a.m., (CRS-158-02-06); see also Transcript of
Crude Outtakes, attached as Exhibit 5 to Chevron’s Supplemental Motion for Terminating Sanctions, filed
Sept. 14, 2010 at 11:10 a.m., (CRS-347-00-01); Transcript of Crude Outtakes, attached as Annex 1 to
Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., (CRS-158-02-07).
107 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 345-02-05).
108 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 361-11-01). Ms. Atossa Soltani, the founder and director of Amazon Watch, is also
shown on tape asking Judge Yánez why he has not yet appointed a global expert, further illustrating the
pressure plaintiffs put on the Court. Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s
Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 347-00-02).
109 Transcript of Crude Outtakes, attached as Exhibit 5 to Chevron’s Supplemental Motion for
Terminating Sanctions, filed Sept. 14, 2010 at 11:10 a.m., (CRS-158-02-06).
110 See Chevron Motion, filed Dec. 21, 2010 at 10:50 a.m.; Chevron Motion, filed Sept. 23, 2010
at 9:50 a.m.; see 2008 Const. art. 76(7)(a), (k); see also Organic Code of the Judiciary art. 9.
111 Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Second Supplemental Motion
for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 197-00-05).
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Rather, he worked alongside, and on behalf of, the plaintiffs’ representatives. As such,
his expert report was a sham, drafted by the plaintiffs’ attorneys, consultants, and
affiliated activists, and Chevron’s substantial evidence refuting the plaintiffs’ allegations
never received fair consideration; the judges who succeeded former Judge Yánez in
hearing this case were clearly biased and committed to protecting Mr. Cabrera, covering
up the fraudulent acts of the plaintiffs’ attorneys, and affording them impunity, as is
shown by the record and was reported by my client in a timely manner.
The most shocking evidence of this illegal collusion comes from unused film
footage from the documentary film Crude. Those outtakes show Mr. Donziger
explaining, prior to the appointment of Mr. Cabrera as expert, that this Court, per “typical
Ecuador bullshit,” would “appoint someone from the court” to replace the judicialinspection
experts, and even more egregiously, Mr. Donziger confirmed, even at that
early point, that “our people would do the basic work and give it to this guy [Cabrera].”
Thus, the plaintiffs never expected Mr. Cabrera to “go out and do . . . the study.”
Instead, they always knew that “it would be [plaintiffs’] team” doing the work and
preparing the expert’s report for him. 112 As Mr. Donziger explained on another occasion,
“the judge is going to appoint a guy in Ecuador . . . but really, you know, we’ll be
supporting him with the work—our people, E Tech, whoever we choose to use.” 113
Furthermore, Mr. Donziger made clear that this was not to be a scientific or technical
process, but rather a process led by the attorneys in order to “expedite” the case to a
(preordained) judgment. 114 “Science has to serve the law practice,” Mr. Donziger stated,
“the scientists are not the ones who will determine what we do . . . —it’s the attorneys
because they have to handle the case.” 115
112 Transcript of Crude Outtakes, attached as Exhibit 5 to Chevron’s Supplemental Motion for
Terminating Sanctions, filed Sept. 14, 2010 at 11:10 a.m., (CRS 169-05-01).
113 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., (CRS 138-02-01); Testimony from one of plaintiffs’ consultants, Mark A. Quarles, confirms that
plaintiffs discussed a “role” for E-Tech in the global assessment. See Official Transcript of Deposition of
Mark A. Quarles at 60:6-22, dated Sept. 1, 2010, attached as Annex 21 to Chevron’s Motion filed Sept.
16, 2010 at 4:35 p.m.
114 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., (CRS 158-02-09).
115 Id. Mr. Donziger's view is that “science is very malleable” and so the lawyers “need to find the
person who's gonna sort of to stand up to scrutiny as an objective scientist . . . but also can play ball with
you.” Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Motion filed Dec. 8, 2010 at
4:21p.m. (CRS 375-00-16). Likewise, plaintiffs had no respect for the evidentiary process before
Ecuadorian courts, noting that "[i]t's not like a US court in that respect, things are really loose here. . . .
Rules of evidence are, like, not even close to what they are in the US. People can just say whatever the
'f' they want". Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Motion filed Dec. 8, 2010
at 4:21p.m. (CRS 042-14-05). Mr. Donziger also explained to some of plaintiffs’ consultants, “the lawyers
will control the scope [of the process], not the science people.” E-mail from Richard Kamp, dated Feb. 12,
2007 at 3:49 p.m., forwarding e-mail from Steven Donziger to Mark Quarles, dated Feb. 7, 2007 at 10:52
p.m., attached as Annex 7 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed
Dec.8, 2010 at 4:21 p.m. (KAMP-NATIVE001786-001793, 001789).
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That explanation soon became reality. As a result of Chevron’s proof of their
collusion, the plaintiffs recently have conceded, both in this Court and in a filing in a
court in the United States, that they have engaged in ex parte “dealings” with
Mr. Cabrera to “advocate their own [the plaintiffs’] findings, conclusions, and
valuations.” 116 Those dealings were far deeper and more sustained than plaintiffs have
yet been willing to acknowledge. Outtakes from Crude definitively prove that
Mr. Cabrera and plaintiffs clandestinely, illegally, and improperly worked together to
create the report that Mr. Cabrera ultimately filed under his name with this Court, which
was literally drafted by plaintiffs’ own representatives, paid consultants and affiliated
activitists. 117
For example, unused footage from Crude shows Mr. Cabrera attending a March
3, 2007 meeting with plaintiffs’ attorneys and consultants to discuss the global expert
examination. 118 That meeting took place approximately two weeks before Judge Yánez
selected and appointed Mr. Cabrera—purportedly at random—as the sole expert for
global expert assessment expert, and nearly eleven months before the January 30,
2008 order at 9:00 a.m. that the plaintiffs have recently claimed in U.S. court
proceedings supposedly authorized them to submit materials to Mr. Cabrera. According
to one of the plaintiffs’ consultants, the meeting was a gathering of the plaintiffs’
technical and legal teams to discuss the next steps for the case. 119 It was understood
that everyone at the meeting was working for the plaintiffs and representing that party in
the litigation. 120 At that time, the consultant, Mr. Champ, did not realize that Mr. Cabrera
was soon to be appointed by the Court as a purportedly “independent” expert. 121
Mr. Champ later testified that had he known that fact, he would have felt uncomfortable
participating in the meeting. 122
116 See Chevron’s Supplemental Motion to Strike Cabrera Reports, filed June 4, 2010 at 8:35
a.m., at 4; see also Plaintiff’s Motion at 5-7, filed June 21, 2010 at 2:20 p.m.
117 The plaintiffs even controlled picayune aspects of Mr. Cabrera’s work. For example, Mr.
Donziger was sent a draft of a letter, putatively from Cabrera to this Court, for review and comment prior
to filing. E-mail from Joseph Mutti to Steven Donziger, dated Dec. 20, 2007 at 1:40 p.m., attached as
Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30
p.m. (DONZ00025621).
118 The members of plaintiffs’ litigation team present at the meeting are (1) Steven Donziger,
plaintiffs’ U.S. team leader; (2) Pablo Fajardo, lead Ecuadorian counsel for plaintiffs; (3) Luis Yanza,
representative of the Amazon Defense Front (also known as Frente) or Selva Viva, and who introduces
himself as the “coordinator” for plaintiffs’ case; (4) Dick Kamp, director of E-Tech International; (5) Ann
Maest, a managing scientist at Stratus Consulting, Inc. and E-Tech; and (6) Charlie Champ, of Champ
Science and Engineering. See Chevron’s Motion for Terminating Sanctions at 15-16, filed Aug. 6, 2010
at 2:50 p.m.
119 See Official Transcript of Deposition of Charles Champ dated Sept. 9, 2010, at 93:8-19,
submitted as Annex 35 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
120 See id. at 99:5-11, 386:11-16.
121 See id. at 386:11-22.
122 See id. at 386:17 - 387:22.
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During this meeting of March 3, 2007, plaintiffs’ counsel Pablo Fajardo presented
a PowerPoint outline of a “Plan Para Examen Pericial Global.” 123 In a diary entry,
Mr. Donziger described that, at the meeting, “he spen[t] the whole day making
comments and mostly directing them to Richard. We laid out our entire case and legal
theory—what a benefit! We need to do the same with the judge.” 124 The footage shows
that plaintiffs laid out every aspect of Mr. Cabrera’s report and work plan, including:
• What would be tested, how the sampling and analysis will be done, how
the sites should be chosen, and what other “harms” should be
computed; 125
• The legal theory that “Texaco is liable for all of the existing damage, even
that caused by Petroecuador”; 126
• Details regarding the content of the expert report, including what legal
standards and scientific methodologies should govern; 127 and
• How the final report should look and the various sections that it should
have. 128
123 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-187-01-02-12).
124 Diary of Steven Donziger, entry dated Mar. 7, 2007, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m., at 5 (DONZ00027256).
125 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-187-01-02-12 and CRS-193-00-01).
126 See Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion, filed Sept. 16,
2010 at 4:35 p.m., (CRS-187-01-02-11).
127 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-188-00-02 and CRS-193-00-01).
128 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-187-01-02-12). “[The report] must have an executive
summary, a conclusive executive summary, that is, maybe the report is sixty, a hundred pages, which will
make it difficult for the judge and perhaps other people to read, Maybe in five pages, or ten pages, a very
clear executive summary, very didactic, understandable and conclusive. Is the one or isn’t there . . . It
must categorize the damage, what was asking, as far as- as far as the environment, for example. We
must categorize the wells operated by Texaco, the ones remediated by Texaco, the hidden pools, the
toxic components, a list of what was found during the expert’s study and the inspections, the extent of the
damage, the toxic products . . .as far as the biotic aspect, damage to the flora and fauna, the most
affected species, both land and lehthyological species, or fish. On the human side, effects on the
indigenous peoples, culture, effects on people’s lives, both to their health and to their possessions, It
must also have the repair mechanisms and establish the costs to repair the damage.” Id. In a
subsequent meeting, plaintiffs’ attorneys and consultants discussed their "outline” for the “peritaje global.”
Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.,
(CRS-198-00-06). Plaintiffs’ involvement in drafting Mr. Cabrera’s work plan is further corroborated by the
fact that they provided one of their consultants with an unsigned copy of that document which apparently
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Mr. Fajardo also outlines a plan to hide the truth from Chevron. For the
amusement of the participants, he indicates that “Chevron’s main problem right now is
that it doesn’t know what the hell is going to happen in the global expert examination. In
other words, they don’t know that. I hope none of you tell them, please . . . it’s
Chevron’s problem.” 129 Mr. Fajardo also identifies various steps that must be taken to
counteract my client’s possible actions, including: (i) the plaintiffs “[must k]eep up the
pressure and constant oversight in the court”; (ii) “[m]ake certain that the expert
constantly coordinates with the plaintiffs’ technical and legal team”; (iii) “[t]he plaintiffs’
technical coordinator must be [involved] in the process fulltime”; (iv) at least one lawyer
must “[a]ccompany the expert in the field” to “protect the activity being performed”; and
(v) plaintiffs must “provide the facilities and necessary support to the field team” and
“support the expert in writing the report.” 130
Mr. Fajardo emphasizes that “the burden isn’t going to be the expert’s. All of us
bear the burden.” 131 When one of the participants asks whether the final report will be
completed by the expert alone, Mr. Fajardo states that “what the expert is going to do
is . . . sign the report and review it. But all of us . . . have to contribute to that report.” 132
A consultant then asks, “[t]ogether,” and Mr. Fajardo confirms. The consultant again
asks, “[b]ut not Chevron,” to which everyone laughs, demonstrating their complicity in
the conspiracy. 133 Looking Mr. Cabrera in the eye, Mr. Donziger said: “and Richard, of
(continued…)
had not been filed with this Court. See Official Transcript of Deposition of Mark A. Quarles at 110-14,
dated Sept. 1, 2010, attached as Annex 21 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
129 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-191-00-03).
130 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-191-00-03).
131 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-191-00-03).
132 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-191-00-03).
133 See Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-191-00-03). Other consultants were not as comfortable
with plaintiffs’ ex parte contacts with Cabrera. Later footage from March 4, 2007 shows a consultant
expressing his concern to Mr. Donziger, stating that “[h]aving the perito [Cabrera] there yesterday in
retrospect . . . [t]hat was bizarre.” Id. at CRS-196-00-01. Mr. Donziger looks at the consultant for about
two or three seconds, and then instructs him not to “talk about it” and tells the camera crew, “that is off the
record.” Id. at CRS-196-00-01. The cameras are not turned off, however, and Mr. Donziger is recorded
saying to the consultant, “That’s the way it works . . . . Believe me, I would much rather have it work the
normal way. . . . I would much rather have it work the normal way, then I wouldn’t have to worry about
stuff like that.” Id. at CRS-196-00-01.
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course you really have to be comfortable with all that. And we’ll also def- define the
support the expert needs.” 134
The recording ends with Mr. Donziger talking about the ways to make Chevron
pay more, and his foreshadowing comment that plaintiffs could “jack this thing up to
thirty billion . . . in one day.” 135 Of course, that is exactly what they eventually did, in
Mr. Cabrera’s responses to the plaintiffs’ “observations” of his report, filed on November
17, 2008, at 8:25 a.m., when Mr. Cabrera increased his prior “damages” assessment
against Chevron of approximately US$16 billion to over US$27 billion.
Additional evidence obtained by Chevron proves that the plaintiffs, their paid
consultants, and affiliated activists followed through on their plans to collaborate with
Mr. Cabrera. Consultant Douglas Beltman testified that he met personally with
Mr. Cabrera, ex parte, in early 2008 in Quito, at a meeting that was also attended by the
plaintiffs’ representatives (including Mr. Donziger) and other consultants (including Ann
Maest of Stratus). 136 Ms. Maest also produced notes of a meeting from January 2008 in
which the plaintiffs’ consultants (again) discussed the contents of the Cabrera Report
they themselves would draft and distributed the drafting assignments. 137 Thereafter, on
February 22, 2008, Mr. Beltman informed his colleagues that they must “write, over the
next 2 to 3 weeks, probably the single most important technical document for the case,”
a report which will “make recommendations for the court to consider in making its
judgment.” 138 A follow-up e-mail, sent a few days later, confirmed that this “technical
document” was none other than the “Peritaje Global report.” 139 That e-mail outlined the
Cabrera Report and assigned various Stratus employees to draft portions of it, 140 and
134 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-189-00-02).
135
Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-193-00-01).
136 Official Transcript of Deposition of Douglas John Beltman at 33:19-34:14, dated Oct. 6, 2010,
attached as Annex 12 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
137 Notes by Ann Maest from Jan. 15, 2008 meeting (discussing contents of Cabrera Report)
(STRATUS-NATIVE008849), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
138 E-mail from Douglas Beltman to Science Group, et al., dated Feb. 22, 2008, at 6:24 a.m.
(STRATUS-NATIVE043232), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
139 E-mail from Douglas Beltman to Michael Carney, et al., dated Feb. 26, 2008, at 10:05 a.m.
(STRATUS-NATIVE043849), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
140 E-mail from Douglas Beltman to Michael Carney, et al., dated Feb. 26, 2008, at 10:05 a.m.
(STRATUS-NATIVE043849-50), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20
p.m. In fact, the Stratus spreadsheet keeping track of the in-progress annexes for the Cabrera Report
included two columns next to one another: “Who will prepare” and “Attribution in PG Report.” Attachment
to e-mail from Douglas Beltman to Michael Carney et al., dated Feb. 26, 2008 at 10:05 a.m., attached as
Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21
p.m. (STRATUS-NATIVE043851-043859, 043854). Thus, at least internally, the ghostwriting was
transparent, although the fraud also became sufficiently difficult to coordinate that Mr. Beltman bemoaned
“what a tangled web” it had become. E-mail from Douglas Beltman to David Mills, dated July 28, 2008 at
CERT. INTERMARK VER: JD
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another document confirmed that Stratus was asked “to prepare both Spanish and
English versions of the report and annexes.” 141 Two weeks later, on March 10, 2008,
Mr. Beltman told his colleagues that he has been too busy to “work much” on “the report
itself,” which “has to go to the court in 2 weeks and get translated [first].” 142 He asked
his co-workers to help “finish what I started,” with the goal being to have “the entire
report drafted by COB Tuesday.” 143 Two days later, Mr. Beltman sent the “main report”
to be translated into Spanish. 144 Notably, the Stratus employees drafting the “Cabrera”
report were even given ex parte access to Mr. Cabrera’s "TPH soils data," which were
(according to Stratus) "not official[l]y released yet and are considered ‘secret.’" 145
The involvement of plaintiffs’ team in directing Stratus’s work can be seen by the
fact that the damage categories addressed by this consulting firm (hired and paid by the
plaintiffs themselves) in its ghostwritten Cabrera Report had actually been “proposed”
by Mr. Donziger himself, even before Mr. Cabrera’s appointment, which also shows the
extent to which the plaintiffs were involved in directing Stratus' work. 146 Further, the
responsibility for drafting various annexes was delegated to consultants and activists in
favor of the plaintiffs' cause, such as Adolfo Maldonado and even Mr. Donziger. 147
(continued…)
8:56 p.m., attached as Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions,
filed Dec. 8, 2010 at 4:21 p.m. (STRATUS-NATIVE057803).
141 E-mail from Douglas Beltman to Ann Maest, et al., dated Mar. 18, 2008, at 9:11 a.m.
(STRATUS-NATIVE053439), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
142 E-mail from Douglas Beltman to Ann Maest and Jennifer Peers, dated Mar. 10, 2008, at 9:25
p.m. (STRATUS-NATIVE055867), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20
p.m.
143 E-mail from Douglas Beltman to Ann Maest and Jennifer Peers, dated Mar. 10, 2008, at 9:25
p.m. (STRATUS-NATIVE055867), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20
p.m.
144 E-mail from Douglas Beltman to translator, dated Mar. 12, 2008, at 10:11 a.m. (STRATUS-
NATIVE058388), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.; see also
Official Transcript of Deposition of Douglas John Beltman at 148:15-18, dated Oct. 6, 2010, attached as
Annex 12 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
145 E-mail from Preston Sowell to Douglas Beltman, et al., dated Oct. 2, 2007, at 11:02 a.m.
(STRATUS-NATIVE049071), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
146 Official transcript of Deposition of Douglas John Beltman at 78:1-8, dated October 6, 2010,
attached as Annex 9 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec.
8,2010 at 4:21 p.m. Other documents indicate that plaintiffs' consultants depended on instructions from
plaintiffs' attorneys. See Attachment to e-mail from Douglas Beltman to Michael Carney et al., dated Feb.
26, 2008 at 10:05 a.m., attached as Annex 8 to Chevron’s Second Supplemental Motion for Terminating
Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (STRATUS-NATIVE043851-043859, 043857), indicating that
the consultants had to "ask Pablo [Fajardo]" whether to include certain information).
147 Attachment to e-mail from Douglas Beltman to Michael Carney et al., dated February 26, 2008
at 10:05 a.m., attached as Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions,
filed Dec. 8, 2010 at 4:21 p.m. (STRATUS-NATIVE043851-043859).
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David Mills, another of plaintiffs’ consultants at Stratus, corroborated that the
“reports and summaries [Stratus] prepared in English” were translated to Spanish and
then “submitted to Cabrera, and apparently Cabrera used [them] in part or in whole as
part of the [Cabrera report] annexes.” 148 With respect to his work on Stratus reports that
were included as annexes to the Cabrera Report, Mr. Mills testified that his work had
been done without any inputs or data from Mr. Cabrera or his disclosed team, and that
no portion of those annexes had been drafted or even revised by them. 149 Mr. Mills had
no knowledge of Mr. Cabrera “independently working on a separate report” and
implicitly acknowledged that Stratus’s work required no further action by Mr. Cabrera, as
it “uses Richard Cabrera’s name and I in the first person.” 150
Mr. Mills’ testimony corroborates that of William Powers, a consultant working
with the plaintiffs and Stratus, who testified that Annex S of Mr. Cabrera’s report was
nothing more than a “slightly different” version of a report he drafted for Stratus. 151 A
review of Mr. Powers’ report confirms that there are no substantive differences between
that document and the document submitted to this Court as the work of Mr. Cabrera. 152
Similarly, Mr. Powers admitted that his calculations were used in Annex T of the report
submitted by Mr. Cabrera. 153 Powers further testified that he was aware that his work
would be “going into a larger report that Stratus was writing.” 154
The work and drafting illicitly done by the plaintiffs’ own attorneys, paid
consultants, and affiliated activists was not marginal or peripheral to the Cabrera Report.
E-mails show that they wrote the entire report, including Cabrera’s summary
148 Official Transcript of Deposition of David M. Mills at 196:5-12, dated Oct. 20, 2010, attached
as Annex 20 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
149 Official Transcript of Deposition of David M. Mills at 124:25-125:9, 247:3-6, 253:4-23, 281:22-
282:1, dated Oct. 20, 2010, attached as Annex 20 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
150 Official Transcript of Deposition of David M. Mills at 150:23-24, 260:11-12, dated Oct. 20, 2010,
attached as Annex 20 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
151 Transcript of Deposition of William Powers at 96:18-97:9, 98:11-20, 108:15-109:7, dated Sept.
10, 2010, attached as Annex 34 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m. Similarly, Mr.
Doniziger is asked whether Mr. Charles Champ, one of the plaintiffs’ technical consultants, "need[s] an
Ecuadorian counterpart to bless" his work. Transcript of Crude Outtakes, attached as Annex 3 to
Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS
169-05-12). Mr. Donziger explains that the work "will all go through the court-appointed expert." Id.
When the questioner follows up, saying, "[s]o the court-appointed expert will just bless what--or
presumably--or critique it or whatever," Mr. Donziger replies "Yeah." Id. When asked whether plaintiffs
will need their "own Ecuadorian cleanup—cost--estimator or whatever the hell you call it," Mr. Donziger
answers, "No, no. That's--that's in the bag." Id.
152 See Powers Report, dated March 22, 2008, attached as Annex 18 to Chevron’s Motion filed
Sept. 16, 2010 at 4:35 p.m.; see also Transcript of Deposition of William Powers at 108:15-109:7, 275:7-
11, 276:5-8, dated Sept. 10, 2010, attached as Annex 34 to Chevron’s Motion filed Sept. 16, 2010 at 4:35
p.m.
153 Transcript of Deposition of William Powers at 251:4-253:1, 255:13-256:13, dated Sept. 10,
2010, attached as Annex 34 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
154 Id. at 90:4-9.
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“Declaration of Findings,” which was translated from English, as well as the report’s
annexes. 155 It is doubtful whether Mr. Cabrera actually read (or had time to read) the
6,196 page document the plaintiffs drafted; one of the plaintiffs’ other consultants
testified that it took him twenty-four working hours to analyze just a small portion of the
Cabrera Report. 156 Plainly the plaintiffs and their consultants did not anticipate that any
supposed review by Mr. Cabrera’s would affect their filing, and in any case, an eleventhhour
“review” comes nowhere near meeting Mr. Cabrera’s obligation to perform his own
work independently and impartially. That is why drafts written by Stratus had
Mr. Cabrera’s name at the top, and were dated “March 24, 2008,” the date that
Mr. Beltman believed the report would be submitted by Mr. Cabrera to this Court. 157
(This Court ultimately granted Mr. Cabrera an extension, and the report was not
submitted until April 1, 2008, but Mr. Beltman and the plaintiffs’ attorneys continued
working on it right until that date, as the e-mails reflect, and the filed version of the
report bears the date “March 24, 2008.” 158 ) And it is why Mr. Beltman responded
“yikes!” when he observed that the numbers in some of his annexes were changed by
the plaintiffs’ team in Quito before they were submitted to the Court. 159 Indeed, the
target audience for Stratus’s work product, according to Mr. Beltman, was “the judge”—
not Mr. Cabrera or his team. 160 In all of the discovery my client has obtained to date,
there is no record of Mr. Cabrera reviewing, much less editing, questioning, or changing
the material given him. As Mr. Beltman admitted, Stratus’s work “got used almost
straight as is” in the Cabrera Report. 161
In sum, documents recently discovered by U.S. courts remove any doubt that the
global assessment repeatedly heralded by plaintiffs and Mr. Cabrera as “impartial” and
“independent” was, in fact, the wholly biased work of plaintiffs’ attorneys and paid
155 E-mail from Douglas Beltman to Ann Maest and Brian Lazar, dated Apr. 1, 2008, at 1:53 p.m.
(STRATUS-NATIVE065493), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
156 Official Transcript of Second Deposition of Mark A. Quarles at 359:11-360:21, dated Oct. 12,
2010, attached as Annex 11 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
157 Official Transcript of Deposition of Douglas John Beltman at 135:3-18, 198:12-199:11, 209:14-
17, dated Oct. 6, 2010, attached as Annex 12 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
158 See E-mail from Douglas Beltman to Juan Pablo Sáenz and Steven Donziger, dated Mar. 25,
2008, at 9:44 a.m. (STRATUS-NATIVE063142), attached as Annex 10 to Chevron’s Motion filed Oct. 29,
2010 at 5:20 p.m.; E-mail from Douglas Beltman to Steven Donziger, dated Mar. 30, 2008, at 9:48 p.m.
(STRATUS-NATIVE069123) attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.;
E-mail from Douglas Beltman to Ann Maest and Brian Lazar, dated Apr. 1, 2008, at 1:53 p.m. (STRATUS-
NATIVE065493), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
159 E-mail from Douglas Beltman to Brian Lazar, dated July 28, 2008, at 3:12 p.m., attached as
Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m. (STRATUS-NATIVE044716).
160 E-mail from Douglas Beltman to Michael Carney, dated March 1, 2008 at 8:14 p.m., attached
as Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at
4:21 p.m. (STRATUS-NATIVE059357).
161 Official Transcript of Deposition of Douglas John Beltman at 194:18-21, dated October 6, 2010,
attached as Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m.
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consultants—it can no longer be considered the work of Mr. Cabrera and cannot
possibly be given any credence by this Court.
Yet the plaintiffs’ attorneys and paid consultants wrote not just the original
Cabrera Report, but also Mr. Cabrera’s purported responses to questions posed by the
plaintiffs. 162 Some of those “questions to the Perito,” according to an internal Stratus e-
mail, were “assigned to us.” 163 In other words, the plaintiffs asked and answered their
own questions about their own work appearing in the Cabrera Report, increasing in the
process the estimated damages by over US$10 billion. In an e-mail dated August 1,
2008, Mr. Beltman outlined for his colleagues what “we need to do for the comments on
the Cabrera report.” 164 His e-mail listed the various answers that need to be prepared,
and what they should say. Notably, Mr. Beltman repeatedly referred to the plaintiffs’
questions in the first-person and to their own work as that of “Mr. Cabrera.” For
example, he says that “[w]e comment on the lack of consideration given to cleanup of
rivers and streams,” and “[w]e comment that Cabrera does not consider metal
contamination in his cleanup costs.” 165 He then suggests possible responses to those
comments. 166
Likewise, Mr. Powers confirmed that he drafted portions of Mr. Cabrera’s
“answers” to questions that the plaintiffs raised about the initial Cabrera Report, by
providing answers to Stratus regarding questions that were “substantively the same” as
the “objections” plaintiffs had filed to Mr. Cabrera’s report. 167 Mr. Powers attested that
162 E-mail from Douglas Beltman to Ann Maest, et al., dated Aug. 1, 2008, at 5:27 a.m.
(STRATUS-NATIVE058697), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.;
e-mail from Douglas Beltman to Jennifer Peers, et al., dated August 10, 2008 at 10:55 a.m. (STRATUS-
NATIVE056768), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.; see also E-
mail from Jennifer Peers to Pablo Fajardo, et al., dated Aug. 12, 2008 at 6:17 p.m., attached as Annex 1
to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m.
(DONZ00026679). In fact, plaintiffs’ team in Ecuador requested Stratus’s ghostwritten answers to
plaintiffs’ questions for Mr. Cabrera just “two days in advance” of the deadline for submission of the
answers to the court. E-mail from Tania Naranjo to Ann Maest dated October 24, 2008 at 11:33 a.m.,
attached as Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m. (STRATUS-NATIVE-045778).
163 E-mail from Douglas Beltman to Jennifer Peers and Ann Maest, dated October 27, 2008, at
6:18 p.m. (responding to Jennifer Peers’ e-mail referring to "questions to the Perito assigned to
us")(STRATUS-NATIVE051388), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20
p.m.
164 E-mail from Douglas Beltman to Ann Maest, et al., dated Aug. 1, 2008, at 5:27 a.m.
(STRATUS-NATIVE058697), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
165 E-mail from Douglas Beltman to Ann Maest, et al., dated Aug. 1, 2008, at 5:27 a.m.
(STRATUS-NATIVE058697), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
166 E-mail from Douglas Beltman to Ann Maest, et al., dated Aug. 1, 2008, at 5:27 a.m.
(STRATUS-NATIVE058697), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
167 Id. at 93:7-94:5, 152:20-158:4, 162:5-166:19; see also e-mail from Ann Maest to William
Powers, dated October 31, 2008, attached as Annex 19 to Chevron’s Motion filed Sept. 16, 2010 at 4:35
p.m.; e-mail exchange between Ann Maest and William Powers, dated Oct. 27, 2008, attached as Annex
CERT. INTERMARK VER: JD
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the answers Mr. Cabrera gave to plaintiffs’ “objections” in the Supplemental Cabrera
Report were also “substantively the same” as the answers that he had drafted for
Stratus. 168 In other words, the plaintiffs asked and answered their own questions—but
they falsely made it appear as though Mr. Cabrera was responding to the "objections" to
the initial report "of Mr. Cabrera." To further this charade, Stratus also published
comments purporting to independently review and validate the Cabrera Report, and
sought to persuade others in the field to lend their names to what they referred to as the
work of the “Technical Special Master” acting in “the capacity of a neutral ‘expert’ to the
Court.” 169 But finding others willing to validate the Cabrera Report proved difficult; Mr.
Beltman explained to Mr. Donziger that “some of the underlying work in the Cabrera
report has weaknesses that an academic would probably have a hard time
defending.” 170 Plaintiffs have not, and cannot provide a valid explanation for why or how
the supposedly independent court expert, Mr. Cabrera, submitted answers prepared by
one of their own consultants to questions they themselves had posed.
The evidence also shows that the plaintiffs were conscious of the illegality of their
actions and took steps to conceal it. 171 The e-mails produced to my client in the last two
months demonstrate that the plaintiffs’ consultants and lawyers were in constant
communication with one another throughout this fraudulent process, as drafts, inserts,
and annexes were transmitted back and forth. 172 In one early outline of what would
(continued…)
19 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m; Plaintiffs’ Observations of the Global Expert
Report, filed Sept. 16, 2008 at 11:30 a.m., Record at 150878-150995v.
168 Transcript of Deposition of William Powers at 288:7-291:18, dated Sept. 10, 2010, attached as
Annex 34 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
169 BELTMAN, Douglas, et al., Comments on the Report of the Court-Appointed Expert Ing.
Richard Cabrera Vega in the Case of Maria Aguinda y Otros v. Chevron Corp., dated Dec. 1, 2008, at 1,
attached as Annex 16 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m.
170 Annex 2 to Chevron’s Fourth Supplemental Motion for Terminating Sanctions, filed Dec. 22,
2010 at 5:45 p.m. (STRATUS-NATIVE042610).
171 For example, one of the consultants who had attended the March 3, 2007 meeting with
Mr. Cabrera said that, during lunch the following day, Mr. Donziger “made a big point” that he “definitely
didn’t want to talk about” Mr. Cabrera’s involvement “on film.” Deposition of Richard A. Kamp, dated Oct.
7-8, 2010, at 386:19-388:1, attached as Annex 11 to Chevron’s Second Supplemental Motion for
Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m.
172 See E-mail from Douglas Beltman to Juan Pablo Sáenz and Steven Donziger, dated Mar. 25,
2008, at 9:44 a.m. (STRATUS-NATIVE063142), attached as Annex 10 to Chevron’s Motion filed Oct. 29,
2010 at 5:20 p.m.; E-mail from Douglas Beltman to Steven Donziger, dated Mar. 13, 2008, at 8:35 a.m.
(STRATUS-NATIVE065019), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.;
E-mail from Douglas Beltman to Steven Donziger, dated Mar. 30, 2008, at 9:48 p.m. (STRATUS-
NATIVE069123) attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.; E-mail from
Douglas Beltman to Steven Donziger, dated Sept. 30, 2009, at 5:00 p.m. (STRATUS-NATIVE050326),
attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.; see also E-mail from Douglas
Beltman to Ann Maest, et al., dated Aug. 1, 2008, at 5:27 a.m. (referring to conversations with “Pablo”)
(STRATUS-NATIVE058697), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.;
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ecome the Cabrera Report, a note observed the "need to figure out to whom Richard
will attribute each of the annexes." 173 The consultants thus understood the "need" to
hide their own role. They also understood the need to hide the fact that the Cabrera
Report was initially written in English, with Mr. Beltman telling a colleague to treat “our
original English version as if it’s a translated version” of Cabrera’s work, rather than vice
versa. 174 One Stratus employee advised that, in their ghostwritten “responses” to
questions about the Cabrera Report, the consultants would try “to clean up the
language so it sounds more like the Perito.” 175 And Mr. Beltman acknowledged the
need to keep the material “in a form that someone in Ecuador could have written,” to
evade detection of the fraud. 176 In a similar vein, Mr. Beltman by e-mail reminded
Mr. Donziger that a report drafted by another of plaintiffs’ consultants, William Powers,
needed to have “his name taken off” before it could be used. 177 Likewise, a third
plaintiffs’ consultant, Richard Clapp, drafted one report that “was incorporated into the
expert report as an annex pretty much as is,” and another that “will probably appear in
the expert’s response to comments.” 178 Mr. Beltman warned Mr. Donziger not to show
anyone these reports under Mr. Clapp’s name, “thereby distributing proof” of their true
authorship. 179 And before a meeting between Mr. Donziger and a U.S. Congressman,
Mr. Beltman emphasized that a report authored by Mr. Clapp “CANNOT go into the
(continued…)
see also Official Transcript of Deposition of Douglas John Beltman at 95:19-21, 98:24-99:7, dated Oct. 6,
2010, attached as Annex 12 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
173 E-mail from Douglas Beltman to Steven Donziger, dated March 11, 2008, at 2:22 p.m.
(attaching outline of report) (STRATUS-NATIVE067410, 067418), attached as Annex 10 to Chevron’s
Motion filed Oct. 29, 2010 at 5:20 p.m.
174 E-mail from Douglas Beltman to Brian Lazar, dated July 28, 2008, at 3:12 p.m. (STRATUS-
NATIVE044716), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
175 E-mail from Jennifer Peers to Ann Maest and Doug Beltman, dated Oct. 27 2008 at 4:59 p.m.,
attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m. (STRATUS-NATIVE051388-
89).
176 E-mail from Douglas Beltman to Jennifer Peers and Ann Maest, dated October 29, 2008 at
5:29 p.m., attached as Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions,
filed Dec. 8, 2010 at 4:21 p.m. (STRATUS-NATIVE053480).
177 E-mail from Douglas Beltman to Steven Donziger, dated March 23, 2008, at 4:02 a.m.
(STRATUS-NATIVE063676), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
178 E-mail from Douglas Beltman to Steven Donziger, dated Nov. 6, 2008, at 9:20 a.m.
(STRATUS-NATIVE065062), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
179 E-mail from Douglas Beltman to Steven Donziger, dated Nov. 6, 2008, at 9:20 a.m.
(STRATUS-NATIVE065062), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
Similarly, in an email discussion concerning which materials to send to a reporter, Mr. Beltman advised
that certain photos not be sent “[b]ecause of potential similarities with Cabrera’s figures.” E-mail from
Douglas Beltman to Jennifer Peers et al., dated March 25, 2009, at 5:23 p.m., attached as Annex 8 to
Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m.
(STRATUS-NATIVE52245).
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Congressional Record as being authored by him.” 180 That would have revealed the
extent of the plaintiffs’ fraud, which they were intent on covering up. Even as telltale
signs of collusion began to emerge, Messrs. Beltman and Donziger discussed publicly
asserting that Mr. Cabrera's work was "clearly his own." 181 These blatantly false denials,
which continue to this day, confirm the wantonness of plaintiffs' illicit conduct.
The recently obtained evidence of the reactions of the plaintiffs to early versions
of the documentary Crude provide additional evidence of efforts to conceal their
fraudulent conduct. Upon reviewing a rough and unreleased version of the film,
Mr. Donziger complained to Mr. Berlinger that, “[l]egally, Chevron could use the film to
help block enforcement of a foreign judgment and I believe they will do that if the film is
released in its current state.” 182 Mr. Donziger therefore requested the removal of
scenes “which are very undermining of the legal case.” 183
Plaintiffs’ counsel were insistent upon removing the scenes revealing their work
on the Cabrera Report. Plaintiffs were successful in getting Mr. Berlinger to excise the
shots in which plaintiffs are seen working with one of Mr. Cabrera’s disclosed team
members, Carlos Beristain, months before his appointment as an “independent”
auxiliary expert. 184 Specifically, Mr. Donziger told Mr. Berlinger to “please take out part
where I talk about preparing a damages claim and other part where I say that we have
180 E-mail from Douglas Beltman to Steven Donziger, dated Nov. 18, 2008, at 1:57 p.m.
(STRATUS-NATIVE061311), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
181 E-mail from Steven Donziger to Douglas Beltman, dated Mar. 18, 2009, at 12:38 p.m. (replying
to Beltman’s email containing draft text to address Chevron ad regarding language in Cabrera’s
supplemental report) (STRATUS-NATIVE069215), attached as Annex 10 to Chevron’s Motion filed Oct.
29, 2010 at 5:20 p.m. New testimony from the plaintiffs’ other consultants further confirms that the
plaintiffs’ attorneys understood their own unethical behavior. According to Richard Kamp, one of the
plaintiffs’ consultants, Mr. Donziger “made a big point that we’re not going to talk about” Mr. Cabrera’s
presence at the plaintiffs’ March 3, 2007, strategy meeting, at which they discussed the plan for the global
expert evaluation before Mr. Cabrera was even appointed by this Court. See Official Transcript of
Deposition of Richard A. Kamp at 387:5-6, dated Oct. 7-8, 2010, attached as Annex 13 to Chevron’s
Motion filed Oct. 29, 2010 at 5:20 p.m.
182 Notes from Steven Donziger to Joseph Berlinger, dated Oct. 27, 2008, attached as Annex 5 to
Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m.
(JB01517) (offering his comments and suggestions on Crude).
183 Notes from Steven Donziger to Joseph Berlinger, dated Oct. 27, 2008, attached as Annex 5 to
Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m.,
(offering his comments and suggestions on Crude) (JB01521); see also Official Transcript of Deposition
of Joseph Berlinger, at 72:8-10, Oct. 28, 2010 (acknowledging that Mr. Donziger wanted “many” things
taken out of the film).
184 E-mail from Mike Bonfiglio to Joseph Berlinger, dated April 14, 2010, at 12:08 a.m., attached
as Annex 6 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at
4:21 p.m. (JB-NonWaiver00127806); see also Official Transcript of Deposition of Joseph Berlinger, dated
Nov. 5, 2010, at 260:5-6, 268:4, 287:10-17, attached as Annex 12 to Chevron’s Supplemental Motion for
Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (acknowledging that the scene with Dr. Berstain
was “troubling to the plaintiffs” and “upset” them and that “it is abundantly obvious if Dr. Beristain was a
part of Cabrera’s independent team, he couldn’t also be working with the plaintiffs”).
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assembled a team of experts” because “[t]here’s some detail here that is going to hurt
the case.” 185 A few months later, Mr. Fajardo wrote separately to state that these
scenes “are so serious that we can lose everything or a lot just because of those few,
miniscule images,” and again urged that they “be corrected or removed.” 186 In another
email, Mr. Fajardo, pleads with the filmmakers to remove scenes showing Mr. Beristain
and Mr. Maldonado: “Those two guys must not appear in the documentary at all!” 187
Mr. Fajardo emphasizes that if the two remain in the film, “the entire case will simply fall
apart on us.” 188 In further recognition of their damning effect, Mr. Donziger offered to
split the costs of making these deletions. 189 In addition to erasing evidence of their
fraudulent work with Mr. Cabrera, Mr. Donziger also wanted to minimize his contacts
with the Government, saying that inclusion of his quote that “we have just achieved
something important in the case, we are now friends with the President,” would be “just
devastating for the case in light of Chevron’s arguments.” 190 Mr. Donziger also
requested that his assessments of the Ecuadorian judiciary—such as “‘there are almost
no rules here’” and “‘it makes me sad that the courts are so utterly weak’”—be
“removed” from the film. 191 This telling new evidence confirms that plaintiffs were fully
aware of the impropriety of their actions and actively attempted to conceal them.
185 Notes from Steven Donziger to Joseph Berlinger, dated October 27, 2008, attached as
Annex 5 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21
p.m. (offering his comments and suggestions on Crude) (JB01522).
186 E-mail from Pablo Fajardo to Mike Bonfiglio et al., dated Jan. 22, 2009, at 1:03 p.m., attached
as Annex 6 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at
4:21 p.m. (JB-NonWaiver00091322).
187 E-mail from Pablo Fajardo to Mike Bonfiglio, dated Dec. 25, 2008, at 10:19 p.m., attached as
Annex 4 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21
p.m. (MB-STIP00097061).
188 E-mail from Pablo Fajardo to Mike Bonfiglio, dated Dec. 25, 2008, at 10:19 p.m., attached as
Annex 4 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21
p.m. (MB-STIP00097061).
189 E-mail from Mike Bonfiglio to Joseph Berlinger, dated Jan. 28, 2009 at 3:58 p.m., attached as
Annex 6 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21
p.m. (JB-NonWaiver00009135); Official Transcript of Deposition of Joseph Berlinger, at 294:25-295:11,
Nov. 5, 2010, attached as Annex 12 to Chevron’s Second Supplemental Motion for Terminating
Sanctions, filed Dec. 8, 2010 at 4:21 p.m.
190 Notes from Steven Donziger to Joseph Berlinger, dated October 27, 2008, attached as
Annex 5 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21
p.m. (offering his comments and suggestions on Crude) (JB01523); see also the e-mail from Mike
Bonfiglio to Joseph Berlinger, dated December 17, 2008, at 1:16 a.m., attached as Annex 6 to Chevron’s
Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (JB-
NonWaiver00063288).
191 Notes from Steven Donziger to Joseph Berlinger, dated October 27, 2008, attached as
Annex 5 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21
p.m. (offering his comments and suggestions on Crude) (JB01520-21); see also the e-mail from Mike
Bonfiglio to Joseph Berlinger, dated December 17, 2008, at 1:16 a.m., attached as Annex 6 to Chevron’s
Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (JB-
NonWaiver00063288); Official Transcript of Deposition of Joseph Berlinger, at 72:11-19, Oct. 28, 2010,
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The illicit nature of plaintiffs’ conduct has also been acknowledged in newly
obtained sworn testimony from one of the plaintiffs’ own attorneys who claims to not
have been directly involved in these events.
Similarly, when Joseph Kohn, a U.S. lawyer whose law firm was funding the litigation in
Lago Agrio, learned of the evidence that the plaintiffs had colluded with Mr. Cabrera, he
wrote in a letter to the plaintiffs’ team:
We now find out that there may have been extensive, systematic contacts,
orchestrated by Donziger, and with your participation and agreement, which
have threatened the entire case. . . .
I am also shocked by recent disclosures concerning potentially improper and
unethical, if not illegal, contacts with the court-appointed expert, Mr. Cabrera,
which are coming out in the U.S. discovery proceedings being initiated by
Chevron. Not only did we not know of any of this conduct, it is contrary to the
assurances that Donziger and you made to us on numerous occasions. . . .
Finally, and most disturbing and shocking to our firm are recent revelations in
Chevron’s discovery of the extent of contacts with Cabrera, which our firm
had no knowledge of and never would have approved. Indeed, it appears to
me that the outright refusal to provide us with any information about Cabrera’s
report were intended to hide from us what may have been outrageously
improper conduct. 194
(continued…)
attached as Annex 12 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m.
194 Letter from Joseph Kohn to Pablo Fajardo, et al., dated Aug. 9, 2010, at 2, 5, 6, attached as
Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30
p.m. (DONZ00026949)
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And even Mr. Donziger himself predicted “that the information Stratus may provide will
be damaging to the case and highly embarrassing.” 195
The fact that the plaintiffs’ attorneys had long planned to corrupt the global expert
investigation is further demonstrated by testimony from Mark Quarles and Richard
Kamp, the plaintiffs’ consultants at another firm, E-Tech. Mr. Quarles testified that the
plaintiffs’ attorneys had discussed with him the possibility of E-Tech “actually collecting
the samples and writing the Peritaje Global report.” 196 Although he claimed that E-Tech
ultimately did not fulfill this role, he admits to having “spent a considerable amount of
time defining what a scope of work would be for Peritaje Global” with Stratus, which
ended up filling the role of ghostwriter of the Cabrera report instead of E-Tech. 197
Mr. Quarles testified that he “would not have” “agreed to write the global expert report
for Mr. Cabrera and allow him to submit it under his name.” 198 Likewise, Mr. Kamp
testified that he “probably would not have been involved in a process” that involved
ghostwriting a report for a court-appointed expert, because he would “not understand
the legality of it.” 199 He added that it is not appropriate for a “court appointed expert to
take word for word [what] somebody gives them and say this is my work.” 200
Furthermore, among the individuals who assisted in the secret preparation of the
Cabrera Report was Luis Villacreces, 201 who had been nominated by the plaintiffs to
serve as an expert during the judicial inspections process. His involvement in the
fraudulent and collusive process of writing the Cabrera Report on the plaintiffs’ behalf
suggests that he was anything but independent of the plaintiffs. This only raises further
questions about how the plaintiffs—in addition to falsifying the expert reports of
195 Letter from Joseph Kohn to Pablo Fajardo, et al., dated Apr. 13, 2010, attached as Annex 1 to
Chevron’s Third Supplemental Motion for Terminating Sanctions, filed on Dec. 20, 2010 at 4:30 p.m.
(informing the attorneys of a recent communication with Steven Donziger) (DONZ00036530).
196 Official Transcript of Second Deposition of Mark Quarles at 240:24-241:1, dated Oct. 12, 2010,
attached as Annex 11 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
197 Official Transcript of Second Deposition of Mark Quarles at 248:15-17, dated Oct. 12, 2010,
attached as Annex 11 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
198 Official Transcript of Second Deposition of Mark Quarles at 377:8-11, dated Oct. 12, 2010,
attached as Annex 11 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m. At the time, Mr. Quarles told
Mr. Donziger that he would “only certify the contents of a report if it is done under my direct supervision.”
Mr. Donziger responded to this concern: “Don’t be so schematic. This is Ecuador.” E-mail from Richard
Kamp, dated Feb. 12, 2007 at 3:49 p.m., forwarding e-mail from Steven Donziger to Mark Quarles, dated
Feb. 7, 2007 at 4:04 p.m., attached as Annex 7 to Chevron’s Second Supplemental Motion for
Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (KAMP-NATIVE001786 to 001793, 001790).
199 Official Transcript of Deposition of Richard A. Kamp at 476:4-8, dated Oct. 7-8, 2010, attached
as Annex 13 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
200 Official Transcript of Deposition of Richard A. Kamp at 252:6-13, dated Oct. 7-8, 2010,
attached as Annex 13 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
201 E-mail from Douglas Beltman to Steven Donziger, dated Mar. 11, 2008, at 2:22 p.m.
(STRATUS-NATIVE067410, 067412-18), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010
at 5:20 p.m.
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Dr. Charles Calmbacher—may have deceived and defrauded the Court during the
judicial inspections.
This involvement of Stratus was improper, not only because Mr. Cabrera never
disclosed the assistance or communications, but also because Stratus had been hired
by plaintiffs, was paid by the plaintiffs, and worked on their behalf. Chevron never had
an opportunity to review, much less respond to, the Stratus’ work. Nor was my client
given the opportunity to learn the full extent of the now evident ex parte communications
and apparent collaboration between Mr. Cabrera and the plaintiffs’ representatives.
These emails and testimony confirm what Chevron already suspected based on
the final product submitted by Mr. Cabrera. Mr. Cabrera’s report itself contains citations,
cost estimates, figures, and technical annexes that could only have been provided ex
parte by the plaintiffs’ representatives. 202 Indeed, in his supplemental report, the author
of the Cabrera Report cut-and-pasted significant portions of the plaintiffs’ submissions
almost verbatim. 203 Further, linguistic analysis by Dr. Teresa Turell revealed that, as
has since been confirmed, much of the Cabrera Report was not written by Mr. Cabrera
at all, but rather was translated from English, or was written in Spanish by a native
speaker of English—a language which, as far as we know, is not spoken by Mr. Cabrera
or anyone else on his team. 204 Portions are translations of a report written by Stratus;
many details in the Cabrera Report are identical to details in the Stratus report,
including the entire proposed potable water system. 205 The Stratus emails illustrate why:
because Stratus wrote the report.
Evidence obtained by my client also demonstrates that whoever drafted the
supplemental Cabrera Report used the database prepared for this trial by Selva Viva,
the entity set up by the Frente and the plaintiffs’ lawyers in order to fund and facilitate
this case. One of the plaintiffs’ environmental consultants, Laura Belanger, recently
produced the database in response to a subpoena issued by a court in the United
States, and forensics experts have confirmed that the database was the source for
annexes and other data used in Cabrera’s supplemental report. 206 In fact, entire tables
202 See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14
p.m., Record at 141082-203, 141101. In addition, because Mr. Cabrera is a geologist and had no
lawyers on his team, the discussions of U.S. law in his submissions could only have come from the
plaintiffs’ U.S. attorneys. Id.
203 See Chevron’s comprehensive brief on the fundamental problems with Mr. Cabrera’s reports
(Cabrera Omnibus), filed May 21, 2010 at 4:35 p.m., at 14-17, Record at 178982-179041, 178995-98; see
also Annex 23 of Expert Cabrera’s Response to Plaintiffs’ Questions regarding Global Report at 17-18,
filed Nov. 17, 2008, at 8:25 a.m., Record at 152949-153000, 152966-67.
204 Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 13-14, Record at 178982-179041,
178994-95; Chevron’s Rebuttal to Fajardo’s Response at 18-19, filed July 12, 2010 at 2:39 p.m.
205 See Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 12-15, Record at 178982-179041,
178993-96; Chevron’s Supplemental Motion to Strike Cabrera Reports at 7-9, filed June 4, 2010 at 8:35
a.m.
206 Chevron’s Supplemental Motion to Strike Cabrera Reports at 5-6, filed June 4, 2010 at 8:35
a.m.
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from the supplemental report’s annexes were adopted wholesale from the Selva Viva
database, and some in fact include Selva Viva and Frente logos. 207
The involvement of the plaintiffs’ counsel and supporters was particularly
significant with respect to the health survey upon which Mr. Cabrera’s report relied in
assessing almost US$10 billion in damages for “excess” cancer deaths. Carlos
Beristain and Adolfo Maldonado began their work even before Mr. Cabrera was
appointed as an expert, and conducted the surveys on behalf of the Frente and in
conjunction with the plaintiffs’ legal and technical teams. 208 Dr. Beristain himself has
claimed that he began his research at least eight months before Mr. Cabrera began his
official duties, and has acknowledged publicly that he was working in coordination with
the Frente, the sole designated beneficiary of a possible judgment against Chevron. 209
This is confirmed by evidence that the Frente paid for the survey to be conducted by
Acción Ecológica and Oil Watch International which also support the plaintiffs—the
original survey form in fact bears the names of these organizations. 210
Footage taken for the documentary film Crude shows Mr. Donziger talking about
using Dr. Beristain to do a study for the global damages report, as early as January
2007. 211 And video also shows that contact between the plaintiffs and Dr. Beristain
continued after Mr. Cabrera’s appointment. 212 On film, Dr. Beristain can be seen
collaborating with plaintiffs’ team leaders, Messrs. Donziger and Fajardo, and with
representatives of Acción Ecológica and the Frente, Adolfo Maldonado and Luis Yanza,
at a focus group meeting to collect survey data from the area residents. 213 On camera,
Adolfo Maldonado describes the survey as being part of a project—run by “a group of
people along with . . . the Front, Acción Ecológica and another series of
organizations”—in order to “really analyze, systematize what that impact [of oil
production] has been and, based on that, determine which—what may need to be . . .
a.m.
179001-05.
207 Chevron’s Supplemental Motion to Strike Cabrera Reports at 5-6, filed June 4, 2010 at 8:35
208 Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 20-24, Record at 178982-179041,
209 See Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 20-23, Record at 178982-179041,
179001-04; Chevron’s Objections to Expert Cabrera’s Supplemental Report at 7, filed Apr. 24, 2009 at
2:21 p.m., Record at 156327-35, 156333.
210 E-mail from Luis Yanza to Adolfo Maldonado (but sent to Adolfo Callejas), attached as Annex
F to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at
141268-73, 141270.
211 See transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16,
2010 at 4:35 p.m., (CRS 159-00-09).
212 See transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16,
2010 at 4:35 p.m., (CRS 302-00-04).
213 Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 12, 23-24, Record at 178982-179041,
178993, 179004 -05.
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corrected.” 214 Maldonado explicitly states that the meeting is for the global assessment,
and Dr. Beristain himself confirms this. 215 Tellingly, the plaintiffs’ counsel attempted to
hide this evidence of Dr. Beristain’s bias and partiality by asking the producer of Crude
to edit this footage out of the film. 216
Moreover, as shown in prior submissions, Mr. Cabrera took improper payments
from the plaintiffs’ representatives, who also actively assisted him in his fieldwork. 217
The plaintiffs’ counsel even acknowledged that two of the plaintiffs’ representatives,
Donald Moncayo (a member of the Frente) and Silvio Jaya (a member of the plaintiffs’
technical team), “facilitate[d] the work of the expert and his team.” 218 In addition, their
coordination is further confirmed by the fact that, although Mr. Cabrera made no public
announcement that he had completed and was going to file his work, plaintiffs’
representatives alerted the Crude film crew, which was present when Mr. Cabrera went
to the Lago Agrio courtroom to deliver his first report. 219
This overwhelming evidence of collusion stands in clear violation of this Court’s
repeated orders, and in irreconcilable conflict with Mr. Cabrera’s own representations
and statements made by the plaintiffs regarding his independence. This Court’s orders
indicate that Mr. Cabrera had to be “responsible for the entire report, the methodology
used, for the work done by his assistants, etc.” 220 Mr. Cabrera was to “perform his work
in an impartial manner and independently with respect to the parties, as well as comply
with the requirements contained in the Code of Civil Procedure for the appointment and
performance of experts.” 221 The Court further ordered Mr. Cabrera to “observe and
ensure . . . the impartiality of his work, and the transparency of his activities as a
professional appointed.” 222 In short, the Court directed Mr. Cabrera to “maintain strict
independence with regard to the parties.” 223
214 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., (CRS 301-00-06).
215 See transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16,
2010 at 4:35, (CRS 301-00-06; CRS 342-01-03; CRS 342-01-07).
216 Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 24, Record at 178982-179041, 179005.
217 See Chevron’s Motion regarding Expert Cabrera’s Bias, Support of Plaintiffs and Negotiations
with the Amazon Defense Front, filed Dec. 18, 2008, at 3:12 p.m., Record at 153712-13, 153712-13; see
also Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 11-12, 29, Record at 178982-179041, 178992-
93, 179010.
218 Ruling Expected in Texaco’s Trial, El Comercio (Feb. 20, 2009).
219 See Crude Documentary (Joe Berlinger, First Run Features) (publicly available).
220 Order of Oct. 3, 2007, filed at 11:00 a.m., Record at 132846-56, 132850v.
221 Order of Oct. 3, 2007, filed at 11:00 a.m., Record at 132846-56, 132848v.
222 Order of Oct. 3, 2007, filed at 11:00 a.m., Record at 132846-56, 132851v.
223 Order of Oct. 3, 2007, filed at 11:00 a.m., Record at 132846-56, 132853v.
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Mr. Cabrera repeatedly promised to abide by these standards. In June 2007,
when he was sworn in as the sole expert for the performance of the assessment of all
the fields operated by the former Petroecuador-TexPet Consortium, Mr. Cabrera
promised to perform his duties “with complete impartiality and independence vis-à-vis
the parties.” 224 He assured the Court that he did “not have any relation or agreements
with the plaintiffs” and that it was “an insult against [him] that [he] should be linked with
the attorneys of the plaintiffs.” 225 Mr. Cabrera also declared that he performed his
expert examination with “absolute impartiality, honesty, transparency and
professionalism.” 226 Even after filing his report, he stated he was “an honest man with
nothing to hide” and emphatically declared to the Court, “I am not, nor will I be, subject
to the views or whims of either of the parties.” 227
Plaintiffs have also represented that they had no special or improper relationship
with Mr. Cabrera. For example, Mr. Fajardo stated that the idea that Mr. Cabrera was
working for plaintiffs was “simply ridiculous.” 228 He also brushed aside my client’s
assertion that there was “some type of collusion between plaintiffs and Cabrera” by
calling this notion a “ridiculous affirmation.” 229
Of course, the evidence described above reveals a reality very different from the
representations of Mr. Cabrera and the plaintiffs. In open defiance of this Court’s orders,
plaintiffs and Mr. Cabrera, beginning as early as March 2007 (and likely even earlier
given that they first had to secure Mr. Cabrera’s complicity in the scheme and Judge
Yánez’s agreement to appoint Mr. Cabrera), closely colluded to prepare, draft, and
present a biased and fraudulent report and pass it off as an “independent” assessment
of environmental harm and risk to human health in the area analyzed in the expert
report.
All of this conduct by Mr. Cabrera violated several provisions of Ecuadorian law.
First and foremost, “[t]he expert . . . is not the representative of the parties in the lawsuit,
and his job is not to do something on behalf of someone else, but rather to issue his
own opinion on a technical question.” 230 Additionally, the expert is an assistant to
224 Transcript of Swearing In of Expert Richard Cabrera, filed June 13, 2007 at 9:45 a.m., Record
at 130169-69v, 130169v.
225 Cabrera Submission, filed July 23, 2007 at 10:15 a.m., Record at 131972.
226 Cabrera Submission, filed Oct. 11, 2007 at 2:20 p.m., Record at 133178-80, 133178.
227 Cabrera Response to Chevron’s Deposition Request of Sept. 17, 2008, filed Oct. 8, 2008, at
10:50 a.m., Record at 151316-27, 151323.
228 Plaintiffs’ Motion filed Apr. 4, 2008 at 5:15 p.m., Record at 140166-140167. In related litigation
in the United States, plaintiffs’ consultant Mark A. Quarles filed a declaration indicating that Mr. Cabrera
acted as an independent court expert. See Deposition of Mark A. Quarles at 121, Sept. 1, 2010, attached
as Annex 21 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m. Mr. Quarles later admitted that had he
known that “Mr. Cabrera was working directly with the plaintiffs,” he would not have signed such a
declaration. Id. at 122.
229 Plaintiffs’ Motion, filed June 4, 2008 at 5:38 p.m., Record at 140466.
230 DE SANTO, Victor, Expert Evidence, Editorial Universidad, Buenos Aires, 1997, p.62.
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justice who must act with absolute impartiality, truthfully submitting the technical reports
requested of him, regardless of the origin of his appointment and without any interest
other than to contribute to clarifying the facts so that a lawsuit can be decided in the
fairest and most lawful manner possible. 231
In addition to violating these principles, Mr. Cabrera also ran afoul of other legal
provisions:
• Because an expert is an assistant to justice and above all to the judge, he
must act in accordance with the same principles and obligations as those
imposed in a general manner on judges; in other words, he must act in an
impartial, disinterested manner and seek the historical and procedural
truth. Article 9 of the Organic Judiciary Code prohibits the judge from
meeting ex parte with one of the parties, so this obligation applies to the
expert’s work as well and has been breached in this lawsuit.
• Mr. Cabrera has violated Article 251 of the Code of Civil Procedure, which
required him to act with honesty and probity in carrying out the expert
investigation and writing the related expert report “because the expert who
acts as an auxiliary to the Judge assumes special responsibility, which
can even result in civil and criminal liability if he fails to act faithfully within
the scope of the law, by attempting to mislead the Judge.” 232
• Mr. Cabrera has violated Article 257 of the Code of Civil Procedure, by
failing to comply with his obligation to properly support each and every
one of his statements and conclusions in his expert report. “In his report,
the expert must provide the court with the elements that led him to the
conclusions he arrives at . . . the expert opinion is only worth as much as
the reasons supporting it. Expert reports must indicate the background
and explanations that justify their opinion on the subject matter on which
the reports are issued.” 233
• Mr. Cabrera has violated the principle that evidence must be made public,
as provided for in Article 120 of the Code of Civil Procedure, by refusing to
turn over the surveys and documents on which he based his expert
opinion and by refusing to identify the people who helped him prepare and
draft the report.
231 DE SANTO, Victor, Expert Evidence, Editorial Universidad, Buenos Aires, 1997, p.72.
232 Carlita Rosenda Ordoñez vs. Gustavo Germán Granja Villacís, Case 83-99, Judgment of the
Supreme Court of Justice, First Civil and Commercial Division, Feb. 11, 1999, published in Official
Gazette 159, Mar. 29, 1999.
233 WITTHAUS, Rodolfo E. Expert Evidence. Editorial Universidad. Buenos Aires. 1991. p. 53.
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• Mr. Cabrera breached his obligation to act in a manner consistent with the
purpose of the expert assessment and the instructions given by the judge.
If an expert goes beyond the objective and scope of his appointment, his
report lacks probative value, because the expert has not complied with his
mandate. This obligation is set forth in Article 260 of the Code of Civil
Procedure.
• Mr. Cabrera also violated his duty to provide additional explanations and
to answer the comments on and challenges to his report. 234 This violation
is particularly egregious because it is now evident that Mr. Cabrera was
secretly working in collusion with the plaintiffs’ representatives and paid
consultants.
• In sum, Mr. Cabrera acted as an adversary to my client, not a neutral and
independent auxiliary to the court.
Meanwhile, by their actions, the plaintiffs’ counsel have also violated numerous
legal provisions. Article 335(9) of Ecuadorian Organic Code of the Judiciary prohibits
attorneys from “[e]xercising the right of action or contradiction in abusive, malicious or
temerarious fashion, violating the principle of good faith and loyalty by means of
practices such as submission of deformed proofs, use of tricks, and bad faith . . . .”
Plaintiffs’ counsel have also neglected their affirmative duty to act at all times “in
keeping with principles of loyalty, integrity, truthfulness, honesty and good faith.” 235
Indeed, the malfeasance committed here is likely criminal. The outtakes from Crude,
which show plaintiffs’ counsel and consultants meeting with Mr. Cabrera before his
appointment as expert to ensure that the scope, content, and drafting of his report
would support plaintiffs’ case, plainly implicate the prohibition on collusion, which “was
established for the purpose of judging and sanctioning fraudulent procedures between
two or more persons having the purpose of inflicting damages to third parties.” 236
Assuming that plaintiffs must have made side payments or promises of side payments
to obtain Mr. Cabrera’s complicity in this collusive scheme, they would be in violation of
the prohibition on bribing experts found in Article 359 of the Criminal Code. Article 359
also prohibits the knowing use of “false witnesses or experts in a legal act.” More
generally, Article 296 of the Criminal Code provides punishment for “[a]ny person who,
in the course of a civil or administrative proceeding, . . . for the purpose of inducing the
judge into error, artificially changes the state of things, places or people.”
234 See GHERSI, Carlos, Responsibility of an Expert, p. 9.
235 Article 330(2) of the Organic Code of the Judiciary.
236 The Law on Judgment of Collusion, First Consideration for Enacting the Law; see also id. art.
1. The Supreme Court of Justice has stated that collusion has two principal elements: “(a) that there
should exist a fraudulent trial, proceeding, or an act or contract from both parties participating therein with
the intent or full knowledge that it is done to the detriment of a third party. . . . and (b) that there should
exist real damages against a third party such as deprivation of ownership, possession or tenancy of some
personal property or some real rights on real property, or other rights legally pertaining to that person.”
Criminal Division, Mar. 17, 1998, published in Judicial Gazette, year XCVIII, Series XVI, no. 11, p. 2877.
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The involvement of the plaintiffs’ representatives in Mr. Cabrera’s work—
especially when viewed in the context of Mr. Cabrera’s fabricated US$27 billion figure—
suggests strongly that Mr. Cabrera did little more than act as a “front man” for the
plaintiffs’ lawyers. The plaintiffs’ repeated and vehement denials of such collusion is a
further violation of Ecuadorian law and demonstrates a manifest consciousness that
their underlying collaboration was unlawful. Through their complicity, Mr. Cabrera and
the plaintiffs have effectively stripped my client of its right to defense and to a neutral,
fair, and impartial trial. In light of the unimpeachable evidence of pervasive fraud
described above, this Court has no choice but to nullify the proceedings and dismiss
this case. This step is necessary because no judgment consistent with due process
could possibly be issued given the comprehensive fraud and deceit perpetrated against
my client. Any sanction short of dismissal would trivialize plaintiffs’ incredible
misconduct.
2.2.2 The Fraudulent Nature of Mr. Cabrera’s Report Is Evident from Its Many
Flaws and Errors
The many flaws and scientific errors that taint Mr. Cabrera’s fieldwork are
described infra §§ 3.4.3-3.4.6. Among other things, Mr. Cabrera’s inability and failure to
engage in serious scientific sampling work; his selective choice of soil and
“groundwater” samples; and his use of laboratories selected by the Frente, all confirm
that his work was intended to serve the plaintiffs and not this Court.
Mr. Cabrera’s damages assessments, which as described were in fact written by
plaintiffs’ attorneys and consultants, supra § 2.2.1, are similarly tainted with blatant
errors, exaggerations, and non sequiturs. For example:
• As described infra § 3.4.5, Mr. Cabrera’s report found that Chevron should
pay US$9.5 billion in compensation for excess cancer deaths, but never
identified a single individual who died of cancer. Instead, Mr. Cabrera’s
report relied on the biased Beristain and Maldonado survey, see supra
§ 2.2.1, which was conducted with the participation of the plaintiffs’
attorneys and simply asked leading survey questions to villagers, the
answers to which were never submitted to the court or medically verified.
• In its soil remediation calculations, Mr. Cabrera’s ghostwritten report
grossly overestimates both the volume of soil requiring remediation and
the unit cost of remediation under conditions presented at the site. First,
Mr. Cabrera’s report ignores comparable, and much lower, remediation
costs per unit. Petroecuador has been remediating pits in the former
concession for a number of years, yet Mr. Cabrera’s report estimates his
costs per cubic meter at more than ten times what Petroecuador is paying
for remediation in the same area. It draws its cost estimates not from any
prior Ecuadorian remediation work, or even from petroleum sites
elsewhere in the world, but from the remediation of sites affected by
chlorinated solvents, creosote (used to preserve lumber), and other
substances which are far more difficult to address than weathered crude.
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Second, to exaggerate his volume figures and compound the overestimate
of soil remediation costs, Mr. Cabrera’s report assumes a pit depth greater
than the evidence can support and makes the unfounded and arbitrary
supposition that each pit has a large "halo" of contaminated soil around it.
Neither plaintiffs nor Mr. Cabrera conducted the methodical sampling
necessary to determine the existence and/or extent of any such halo. 237
• Mr. Cabrera’s report estimated the cost of repairing supposed “ecological”
damages at nearly US$1.7 billion; in this category it included work to
restore areas previously covered by natural rainforests to their former
state, including places where roads and other infrastructure had been
constructed. These infrastructure improvements were planned and
approved by the Government of Ecuador, and in many cases inhabitants
not only requested the work but also demanded it at public protests. 238
• Mr. Cabrera’s report recommends that Chevron be forced to build a new
potable-water system at a cost of US$428 million, even though drinking
water samples taken as part of this trial clearly show contamination by
untreated sewage and not by hydrocarbons attributable to activities of the
Consortium. 239
• The Cabrera Report also assesses hundreds of millions of dollars to pay
for a cultural center, a new health care system, and modernization of
Petroecuador’s oil infrastructure, without any attempt to link these
damages to any operations of TexPet. 240
The errors in, and lack of scientific basis for, Mr. Cabrera’s fieldwork and
conclusions in his report illustrate the fraudulent nature of his role in this case. The
Cabrera Report should be stricken from the record because it lacks evidentiary value.
Without it, there is no evidence supporting the plaintiffs’ allegations, and therefore this
action should be dismissed. Notably, the plaintiffs’ submission of September 16, 2010,
at 5:15 p.m., contains no new data, sampling, or analysis, but rather relies heavily on
the tainted data that the plaintiffs had themselves created and then delivered to
Mr. Cabrera for inclusion in his report. See infra §§ 3.1, 3.5.
237 Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 40, Record at 178982-179041, 179021;
see also HINCHEE, Robert E., Rebuttal of the Method Used by Mr. Cabrera to Determine the Supposed
Necessity and Cost of Remediation at 20-21, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148129-173, 148148-149.
238 Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 41, Record at 178982-179041, 179022.
239 Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 41-42, Record at 178982-179041,
179022-23.
240 Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 42-43, Record at 178982-179041,
179023-24.
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2.3 The Case Was Irremediably Tainted by Judge Núñez’s Rulings Against
Chevron
Judge Juan Núñez, who presided over this trial for over a year and issued many
important rulings which have placed irreparable burdens on my client, has been
implicated in an attempted bribery scheme that undermines the integrity of these
proceedings in their entirety. 241 During discussions among the apparent conspirators in
the scheme, Judge Núñez was videotaped affirming his intention to issue a judgment in
the plaintiffs’ favor and promising that any appeals of that judgment would be a
“formality.” 242 Purported representatives of the Ecuadorian Government were also
videotaped explaining that Government attorneys would assist Judge Núñez in crafting
the decision. 243 The attempted bribery scheme, the apparent involvement of the same
Ecuadorian Government that has repeatedly pressured the Court to rule against
Chevron, see infra § 3.7, and the Court’s failure to investigate the videotape evidence
and its denial of Chevron’s motion to annul Judge Núñez’s biased rulings, 244 all
demonstrate that Chevron cannot receive a fair trial, and that any judgment against
Chevron would be irrevocably tainted by political pressure, corruption, and a basic lack
of due process.
Chevron was given, and then provided to the proper Ecuadorian authorities,
audiovisual recordings of four meetings where the bribery scheme was discussed. An
expert analysis of the tapes ordered by the National Judicial Council concluded that
these tapes are indeed authentic and unaltered. 245 The recordings were made, without
Chevron’s knowledge, by prospective environmental remediation contractors in May
and June 2009 after receiving a bribe demand from persons purporting to represent the
Ecuadorian Government and Alianza PAIS, the Government's political movement. 246
The first and last of the recorded meetings took place in one of Alianza PAIS
241 Ruling of the Plenary Session of the Judiciary Council, dated Oct. 27, 2010 at 2:15 p.m.,
Disciplinary Case No. 008-2009-P-CPJS (decision in the case against Judge Juan Evangelista Núñez
Sanabria), attached as Annex 14 to Chevron’s motion filed Dec. 20, 2010 at 5:50 p.m.
242 See Transcript of the June 5, 2009 Meeting between Judge Juan Evangelista Núñez Sanabria,
Juan Pablo Novoa Velasco, Diego Fernando Borja Sánchez, and Wayne Douglas Hansen, attached as
Annex 5-C to Chevron’s Motion in Support of Judge Núñez’s Recusal, filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158285-322, 158301-02, 158317, 158319.
243 See Transcripts of the May 11, 2009 Meetings between Carlos Patricio García Ortega, Pablo
Almeida, Aulo Gelio Servio Tulio Ávila Cartagena, Rubén Darío Miranda Martínez, and Diego Fernando
Borja Sánchez, attached as Annex 5 to Chevron’s Motion in Support of Judge Núñez’s Recusal, filed
Sept. 9, 2009 at 4:20 p.m., Record at 158218-255, 158252-53, 158252-53.
244 Number 13 of Order of Oct. 21, 2009 at 4:05 p.m., Record at 159061-63v, 159062.
245 See Expert Report of Hugo Rekalde D. Submitted to the Executive Director of the Judiciary
Council, attached as Annex 9 to Chevron’s Motion, filed July 13, 2010 at 8:48 a.m.; see also Chevron’s
Motion at 5-6, filed July 13, 2010 at 8:48 a.m.
246 Letter from T. Cullen, Jr. to the Prosecutor General, attached to Chevron’s Motion regarding
Judge Núñez bribery videos, filed Nov. 17, 2009 at 2:18 p.m., Record at 159290-95, 159290 (the Spanish
translation is included at Record at 159293-95).
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headquarters in Quito. The recordings show the purported Government representatives
offering to hire potential remediation contractors to conduct a portion of the
environmental remediation in Ecuador that Chevron would be required to fund as a
result of a judgment against Chevron in this case. The remediation work would be
awarded, however, only if the potential contractors paid a US$3 million bribe to be split
as follows: US$1 million to Judge Núñez, US$1 million to those who claimed to be
representatives of the Presidency of the Republic, and US$1 million to the plaintiffs. 247
The purported Government representatives who participated in the meetings,
and their stated positions, included Carlos Patricio García Ortega (Patricio García),
apparently a political coordinator for Alianza PAIS; Juan Pablo Novoa Velasco (Pablo
Novoa), a lawyer supposedly representing the Government; Aulo Gelio Servio Tulio
Ávila Cartagena (Aulo Gelio Ávila), a lawyer close to Judge Núñez; Pablo Almeida, an
environmental remediation contractor; and Rubén Dario Miranda Martinez (Rubén
Miranda), assistant to Patricio García. 248 In the recordings, these purported
representatives state that:
(i)
The Ecuadorian Government managed Judge Núñez in his conduct of the
case; 249
(ii) “Chevron is going to lose the trial”; 250
(iii)
The Government will provide lawyers to help craft the opinion against
Chevron; 251
247 Letter from T. Cullen, Jr. to the Prosecutor General, attached to Chevron’s Motion regarding
Judge Núñez bribery videos, filed Nov. 17, 2009 at 2:18 p.m., Record at 159290-95, 159290 (the Spanish
translation is included at Record at 159293-95); see also Transcript of June 22, 2009 Meeting between
Carlos Patricio García Ortega, Rubén Darío Miranda Martínez, and Diego Fernando Borja Sánchez,
attached as Annex 5-D to Chevron’s Motion in Support of Judge Núñez’s Recusal, filed Sept. 9, 2009 at
4:20 p.m., Record at 158323-64, 158326-27.
248 See Transcripts of the May 11, 2009 and June 5, 2009 Meetings between Carlos Patricio
García Ortega, Pablo Almeida, Aulo Gelio Servio Tulio Ávila Cartagena, Rubén Darío Miranda Martínez,
and Diego Fernando Borja Sánchez, attached as Annexes 5-A and 5-C to Chevron’s Motion in Support of
Judge Núñez’s Recusal, filed Sept. 9, 2009 at 4:20 p.m., Record at 158218-255, and 158285-322,
respectively, 158218, 158285.
249 See, e.g., Transcripts of the May 11, 2009 Meeting between Carlos Patricio García Ortega,
Pablo Almeida, Aulo Gelio Servio Tulio Ávila Cartagena, Rubén Darío Miranda Martínez, and Diego
Fernando Borja Sánchez, attached as Annex 5-A to Chevron’s Motion in Support of Judge Núñez’s
Recusal, filed Sept. 9, 2009 at 4:20 p.m., Record at 158218-255, 158224, 158240-44.
250 See Transcript of the June 5, 2009 Meeting between Judge Juan Evangelista Núñez Sanabria,
Juan Pablo Novoa Velasco, Diego Fernando Borja Sánchez, and Wayne Douglas Hansen, attached as
Annex 5 to Chevron’s Motion in Support of Judge Núñez’s Recusal, filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158285-322, 158302.
251 Transcript of the May 11, 2009 and June 5, 2009 Meeting between Carlos Patricio García
Ortega, Pablo Almeida, Aulo Gelio Servio Tulio Ávila Cartagena, Rubén Darío Miranda Martínez, and
Diego Fernando Borja Sánchez, attached as Annex 5 to Chevron’s Motion in Support of Judge Núñez’s
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(iv)
(v)
The president’s legal advisor has instructed Judge Núñez on how to route
the judgment money; 252 and
Patricio García will deliver Judge Núñez’s share of the bribe money to
him. 253
According to the audiovisual recordings, in order to secure payment of the
requested bribe, the purported Government representatives sought to assure the
contractors that Judge Núñez would find Chevron liable―even though the trial was
ongoing and evidence still being presented―and that the judgment would require
Chevron to pay the Government billions of dollars for environmental remediation. To
demonstrate to the contractors that the result of the trial had been preordained, the
purported Government representatives took the contractors to meet with Judge Núñez
twice during the period of time between the two meetings at the Alianza PAIS
headquarters. 254 The first meeting with Judge Núñez took place in the Judge’s office at
the courthouse in Lago Agrio, and the second took place in a hotel in Quito. In the
recordings of these meetings, Judge Núñez confirms that:
(vi) He will find Chevron guilty; 255
(vii)
The claim is for US$27 billion, and he will decide whether to award more
or less; 256
(continued…)
Recusal filed Sept. 9, 2009 at 4:20 p.m., Record at 158218-255, and 158285-322, respectively, 158252-
53; see also Transcript of the June 5, 2009 Meeting between Judge Juan Evangelista Núñez Sanabria,
Juan Pablo Novoa Velasco, Diego Fernando Borja Sánchez, and Wayne Douglas Hansen, attached as
Annex 5 to Chevron’s Motion in Support of Judge Núñez’s Recusal, filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158285-322, 158319.
252 Transcript of the May 11, 2009 Meeting between Carlos Patricio García Ortega, Pablo
Almeida, Aulo Gelio Servio Tulio Ávila Cartagena, Rubén Darío Miranda Martínez, and Diego Fernando
Borja Sánchez, attached as Annex 5-A to Chevron’s Motion in Support of Judge Núñez’s Recusal filed
Sept. 9, 2009 at 4:20 p.m., Record at 158218-255, and 158285-322, respectively, 158224.
253 Transcript of June 22, 2009 Meeting between Carlos Patricio García Ortega, Rubén Darío
Miranda Martínez, and Diego Fernando Borja Sánchez, attached as Annex 5-D to Chevron’s Motion in
Support of Judge Núñez’s Recusal ,filed Sept. 9, 2009 at 4:20 p.m., Record at 158323-64, 158329.
254 Letter from T. Cullen, Jr. to the Prosecutor General, attached to Chevron’s Motion regarding
Judge Núñez bribery videos, filed Nov. 17, 2009 at 2:18 p.m., Record at 159290-95, 159294.
255 Transcript of the June 5, 2009 Meeting between Judge Juan Evangelista Núñez Sanabria,
Juan Pablo Novoa Velasco, Diego Fernando Borja Sánchez, and Wayne Douglas Hansen, attached as
Annex 5-C to Chevron’s Motion in Support of Judge Núñez’s Recusal filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158285-322, 158319.
256 Transcript of the June 5, 2009 Meeting between Judge Juan Evangelista Núnez Sanabria,
Juan Pablo Novoa Velasco, Diego Fernando Borja Sánchez, and Wayne Douglas Hansen, attached as
Annex 5-C to Chevron’s Motion in Support of Judge Núñez’s Recusal filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158285-322, 158319.
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(viii) The award will be made in part to the Government; 257
(ix)
(x)
He will issue the ruling in October or November 2009; 258 and
The appeal process to the full chamber of the provincial court will be a
formality. 259
The participation of Judge Núñez in these meetings, and his apparent
consignment of judicial power to the purported Government representatives to dictate
the decision, irremediably taint and nullify the instant case against Chevron. Even Mr.
Donziger admitted internally that the “judge should not have been in the meetings
period.” 260
After the discovery of these tapes, Judge Núñez requested that he be permitted
to excuse himself voluntarily from the case on plainly inapplicable and benign grounds,
thereby avoiding admission of any impropriety on his part. 261 Upon learning of his
action, on September 9, 2009, at 4:20 p.m., Chevron requested that the Subrogate
President not accept Judge Núñez’s voluntary excusal, as it lacked valid legal grounds,
and instead sanction Judge Núñez in conformity with the applicable regulations and the
seriousness of the offense. 262 In short, Chevron posited that Judge Núñez excused
himself from this trial as a way to avoid taking responsibility and to obtain impunity
against the extremely serious acts that my client had denounced with the public
authorities. After Judge Núñez refused to support his request to excuse himself with
documentation, it was initially denied, but later granted. 263 He has thus been allowed to
withdraw on vague and ambiguous grounds, thereby avoiding responding to, and
257 Transcript of the June 5, 2009 Meeting between Judge Juan Evangelista Núnez Sanabria,
Juan Pablo Novoa Velasco, Diego Fernando Borja Sánchez, and Wayne Douglas Hansen, attached as
Annex 5-C to Chevron’s Motion in Support of Judge Núñez’s Recusal filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158285-322, 158293.
258 Transcript of the June 5, 2009 Meeting between Judge Juan Evangelista Núnez Sanabria,
Juan Pablo Novoa Velasco, Diego Fernando Borja Sánchez, and Wayne Douglas Hansen, attached as
Annex 5-C to Chevron’s Motion in Support of Judge Núñez’s Recusal filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158285-322, 158316.
259 Transcript of the June 5, 2009 Meeting between Judge Juan Evangelista Núnez Sanabria,
Juan Pablo Novoa Velasco, Diego Fernando Borja Sánchez, and Wayne Douglas Hansen, attached as
Annex 5-C to Chevron’s Motion in Support of Judge Núñez’s Recusal filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158285-322, 158317.
260 Attached as Annex 1 to Chevron’s Fourth Supplemental Motion for Terminating Sanctions,
filed Dec. 22, 2010 at 5:45 p.m. (DONZ00019514).
261 Judge Núñez Recusal Order, filed on Sept. 3, 2009 at 5:10 p.m., Record at 158177.
262 See Chevron’s Motion in Support of Judge Núñez’s Recusal, filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158420-27.
263 See Decision regarding Judge Núñez’s Recusal, issued by the Provincial Court of Justice of
Sucumbíos, filed Sept. 28, 2009 at 10:00 a.m., Record at 158724.
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preventing Chevron from proving, the gross improprieties he apparently committed in
violation of Chevron’s rights.
There has not been any investigation of other aspects of the videotapes, a
glaring omission given the existence of other evidence that corroborates both the
identities of the participants on the tapes and the involvement of the Government in
managing this case. For example, subsequent to the recordings, Mr. Garcia appeared
on a radio program, admitting that he was “in charge” of a branch of the Alianza País
movement and that he met with Diego Borja. 264 Court filings in a different case also
identify Mr. Garcia as a “public employee” belonging to the political office of the Alianza
País movement. 265 Additionally, Mr. Novoa’s relationship with the Ecuadorian
Government was confirmed when, in November 2009, Novoa was appointed to perform
public functions as a bank liquidator, a potentially lucrative position often given as a
patronage appointment under the purview of the Superintendence of Banks. 266
Even prior to involvement in this apparent bribery scheme, Judge Núñez made
no secret of the fact that he was biased in favor of the plaintiffs. The Economist, for
example, observed that “[t]he judge in Lago Agrio, Juan Núñez, . . . has made no secret
of his sympathy for the plaintiffs.” 267 The New York Times similarly has noted that
Judge Núñez’s “sympathies… are not hard to discern,” and that “he appears likely to
rule against Chevron this year.” 268 These publications followed a public demand from
the current President for “expedited treatment of cases that are of interest to Ecuador”
during a two-hour luncheon with the members of the National Court of Justice. 269
Consistent with his videotaped activities and his statements to the press, prior to
his withdrawal from this case, Judge Núñez issued unsupportable rulings against
264 See Transcript of Interview of Carlos Patricio García, La Clave, La Luna Radio Station, Sept. 4,
2009, attached as Annex to Chevron’s motion filed on July 13, 2010 at 8:48 a.m.
265 Robles v. Garcia, Pichincha Second Landlord-Tenant Court, Cause: 601 V.P. 2009, July 21,
2009.
266 See Andres v. State Attorney General, Case No. 2009-0827, Third Civil Court. Evidence also
confirms the position of other participants. For example, Rubén Dario Miranda sent Mr. Borja an email
with instructions for wiring money into a bank account of a company registered as a vendor of
Petroecuador. See E-mail from Rubén Dario Miranda to Diego Borja re: cuenta, June 22, 2009 2:20:27
p.m., attached as Annex 10 to Chevron’s Motion, filed July 13, 2010 at 8:48 a.m. Additionally, the
Prosecutor General confirmed that another participant, Aulo Servio Avila, was the property registrar in
Lago Agrio. See Transcript of Press Conference for Prosecutor Washington Pesántez, dated Sept. 4,
2009, attached as Annex 10 to Chevron’s Motion, filed July 13, 2010 at 8:48 a.m. .
267 Justice or Extortion: The Hounding of an American Oil Company, The Economist, May 23-29,
2009, at 42, attached as Annex 6 to Chevron’s Motion in Support of Judge Núñez’s Recusal filed Sept. 9,
2009 at 4:20 p.m., Record at 158365-69, 158366, 158368.
268 In Ecuador, Resentment of an Oil Company Oozes, N.Y. Times, May 15, 2009, attached as
Annex 7 to Chevron’s Motion in Support of Judge Núñez’s Recusal filed Sept. 9, 2009 at 4:20 p.m.,
Record at 158371-74, 158371.
269 CAMPANA M., Joffre, Interference in the Administration of Justice, El Universo (Mar. 5, 2009).
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Chevron which are unreasoned, violate rules of procedure, and deprive Chevron of its
due process rights. Most significantly, the judge refused to examine the patent
irregularities in the work of the court-appointed “expert,” Richard Cabrera. 270 In addition,
Judge Núñez arbitrarily sanctioned one of Chevron’s attorneys for simply appealing the
Court’s rulings. 271 Judge Núñez even went so far as to order Petroecuador to cease its
own belated remediation efforts in the region, so as to further bloat a judgment against
Chevron. See infra § 7.3.1. On September 11, 2009, at 5:50 p.m., Chevron filed a
motion pursuant to Article 9 of the Civil Code 272 to declare Judge Núñez’s actions
null. 273 But the Court denied this motion, and a subsequent motion filed on September
17, 2009 at 5:43 p.m., thereby permitting Judge Núñez’s tainted rulings to stand. 274 A
proceeding that includes those biased rulings, and all of the other fundamental flaws
discussed below, is fraudulent and cannot be a legitimate basis for any judgment
against Chevron.
2.4 The Constitutional Guarantee of Due Process Demands That This Case
Be Dismissed
As my client has requested, in light of the unimpeachable evidence of pervasive
fraud and deceit, this Court has no choice but to nullify the proceedings and terminate
the case immediately, in acknowledgement of the audacity and bad faith of plaintiffs’
attorneys, and to avoid being complicit in the plaintiffs’ fraud. This step is necessary
because no judgment consistent with due process could possibly be issued given that
the comprehensive fraud and deceit perpetrated against my client must be severely
punished and sanctioned, and any sanction short of dismissal of the case and
prosecution of the plaintiffs would trivialize the frightening and appalling misconduct on
the part of the plaintiffs and their attorneys and backers.
Courts in the United States have recognized and the declared the plainly
fraudulent nature of the plaintiffs’ conduct. One court remarked that “[t]he release of
many hours of the outtakes [from the documentary Crude] has sent shockwaves
through the nation’s legal communities, primarily because the footage shows, with
unflattering frankness, inappropriate, unethical and perhaps illegal conduct. In the film
itself, Attorney Donziger brags of his ex parte contacts with the Ecuadorian judge,
confessing that he would never be allowed to do such things in the United States, but, in
156691-91v.
270 See, e.g., Number 9 of Order of May 28, 2009, filed at 11:00 a.m., Record at 156691-93v,
271 Number 11 of Order of Aug. 13, 2009, filed at 2:30 p.m., Record at 157929-31v, 157930-30v.
272 Article 9 provides: “Acts prohibited by law shall be null and void, unless an effect other than
nullity is expressly provided for in the event of a violation.”
273 Chevron’s Motion for Annulment of All Rulings Entered by Judge Núñez, filed Sept. 11, 2009
at 5:50 p.m., Record at 158430-38, 158435-38.
159062.
274 See Order of Oct. 21, 2009, filed at 4:05 p.m., at numeral 13 and 17, Record at 159061-63v,
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Ecuador, everyone plays dirty.” 275 The same court concluded that “[t]he outtakes
support, in large part,” my client’s “contentions of corruption in the judicial process.” 276
Another court stated that while it was “unfamiliar with the practices of the Ecuadorian
judicial system, . . . the concept of fraud is universal, and that what has blatantly
occurred in this matter would in fact be considered fraud by any court.” 277 “If such
conduct does not amount to fraud in a particular country,” that court reasoned, “then
that country has larger problems than an oil spill.” 278
With respect to the burden of proof, the evidence of the plaintiffs' malfeasance
and fraud provided by Chevron leaves the plaintiffs with no valid evidence to support
their claims. As explained, the plaintiffs tainted the entire judicial-inspections process
by falsifying and submitting to the Court false and forged reports purporting to be written
by Dr. Charles Calmbacher, one of the experts nominated by the plaintiffs themselves.
In fact, Dr. Calmbacher did not write those reports and did not agree with the
conclusions that the plaintiffs falsified. In light of that proven fraud, all of the reports
submitted by the plaintiffs’ nominated experts during the judicial-inspection process are
cast into doubt and cannot be deemed credible or worthy of evidentiary weight without a
275 In re Chevron Corp., No. 10-MC-21JH/LFG (D.N.M. Sept 1, 2010), at 3-4, attached as Annex
26 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m. Almost without exception, “every single [judge]”
who has reviewed the evidence submitted to this Court has been “shocked to the core of his professional
being.” See Hearing Transcript at 27:19-21, In re Chevron Corp., No. 10 MC 00002 (LAK) (S.D.N.Y. Sept.
23, 2010), submitted as Annex 19 to Chevron's Motion, filed Oct. 29, 2010, at 5:20 p.m. Some have even
suggested that the conduct of plaintiffs’ attorneys would violate U.S. criminal law. See, e.g., id. at 24:21-
22 (“Now, do the phrases Hobbs Act, extortion, RICO, have any bearing here”).
276 In re Chevron Corp., No. 10-MC-21JH/LFG (D.N.M. Sept 1, 2010), at 4, attached as Annex 26
to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m. Other courts have reached similar conclusions.
See In re Chevron Corp., No. 10 MC 00001 (LAK) (S.D.N.Y. Sept. 7, 2010), at 3, attached as Annex 27 to
Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., (“[T]he outtakes [from Crude] contain substantial
evidence of misconduct in and relating to the Ecuadorian litigation.”).
277 Chevron Corp. v. Champ, Nos. 1:10mc 27, 1:10mc28 (W.D.N.C. Aug. 30, 2010), at 12,
attached as Annex 25 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
278 Chevron Corp. v. Champ, Nos. 1:10mc 27, 1:10mc28 (W.D.N.C. Aug. 30, 2010), at 12,
attached as Annex 25 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m. Additional courts have
reached similar conclusions. Hearing Transcript at 44, In re Chevron Corp., No. 10-2675(SRC) (D.N.J.
June 11, 2010), attached as Annex 23 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., (“In short,
the provision of materials and information by consultants on the litigation team of the Lago Agrio plaintiffs
in what appears to be a secret and an undisclosed aid of a supposedly neutral court-appointed expert in
this Court's view constitutes a prima facie demonstration of a fraud on the tribunal.”); Hearing Transcript
at 58, In re Chevron Corp., No. 10CV1146-IEG(WMC) (S.D. Cal. Aug. 27, 2010), attached as Annex 28 to
Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., (“The two orders from the Ecuadorian tribunal were
very clear that Mr. Cabrera was to give to the Court his independent intellectual work, and while he may
adopt certain findings and conclusions of other experts, that adoption may occur only after he has
independently assessed the integrity and validity of those findings and conclusions and notified the Court
of such adoption, the reason for his adoption, and the process by which he came to the conclusion that
such adoption was consistent with his own duties to the Court. It appears that Mr. Cabrera has failed to
do that . . , and Chevron has a right to explore . . . whether indeed the crime fraud exception is implicated
as directly as the evidence suggests it has been. ‘No fraud is more odious than an attempt to subvert the
administration of justice.’").
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complete investigation, particularly given the fact that my client has made claims of
essential error and fraud with respect to them, many of which have been denied; and
others, in violation of an express legal rule, have not been resolved within the deadlines
imposed by Article 258 of the Code of Civil Procedure. And the report submitted in
Mr. Cabrera’s name has now been revealed as an utter fraud—the product of collusion
that began before he was even appointed as an expert by this Court; written by plaintiffs,
their counsel, and their consultants to reach a result that was outlined even before
Mr. Cabrera began the show of his inept field work. Their efforts were designed solely
to impose massive and unprecedented liability on my client even in the face of express
acknowledgement of the absence of evidence supporting their allegations. Indeed,
Mr. Cabrera’s report suggested that Chevron was responsible for millions and millions
of dollars for groundwater remediation without obtaining or analyzing a valid
groundwater sample. No judgment can be based upon this “evidence.”
In a last-ditch effort to save their case, the plaintiffs proposed—and the Court
accepted—a plan for the parties to submit ad hoc reports addressing the cost of
remediation. But the plaintiffs’ submission containing their assessment of alleged
damages does nothing to remedy the fraud that has irreparably tainted their “evidence.”
Indeed, it contains no new data and relies on no new samples; it merely recycles the
opinions and concepts from the Cabrera Report, inflating its already outrageous and
arbitrary determinations. Instead, it merely accepts as fact the wholly unreliable data
produced by the experts they nominated to perform the fraudulent judicial inspections
and the collusion by Mr. Cabrera, using those corrupted figures to support further
inflated damage estimates with no basis in law or fact. See infra §§ 3.1, 3.5. (As the
plaintiffs’ former counsel, Mr. Bonifaz, pointed out years ago in a statement that remains
true, “[a]ll the numbers about billions of dollars that get passed around are purely for PR
purposes.” 279 ) Any award issued as a result of these irreparably tainted proceedings
would be a gross violation of the universal norms of due process included in Ecuador’s
constitution.
The plaintiffs have also insisted that their case is “unaffected” because there
exists other evidence in their favor. 280 There exists no such other competent evidence.
See infra Chapter VII. But, in any event, the contention ignores that courts can and do
legitimately infer, from the very fact that a party saw the need to resort to fraud, that the
party has no confidence in the strength of his case. The plaintiffs were unable to prove
their case using honest evidence and truly independent analysis, and therefore had to
corrupt the judicial process through the knowing submission of falsified (fabricated)
evidence and through the illicit collusion with Mr. Cabrera and secret ghostwriting of his
report. That misconduct, which the plaintiffs have never even bothered to try to defend,
hardly leaves their other evidence “unaffected.”
279 E-mail from Cristóbal Bonifaz to Alberto Wray, et al. dated Dec. 12, 2004 at 2:34 p.m.,
attached as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20,
2010 at 4:30 p.m. (DONZ0027310).
280 Plaintiffs’ Motion, filed Oct. 14, 2010 at 11:30 a.m., at 3-4.
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To the contrary: When a party commits a fraud upon the Court, the Court cannot
allow that party to evade the consequences by arguing that the tainted testimony or
evidence was not critical to their case or that their suit has merit nevertheless. Having
gone to “considerable trouble and expense” to perpetrate their fraud, the plaintiffs are
“in no position now to dispute its effectiveness.” 281 Had they any confidence in the
strength of their own case, they would not have resorted to these disgraceful tactics:
“Truth needs no disguise.” 282 Where, as here, the fraud goes to the merits and core of
plaintiffs’ case, there is no way for the plaintiffs to escape the consequences of their
misconduct by pointing to “other” evidence. As a U.S. court explained, 283 “[h]istory is
not so glibly to be erased. Once a litigant chooses to practice fraud, that misconduct
infects his cause of action, in whatever guises it may subsequently appear.” 284 The
plaintiffs cannot “simply walk away” from what was done with Mr. Cabrera, now that
they have been caught “red-handed.” 285
In any event, the plaintiffs have not walked away from Mr. Cabrera. Even their
filing of September 16, 2010, at 5:15 p.m., which came after the plaintiffs’ fraud had
been exposed, relied on the same fraudulent and tainted evidence, derived from
Mr. Cabrera and from the judicial inspections. See infra § 3.5. It is not surprising that
the plaintiffs have been unable to abandon the Cabrera Report, because
notwithstanding their current claims, they have long pronounced that it was the critical
element of their proof in this case. In their submissions to this Court, the plaintiffs
predicted that “[t]he expert examination, in turn, will prove the magnitude of the damage
and the remediation,” 286 and as such, that it constitutes “a proceeding of special
importance.” 287 In private, the plaintiffs were even more candid. Mr. Donziger has
written that the Cabrera Report “is the most important thing in the case, the basis for
them to pay millions of dollars.” 288 Outtakes from the documentary Crude show
plaintiffs’ attorneys referring to the Cabrera Report as “the most important evidence we
have in the case.” 289 They viewed it as “huge for us.” 290 And, when the Cabrera Report
281 Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 247 (1944)
282 Id.
283 Aoude v. Mobil Oil Corp., 892 F.2d 1115 (1st Cir. 1989).
284 Id. at 1121.
285 Id. at 1120-21.
286 Plaintiffs’ Motion regarding Procedures for Global Assessment Phase, filed Apr. 26, 2007 at
6:00 p.m., Record at 129589-91, 129590.
287 Plaintiffs’ Motion To Dismiss Chevron’s Motion of Mar. 2, 2007 regarding Global Assessment,
filed Mar. 9, 2007 at 5:25 p.m., Record at 126732-34, 126733.
288 E-mail from Steven Donziger to Pablo Fajardo, et al., dated Feb. 16, 2007 at 4:54 p.m., at 2,
attached as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20,
2010 at 4:30 p.m. (DONZ00024227).
289 Transcript of Crude Outtakes, attached as Annex 1 of Chevron Motion, filed Sept. 16, 2010 at
4:35 p.m. (CRS 187-01-02).
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was submitted, Mr. Donziger told the press that the case was at a “critical and important
moment” in light of the report. 291 One of the plaintiffs’ consultants, Mr. Douglas Beltman,
who was paid by the plaintiffs to secretly write the “main” report, told his colleagues that
it was “probably the single most important technical document for the case.” 292
Having repeatedly touted the Cabrera Report as the key and central evidence in
their case against Chevron, the plaintiffs can hardly now argue that the Cabrera Report
is irrelevant or that they are still in a position to win the case even after their fraudulently
manufacturing the “most important” evidence in the case. The plaintiffs’ prior remarks
fatally belie their eleventh-hour effort to avoid liability for the gross misconduct.
Moreover, apart from confirming that the plaintiffs lack any real evidence to
support their claims, the falsified Calmbacher reports and the revelations contained in
outtakes from the film Crude, demand a severe sanction for the plaintiffs’ reckless and
malicious procedural conduct, abusing the judicial process and violating the law and this
Court’s orders. It is particularly important for this Court to follow the money in and
where it is spent: the plaintiffs have paid fees directly for the services of experts,
including Mr. Cabrera, 293 who have acted in collusion with the plaintiffs and from whose
results the plaintiffs, the Frente, and the Government hope to receive exorbitant sums of
money, supposedly for environmental remediation work, based on the compensation
they expect Chevron to pay. Following those payments, it is clear who is paying for
what and what they hope to get, yet this Court—as it does whenever faced with
indefensible conduct by the plaintiffs—has wholly ignored it. Of course the scope and
seriousness of the misconduct compel nullification of the proceedings and termination of
this trial by its complete dismissal, as well as prosecution of the plaintiffs and their
attorneys.
The Ecuadorian Constitution mandates that “[n]oncompliance with court orders
shall be punished by the law.” 294 The judge also holds the express and inherent
(continued…)
290 Transcript of Crude Outtakes, attached as Annex 8 to Chevron’s Motion filed Dec. 22, 2010 at
5:45 p.m. (CRS 200-01-03).
291 Transcript of Crude Outtakes, attached as Annex 8 to Chevron’s Motion filed Dec. 22, 2010 at
5:45 p.m. (CRS 475-00-03).
292 E-mail from Douglas Beltman to Science Group, et al., dated Feb. 22, 2008, at 6:24 a.m.
(STRATUS-NATIVE043232), attached as Annex 10 to Chevron Motion, filed Oct. 29, 2010 at 5:20 p.m.
293 Mr. Cabrera recognized “the fees agreed to by the Frente de Defensa Amazónico [were]
already…paid to [him]” in a communication that was sent to the then-President of the Court, Judge
Germán Yánez and later hurriedly withdrawn from the file by permission of that same judge. Letter from
Expert Cabrera to President Germán Yánez of the Superior Court of Justice of Nueva Loja, Feb. 7, 2007,
attached as Annex to Chevron’s Motion filed Jul. 2, 2007 at 9:00 a.m., Record at 130663-72, 130672. See
Attestation by Liliana Suárez Clerk of the Superior Court, filed Jun. 4, 2008 at 8:00 a.m., Record at
140413-16, 140413 (providing attestation as ordered in Order of May 30, 2008 at 10:30 a.m.). See also
Order, filed May 30, 2008 at 10:30 a.m., Record at 140405-12, 140410v.
294 1998 Const., art. 24(17); 2008 Const., art. 75.
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competence to dismiss proceedings as an appropriate sanction for serious and
repeated noncompliance with the Constitution and other laws. It “must . . . reject” any
“clear fraud against the law” as well as any court filing that reflects “clear abuse of
right.” 295 In particular, “distorted evidence as well as all types of abuse of right . . . shall
be penalized.” 296 A case cannot simply be permitted to proceed once it has become
evident that a party has grossly abused the judicial process. Surely this is so where the
party’s misconduct is, as here, also criminal in nature.
Not only does Ecuadorian law require that the plaintiffs’ fraud be sanctioned in
the strongest possible fashion, but international principles of due process require the
same, under the ancient legal maxim “dolus et fraus una in parte sanari debent,”
meaning, deceit and fraud must always be remedied. 297 International tribunals have
acted in accord. For example, in the Lehigh Valley Railroad Co. Case, the tribunal set
aside its decision when it learned that a party had filed false pleadings and suborned
perjury. The court declared that when a tribunal has been “misled by fraud and
collusion on the part of the witnesses . . . [n]o tribunal worthy [of] its name or of any
respect may allow its decision to stand if such allegations are well-founded.” 298 And, of
course, courts across the world refuse to recognize foreign judgments that are tainted
by fraud. Recent examples from the United States include Transportes Aereos Pegaso,
S.A. de C.V. v. Bell Helicopter Textron, Inc., 299 involving a solicited bribe; Manez Lopez
v. Ford Motor Co., 300 involving inappropriate contacts with court officials, and de la Mata
v. Am. Life Ins. Co., 301 involving a plaintiff who hid evidence. Courts in other countries
follow the same rule. 302
In this case, the plaintiffs have meticulously engineered a fraud, threatening,
ignoring, and jeopardizing the very validity of the judicial process. Your Honor should
exercise your authority to sanction that outrageous conduct by immediately terminating
295 Ecuadorian Organic Code of the Judiciary, art. 130.
296 Ecuadorian Organic Code of the Judiciary, art. 26
297 PELOUBET, S.S. A Collection of Legal Maxims in Law and Equity. George S. Diossy. New
York. 1880. p. 58. No. 480.
298 Lehigh Valley Railroad Company v. Germany, Decision and Opinion of Mixed Claims
Commission, United States and Germany, dated Dec. 15, 1933, published in Reports of International
Arbitral Awards, United Nations, 2006, Volume III, at 189-90; see also La Abra Silver Mining Co. Case
and Benjamin Weil Case, published in MOORE, John Bassett, History and Digest of the International
Arbitrations to which the United States has been a Party. Volume II. Washington. 1898. p. 1333-39.
299 Transportes Aereos Pegaso, S.A. de C.V. v. Bell Helicopter Textron, Inc., 623 F. Supp. 2d 518,
534-38 (D. Del. 2009).
300 Manez Lopez v. Ford Motor Co., 470 F. Supp. 2d 917, 922-29 (S.D. Ind. 2006).
301 de la Mata v. Am. Life Ins. Co., 771 F. Supp. 1375, 1388-89 (D. Del. 1991).
302 GERHARD, Walter and BAUMGARTNER, Samuel P. Recognition and Enforcement of
Foreign Judgments Outside the Scope of the Brussels and Lugano Conventions. Kluwer Law
International. The Hague. 2000. p. 31.
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this case by completely dismissing the complaint and ordering the prosecution of the
plaintiffs.
Moreover, as my client has requested, this Court should conduct a complete,
exhaustive, and transparent investigation into the fraudulent activities of the plaintiffs.
As even the plaintiffs’ lead counsel, Mr. Fajardo, has publicly admitted, my client has
presented “over 50 thousand pages of information questioning the judicial process and
its validity,” all of which “have to be analyzed by Judge Zambrano now.” 303 The Office
of the Public Prosecutor should also be informed, so that it can conduct its own
investigation regarding the possibly criminal activities described above. Such egregious
acts of deceit and corruption simply cannot go unpunished.
CHAPTER III.
CHEVRON HAS BEEN DENIED DUE PROCESS
AND ITS CONSTITUTIONAL RIGHTS
“Due process” as a fundamental guarantee has continually evolved throughout
Ecuadorian constitutional history. 304 It has been defined as
a set of substantive and procedural rights possessed by
persons and not dependent on the State, recognized by the
Constitution, that seek to protect liberty and to ensure that
anyone being tried shall enjoy guarantees for exercising the
right to defend themselves and for obtaining from judicial
and administrative entities a fair, prompt and transparent trial.
Guarantees related to due process are covered by Article 24
of the [Constitution], and according to the principle of legal
hierarchy, prevail over any subsidiary law, procedural
practice or authority. 305
The right to due process and its various guarantees are aimed at ensuring,
among other things, (i) the right to a defense (i.e., ensuring both parties have equal
access to the court, equal access to witnesses and experts, and equal opportunity to
present their claims, defenses, and relevant evidence to prove their claims and rebut
the opposing party’s claims); (ii) the right to be judged by a “natural judge” (i.e., judges
that act independently, impartially, and competently); and (iii) the openness of trials (i.e.,
ensuring that all fact-finding be conducted transparently, that, among others, the experts
provide all data that they rely upon, and respond to the questions posed to them).
These rights have been incorporated into the Constitutions of 1978, 1998, and 2008
303 Interview of Pablo Fajardo, EcuadorInmediato Radio, El Poder de la Palabra, Dec. 20, 2010 at
7:00 p.m.
304 See, e.g., Article 76 of the Constitution; Article 24 of the 1998 Constitution; Article 19(16) of
the 1978 Constitution.
305 CORRAL, Fabián, Due Process, El Comercio, Nov. 9, 2006, at A3 (discussing the 1998
Constitution).
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which, according to Santiago Andrade Ubidia, give “a new role to the judge, as
guarantor of . . . the rights and guarantees established in the Constitution.” 306 In this
trial, each and every one of these basic guarantees has been violated or ignored
throughout this lawsuit, as shown and summarized below.
As discussed here, Chevron has been denied its right to due process through a
pattern of unlawful, improper, and unfair orders that should be declared null and void.
These orders lack the necessary reasoning and have deprived Chevron of its basic
entitlement to defend itself before independent and impartial judges. Among the most
egregious of these orders was that of August 2, 2010, at 9:00 a.m., in which the judge,
using the ploy of ruling sua sponte, arbitrarily and without stating the reasons for his
decision, ordered the parties to file an unlawful "legal brief" on the economic criteria and
the economic valuation for repairing the (alleged) "damage." The provisions of that
order not only indisputably constituted malfeasance of office by the judge, which cannot
be covered up, through which a priori, and before issuing a judgment, he not only took
for granted the very existence of the alleged damage that were supposed to be
evaluated, but also, through the supposed, poorly defined "legal brief" he created ad
hoc a new procedural step, which is not provided for in the law, through which not only
has an attempt has been made to cover up and dismiss the plaintiffs' malfeasance, bad
faith and fraud and the nullities that remove any weight from the evidence produced by
the plaintiffs through the judicial inspections and the global expert assessment, but that
order also validated, with the judge's active participation, the plaintiffs' attempt to
surreptitiously reintroduce their fabricated evidence, to “paper over” the procedural fraud
they had committed through expert reports that were falsified and the supposedly
independent expert, Mr. Cabrera, whose “independent” report they secretly authored.
In doing so, the judge cemented the constitutional violations my client has suffered as a
result of the fraud that has permeated this trial, as discussed in Chapter II, supra. In
addition to denying my client the right to be tried in accordance with the rule of law,
these serial violations of due process constitute nullities that require the entire
proceeding to be declared null and void. See infra Chapter IV.
3.1 The August 2, 2010 Providencia at 9:00 a.m. and the Submissions It
Authorized Violate Due Process and Aggravate the Fraud That Has
Pervaded These Proceedings
In response to the evidence of the plaintiffs' malfeasance and procedural fraud
detailed above, supra §§ 2.1, 2.2, which was reported to this Court in numerous
motions requesting action, Judge Ordóñez not only failed to terminate this action or
sanction the plaintiffs in any way for their evident and egregious misconduct intended
to deceive this Court in the manner that would be proper in this case, nor has he sent
copies of the record to the Prosecutor so that these crimes can be investigated and
punished; rather, he unexpectedly accepted the plaintiffs’ petition to invent a novel
306 ANDRADE UBIDIA, Santiago, The Judicial Branch in the current Constitution of the Republic,
published in The New Constitution of Ecuador: The State, Rights, and Institutions, Editorial Corporación
Editora Nacional, Quito, 2009, p. 240.
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mechanism—a second, ad hoc evidentiary period, wrongly referred to as a "legal
brief"—without legal basis, to attempt to whitewash their fraudulent conduct. But it is
obvious that nothing the plaintiffs request can be given any credence, let alone
overcome or substitute for the fraudulent, unreliable, and insufficient evidence that
they offered throughout this trial. 307 That order of August 2, 2010, at 9:00 a.m. violates
my client’s due process rights and demonstrated Judge Ordóñez’s clear partiality for,
and complete alignment with, the plaintiffs. Your Honor demonstrated the same bias
when you denied my client’s request to revoke the August 2 order. 308
The plaintiffs, recognizing that they could no longer rely on the results and
conclusions of the reports produced by the experts they had nominated to perform
judicial inspections, reports that contain indefensible basic errors, or continue to
defend the flawed and fraudulent Cabrera Report secretly composed by the plaintiffs’
own team of counsel and consultants, requested that this Court order the parties to
submit “a legal brief” that would analyze “the economic criteria applicable for
reparation of environmental damage.” 309 This order, which was issued over my
client’s strong objections, 310 additionally declared a priori that the judge would refuse
to consider any other filings made by the parties, thereby infringing the parties’ right to
request the clarification or even reversal of that order. It is, to say the least,
astounding and illogical that a court of law charged with discerning the truth would
wholly ignore irrefutable evidence that one of the parties had falsified evidence and
corrupted the principal expert’s work and instead, in the absence of any reliable or
sufficient evidence of the supposed harm or the existence of causation, call for an
assessment of damages from the parties. The fact that other courts—when reviewing
the same evidence—have concluded that the plaintiffs’ actions would “be considered
fraud by any court” further illustrates the utterly indefensible nature of this Court’s
action. 311 For this and a number of other reasons, the order of August 2, 2010, at 9:00
a.m. is indefensible and wholly improper, illegal and illegitimate.
First, an ad hoc “legal brief,” such as the one submitted by plaintiffs on
September 16, 2010, at 5:15 p.m., cannot cure the fundamental problems with the
Cabrera Report, namely its nullity and absence of evidentiary value, or the
malfeasance by the plaintiffs that has pervaded this trial. As discussed infra § 3.5, the
fact remains that the “economic criteria” formulated by plaintiffs are based largely on
the flawed and fraudulent evidence fabricated during the performance of the judicial
inspections, through the submission of reports lacking any basis, tainted with essential
errors and fraud, evidence that was produced with the manifest intent to make a
307 Order, filed Aug. 2, 2010 at 9:00 a.m.
308 Order, filed Oct. 11, 2010 at 5:17 p.m., numeral 29, at 5.
309 Plaintiffs’ Motion at 2, 8, filed June 21, 2010 at 2:20 p.m.; see also Order of Aug. 2, 2010 at
9:00 a.m.
310 See Chevron’s Rebuttal to Plaintiffs’ Response, filed July 12, 2010 at 2:39 p.m.
311 Chevron Corp. v. Champ, Nos. 1:10mc 27, 1:10mc28 (W.D.N.C. Aug. 30, 2010), at 12,
attached as Annex 25 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
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distorted presentation of the facts in dispute and to mislead the courts, in order to
harm my client, in the same way as the expert examination of all the fields operated by
the former Consortium, which like the judicial inspections, suffers from the same
defects indicated above. Repackaging or recycling the same evidence does nothing to
remedy plaintiffs’ misconduct and bad faith or the fraud that such misconduct brought
about. In fact, this Court’s decision to authorize the untimely, unnatural legal briefs
(used as a vehicle for the plaintiffs to reintroduce their fraudulent evidence and
attempt to make it legitimate) only made the nullity problems worse and violate even
more the constitutional right to due process to which my client is entitled. After all, the
fraudulent Cabrera Report was intended by the plaintiffs to serve as a substitute for
the 64 judicial inspections that they illegally waived, while those that had already been
performed were tainted by the plaintiffs' misconduct and suffered from defects of
essential error (which included acting with fraud) alleged by my client, the hearing of
which was arbitrarily denied in some cases, and improperly conducted in other cases
without being resolved to date. And then this Court gave plaintiffs a third bite at the
apple. In doing so, it ignored the fact that when previously provided with opportunities
to prove their case, plaintiffs first falsified the reports of their nominated expert, Dr.
Calmbacher, and then improperly worked with the “neutral” expert, Mr. Cabrera, to
craft a fraudulent report intended to lead the administration of justice into error and to
gravely harm Chevron. In light of those deceitful and fraudulent activities, this Court
cannot possibly give any probative validity to plaintiffs’ submission on September 16,
2010, at 5:15 p.m., in which they state their “economic criteria” for the assessment of
environmental damages. In any other system of justice, the plaintiffs would have been
prevented from continuing with the trial and their counsel would have been suspended
from practicing law. They certainly would not have been given the chance to
whitewash their malfeasance, take advantage of their own deceitful actions, and try to
salvage their case in an ad hoc eleventh-hour filing of new (recycled) evidence.
Second, without any investigation conducted in accordance with the legal rules,
which eliminates any doubts regarding the now public and probably criminal acts of
the plaintiffs in producing the fabricated "evidence" of damages alleged in their
complaint and which result solely from the Cabrera Report, it was absolutely improper
for the judge to order a quantification of the damages, or even worse, for him to
consider or give any merit to such quantification when he decides the case. A case
cannot go forward without competent or reliable evidence, both procedurally and in
terms of relevance to the issues in the case, that is not fabricated and does not
contain a distorted portrayal of the facts, and also proves the supposed damages
alleged in the complaint. Ordering the parties to file “legal briefs” on economic criteria
for purposes of reparation of damages without having first determined in a judgment
that such damages exist and that the defendant is liable for them and must be ordered
to redress them was not only an arbitrary decision that undeniably involves a rush to
judgment, but is contrary to reason, logic and law. Therefore, Judge Ordóñez
revealed his opinion in the case prematurely when he issued his order of August 2,
2010, at 9:00 a.m., which effectively constituted an advance opinion, which although it
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attempted to confirm, it recognized and could only be proper by assuming a priori,
both that damages occurred and that my client was liable to repair them. 312
Third, there was no procedural basis in law for the order’s call for supplemental
briefing on the issue of alleged damages. By law, judges must “administer justice by
applying the relevant legal provision.” 313 This Court is not empowered to invent novel
means of proof not envisaged in the law, let alone to require parties to collaborate in
the conduct of proceedings or procedural steps that are not contemplated or
authorized in the law. In accordance with the rule of law, and preexisting rules of
procedure that govern lawsuits in general and summary verbal proceedings (as in the
present case) in particular, the plaintiffs have had the opportunity to prove their case,
but they were unable to do so without illegally resorting to fabricated evidence and
distorted facts, with the intent to mislead the court and injure my client. The filings
requested by Judge Ordóñez in his order of August 2, 2010 at 9:00 a.m. are not the
way or the means to provide evidence, nor are they consistent with any type of
evidence admissible under the Code of Civil Procedure. These "legal briefs" cannot
validate or rectify the plaintiffs’ failure to submit any competent evidence, with a logical,
technical and scientific basis that also has probative value. 314
Fourth, Judge Ordóñez’s order of August 2, 2010, at 9:00 a.m., in refusing to
consider any additional filings beyond those ordered by the Court, was an
unconstitutional, illegal, and illegitimate restriction on my client’s right of petition. 315
This Court has a constitutional obligation to act impartially and ensure due process,
and my client is entitled to submit concrete evidence that its rights have been
egregiously violated during these proceedings. The violation of my client’s
constitutional rights by the order of August 2, 2010, at 9:00 a.m. is all the more striking
and astounding since Judge Ordóñez claimed that he would not even take into
account evidence which shows fraudulent acts on the part of the plaintiffs that would
merit annulment of this proceeding. In other words, the order attempted to cover up
and exclude evidence that shows the plaintiffs' corruption and the nullities that affect
the validity of this trial, as well as the now public misconduct of the plaintiffs to mislead
the judge; moreover, this order shows that the judge was not concerned in the
slightest about the legitimacy of his decisions; otherwise, he not only would not have
issued the order that did, but he would also have thoroughly investigated the evidence
of malfeasance, bad faith and procedural fraud and sanctioned it; similarly, in
compliance with his obligations as a judge, he would have declared the nullity of the
proceedings in all areas where appropriate. The order stating that this Court would
ignore any other submissions or petitions by the parties is yet another manifestation of
312 See Chevron’s Revocation Motion at 8-9, filed Aug. 5, 2010 at 4:30 p.m.
313 Article 129(2) of the Organic Code of the Judiciary.
314 See Chevron’s Revocation Motion at 5-8, filed Aug. 5, 2010 at 4:30 p.m.; see also Chevron’s
Motion to Recuse Judge Ordonez at 24 -25, filed Aug. 26, 2010 at 2:45 p.m.
315 See Chevron’s Revocation Motion at 9-10, filed Aug. 5, 2010 at 4:30 p.m.
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the fact that because of the acts and influence of the plaintiffs and other judges biased
in their favor, everything done in this trial lacks any credibility and is an utter sham.
In sum, this Court’s refusal to act upon, or even acknowledge, the overwhelming
evidence of the plaintiffs’ fraudulent and deceitful conduct is utterly indefensible. The
baseless and arbitrary order made on August 2, 2010 at 9:00 a.m. reflects the intense
and illegal social and political pressure to award the plaintiffs a large judgment,
heedless of the law or the facts. In order to preserve my client’s right to due process,
this case should have been terminated at once. Instead, the plaintiffs went
unpunished and, in fact, were given yet another chance to attempt to illegally salvage
their case, even though all of the evidence they submitted with regard to the supposed
environmental damages they allege in their complaint was falsified, illegal, and not at
all reliable. This was a gross violation of the most basic constitutional principles of
due process and the most basic principles of procedural law.
3.2 By Ignoring and Whitewashing the Plaintiffs’ Fraud, This Court Has
Exposed Its Bias
Judge Ordóñez, in steadfastly and arbitrarily refusing to acknowledge or even
investigate the plaintiffs’ pattern of malfeasance, and instead accepting a suggestion by
the plaintiffs (even though their acts as perpetrators of procedural fraud to mislead the
court and harm my client have come to light) and issuing an arbitrary, baseless order
revealed that he was not and could not be an impartial judge in this matter. For these
and other reasons, my client therefore sought and obtained his recusal from the case
according to the law. 316
The Constitution and the Organic Code of the Judiciary guarantee the impartiality
of the judge. 317 Principles of due process protect the same right. 318 An impartial judge
means one who will not “replace his judgment with considerations of friendship, enmity,
sympathy or dislike with respect to the litigants or their legal representatives, or with the
possibility of personal gain or illicitly offered gifts, or with political reasons.” 319
By issuing the orders described above, supra § 3.1—refusing to investigate the
plaintiffs’ actions despite concrete proof of fraud, and inventing an evidentiary process
solely to assist the plaintiffs in whitewashing their misconduct—Judge Ordóñez revealed
his lack of interest in the truth; his lack of intent to rule based on the facts and law; his
lack of regard for due process; and his lack of impartiality. Accordingly, my client
316 See Motion to Recuse Judge Ordóñez, filed Aug. 26, 2010 at 2:45 p.m.
317 2008 Const. art. 76(7)(k); Organic Code of the Judiciary, art. 9.
318 See 2008 Const. art. 76(7)(a).
319 DEVIS ECHANDÍA, Hernando. General Theory of Process. 3rd Edition, Editorial Universidad,
Buenos Aires, 2002, p. 129.
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equested that Judge Ordóñez be recused from these proceedings on account of his
evident bias. 320
But even this effort to obtain due process was thwarted by Judge Ordóñez’s
determination to rule against my client. Under Ecuadorian law, Judge Ordóñez had no
authority to order autos para sentencia in this proceeding while a recusal motion was
pending against him. See infra § 4.4. He lost all authority to act, by operation of law.
Nonetheless, Judge Ordóñez, knowing of the pending recusal motion against him,
ignored it and issued three orders, one of which declared autos para sentencia. 321 The
court clerk has certified that Judge Ordóñez, without any legal authority, withheld the
recusal motion and thus prevented it from being transmitted to the appropriate judge for
over two weeks. 322 The motion was finally transmitted to you, your Honor, who
accepted it and ordered Judge Ordóñez to respond to the allegations within twenty-four
hours. 323 In yet another improper and suspicious delay, nearly two weeks passed
before Judge Ordóñez was officially served with your order, during which time Judge
Ordóñez issued two of his three illegal orders, including autos para sentencia. 324
The fact that Judge Ordóñez knew that his jurisdiction had been suspended and
yet continued to exercise jurisdiction over the case violates Article 164 of the Organic
Code of the Judicial Function, Article 864 of the Code of Civil Procedure, and Article
256 of the Criminal Code. Even the plaintiffs’ representatives admitted that because
“[Judge] Ordóñez . . . kn[e]w about the recusal . . . he was prevented from making
rulings. . . . [Judge] Ordóñez has made two rulings while being recused which, by Law,
he cannot do.” 325 This fact also provides further evidence that Judge Ordóñez had
succumbed to the external pressure to rule against my client, regardless of the law or
the evidence. To hinder the recusal proceeding while entering key rulings sought by the
plaintiffs is inexcusable. His flagrant march towards judgment in the absence of
jurisdiction and in the face of clear evidence of plaintiffs’ fraud betray a clear bias and
constitute a serious violation of my client’s constitutional right to due process.
The fact that Judge Ordóñez was ultimately recused does not remedy the
violations discussed above. Because Judge Ordóñez was recused for his failure to
320 Recusal was also requested because the judge failed to rule on at least fifty motions within
triple the time allowed by law. See Code of Civil Procedure, art. 856(10); Chevron’s motion filed on Aug.
26, 2010 at 2:45 p.m.; Chevron’s motion filed at Oct. 15, 2010 at 2:25 pm.
321 Order of Sept. 17, 2010 at 8:05 a.m.
322 Recusal Case No. 002-2010, Order of Sept. 24, 2010 at 4:30 p.m.
323 Recusal Case No. 002-2010, Order of Sept. 16, 2010 at 11:10 a.m.
324 See Order of Sept. 17, 2010 at 8:05 a.m., (ordering autos para sentencia); see also Recusal
Case No. 002-2010, Order of Sept. 24, 2010 at 4:30 p.m., (ordering the court clerk to serve Dr. Leonardo
Ordóñez with the recusal motion in accordance with what was “ordered in the orders of September 16,
2010 at 11:10 a.m. and September 20, 2010 at 4:15 p.m.”); Recusal Case No. 002-2010, Response by
Judge Leonardo Ordóñez to Chevron’s motion for recusal, filed Sept. 28, 2010 at 5:58 p.m.
325 Interview of Luis Yanza, Radio Amazonas, Sept. 25, 2010.
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comply with procedural deadlines, this Court has never addressed his evident bias
against my client. The only remedy for such bias is the nullification of Judge Ordóñez’s
rulings, at least from August 2, 2010 onward.
Yet, apart from the temporary withdrawal of autos para sentencia, Your Honor
ratified the key orders issued by Judge Ordóñez instead of nullifying them, thus
evidencing the very same partiality that he displayed. 326 Like Judge Ordóñez, Your
Honor has refused (you will decide at the appropriate procedural time) to sanction the
plaintiffs for falsifying evidence, lying to this Court, intimidating and extorting judges
(Yánez) and ghostwriting Mr. Cabrera’s report, among other unlawful misconduct. Like
Judge Ordóñez, Your Honor has refused to commence any investigation into the
compelling evidence of these fraudulent activities. And like Judge Ordóñez, Your Honor
has instead rushed toward the premature declaration of autos para sentencia, zealously
hastening a judgment against my client even as new and shocking evidence of the
scope and extent of the plaintiffs’ fraud continues to be revealed. Thus, like Judge
Ordóñez, by acting in violation of express legal and constitutional principles and rules of
due process, Your Honor has not only revealed your bias against my client, but has also
violated my client's right to defend itself, and its right to receive a fair trial and be judged
by an independent, impartial judge.
3.3 The Truncated and Unreliable Judicial-Inspection Process
While recent events have provided irrefutable evidence of this Court’s refusal to
grant expeditious, timely and impartial judicial protection to safeguard my client’s rights
in this case, the truth is that my client has been denied due process from the very start
of these proceedings.
3.3.1 The Process for Judicial Inspections Established by This Court Was
Improperly Truncated
When this Court failed to act at the outset of this case on Chevron’s dispositive
motions, such as those regarding this Court’s lack of jurisdiction and the plaintiffs’ suit
against the wrong party, Chevron was forced to proceed to the evidentiary phase. 327 In
order to guarantee that all of the experts in the case would act in a transparent and
reliable manner, the parties spent several months negotiating a “procedural agreement”
that, once finalized, was filed with the Court. 328 This agreement included three
documents: (i) the Terms of Reference for the Participation of the Experts During the
Judicial Inspections; (ii) a Sample Collection Plan for the environmental evaluation of
the sites subject to judicial inspection; and (iii) an Analysis Plan outlining the analytical
326 See, e.g., Order, filed Oct. 11, 2010 at 5:17 p.m.
327 See Order Granting Judicial Inspections, filed Oct. 29, 2003 at 5:55 p.m., Record at 4681-84v,
4681-81v.
328 Reference Terms for Acts of the Experts During Judicial Inspections, filed Aug. 18, 2004 at
8:02 a.m., Record at 8470-74, 8550-51, approved by Order of Aug. 26, 2004, filed at 9:00 a.m., Record at
9051-53, 9052.
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protocols for analyzing samples taken during the judicial inspections sought by the
parties and ordered by the judge, within the evidentiary period. 329 The Court approved
this “procedural agreement” in an order issued on August 26, 2004, at 9:00 a.m.,
thereby making the agreement’s contents binding rules for the case. 330
Within this framework, the Court ordered that two experts participate in each of
the “judicial” inspections, one suggested by each party. 331 The Court also ordered that
if the respective party-appointed experts issued “divergent” reports, then such
divergence would be “settled” by experts appointed by the Court. 332 In addition, per the
plaintiffs’ request, the Court further ordered that the experts appointed for the
inspections also would participate in the “global” assessment of all of the fields operated
by the former Consortium, selecting from among those that participated in different
judicial inspections requested by the parties. 333
Pursuant to the procedural agreement approved by this Court and Article 252 of
the Code of Civil Procedure, each party suggested its own experts to participate in the
judicial inspections, while the Court, in turn, appointed the respective settling experts. 334
In two cases, however, the expert suggested by the plaintiffs, Dr. Charles Calmbacher,
did not submit an expert report (Sacha-6 and Sacha-21). (It was later revealed that Dr.
Calmbacher had been fired by the plaintiffs because his conclusions did not support
their allegations, and that the two reports submitted in his name, for Sacha-94 and
Shushufindi-48, had been forged by the plaintiffs. See supra § 2.1.)
In several other cases, the plaintiffs refused to nominate an expert at all. 335 In all
other cases, the reports submitted by the parties’ experts presented conflicting data,
conflicting interpretations of data, and conflicting conclusions, which should have
resulted in resolution by the court-appointed settling experts. 336 There was no
329 Reference Terms for Acts of the Experts During Judicial Inspections, filed Aug. 18, 2004 at
8:02 a.m., Record at 8470-551, 8470-72, 8475-8518, 8519-49.
330 Order of Aug. 26, 2004, filed at 9:00 a.m., Record at 9051-53, 9052.
331 See Reference Terms for Acts of the Experts During Judicial Inspections, filed Aug. 18, 2004
at 8:02 a.m., Record at 8470-8551, 8470-71; See also Order of Aug. 26, 2004, filed at 9:00 a.m., Record
at 9051-52v, 9052.
332 See Order of Sept. 16, 2004, filed at 9:30 a.m., Record at 79736-36v, 79736.
333 Plaintiffs’ Motion Requesting Judicial Inspections and Global Assessment, filed Oct. 29, 2003
at 5:45 p.m., Record at 4677-78, 4677v-78; Order of Oct. 29, 2003 at 5:55 p.m., Record at 4681-84v,
4683v-84.
334 Chevron’s Motion regarding Requirements, Roles, and Responsibilities of the Experts, filed
Nov. 23, 2005 at 3:10 p.m., Record at 84794-98, 84794-95; see also Chevron’s Motion, filed Sept. 20,
2005 at 5:00 p.m., Record at 79738-42, 79739-41; Order of Sept. 16, 2005 at 9:30 a.m., Record at
79736-36v, 79736.
335 See Chevron’s Pleading regarding Enforcement of Joint Agreement on Judicial Inspection and
Expert Procedures, filed Nov. 7, 2008, at 5:02 p.m., Record at 152818-21, 152820.
132920.
336 See Chevron’s Motion to Dismiss, filed Oct. 8, 2007 at 8:10 a.m., Record at 132897-996,
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impediment to doing so since settling experts had been named for this express purpose
and had participated in conducting each of the respective judicial inspections.
Nevertheless, the Court ordered the settling experts to review and address the
parties’ experts’ conflicting reports for only one of the sites examined in one judicialinspection:
Sacha-53. 337 Based on their review of both parties’ experts’ reports, the
settling experts concluded that pits 3 and 4 at this site did not require any further action
under the standards established in the Remedial Action Plan (“RAP”). The settling
experts also concluded that all pits at Sacha-53 were unlikely to impact the health of the
people living in the area. The settling experts concluded that testing at pits 1 and 2
demonstrated proper remediation and compliance with all 1995 standards for
hydrocarbon activities. Referring to the analysis for pits 1, 2, and 3, as well as for the
“old spill zone” at the Sacha-53 well site, the settling experts also concluded that there
was insufficient evidence “to affirm or reject an impact on vegetation and cattle in the
vicinity of the well; no analysis of contaminant elements that are potentially present in
plant and animal tissues are presented.” 338
After the report of the settling experts was submitted for the Sacha-53 well-site,
the plaintiffs’ lawyers—who were also running low on funds—opposed any further work
by the settling experts. 339 For example, the plaintiffs began refusing to pay the settling
experts’ fees. 340 Despite repeated requests by Chevron to have the appointed settling
experts make a decision regarding divergent reports of the experts suggested by the
parties for judicial-inspections, the Court inexplicably did not order further settling expert
reports. 341
As early as January 2006, the plaintiffs began to take action to expedite the
process of judicial inspections sought by the parties and ordered by the court. After the
settling experts had issued their report on Sacha-53, however, which was unfavorable
to the plaintiffs, the plaintiffs, arguing that their financial resources were limited, sought
to terminate the entire judicial inspection process altogether. This was a desperate
maneuver to avoid at all costs any more judicial inspections—a reflection of the fact that
the plaintiffs’ case could not withstand independent and unbiased scientific scrutiny.
337 Order of Sept. 16, 2005 at 9:30 a.m., Record at 79736-36v, 79736.
338 Settling Experts’ Report, filed Feb. 1, 2006 at 5:00 p.m., Record at 92492-685, 92576.
339 Plaintiffs’ Objection to Appointment of Settling Experts, filed Mar. 2, 2006 at 5:45 p.m., Record
at 97394-400, 97399.
340 Plaintiffs’ Objection to Paying Settling Expert Fees, filed June 13, 2006 at 5:52 p.m., Record at
112195-96.
341 Order Denying Chevron’s Request for Settling Expert, filed Mar. 19, 2007 at 8:30 a.m., Record
at 127044-45v, 127044-44v; See also Chevron’s Second Motion Requesting Settling Expert for Guanta 7,
filed Mar. 9, 2007 at 5:10 p.m., Record at 126723; Order of Mar. 5, 2007 at 5:50 p.m., Record at 126682-
85, 126682v; Chevron Motion Requesting Settling Expert for Guanta 7, filed Feb. 28, 2007 at 5:30 p.m.,
Record at 126287-126290, 126289-90.
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The plaintiffs first tried, in January 2006, to “withdraw” from twenty-six judicial
inspections because, in their opinion, the judicial inspections had gone on for too long
and were unnecessary, particularly because, during the expert examination of all fields
operated by TexPet as operator of the former Consortium, an exhaustive investigation
of these sites would be conducted during the global assessment. 342 This request was
effectively denied by this Court on June 8, 2006. 343
On February 1, 2006, at 5:00 p.m., the settling experts issued their report on
Sacha-53, refuting plaintiffs’ allegations regarding the insufficiency of TexPet's
remediation work and the existence of alleged massive contamination and risks to
human health. Then, in June 2006, a consulting attorney for the plaintiffs publicly stated
regarding funding that “we’ve been sort of living on a shoestring for the last couple of
inspections.” 344 That same month, plaintiffs successfully delayed further judicial
inspections based upon a lack of resources. 345 In July 2006, now citing Article 11 of the
Civil Code, 346 the plaintiffs moved to “relinquish” sixty-four of the ninety-seven judicial
inspections they had originally requested. 347 The Court accepted the relinquishment, 348
thereby altering the ruling issued on October 29, 2003, at 5:55 p.m., 349 which, in turn,
violated the provisions of Article 292 of the Code of Civil Procedure. 350
The relinquishment of the judicial inspections by the plaintiffs’ violated, among
other things, the legal concept of “unity of the act,” 351 which makes clear that the judicial
inspections requested by the plaintiffs were not ninety-seven individual procedures but
rather an evidentiary unit. Under the principle of community or acquisition, the
production of evidence requested by one of the parties and ordered by the Court does
not belong to or benefit only the one who provides or requests it, since once evidence is
342 Plaintiffs’ Motion regarding Waiver of Judicial Inspections, filed Jan. 27, 2006 at 5:10 p.m.,
Record at 92442-44, 92443.
343 See Order of June 8, 2006, filed at 8:30 a.m., Record at 112062-66v, 112065v-112066.
344 See Crude Documentary (Joe Berlinger, First Run Features) (publicly available).
345 Order of June 19, 2006, filed at 3:00 p.m., Record at 112208-09, 112208v.
346 Article 11 of the Civil Code provides: “The rights conferred by law can be relinquished,
provided that they only concern the individual interest of the one relinquishing, and that their
relinquishment is not prohibited.”
347 Plaintiffs’ Motion regarding Relinquishment of Judicial Inspections, filed July 21, 2006 at 9:10
a.m., Record at 116431-34, 116434.
348 Order of Aug. 22, 2006, filed at 11:00 a.m., Record at 117589-90, 117589.
349 Order of Oct. 29, 2003 at 5:55 p.m., Record at 4681-84v, 4683v.
350 Article 292 of the Code of Civil Procedure provides: “Motions that violate the provisions of the
previous article, or whose purpose is to the change the sense of judgments, collateral orders or
procedural orders, or to delay the progress of the case, or to intentionally harm the other party, shall be
dismissed and penalized in accordance with the following article.”
351 This concept is defined as the “commission of an act with legal consequences without
interruption, from the commencement to the conclusion thereof.” SANCHEZ ZURATY, Manuel, Basic
Legal Dictionary, Editorial Jurídica del Ecuador, 2d ed., vol. 2, 1993, p. 783.
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admitted into the proceeding it may also benefit the opposing party. 352 In other words,
once production of evidence is ordered by the Court, it becomes part of the proceeding
and is no longer at the free disposal of the party that requested the production of
evidence, but rather comes to belong to all of the litigants. The requested evidence also
aids the judge as he seeks to enter a well-founded and reasoned decision, as required
by Article 76 of the Constitution. As conceded by Dr. Wray, counsel of record for the
plaintiffs, “[e]vidence is indivisible . . . trying to divide it . . . would mean directly violating
the right to due process established in the Constitution and Article 8 of the American
Convention on Human Rights, which protects judicial guarantees.” 353 “I must remind
you, your Honor, that evidence is indivisible, such that inspections are not exclusively
the defendant’s proceedings, but rather are case proceedings in which both parties
have the same rights.” 354
Furthermore, even if the plaintiffs could relinquish their own duty to present
evidence requested and ordered by the Court, a notion the defense does not accept,
they certainly had no right to relinquish the settling experts’ duty to resolve the divergent
conclusions reached by the party-nominated experts in their expert reports regarding
the inspections already completed. Both parties agreed that the independent settling
experts would resolve conflicting conclusions, and both parties had the right to insist on
having that process carried out according to a definitive court order. Pursuant to Article
250 of the Code of Civil Procedure, “[a]n expert or experts will be appointed for issues in
dispute that require knowledge of a certain science, art or trade.” This provision reflects
that there are certain judicial disputes that relate to technical and scientific matters that
are not within the jurisdictional authority of the judge hearing the case and therefore,
they require an expert report to assist the judge in resolving the controverted technical
and scientific allegations at issue. Given the divergent results from the expert reports
from the judicial-inspection process, it was necessary under Article 259 of the Code of
Civil Procedure to appoint settling experts to render a conclusion. As none of the
judges who previously heard this lawsuit did so, the divergent expert reports cannot be
given any evidentiary value. In particular, the reports submitted by the plaintiffs’
nominated experts cannot be given any weight because many of them are affected by
my client's allegations of essential error and fraud, and these allegations have not been
resolved in a timely manner as ordered by law, and because the only settling experts
appointed in this case found that the reports of the plaintiffs’ nominated experts
regarding the judicial inspection of Sacha-53 were false.
352 DEVIS ECHANDIA, Hernando, General Theory of Court Evidence, 5th ed., vol. I, Editorial
ABC, Bogotá, Columbia, p. 118.
353 Plaintiffs’ Motion, filed Oct. 5, 2005 at 11:50a.m., Record at 80940-41, 80940v.
354 Plaintiffs’ Objections to Suspension of Judicial Inspection at Guanta Productions Station, filed
Oct. 19, 2005 at 9:50 a.m., Record at 81535, 81535; see also Plaintiffs’ Motion in Response to Chevron’s
Objections, filed Oct. 5, 2005 at 11:50 a.m., Record at 80940-41, 80940.
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Accordingly, Chevron opposed the relinquishment because it would violate
Ecuadorian law 355 and would infringe upon Chevron’s due process right to present its
defense. 356 The Court’s decision accepting relinquishment came after the plaintiffs
orchestrated a public protest accusing this Court of favoring a corporate foreigner over
indigenous Ecuadorians and after several Ecuadorians, including the manager of
President Correa’s election campaign, signed an amicus brief urging this Court to
expedite the litigation. 357 Chevron complained that this unlawful change in the
procedural agreement was the product of this external pressure. 358
In response to Chevron’s motion for revocation of the Court’s decision accepting
the plaintiffs’ relinquishment of the judicial inspections pursuant to Article 43 of the Code
of Civil Procedure, 359 the Court ordered each of the forty-eight named plaintiffs were to
personally ratify the purported relinquishment of the judicial inspections. 360 But not all of
the plaintiffs gave the necessary ratification. Even after several extensions, at the end
of the period granted, seven plaintiffs had not ratified the relinquishment request. 361
355 As explained in a leading treatise, under the maxim of “quae non sunt permissae prohibita
intelliguntur [that which is not permitted must be deemed prohibited],” in order “[t]o determine the validity
of an act, . . . one must ask whether any legal principle allows it.” GARCÍA DE ENTERRÍA, and Eduardo
Tomás-Ramón Fernández, Administrative Law Course, Editorial Civitas, Madrid, 1974, Vol. I, p. 448
(citing Ballbe).
356 Chevron’s Motion regarding Plaintiffs’ Relinquishment of Judicial Inspections, filed Feb. 22,
2006 at 9:38 a.m., Record at 95411-21, 95416-18.
357 See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14
p.m., Record at 141082-203, 141091; Amicus Brief, filed July 21, 2006 at 9:15 a.m., Record at 116436-41,
116440.
358 Chevron’s Motion, filed Aug. 16, 2006 at 5:40 p.m., Record at 117234-52, 117243.
359 Article 43 of the Code of Civil Procedure provides: “In every lawsuit, the parties shall appear
either in person, or by way of their legal representative or counsel of record, and the latter must prove his
right of representation as soon as he appears in the lawsuit, unless the judge, for serious reasons, grants
him a period in which to submit his power of attorney, and this period shall not exceed 15 days in the
client is in Ecuador, or 60 days if he is abroad. No such time shall be granted, regardless of the reason
for which it is invoked, if an unknown person or a person without responsibility presents himself.
If the counsel of record does not submit the power of attorney within the period referred to in the
previous paragraph, he shall pay any costs and damages that this may cause, in addition to a fine from
one ten U.S. dollars for each day of delay resulting from the false representation, the total amount of
which shall not exceed the equivalent of 360 days. When imposing the fine, half of which shall be paid to
the tax authorities and the other half to the injured party, the judge shall take into account the nature of
the case and the amount in controversy. Persons held to be false representatives shall pay the costs and
damages of the proceeding even if they later provide evidence of their right of representation after the
statement.”
360 Order of Oct. 2, 2006, filed at 3:30 p.m., Record at 120552-55, 120552v.
361 See Chevron’s Motion regarding Seven Plaintiffs, filed Feb. 27, 2007 at 5:42 p.m., Record at
126252-53, 126253; see also Chevron’s Motion regarding Plaintiffs’ Relinquishment of Judicial
Inspections, filed Mar. 22, 2007 at 5:32 p.m., Record at 127962, 127962 (noting that it is unclear which
plaintiffs ratified the request to relinquish a number of pending inspections).
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Despite this nullity, the Court contradicted its previous rulings and accepted the waiver
in violation of clear procedural law. 362 See infra § 4.4.2.
The “relinquishment” of the judicial inspections has the same meaning and effect
as the “waiver,” which was previously sought by the plaintiffs but not accepted by the
court (“since whoever desists, waives”). 363 All waivers must meet two requirements: (i)
that only the particular interest of the one waiving is involved, and (ii) that waiver does
not harm the rights of other persons. 364 Additionally, waiver cannot be granted to “those
who intend to elude, by means of the waiver, the procedural advantage that could be
had by the other party or a third party.” 365
Here, the non-production of evidence requested by the parties and ordered by
this Court affected Chevron’s rights. Indeed, the curtailment of the evidentiary process
prejudicially affected Chevron’s right to defend itself. Chevron was entitled to have a
judicial inspection conducted at each designated site and to present as a part of this
process concrete evidence confirming TexPet’s remedial work and refuting the plaintiffs’
sweeping allegations of harm. Completion of all site inspections was also needed to
ensure that any judgment was based upon science and hard facts, not generalization,
conjecture, or extrapolation. In addition, Chevron was entitled to have the independent
settling experts resolve the divergent data and conclusions submitted by the partynominated
experts during the judicial-inspection process. Instead, that work was not
done, and in violation of the procedural agreement approved by the parties and this
Court, the relinquished judicial inspections were replaced by an expert examination
supposedly conducted by Mr. Cabrera, see supra § 2.2, who was neither independent
nor qualified to be an expert. This Court has itself recognized that “expert Cabrera is
not a settling expert and this is not the function for which he was appointed.” 366 The
harm to Chevron becomes even more acute when coupled with Judge Núñez’s biased
suggestion toward the end of the case, discussed further infra § 7.7, that the burden of
proof would be retroactively reversed and shifted to Chevron under provisions of the
new 2008 Constitution. 367 In sum, Chevron was illegally and unacceptably denied all
362 Order of Jan. 22, 2007, filed at 9:00 a.m., Record at 125656-59, 125657 (“[C]onsequently, the
waiver of the judicial inspections indicated in the waiver submissions are legally effective with respect to
the motion for revocation filed by the defendant on September 13, 2006, at 4:00 p.m., subject to the
provisions of this order.”).
363 Banco del Pacífico vs. Sostenes Onias Cedeño Loor, Judgment of the Supreme Court of
Justice, First Civil and Commercial Division, Case 228-2001, published in Official Gazette No. 378, July
27, 2001. From a legal standpoint, the authority to waive is conditioned on application solely to the
interest of the person waiving such and that his waiver is not prohibited. See also Order of Jun. 19, 2006
at 3:00 p.m., Record at 112208-09v, 112208v.
364 See Article 11 of the Civil Code.
365 Article 375 of the Code of Civil Procedure.
366 Order of May 30, 2008, filed at 10:30 a.m., Record at 140405-11v, 140406.
367 Order of Aug. 13, 2009, filed at 2:30 p.m., numeral 10, Record at 157929-31v, 157929v-30,
citing Article 397(1) of the current Constitution: “The burden of proof about inexistence of potential or real
damages shall be upon the promoter of the activity or the defendant.”
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possibility to defend itself, refute the plaintiffs’ evidence, and file evidence in support of
its allegations and defenses.
3.3.2 The Biased and Unreliable Reports of Plaintiffs’ Nominated Experts
Prior to the improper relinquishment of judicial inspections, the plaintiffs’
nominated experts submitted forty-three expert reports to this Court. Those reports are
tainted, biased, and unreliable, and their findings cannot be used in this proceeding
consistent with due process. 368 As noted in notes recently produced by the director of
Crude, Joseph Berlinger, even Mr. Donziger acknowledged “that the scientific work has
been spotty.” 369 Or, as he later wrote, “screwy.” 370
First, two of the reports which the plaintiffs stated had been authored by their
nominated expert, Dr. Charles Calmbacher, were utter forgeries, as Dr. Calmbacher
testified under oath in the United States and as discussed in detail above and will be
discussed again below. Supra § 2.1. Dr. Calmbacher’s testimony shows that, for the
plaintiffs, the judicial-inspection process was one driven by lawyers who sought to
achieve predetermined results regardless of the fact that those results had no
relationship to historical reality or logical coherence and were devoid of scientific and
technical basis. 371
Second, although the plaintiffs’ nominated experts were instructed by the Court
to conduct their work “in accordance with science, impartiality, and independence,” 372
they failed to do so. Instead, they colluded with the plaintiffs’ lawyers, as well as with
the Frente, and with Selva Viva, entities created by the plaintiffs for purposes of this
litigation. In a serious conflict of interests (to put it mildly), the experts used samples
and data provided by the Frente and by Selva Viva, even though the former is named
as beneficiary of any judgment from this lawsuit 373 and the latter is a creation of the
368 Chevron Motion to Strike Judicial Inspection Reports at 1-2, 5, filed Aug. 6, 2010 at 2:30 p.m.
369 E-mail from Joe Berlinger to Mike Bonfiglio and Alyse Spiegel, dated January 28, 2008 at 2:08
p.m., attached as Annex 6 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed
Dec. 8, 2010 at 4:21 p.m. (JB-NonWaiver00092079-83).
370 Diary of Steven Donziger entry dated Mar. 7, 2006, at 5, attached as Annex 1 to Chevron’s
Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ0027256);
see also Diary of Steven Donziger entry dated Jun. 3, 2006, at 2, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ0023089)
(expressing concern that the plaintiffs do not have the “really tight science” needed in order to win the
case).
371 Chevron Motion to Strike Judicial Inspection Reports at 7-11, filed Aug. 6, 2010 at 2:30 p.m.
372 Chevron Motion to Strike Judicial Inspection Reports at 2, filed Aug. 6, 2010 at 2:30 p.m.
373 The plaintiffs tried to hide the fact that the Frente was a beneficiary, with Mr. Donziger writing
in 2008 that “it would be best if Chevron did not know that the Front will receive money because . . .
politically that could harm the image.” Email from Steven Donziger to Luis Yanza, dated Sept. 9, 2008 at
8:31 a.m., attached as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed
Dec. 20, 2010 at 4:30 p.m., at 1(DONZ00030370).
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plaintiffs. The experts also did testing at the “Selva Viva Laboratory,” which was in truth
(as Dr. Calmbacher testified) the hotel room used by the plaintiffs’ technical team, not
an independent or accredited laboratory. Moreover, one of the plaintiffs’ nominated
experts, Édison Camino, was managing Selva Viva on behalf of the plaintiffs at the
same time as he was serving as a supposedly impartial expert. 374
plaintiffs’ nominated experts rely on test results from the patently
non-independent, unaccredited Selva Viva Laboratory. 379
Third, the plaintiffs’ nominated experts failed to use the sampling and analysis
plans ordered by this Court, instead using unreliable methods and instruments to collect
samples, unaccredited laboratories to analyze them, and incomplete or falsified
documentation to conceal those failures. As to collection, the experts used crude
devices and improper equipment, which could not gather scientifically representative
samples. As to analysis, the experts used primitive and technically improper methods
to determine contamination levels—for example, “organoleptic perception,” which
means looking at and smelling the sample to choose the samples which would be sent
to unaccredited laboratories. Infra § 3.4.4. Moreover, the majority of the samples taken
by plaintiffs’ nominated experts were analyzed by HAVOC laboratory, which lacked the
proper accreditation, as my client has repeatedly pointed out and the plaintiffs are now
374 Chevron Motion to Strike Judicial Inspection Reports at 16-19, filed Aug. 6, 2010 at 2:30 p.m.
379 Laboratory Results from the Judicial Inspection of Sacha-51, attached as Annex 2 to Edison
Camino Castro’s Report on Sacha-51, filed April 27, 2005 at 10:30 a.m., Record at 59790-96, 59792-94;
Laboratory Results from the Judicial Inspection of Sacha-10, attached as Annex 2 to Edison Camino
Castro’s Report on Sacha-10, filed April 19, 2005 at 5:45 p.m., Record at 52615-18, 52618.
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seen conceding in the Crude outtakes. 380 In an effort to conceal this fraud—and
because according to Mr. Donziger, "without our lab, we don't have evidence" 381 —the
plaintiffs repeatedly prevented the Twentieth Civil Court of Pichincha and Chevron from
conducting the inspections of the HAVOC laboratory ordered by that court. 382 En route
to block one of these inspections, Mr. Donziger explains on camera that in Ecuador,
“this is how the game is played, it’s dirty.” 383 Mr. Donziger also later admitted that he
had, “via intimidation, put an end to two lawsuits,” including “the one about the Havoc
inspections.” 384 And the plaintiffs’ nominated experts did not retain or provide complete
documentation for their sampling and analysis (such as the crucial chain of custody
forms), making it impossible to verify the scientific validity of their work. 385 Ultimately,
the pervasively biased process utilized by the plaintiffs’ nominated experts precludes
any confidence in the conclusions they reached.
Finally, the plaintiffs’ nominated experts egregiously misrepresented the results
of laboratory testing, claiming contamination where the data said otherwise. Likewise,
these experts altered and mistranslated quotations from scientific publications in order
to distort the text and support the plaintiffs’ baseless claims. They also applied the
wrong remediation standards to give the worst appearance possible to their (flawed)
data. 386 380 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148210; see also
Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
(CRS 068-00-02).
381 E-mail from Steven Donziger to Michael Bonfiglio et al., dated March 23, 2006 at 5:42 p.m.,
attached as Annex 4 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m. (MB-STIP00016392).
382 Chevron’s Oct. 19, 2006 Press Release, For the 6th Time the Judge is Impeded from Carrying
out the Judicial Inspection, attached as Appendix 2 to Chevron’s Objections to Expert Mora’s JI Report for
Shushufindi-25, filed Mar. 13, 2007 at 5:15 p.m., Record at 126743-127041, 126968-70.
383 See Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16,
2010 at 4:35 p.m., (CRS-052-00-5).
384 Diary of Steven Donziger, entry dated May 13 2006, at 6, attached as Annex 1 to Chevron’s
Third Supplemental Motion for Terminating Sanctions filed Dec. 20, 2010 at 4:30 p.m. (DONZ00023089).
385 Chevron Motion to Strike Judicial Inspection Reports at 20-21, 26-27, filed Aug. 6, 2010 at
2:30 p.m.
386 Chevron Motion to Strike Judicial Inspection Reports at 33-34, 36, filed Aug. 6, 2010 at 2:30
p.m.
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None of the reports submitted by plaintiffs’ nominated experts are worthy of any
credence, given the procedural and substantive errors that occurred during their
preparation. It is thus no surprise that the settling experts, with respect to the one site
for which they rendered conclusions, agreed largely with the conclusions of my client’s
nominated experts, not with those of the plaintiffs’ nominated experts. The reports of
these latter experts should have been stricken from the record. Any reliance thereupon,
in light of the facts detailed above, would violate my client’s due process rights.
3.3.3 The Prejudicial Denial of Chevron’s Essential-Error Petitions
Pursuant to the provisions of Article 258 of the Code of Civil Procedure—which
provides that “[o]nce it has been summarily proven that an expert report is tainted with
material error, the judge must, at the request of a party or on his own motion, order that
the report be corrected by another expert or experts, without prejudice to any liability
they may have incurred as a result of fraud or bad faith”—Chevron has alleged the
existence of essential errors in many of the reports of the experts proposed by the
plaintiffs. 389 The Court does not have the authority to refuse such requests to open
summary proceedings for those errors, and to decide them on a timely basis. 390 Yet
that has happened on a number of occasions with respect to many expert reports—
another example of this Court ignoring what cannot be defended by the plaintiffs, with
severe prejudice to Chevron’s defense. 391
In one case, Judge Yánez rejected a request to open summary proceedings with
respect to the report of the plaintiffs’ nominated expert, Xavier Grandes (judicial
inspection of the Shushufindi 08 well site), reasoning that the technical subjects of the
389 See, e.g., Chevron’s Motion regarding Expert Jose Robalino Hidalgo’s Report on Sacha-57,
filed Jan 11, 2006 at 7:20 p.m., Record at 89316-47, 89335; Chevron’s Motion regarding Expert Xavier
Alonso Grandes Zambonino’s Report on Shushufindi-8, filed Feb. 15, 2006 at 11:30 a.m., Record at
93577-616, 93579; Chevron’s Motion in support of 26 additional essential error petitions, filed May 12,
2010 at 9:50 a.m.
390 See Article 258 of the Code of Civil Procedure.
391 See, e.g., Order of Feb. 17, 2006, filed at 2:30 p.m., Record at 93637-39v, 93638-38v; Order
of July 27, 2010 at 10:00 a.m., and Chevron’s objections to that Order, filed on July 29, 2010 at 3:23 p.m.
and 3:28 p.m., and on July 30, 2010 at 5:48 p.m. In a very important ruling on cassation, the Ecuadorian
courts have cited author Guash Fernández, who states that “[i]n this way, stating the basis for a ruling is a
manner of distinguishing between rationality and arbitrariness. Reasoning is arbitrary when it lacks any
basis whatsoever or when it is erroneous.” Mariana del Carmen Ponce Játiva vs. César Villegas Játiva y
otros, Judgment of the Supreme Court of Justice, First Civil and Commercial Division, Case 215-2004,
published in Official Gazette Supplement 537, Mar. 4., 2005.
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eport could be analyzed by the court-appointed settling experts. 392 But the settling
experts were never able to fulfill that role because the Court never ordered the
submission of any additional settling reports, thus perfecting the violation of my client’s
right to defend itself, as such evidence was incomplete.
Later, Judge Núñez, manifesting his bias against Chevron, arbitrarily refused to
handle my client’s petition of essential error with respect to the report of Oscar Dávila. 393
The expert, Mr. Dávila, participated in the judicial inspection of the Shushufindi North
production-station site. His report was challenged because though it did not contain any
data from laboratory analysis, it still included statements regarding the alleged existence
of contamination. As shown in earlier filings, the refusal of the biased Judge Núñez to
open summary proceedings to investigate these essential errors prevented Chevron
from exploring Mr. Dávila’s relationship with the plaintiffs’ counsel and their supporting
company, Selva Viva Cía. Ltda. 394
Judge Ordóñez ignored the evidence filed in twelve petitions for essential error,
and with respect to another thirteen such petitions, he refused to permit the experts to
respond or my client to submit any non-documentary evidence in support. 395 Your
Honor ratified these decisions, 396 leaving the record in the indefensible state of being
incomplete and having denied my client its right to summary proceedings on numerous
essential-error petitions and having failed to issue decisions on those petitions where a
summary proceeding was held.
392 Order of Feb. 17, 2006, filed at 2:30 p.m., Record at 93637-39v, 93638-38v.
393 Order of May 28, 2009, filed at 11:00 a.m., numeral 32, Record at 156691-93v, 156693-93v:
“32. The submission filed by the defendant and received in the Office of the President’s Clerk on May 21,
2009, at 11:46 a.m., and in response to the text thereof, it is hereby ordered: having reviewed the docket,
we noted in the text of the certificate of judicial inspection of the Shushufindi Norte Station, which can be
found on pages 17,712 to 17,775 of the record, that the experts who participated in that investigation
were experts designated by the plaintiffs, designated by the defendants and also a settling expert
appointed by the court: Eng. John Connor, Eng. Oscar Dávila, Eng. Fernando Albán, Eng. Johnny
Zambrano, all of whom have submitted their reports on the results of their investigations. Now that the
reports have been submitted by the experts identified above, with regard to the investigation they
participated in, at the request of the parties they will be asked for explanations of the text of their reports.
At the defendant’s request, he has answered the questions he was asked, has submitted additional
reports to expand upon and clarify what the parties have asked, as permitted by Section 257 of the
Consolidated Code of Civil Procedure, if the report is obscure or insufficient to establish the facts in
controversy; therefore, there are no grounds to commence summary proceedings against this expert
Richard Cabrera Vega, and the motion to do so is hereby denied; in any event, ‘It is not the judge’s
obligation to abide by the expert’s opinion if it is counter to the judge’s own conviction,” particularly in a
case such as this where we have the reports of other experts who participated in the investigation, all of
which will be analyzed by the Judge. ”
394 See, e.g., Chevron Motion to Strike Judicial Inspection Reports at 11-36, filed Aug. 6, 2010 at
2:30 p.m.
395 Order of July 27, 2010, filed at 10:00 a.m.
396 Order of July 29, 2010 at 5:00 p.m.
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These rulings have prevented my client from defending itself against the
evidence brought against it—evidence that we know, from the U.S. discovery, is
fraudulent. This is an indication of the failure of the Ecuadorian judicial system to
provide justice. And the prejudice to my client from this is particularly serious because
this is an environmental lawsuit involving an oral summary proceeding. First, suits for
environmental damage raise technical issues; therefore, judges must be guided by
expert opinions. If the opinion of an expert contains serious errors, as occurred multiple
times in this case, preventing a defendant from proving those essential errors is
tantamount to leaving that party defenseless. Second, given that, in this oral summary
proceeding, this Court has not allowed appeals of interlocutory decisions even when
they cause harm, or of incidental proceedings, the Court has a special duty to
guarantee the integrity of the proceedings and protect the exercise of the parties’ rights.
3.4 Mr. Cabrera’s Appointment and Fieldwork Violated Due Process
3.4.1 Mr. Cabrera’s Appointment Was Unlawful
After the report by the settling experts at the Sacha-53 site reached a result
unfavorable to the plaintiffs, 397 the plaintiffs’ lawyers—running low on funds 398 —
succeeded not only in relinquishing sixty-four of the judicial inspections they had
originally requested, but also in obtaining the appointment of a single expert, instead of
the two experts who were nominated by the parties (one by each party), to perform the
global assessment of all the fields used by the Consortium. 399 Under great pressure
from the plaintiffs, see supra § 2.2.1, Judge Yánez appointed Richard Cabrera as the
lone global-assessment expert for this case. 400 The appointment of Mr. Cabrera was
both substantively and procedurally improper.
Mr. Cabrera did not meet any of the requirements requested by the plaintiffs
themselves in their motion for a global expert assessment; the procedural agreement
that was approved by the Court required that all experts have expertise in
environmental engineering and applied ecology. 401 But Mr. Cabrera, a mining engineer,
92522.
397 Settling Experts’ Report on Sacha-53, filed Feb. 1, 2006 at 5:00 p.m., Record at 92492-685,
398 See Crude Documentary (Joe Berlinger, First Run Features) (publicly available).
399 Plaintiffs’ Motion regarding Relinquishment of Judicial Inspections, filed July 21, 2006 at 9:10
a.m., Record at 116431-35, 116434, Plaintiffs’ Motion, filed Dec. 4, 2006 at 5:20 p.m., Record at 123454-
55, 123454.
400 Transcript of Swearing In of Expert Richard Cabrera, filed June 13, 2007 at 9:45 a.m., Record
at 130169-69v, 130169.
401 Plaintiffs’ Motion, filed Oct. 29, 2003 at 5:45 p.m., Record at 4677-78, 4678; Order of Oct. 29,
2003, filed at 5:55 p.m., Record at 4681-84v, 4683v-84.
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lacked those qualifications. Indeed, Mr. Cabrera’s curriculum vitae makes clear that he
lacked sufficient specialized qualifications in the field of hydrocarbons. 402
As Chevron pointed out when he was appointed, Mr. Cabrera’s appointment
plainly prejudiced Chevron, as he lacked the necessary education, training, and
experience required to evaluate the existence and scope of any alleged contamination
at an oilfield site, much less assess the source of purported contamination for sites
involving multiple actors or develop an appropriate remedy. Mr. Cabrera was
accredited as an expert only for this case; he had no formal training in environmental
chemistry or petroleum chemistry; his list of prior work projects was extremely limited;
he had no relevant scientific publications; and he lacked experience working at
hydrocarbon exploration and production sites, or at any type of petroleum-impacted
site. 403 Environmental professionals who routinely perform environmental studies
related to the impact of petroleum production must be well-versed in petroleum
chemistry and knowledgeable about how samples are taken in situ, how to carry out
laboratory operations, and how to assure quality control. 404 Mr. Cabrera had none of
these qualifications and had he actually performed the work, it appears that this study
would have been the first one of its kind that he has ever performed. 405
It is a fundamental precept of due process that any expert whose conclusions
may be used by a court as a basis for assigning legal liability to a party must possess
the education, training, and experience necessary to allow him to reach those
conclusions using scientifically valid methods. 406 Mr. Cabrera did not have these
qualifications, and his appointment denied Chevron of its right to due process.
Based on the procedural agreement, the experts for the global assessment
should have been the same that had worked during the judicial inspections.
Mr. Cabrera, however, was not one of those experts. And although he had been
appointed by the Court as a settling expert for three judicial inspections (Auca-01, Yuca-
402 See Curriculum Vitae of Richard Cabrera Vega, filed Nov. 14, 2006 at 9:30 a.m., Record at
122522-28, 122524-26.
403 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148187; see also
Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at
141082-203, 141087, 191092, 141180-81.
404 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, at 8, attached as Appendix to Chevron’s Objections to
Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148187.
405 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148187.
406 See Article 251 of the Code of Civil Procedure provides: “The persons appointed must be of
legal age, recognized honesty and probity, have sufficient knowledge of the matter on which they must
report . . . .”
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2B, and Cononaco-06 sites), Mr. Cabrera was not one of the party-nominated experts
and, thus, was not in the pool of candidates for the “global” assessment, as the plaintiffs
themselves designed it. In addition, Mr. Cabrera was unqualified because he was not
registered with the Court as an expert per the requirements set forth in Article 252 of the
Code of Civil Procedure. 407 Compounding the two previous violations, once
Mr. Cabrera was notified of his appointment as expert, he was not sworn-in within the
five-day period set forth in Article 261 of the Code of Civil Procedure. 408 According to
the law, this led to the expiration of his appointment, and it was therefore necessary,
pursuant to Article 254 of the Code of Civil Procedure, to appoint a new expert. 409 Yet
Judge Yánez illegally and arbitrarily let lapse the notification sent to Mr. Cabrera and
ordered him to be notified again. The rules governing expiration of expert appointments
derive from public law, and therefore cannot be modified by a judge.
The fact that Mr. Cabrera assumed his duties in the manner described above
was absolutely improper and illegal, which means that the report he subsequently
submitted is null and void and, therefore, lacks legal validity. See infra § 4.1.
3.4.2 Mr. Cabrera Had Multiple Conflicts of Interests That He Failed to Disclose
As the court-appointed “global expert,” Mr. Cabrera was required to be
independent and unbiased. But even before his illegal appointment and installation,
Mr. Cabrera was neither.
Mr. Cabrera deliberately concealed a conflict of interests that biased him towards
recommending that Chevron pay for massive remediation. At the time Mr. Cabrera was
appointed an expert in this case, he owned a majority interest in a company named
CAMPET. 410 CAMPET’s activities include the control and cleanup of hydrocarbon spills
407 Article 252 of the Code of Civil Procedure provides: “The judge shall appoint a person of his
own choosing, from among the persons registered with the appellate courts, to serve as a single expert.
However, the parties may unanimously elect the expert or agree to have more than one expert appointed
for the inspection, and this agreement shall be binding on the judge.”
408 Article 261 of the Code of Civil Procedure provides: “The appointment of an expert or experts
shall lapse if they have not accepted the position within five days from the notice of their appointment, if
they fail to appear at the inspection on the appointed date, or if they fail to present their report within the
term established by the judge.”
409 Article 254 of the Code of Civil Procedure provides: “If the expert or experts fail to appear in
order to be sworn in, or fail to perform the expert evaluation or fail to issue their report within the term
granted therefore, or if the parties who elected the expert do not indicate where he is to be notified, the
appointment shall lapse and the judge shall appoint a new expert.”
410 See Resolution No. 3 of the Superintendency of Companies, dated July 29, 2003, attached as
Annex 1 to Chevron’s Motion to Strike Cabrera Report filed Feb. 9, 2010 at 9:07 a.m., Record at 169056-
71, 167057, 167059v, 167062, 167067-68 (date of incorporation and business purpose of CAMPET,
Companía Ambiental Minera-Petrolera S.A.).
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and the installation of geomembranes, and it has been registered to offer this sort of
service to Petroecuador since 2004. 411
Mr. Cabrera’s relationship with CAMPET creates an obvious conflict of interests.
The company, and by consequence Mr. Cabrera personally, could benefit from
Mr. Cabrera’s work on this case. If even a small fraction of the amount recommended
by Mr. Cabrera is actually spent on remediation, then many hundreds of millions of
dollars will flow to the local remediation industry of which CAMPET is a part. For
example, Mr. Cabrera’s bias is evident in his recommendation of an enormous soil
remediation project for US$2.743 billion dollars, at a cost of approximately US$489 per
cubic meter of soil. This estimate is equivalent to ten times more than the per-cubicmeter
cost that Petroecuador has paid when it has remediated oil production sites.
Regardless of whether CAMPET receives a remediation contract that can be directly
linked to this Court’s judgment, it stands to benefit—along with other companies—from
this massive flow of new remediation work at exorbitant costs. Mr. Cabrera’s strained
efforts to absolve Petroecuador of all responsibility, even for its unilateral operations
long after TexPet ceased to operate in Ecuador, discussed infra § 7.5, certainly benefits
Petroecuador. This fact could predictably lead Petroecuador to treat CAMPET
favorably in the future, rendering the Cabrera Report’s conclusions on this point highly
suspect .
In addition, Mr. Cabrera failed to disclose another conflict of interests: both
before and during his service in this matter, the plaintiffs’ former counsel in this case
paid him to serve as an expert in another case claiming environmental damage. 412 In
Arias v. DynCorp, a group of plaintiffs alleged that the use of a pesticide in Colombia
and Ecuador had harmed human health, the water supply, and agricultural resources in
the Oriente region. Those plaintiffs relied heavily on expert reports co-written by
Mr. Cabrera in August 2006 and January 2008, while this case was ongoing. They
were represented by U.S. attorneys Cristóbal Bonifaz, who also represented the
plaintiffs here until February 2006, and Terry Collingsworth, who represented the
Ecuadorian State in connection with arbitration related to this case. 413 It is well known
that Mr. Cabrera’s reports in DynCorp blamed pesticides—not petroleum—for the harms
alleged in that case, which overlap significantly with the harms alleged by the plaintiffs
here.
With these conflicts of interests, Mr. Cabrera should not have agreed to
participate in this lawsuit. At minimum, the law required him to disclose the conflicts.
411 CAMPET’s Current Registration with the Superintendency of Companies, attached as Annex
14 to Chevron’s Motion to Strike Cabrera Report filed Feb. 9, 2010 at 9:07 a.m., Record at 167169-70,
167170; List of Services that CAMPET Can Provide Petroecuador, attached as Annex 3 to Chevron’s
Motion, filed Feb. 9, 2010 at 9:07 a.m., Record at 167075-76, 167076 (CAMPET registration to provide
services for Petroecuador).
412 Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 8-9, Record at 178982-179041, 178989-
90.
413 Id.
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The Code of Civil Procedure requires an expert to satisfy all of the requirements
established in it, to take an oath, and to perform honestly and with integrity, which
includes being forthright and honest in all of his actions. 414 Mr. Cabrera’s failure to
disclose his personal financial interest in the CAMPET company or his ongoing work for
plaintiffs’ former counsel is inconsistent with these requirements. His conflicts of
interest, and his failure to disclose them, prevent him from being of “recognized honesty
and probity” 415 and preclude him from performing his duties in compliance with the laws
and regulations. 416 Therefore, this Court must consider the Cabrera Report as having
not been submitted and, therefore, said report must not be taken into account by the
Court when rendering a decision.
3.4.3 Mr. Cabrera’s Fieldwork Was Non-Transparent and Violated Scientific
Protocol
When he was officially installed in his position, 417 Mr. Cabrera promised under
oath to carry out only the work requested by the plaintiffs and approved by this Court. 418
The Court granted Mr. Cabrera a period of 120 working days to carry out the
assessment and to present his report. He was also granted a period of five days to
propose a schedule of visits to the sites to be assessed in order to guarantee the
publicity of the evidence, which includes the right of the parties to be present during the
expert assessment. 419
Mr. Cabrera did not present the schedule for the sites to be assessed in the
“global” assessment. Instead, he submitted a vague “work plan.” In it, he failed to
comply with the Court’s instructions to assess each and every one of the sites in
Appendix A of the complaint. This and other actions by Mr. Cabrera to shield his work
from Chevron’s oversight was done, the evidence now shows, at the request of
Mr. Donziger, who indicates in one of the Crude outtakes that he wanted to prevent
Chevron from exposing the impropriety of Mr. Cabrera’s work, as it had done with
respect to the HAVOC laboratory. 420 Mr. Donziger expresses that it is “very important”
that Mr. Cabrera’s strategy be kept secret, because “we always want [Chevron] to be
414 Article 256 of the Code of Civil Procedure: “To serve in the position of expert, the appointee
must accept such and swear that he will perform such faithfully and lawfully.”
415 Article 251 of the Code of Civil Procedure.
416 Article 256 of the Code of Civil Procedure.
417 Transcript of Swearing In of Expert Richard Cabrera, filed June 13, 2007 at 9:45 a.m., Record
at 130169-69v, 130169.
418 See Transcript of Swearing In of Expert Richard Cabrera, filed June 13, 2007 at 9:45 a.m.,
Record at 130169-69v, 130169; see also Plaintiffs’ Motion of Oct. 29, 2003, filed at 5:45 p.m., Record at
4677-78, 4677v, ordered in the Order of Oct. 29, 2003 at 5:55 p.m., 4681-84v, 4684.
419 Article 120 of the Code of Civil Procedure provides: “All evidence is public, and the parties are
entitled to attend the taking of evidence.”
420 See transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16,
2010 at 4:35 p.m., (CRS 147-01-01).
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guessing . . . always confused.” To this end, Mr. Donziger directs his associates to
“come up with an operating plan to evade them,” so that Chevron will be unable to verify
the accuracy of the work being done. 421
Ultimately, Mr. Cabrera, with the plaintiffs’ consent and the Court’s permission,
ended up assessing only forty-nine sites (less than fifteen percent) of a total of 316
wells and nineteen stations located in an area of approximately 440,000 hectares. 422
And this assessment was hastily done in the condensed period provided by the Court:
all forty-nine sites were purportedly assessed and a report written by Mr. Cabrera in 120
working days, while preparation of the judicial-inspection reports by other experts took
between fifty and ninety working days per site. 423
In addition, many of the site assessments were performed in secret, which was
no doubt intended to prevent my client from exposing Mr. Cabrera’s improper working
relationship with plaintiffs. 424 Ignoring transparency and Chevron’s right to defend itself,
Mr. Cabrera did not announce his scheduled assessment or permit the presence of
Chevron’s representatives at the assessment 425 sites in two fieldwork campaigns, the
last of which ended on November 3, 2007. 426 Indeed, Mr. Cabrera had expressly stated
before the Court and under oath that the fieldwork began on July 4, 2007, and
concluded on September 28, 2007. 427 In fact, part of Mr. Cabrera’s assessment was
carried out during the two fieldwork campaigns by technical teams that were never
officially presented to the Court and that secretly collected approximately fifty percent of
the soil and water samples 428 separately from Mr. Cabrera and in the absence of the
421 See transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16,
2010 at 4:35 p.m., (CRS 147-01-01); see also Transcript of Crude Outtakes, attached as Exhibit 2 to
Chevron’s Motion for Terminating Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-196-00-01)
(Mr. Donziger stating that "[o]ur goal is that they [Chevron] don't know shit”).
422 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m.,
Record at 141082-203, 141088, 141120; Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 48,
Record at 178982-179041, 179029.
423 See Chevron’s Request for Modification of Mar. 19, 2007 Order, filed Mar 22, 2007 at 5:37
p.m., Record at 127965-75, 127973.
424 See Chevron’s Motion to Order Expert Cabrera to Take All Samples Again to Ensure
Compliance with Due Process, filed Dec. 5, 2007 at 5:33 p.m., Record at 133788-89, 133788.
425 See Expert Cabrera’s Submission, filed Oct. 11, 2007 at 5:56 p.m., Record at 133206 (in
response to Chevron’s letter on the need for a work schedule).
426 The first of these assessments occurred between September 15 and 19, 2007, convened
again on October 4, 2007, and concluded on October 10, 2007; the second began on October 15, 2007
and concluded on November 3, 2007. See Underground Water Monitoring and Water Campaigns,
attached as Annex A to Cabrera Global Report, filed on Apr. 1, 2008, at 8:30 a.m., Record at 138207-316,
138317-139054.
427 Transcript of Hearing regarding Opening of Control Samples, filed Aug. 29, 2008, at 3:10 p.m.,
Record at 151537-39, 151538-39 (“[O]n July 4, 2007, the proceedings began with sampling . . . this
fieldwork was continued until September 28, 2007, when it was completed.”).
428 Chevron’s Objections to Expert Cabrera’s Global Report, filed on Sept. 15, 2008, at 2:14 p.m.,
Record at 141082-203, 141102; see also DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical
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parties. 429 Likewise, the survey of the supposedly affected population—upon which
Mr. Cabrera grounds many of his conclusions regarding excessive cancer deaths—had
been carried out in clandestinely as well, beginning several months before Mr. Cabrera
was sworn in and began his field work, as the Crude outtakes show. 430 See supra §
2.2.1.
On many other occasions, Mr. Cabrera physically prevented Chevron’s field team
from closely observing and acquiring split samples of soil and/or water samples he
collected. 431 As a result, there is no way for the defendant to independently verify and
validate the (limited) environmental chemistry results in his report. This action by
Mr. Cabrera has sullied the transparency and validity of his expert examination and
destroyed all evidentiary value of his samples and the data derived therefrom.
3.4.4 The Data Used in the Cabrera Report Is Incomplete, Unreliable, and Invalid
The sampling done by Mr. Cabrera, as well as the analysis based upon that
sampling, are deeply flawed. They do not satisfy even minimum scientific standards.
Mr. Cabrera’s supposed site sampling was deficient in many respects. As the
court-appointed expert, it was Mr. Cabrera’s responsibility to have direct, personal
involvement and oversight of each phase of the “global” study, from sample collection to
data analysis. 432 Delegation of this role to individuals whose qualifications and
affiliations are unknown, as Mr. Cabrera did here, prevents any confidence in the
accuracy and credibility of the resulting data. For example, in numerous instances,
Mr. Cabrera’s signature does not appear on the chain of custody, rendering those
(continued…)
Data and Evaluation of the Validity of his Sampling and Analysis Programs, at 10, attached as Appendix
to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at
148180-267, 148189.
429
Of the 376 samples of soil and water included in the expert report, 187 were taken by third
parties in the absence of Mr. Cabrera. DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical
Data and Evaluation of the Validity of his Sampling and Analysis Programs, attached as Appendix to
Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at
148180-267, 148190.
430
Cabrera Omnibus, filed May 21, 2010 at 4:35 p.m., at 12, 23-24, Record at 178982-179041,
178993, 179004-05; Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept.
16, 2010 at 4:35 p.m. (CRS 301-00-06); see also Chevron’s Rebuttal to Cabrera Supplemental Report,
filed Feb. 10, 2009 at 5:35 p.m., Record at 154322-545, 154340; see also Expert Cabrera’s Submission,
filed on Oct. 8, 2008, at 10:50 a.m., Record at 151316-27, 151322-23; Chevron’s Objections to Expert
Cabrera’s Supplemental Report, filed Apr. 24, 2009 at 2:21 p.m., Record at 156327-79, 156329.
431 See DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148199.
432 See Chevron’s Objection to Expert Cabrera’s Work Plan, filed Jul. 2, 2007 at 1:00 p.m.,
Record at 130673-87, 130676.
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samples of doubtful origin and inadmissible. 433 In addition, approximately half of the
samples taken by staff were taken in secret, without prior notice to the Court or the
parties. 434 These unlawfully collected samples represent approximately half of the
samples presented in Mr. Cabrera’s report and ninety-four percent of his so-called
groundwater samples. 435
Nor were Mr. Cabrera’s site samples representative or comprehensive. For
example, Mr. Cabrera claimed there were 141 pits at the sites that he visited, but he
only collected samples from eighty-five, so he only offered data for sixty percent of the
pits that he claims exist—and these represent a mere nine percent of his
unsubstantiated total pit count (916) in the area of the former concession. 436 Notably,
plaintiffs were advised by their original Ecuadorian counsel, Dr. Wray, that "'[i]t will be
best to go to each site in the global [examination]’" because '”[w]here you haven't gone,
you can't ask for damages.’” 437
In addition, Mr. Cabrera did not collect a single sample of water from flowing
surface bodies, nor did he collect samples from any drinking water wells or potablewater
supplies within the concession area. 438 Instead, he collected one sample from an
open pit and one from stagnant water in a low-lying area and erroneously labeled them
as surface water. 439 He also collected five samples from open boreholes, which he
erroneously deemed groundwater. 440 Notably, despite these irregularities, none of the
water samples collected by Mr. Cabrera exceeds the World Health Organization’s or the
433 See Chevron’s Motion to Revoke Order of Oct. 21, 2009 regarding Payment to CORPLAB,
filed Oct. 26, 2009 at 10:08 a.m., Record at 159085-121, 159092-96.
434 See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m.,
Record at 141082-203, 141102.
435 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148189.
436 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148192.
437 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., (CRS-189-01).
438 See DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148192.
439 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148192.
440 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148192.
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United States Environmental Protection Agency’s drinking water standards for metals
and relevant petroleum hydrocarbons. 441
Mr. Cabrera selectively discarded twenty-seven percent of his soil samples that
had no hydrocarbon odor or visible contamination and therefore, according to his criteria,
were free of hydrocarbons. 442 In doing so, Mr. Cabrera, at best, assessed isolated
pockets of contamination rather than assessing the sites, or the former concession, as a
whole. Of the discarded samples, twenty-two correspond to nineteen pits at thirteen
sites that he visited. When challenged about his skewed sampling, Mr. Cabrera replied
that his “mission is to investigate the contamination.” 443 Of course, Mr. Cabrera’s
mission was to seek the truth, not to reach a predetermined result, but evidently he did
not see it that way, for the reasons I have now made public. Indeed, in discussing what
samples to take in the "global" report, one of the plaintiffs' consultants took the position
that “[i]f we don't find anything then we don't ever report it.” 444
Even with respect to those samples that Mr. Cabrera did collect, the analyses
performed upon them were scientifically flawed. Proper analysis of various elements
(water, soil, sediments, etc.) is one of the cornerstones to the environmental
investigation of potentially affected sites. 445 Establishing or, at a minimum, identifying
the analytical protocols used in the course of an investigation (and any deviations from
those methods) is the only way an expert can produce scientifically reliable results
capable of being independently evaluated and confirmed. Prior to the start of judicial
inspections, the parties negotiated and agreed to sampling and analytical protocols that
would ensure transparency and reliability. 446 Although the Court approved these
methodologies, neither the plaintiffs nor Mr. Cabrera applied even the most basic
portions of those protocols, such as using a laboratory accredited to perform the proper
analytical tests at the time such tests were performed.
441 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148192.
442 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148199.
443 Chevron Motion, filed July 31, 2007 at 3:20 p.m., Record at 132063-66,132063; Chevron
Motion, filed May 21, 2010 at 4:35 p.m., at 49, Record at 178982-179041, 179030.
444 Transcript of Crude Outtakes, attached as Annex 8 to Chevron’s Motion filed Dec. 22, 2010 at
5:45 p.m. (CRS CRS-197-00-01).
445 See DOUGLAS, Gregory S., Evaluation of the Validity of the Plaintiffs’ Suggested Experts’
Analytical Data from the Judicial Inspections, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146197-268, 146202-03.
446 See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14
p.m., Record at 141082-203, 141090.
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Indeed, although Mr. Cabrera stated in his work plan that only laboratories
accredited by the Ecuadorian Accreditation Organization would be used, 447 in his report
he misrepresented the accreditation of the four laboratories he relied upon—Gruentec,
LabSu, Umwelt, and CORPLAB—since they were not accredited to perform all of the
analyses listed in the analytical plan. 448 There are no indications that Mr. Cabrera ever
audited the laboratories or reviewed their accreditation. 449 In fact, when Chevron
specifically questioned Mr. Cabrera on the subject of laboratory accreditation,
Mr. Cabrera responded (in a submission likely written by plaintiffs, supra § 2.2.1) that
Chevron would have to obtain that information from the laboratory itself. 450
Moreover, a large portion of the data that Mr. Cabrera used came from laboratory
analyses presented by the plaintiffs’ nominated experts during the judicial
inspections. 451 Over three-quarters of those analyses were made by the laboratory
HAVOC, which, as I have repeatedly argued, did not have accreditation at the time it
performed these analyses. 452 Without proper accreditation, there is no way to
guarantee that the laboratory has the necessary infrastructure (e.g., correctly calibrated
analytical chemistry instruments), qualifications (e.g., trained staff), and experience (e.g.,
working with petroleum impacted samples) to perform the work. Therefore, any
analytical chemistry data produced by a laboratory that is not properly accredited for the
specific matrix, analysis, and concentration range must be considered invalid and
inadmissible. (Tellingly, the plaintiffs repeatedly prevented the 20 th Civil Court of
Pichincha and Chevron from performing the inspections of HAVOC that had been
ordered by that court. 453 ) See supra § 3.4.4. Recently obtained emails from plaintiffs’
consultants demonstrate that plaintiffs knew that HAVOC’s analysis of polycyclic
aromatic hydrocarbons (“PAHs”) was invalid, because they were using screening test
447 Expert Cabrera’s Work Plan, filed June 25, 2007 at 2:30 p.m., Record at 130640-51, 130646.
448 See DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, at 15, 17, attached as Appendix to Chevron’s Objections
to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148194,
148196.
449 See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14
p.m., Record at 141082-203, 141190.
450 See Mr. Cabrera’s answers to Chevron’s questions of Dec. 12, 2008, Mar. 4, 2009 at 8:30
p.m., Record at 154587-88.
451 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148210.
452 DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 148180-267, 148210.
453 Chevron’s Oct. 19, 2006 Press Release, For the 6th Time the Judge is Impeded from Carrying
out the Judicial Inspection, attached as Appendix 2 to Chevron’s Objections to Expert Mora’s JI Report for
Sushufindi-25, filed Mar. 13, 2007 at 5:15 p.m., Record at 126743-127041, 126968-70.
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kits for total PAHs—a method that is not U.S. Environmental Protection Agency (“U.S.
EPA”) approved, nor in the analysis plan. 454
Perhaps as significant as the failure to use an accredited lab, both the plaintiffs
and Mr. Cabrera failed to provide the quality control analyses necessary to confirm the
accuracy and precision for each analytical method. 455 For each of Mr. Cabrera’s five
sampling trips (the sixth trip was not conducted by Mr. Cabrera), there are one or more
quality issues with the data that render the results invalid. The laboratories plaintiffs
and their consultants used to prepare the report they attributed to Mr. Cabrera did not
supply, or supplied incomplete, quality assurance/quality control (“QA/QC”)
information. 456 Likewise, the data produced by HAVOC lacked information regarding
Data Quality Objectives which is another reason why that data must be considered
invalid and should be held inadmissible. 457
Because of the absence of QA/QC data, Chevron is unable to independently
determine the reliability of the data in the Cabrera Report or the data of the plaintiffs’
nominated experts. In essence, Mr. Cabrera and the plaintiffs ask Chevron and this
Court to take their word that the data is valid—an impossible request to grant in light of
the overwhelming evidence of Mr. Cabrera’s fraudulent work. Chevron has previously
discovered and presented to this Court concrete reasons why this information cannot be
accepted. These reasons include the following:
• Chevron conducted a double blind study to document the HAVOC
laboratory’s analytical capabilities for most of the critical chemical
analyses performed. 458 The results of this study demonstrate with a high
454 DOUGLAS, Gregory S., The Misuse of Field Screening Test Kits To Report Individual PAH
Concentrations In Judicial Inspection Samples, attached as Annex 9 to Chevron’s Fourth Supplemental
Motion for Terminating Sanctions, filed on Dec. 22, 2010 at 5:45 p.m.
455 See DOUGLAS, Gregory S., Evaluation of the Validity of the Plaintiffs’ Suggested Experts’
Analytical Data from the Judicial Inspections, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 146198-268, 146201; see also
DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the Validity of his
Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert Cabrera’s
Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 148180-267, 148212.
456 See DOUGLAS, Gregory S., Refutation of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling and Analysis Programs, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 148180-267, 148185.
457 See DOUGLAS, Gregory S., Evaluation of the Validity of the Plaintiffs’ Suggested Experts’
Analytical Data from the Judicial Inspections, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 146198-268, 146222-224.
458
In a “double blind” study, an unrelated third party prepares samples with known chemical
concentrations and delivers them to a subject laboratory for testing. The subject laboratory is unaware
that chemical concentrations are predetermined. The third party then compares the results of the subject
laboratory’s tests to the known chemical concentrations and submits its evaluation to the client (in this
case, the defendant). DOUGLAS, Gregory S., Evaluation of the Validity of the Plaintiffs’ Suggested
Experts’ Analytical Data from the Judicial Inspections, at 36-44, attached as Appendix to Chevron’s
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degree of scientific certainty that HAVOC was not capable of producing
defensible, accurate, and precise analytical data. 459
• The analytical tests used in the Cabrera Report and by plaintiffs’
nominated experts to determine TPH levels in soil and water (Methods
EPA 418.1 and APHA 5520F) were not agreed upon by the parties and
have long been recognized as having limited utility, given the tendency of
these methods to lead to false positives for or gross overestimates of TPH
in water and soil samples, particularly common in samples with low
hydrocarbon concentrations. 460
• The HAVOC lab misreported detection limits (the minimum concentration
of a substance that can be measured and reported with ninety-nine
percent confidence that the analyte concentration is greater than zero) as
hits on sixteen different compounds for water samples. In all cases, the
HAVOC MDLs are lower by one to three orders of magnitude than those
of the approved method, and more surprisingly, they are all the same
(0.000001 mg/L). 461
In light of all of the above, and given the limited sampling performed by Mr.
Cabrera, it is not surprising that in private communications recently produced to
Chevron, Mr. Beltman, the plaintiffs' paid consultant who took the lead on ghostwriting
Mr. Cabrera’s report, admitted that the multi-billion-dollar remediation estimates done by
Stratus in Mr. Cabrera’s name lacked scientific foundation. Mr. Beltman conceded to
Mr. Donziger that “we do not know how much it will cost to remediate the contaminated
soils in the Oriente”; “[w]e don’t know what the area or volume of soils is that requires
remediation because the data collections to date have not been designed to define the
full extent of contamination”; and we “also don’t know how much the cleanup will cost
per soil unit area or volume.” 462 In the same memorandum, Mr. Beltman also
(continued…)
Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 146198-268,
146233-41.
459 See DOUGLAS, Gregory S., Evaluation of the Validity of the Plaintiffs’ Suggested Experts’
Analytical Data from the Judicial Inspections, at 5, 36, attached as Appendix to Chevron’s Objections to
Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 146198-268, 146202,
146233.
460 DOUGLAS, Gregory S., Evaluation of the Validity of the Plaintiffs’ Suggested Experts’
Analytical Data from the Judicial Inspections, at 12-13, attached as Appendix to Chevron’s Objections to
Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 146198-268, 146209-10.
461 DOUGLAS, Gregory S., Evaluation of the Validity of the Plaintiffs’ Suggested Experts’
Analytical Data from the Judicial Inspections, at 19, attached as Appendix to Chevron’s Objections to
Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 146198-268, 146216.
462 E-mail from Douglas Beltman to Steven Donziger, dated Sep. 23, 2008 at 7:28 p.m., attached
as Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at
4:21 p.m. (attaching memoranda regarding a settlement, including one analyzing the potential relationship
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acknowledged that the Cabrera Report overstated the per-unit soil remediation costs.
And, as to groundwater remediation costs, Mr. Beltman confessed that there “simply
aren’t sufficient environmental contamination data to work with.” 463 In other words, not
only did plaintiffs’ consultants fraudulently submit their work as that of Mr. Cabrera, but
they also submitted it knowing that it was profoundly defective and contained false
statements. The lack of scientific rigor is not surprising, given that the plaintiffs' objective
was to submit a "large" damages figure, regardless of whether or not there was any
guarantee of the existence of such damage. 464 As Ms. Maest stated in her notes
regarding the global report, they felt that "proving damages [is] preferable, but not
necessary." 465
These admissions are even more incredible in light of the fact that plaintiffs were
apparently playing with a stacked deck. Newly discovered evidence indicates that
plaintiffs’ team had conducted “preinspection identifications of sites” in advance of the
inspections for the global report. 466 Mr. Kamp confirmed that the plaintiffs’ consultants
were performing “presampling” of sites—which consisted of identifying areas that “could
be impacted by contamination,” “in which contamination . . .was present,” or, more
generally, “might be most representative of different types of contamination entering the
(continued…)
between a potential settlement and the contamination) (STRATUS-NATIVE048249-58, 048256-58).
Plaintiffs' consultants also identified other causes for certain of the alleged cases. For example, with
regard to drinking water, the consultants admitted that "a large part of the problem originates in the
deficient sanitary conditions," Id. (STRATUS-NATIVE048254).
463 E-mail from Douglas Beltman to Steven Donziger, dated Sep. 23, 2008 at 7:28 p.m., attached
as Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at
4:21 p.m. (attaching memoranda regarding a settlement, including one analyzing the potential relationship
between a potential settlement and the contamination and reaching a figure for an out-of-court settlement)
(STRATUS-NATIVE048256 to 048258). Another of the plaintiffs' consultants had also warned Mr.
Donziger in these terms: "I think that we currently don't have enough information regarding the levels of
ground water contamination." E-mail from Charles Camp to Steven Donziger et al., dated Mar. 21, 2007,
at 10:15 a.m., attached as Annex 17 to Chevron’s Second Supplemental Motion for Terminating
Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (attaching a memorandum prepared by Mr. Champ in
preparation of a conference call on remediation) (Champ 1106). This consultant, Mr. Champ, stated that
he "never ha[d] the data" even to "do a ballpark" of the costs of cleaning up the ground water. Official
Transcript of Deposition of Charles Champt, at 130:15-16, dated Sep. 9, 2010, attached as to Chevron’s
Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m.
464 See, e.g., Chevron's motion filed Oct. 29, 2010 at 5:20 p.m., at 14-15, n. 59 (regarding the
pressure exerted by Mr. Donziger on the experts from the beginning for them to provide a "large"
damages figure").
465 Ann Maest's notes from the meeting on Mar. 3, 2007, attached as Annex 8 to Chevron’s
Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (discussing the
plan for the global report) (STRATUS-NATIVE128131 to 128132).
466 Official Transcript of Second Deposition of Mark A. Quarles, at 251:23 to 256:4, dated Oct. 12,
2010, attached as Annex 15 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed
Dec. 8, 2010 at 4:21 p.m.
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pathways”–to “recommend that they be included in the global inspection.” 467 Evidently
the goal was to identify so-called “best-site pre-inspection[s]” to ensure that the
collection of samples during the global assessment would be skewed to show
contamination. 468 Mr. Villacreces even prepared a report indicating that “[s]ome 55 to
60 sites with the best conditions for our purposes will be selected” for the global
report. 469 Plaintiffs cannot claim that the admittedly insufficient data in the report
submitted in Mr. Cabrera’s name reflects an accurate overall picture of the
environmental conditions in the Oriente when it is now clear that his sampling was not
scientifically designed to discover the truth, but on the contrary, was biased and
manipulated. 470
Given the lack of transparency and credibility in what was purportedly
Mr. Cabrera’s work, as well as the poor quality of his data and the data of plaintiffs’
nominated experts, his technical conclusions must be considered invalid from a
scientific perspective and therefore inadmissible as evidence.
3.4.5 Mr. Cabrera Exceeded the Scope of His Mandate and This Court Refused to
Allow His Deposition
Mr. Cabrera’s report, covertly drafted by plaintiffs’ team, supra § 2.2.1, also
addressed extraneous issues that exceeded the scope of Mr. Cabrera’s mandate and
the scope of the complaint. Ecuadorian law is clear that such issues are not part of the
case. See infra Chapter VI. Accordingly, such conduct by an expert invalidates his
report, as confirmed by the recent decision of the Provincial Court of Sucumbíos in
Case No. 218-2008, Red Amazónica vs. Oleoducto de Crudos Pesados S.A. (“Red
Amazónica”), a case in which you, Your Honor, were on the panel. 471 The plaintiffs
467 Official Transcript of Deposition of Richard A. Kamp, at 293:4 to 295:14, dated Oct. 7-8, 2010,
attached as Annex 11 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m.
468 E-mail from Richard Kamp to Steven Donziger, dated May 11, 2006 at 9:32 p.m., attached as
Annex 7 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21
p.m. (KAMP-NATIVE000345).
469 Report of Luis Villacreces dated January-February 2008, attached as Annex 8 to Chevron’s
Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (which refers to
the content of the Cabrera Report) (STRATUS-NATIVE008887a to 008890).
470 Similarly, the evidence shows that the plaintiffs had altered the data used to prepare the draft
of the Cabrera Report. See the e-mail from Jennifer Peers to Ann Maest, dated Mar. 6, 2008 at 8:06 a.m.,
forwarding the e-mail from Ann Maest to Jennifer Peers dated Mar. 4, 2008 at 9:30 a.m., attached as
Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21
p.m. (noting that "Tania and Sophie are correcting Cabrera's data today") (STRATUS-NATIVE017660 to
017663, at 017661); see also the e-mail from Tom Hodgson to Jennifer Peers dated Mar. 4, 2008 at 1:43
p.m., forwarding the e-mail from Tom Hodgson to Jennifer Peers, dated Mar. 4, 2008 at 1:19 p.m.,
attached as Annex 8 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m. (stating that a consultant had "deleted" the symbol "

themselves recognized this principle when they argued in their 5:43 p.m. filing on
November 26, 2009, 472 that this Court should strike portions of expert reports “that fail to
correspond to” anything beyond “a strict analysis” of “said expert’s core objective,” and
this Court has ordered experts to “strictly and expressly adhere to the express wording”
of their mandates. 473
Because it is not proper (nor is the evidentiary phase of the case designed) for
one of the experts to address the extraneous issues that Mr. Cabrera’s report reached,
and because the Court did not immediately correct and sanction Mr. Cabrera’s actions,
Chevron has not had a fair or adequate opportunity to be defend itself, assert its
arguments and submit sufficient evidence on those issues. This denial of due process
is compounded by the fact that Mr. Cabrera’s report’s analysis of the extraneous issues
was written by plaintiffs’ consultants as directed by Mr. Donziger, resulting in the
recommendation of an exorbitant amount of damages.
For instance, health issues were beyond Mr. Cabrera’s mandate. Yet
Mr. Cabrera’s ghostwritten report recommended billions of dollars in damages related to
alleged health issues, without any basis whatsoever. Moreover, these recommendations
lack any basis and bear no relation whatsoever to the reality of the facts. 474 First, it did
not use the medical and statistical information available from official sources in Ecuador
on levels of mortality from cancer; 475 second, the conclusions it reached contradict the
information in those sources and, in fact, the cancer rate he used was 250 times greater
than the official National Statistics and Census Institute cancer mortality rate for the
same population; 476 and third, Mr. Cabrera’s report’s conclusions are unsupported by
any medical records, death certificates, or any other objective and verifiable
information. 477 Thus, Mr. Cabrera’s report stretched beyond his mandate and
(continued…)
Marcelo Muñoz, who was also a court-appointed expert in this case, because he had “exceed[ed] the
scope of the task with no legal grounds to do so”).
472 Plaintiffs’ Objections to J. Bermeo Expert Report, filed Nov. 26, 2009 at 5:43 p.m., Record at
159486-89, 159487.
473 Order of Jan. 5, 2010, filed at 3:30 p.m., number 13, Record at 164366-69, 164368.
474 Chevron’s Objections to Expert Cabrera’s Supplemental Report, filed Feb. 10, 2009 at 5:35
p.m., Record at 154322-545, 154328.
475 Chevron’s Objections to Expert Cabrera’s Supplemental Report, filed Apr. 24, 2009 at 2:21
p.m., Record at 156327-79, 156330.
476 See Chevron’s Objections to Expert Cabrera’s Supplemental Report, filed Apr. 24, 2009 at
2:21 p.m., Record at 156327-79, 156330; see also Chevron’s Objections to Expert Cabrera’s Global
Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 141082-203, 141141.
477 KELSH, Michael, Response to Claims of Mr. Cabrera Concerning Alleged Cancer Cases and
other Heath Effects and to His Proposal Concerning New Infrastructure, attached as Appendix to
Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at
146378-423, 146381; see also Expert Cabrera’s Submission, filed on Oct. 8, 2008 at 10:50 a.m., Record
at 151316-27, 151325.
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ecommended an economic value of billions of dollars in damages for alleged “excess
cancer deaths” and other alleged health problems, without presenting a single medical
diagnosis of even one affected person. Furthermore, as noted, the complaint does not
include, and the forty-eight named plaintiffs have no authority to bring, claims for alleged
personal injuries to third parties.
Mr. Cabrera’s report’s conclusions are not supported by the surveys upon which
it relies. The surveys themselves were biased, administered by Mr. Fajardo and
activists who support the plaintiffs, such as the Frente, Oil Watch International, and
Acción Ecológica, as described supra § 2.2. 478 Chevron had no input into the survey
design, no opportunity to observe the procedures followed by the activists administering
the survey, no opportunity to verify how the questions were actually answered, and no
way to evaluate the impartiality of either the interviewers or those being interviewed. 479
The alleged answers upon which Mr. Cabrera’s report relies are self-serving reports by
anonymous members of the communities that hope to benefit from a large judgment
against Chevron. Chevron also had no opportunity to test the truthfulness and accuracy
of those alleged answers—which were not based upon any medical evidence—as the
survey forms were never submitted to this Court. 480 Moreover, even assuming that 306
of the people or their family members surveyed in fact had some form of cancer,
Mr. Cabrera’s report’s methodology for extrapolating those answers across the area,
and its use of the survey to determine the supposed cause of the alleged health
problems, was illegitimate and frivolous. 481 It is evident that the methodology used did
478 Chevron’s Objections to Expert Cabrera’s Supplemental Report, filed Feb. 2, 2009 at 5:35
p.m., Record at 156327-79, 156329; see also Chevron’s Objections to Expert Cabrera’s Global Report,
filed Sept. 15, 2008 at 2:14 p.m., Record at 141082-203, 141141.
479 See Chevron’s Request for Expert Cabrera to Answer Questions regarding Surveys
Undertaken as Part of Cabrera Global Report, filed Sept. 17, 2008 at 3:00 p.m., Record at 151035-37,
151035.
480 See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m.,
Record at 141082-203, 141141-42; see also Chevron’s Request for Expert Cabrera to Answer Questions
regarding Surveys Undertaken as Part of Cabrera Global Report, filed Sept. 17, 2008 at 3:00 p.m.,
Record at 151035-37, 151035, 151036. Information from investigative organizations in Ecuador (INEC
and The Latin American Department of Social Sciences (“FLACSO”)) show that the health of persons
living in the oil-producing areas inside the former concession is no different from that of people in other
sites in the Oriente region and that there is no increase in deaths from cancer or in miscarriages owing to
oil activities in the area of the concession, much less owing to TexPet’s activities. KELSH, Michael,
Response to Claims of Mr. Cabrera Concerning Alleged Cancer Cases and other Heath Effects and to
His Proposal Concerning New Infrastructure, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 146378-423, 146397.
481 The extensive errors contained in Mr. Cabrera’s purported “excess cancer rate” calculations
have been detailed in Chevron’s objections to Mr. Cabrera’s report, which is incorporated herein by
reference. See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m.,
Record at 141082-203, 141119-20, 141169-72; see also KELSH, Michael, Response to Claims of Mr.
Cabrera Concerning Alleged Cancer Cases and other Heath Effects and to His Proposal Concerning New
Infrastructure at 12-16, attached as Appendix to Chevron’s Objections to Expert Cabrera’s Global Report,
filed Sept. 15, 2008 at 2:14 p.m., Record at 146389-93 (in response to Value of Loss of Life due to
Increase in Incidence of Cancer in the Concession at 2-3, attached as Annex Q to Expert Cabrera’s
Global Report, filed Apr. 1, 2008 at 8:30 a.m., Record at 139875-81, 139876-77).
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not justify the conclusion that billions of dollars should be paid for alleged harms
Mr. Cabrera was not appointed to assess, and for which he had no skill to evaluate. In
fact, Mr. Cabrera admitted that he was not able to independently assess the validity of
the psychosocial survey and, as his resume demonstrates, he lacks any experience or
qualifications in the field. His report fails to identify a single individual who prematurely
died of cancer, much less establish an exposure pathway or other fundamental proof of
causation.
Moreover, Mr. Cabrera’s report neither identified any particular type of cancer,
nor evaluated whether or not particular types of cancer could have been caused by
environmental factors other than hydrocarbon exposure—such as exposure to
pesticides, iodine deficiency, sexual history, or family history—prevalent in the
concession. 482 On the other hand, Dr. Aguirre, the Director of Grupo Oncologico at the
Hospital Metropolitana in Quito, has filed a declaration 483 explaining the likely causation
of any increased cancer risk in the region; 484 and disclaiming any causal relationship of
cancer to hydrocarbon exposure. 485 Dr. Aguirre issued his report after conducting
physical exams and reviewing medical history and records, 486 and supported his
conclusions with studies from the scientific community, various governments around the
world, and industry research which have failed to demonstrate a link between petroleum
and certain cancers. 487
482
Mr. San Sebastian himself admits to Mr. Donziger that his study has “certain
methodological . . . limitations,” and that he does not believe science to be the “best judge in these types
of cases . . . because it can be manipulated very - very easily.” Transcript of Crude Outtakes, attached as
Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m. (CRS-375-00-03; CRS-375-00-04). One of
plaintiffs’ consultants also acknowledged that “at no time does it [the San Sebastian report] categorically
state that there’s a relationship between the oil and the [people’s cancer].” Transcript of Crude Outtakes,
attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m. (CRS-159-00-10).
483 See Declaration of Dr. Jose M. Aguirre dated Oct. 24, 2007 at 5, in Gonzales v. Texaco Inc.,
Case No. C-06-02820 WHA (U.S. District Court, N.D. Cal.), submitted as Annex 31 to Chevron's
Evidentiary Request No. 3.6 for the Cononaco-06 Essential Error Petition, filed Apr. 30, 2010 at 5:45 p.m.,
Record at 174968-175032, 174972.
484 Declaration of Dr. Jose M. Aguirre dated Oct. 24, 2007 at 6-7, 12-16, 19-21, in Gonzales v.
Texaco Inc., Case No. C-06-02820 WHA (U.S. District Court, N.D. Cal.), submitted as Annex 31 to
Chevron's Evidentiary Request No. 3.6 for the Cononaco-06 Essential Error Petition, filed Apr. 30, 2010
at 5:45 p.m., Record at 174968-175032, 174975-76, 174981-85, 174988-90 (noting that Ecuador has the
10th highest rate of cervical cancer in the world, citing a SOLCA report from 2004).
485 Declaration of Dr. Jose M. Aguirre dated Oct. 24, 2007 at 23, in Gonzales v. Texaco Inc.,
Case No. C-06-02820 WHA (U.S. District Court, N.D. Cal.), submitted as Annex 31 to Chevron's
Evidentiary Request No. 3.6 for the Cononaco-06 Essential Error Petition, filed Apr. 30, 2010 at 5:45 p.m.,
Record at 174968-175032, 174992.
486 Declaration of Dr. Jose M. Aguirre dated Oct. 24, 2007 at 5, 8-23, in Gonzales v. Texaco Inc.,
Case No. C-06-02820 WHA (U.S. District Court, N.D. Cal.), submitted as Annex 31 to Chevron's
Evidentiary Request No. 3.6 for the Cononaco-06 Essential Error Petition, filed Apr. 30, 2010 at 5:45 p.m.,
Record at 174968-175032, 174974, 174977, 174986.
487 Declaration of Dr. Jose M. Aguirre dated Oct. 24, 2007 at 23-31, in Gonzales v. Texaco Inc.,
Case No. C-06-02820 WHA (U.S. District Court, N.D. Cal.), submitted as Annex 31 to Chevron's
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Chevron also invoked its constitutional right 488 to interrogate Mr. Cabrera and
requested that he appear in the judge’s chamber to respond to relevant questions on
the matter and to produce the underlying, undisclosed source material. 489 Mr. Cabrera
refused to appear for his first court-ordered deposition or produce the supporting
documents. 490 He instead provided a written statement that failed to answer any
questions about the survey methodology, about the team that had carried out the survey,
or, most notably, about the alleged 306 cancer “victims.” 491 The Court then rescheduled
Mr. Cabrera’s deposition for 5:00 p.m. on October 29, 2008. 492 After Mr. Cabrera and
all parties appeared at the appointed time, the Court declared that depositions could not
be conducted after 5:00 p.m. Since then, the Court repeatedly has refused to
reschedule Mr. Cabrera’s deposition. 493 This charade was simply an attempt to obstruct
Chevron’s ability to discover that the Frente and other activists conducted the survey
and to otherwise present a defense on these matters. This Court’s denial of discovery
was prejudicial, as it is now evident—from the discovery obtained in the United States—
that Mr. Cabrera was fraudulently colluding with plaintiffs. This Court denied my client
the only opportunity it had to obtain discovery directly from Mr. Cabrera, showing that
the Ecuadorian judicial system is not capable of ensuring due process.
(continued…)
Evidentiary Request No. 3.6 for the Cononaco-06 Essential Error Petition, filed Apr. 30, 2010 at 5:45 p.m.,
Record at 174968-175032, 174992-175000.
488 Article 76(7)(j) of the Constitution: “Witnesses or experts are obligated to appear before the
judge or authority to respond to questions.” Numeral 15 of Article 24 of the 1998 Constitution provides:
“In any type of proceeding, the witnesses and experts are required to appear before the judge and to
respond to the respective questioning, and the parties shall have the right to access the documents
relating to such proceeding." Article 24(15) of the Constitution of 1998: ”In any type of proceeding,
witnesses and experts shall be obligated to appear before the judge and respond to the respective
interrogatories, and the parties shall have free access to the documents related to those proceedings.”
489 Chevron’s Request for Expert Cabrera to Answer Questions regarding Surveys Undertaken as
Part of Cabrera Global Report, filed Sept. 17, 2008 at 3:00 p.m., Record at 151035-37, 151035.
490 See Expert Cabrera’s Submission, filed Oct. 8, 2008 at 10:50 a.m., Record at 151316-27,
151322-23; see also Order of Sept. 30, 2008, filed at 5:00 p.m., Record at 151093-96V, 151094.
491 See Cabrera Response to Chevron’s Deposition Request of Sept. 17, 2008, filed Oct. 8, 2008
at 10:50 a.m., Record at 151316-27, 151322-27; Number 1 of Order of Oct. 23, 2008, filed at 5:00 p.m.,
Record at 151457-57v, 151457.
492 Order of Oct. 23, 2008 at 5:00 p.m., number 1, Record at 151457-57v, 151457.
493 See, e.g., Chevron’s Request to Schedule Deposition of Expert Cabrera and Allegations of
Judicial Bias, filed Nov. 7, 2008 at 4:58 p.m., Record at 152813-15, 152815; see also Chevron’s Request
for Date to be Set for Expert Cabrera to Answer Interrogatories, filed Nov. 12, 2008 at 5:53 p.m., Record
at 152829-31, 152831.
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3.4.6 The Improper Refusal to Open Summary Proceedings for Proving Material
Errors in Mr. Cabrera’s Report
Mr. Cabrera lacked the basic qualifications to perform his assigned tasks,
included billions of dollars in non-existent damages that exceeded his mandate and the
scope of the plaintiffs’ complaint, conducted much of his work in secret and with the
involvement of the plaintiffs’ representatives, and, by failing to provide vital information
about his sources and methodologies, deprived Chevron of the ability to meaningfully
address his sweeping conclusions. See supra §§ 2.2, 3.4. Accordingly, Chevron
alleged the existence of several material errors, and it made four requests 494 that Judge
Núñez open hearings on these allegations.
Under Ecuadorian law, 495 Judge Núñez had no discretion to deny these
requests 496 for “essential error” hearings, but he did so anyway. At first, he repeatedly
494 See Chevron’s Objections to Expert Cabrera’s Global Report, filed on Sept. 15, 2008 at 2:14
p.m., Record at 141082-203; Chevron’s Motion to Modify Order of Sept. 30, 2008, filed on Oct. 6, 2008 at
11:45 a.m., Record at 151128-34; Chevron’s Motion regarding Essential Error Petitions Against Expert
Cabrera, filed on Oct. 14, 2008 at 11:08 a.m., Record at 151360-61; Chevron’s Objections to control
samples taken by Expert Cabrera, filed on Dec. 12, 2008 at 5:30 PM, Record at 153588-705.
495 Article 258 of the Code of Civil Procedure provides: “Once it has been summarily proven that
an expert report is tainted with material error, the judge must, at the request of a party or on his own
motion, order that the report be corrected by another expert or experts, without prejudice to any liability
they may have incurred as a result of fraud or bad faith.”
Article 277 of the Criminal Code provides: “The following people are deemed to commit
malfeasance of office and will be punished with one to five years of imprisonment:
1.- Judges in courts of law and legal arbitrators who, out of personal interest, like or dislike for a
person or body, or to the detriment of the public good or an individual, rule counter to an express law, or
prosecute someone criminally, knowing that he does not deserve it;
2.- Judges or arbitrators who give advice to one of the parties to a lawsuit who are litigating
before them, to the detriment of the opposing party;
3.- Judges or arbitrators who intentionally violate express laws while hearing cases, by either
doing what the law prohibits or not doing what the law mandates . . . .”
496 It is important to note that in Public Law a judge can only do what the law permits, and
Procedural Law is a branch of public law. See Article 226 of the Constitution of Ecuador. Procedural law
is “a public, formal, instrumental law and autonomous, of superlative importance and of mandatory
compliance”, as set forth in a ruling handed down by the Supreme Court of Justice on Nov. 13, 1981 in
the lawsuit filed by Alberto Feliciano Cadena Viteri against Estéfano Farah R., published in the Judicial
Gazette, Year LXXXII, Series XIII, No. 13, p. 2977. A judge is not allowed to deny a motion for material
error; rather, he must act solely and exclusively as permitted by Article 258 of the Code of Civil Procedure,
which is a mandatory rule (the law mandates, prohibits or permits). Such denial of a motion for material
error not only pre-judges the merit of a claim of essential error, but it also expressly violates the right to
prove it. In this regard, note that Article 277 of the Criminal Code provides that “[t]he employees of the
public administration . . . exercising any judicial authority . . . deny, refuse, or retard the administration of
justice” will be reprimanded with “five years of prison.”
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postponed a decision. 497 For instance, in response to one of Chevron’s requests, 498
Judge Núñez stated that: “[F]irst we must wait for the results of the control samples in
order to determine whether they corroborate the results obtained in the laboratories
used by the Expert, Eng. Richard Cabrera, and confirm his conclusions or not, after
which the parties may present their opinions and request or not the opening of summary
proceedings owing to material errors.” 499 But even after the analysis of the control
samples became available, the judge denied Chevron’s petitions. 500 Because of his
bias, he illegally based his decision on Article 257 of the Code of Civil Procedure,
stating that Mr. Cabrera had responded to all the clarifications and amendments
requested. This clearly was not a legitimate basis for denying Chevron’s request, since
Chevron had not sought clarification under Article 257 but, rather, nullification for
material error under Article 258. By eliding the true issue, the Court violated basic civil
procedure and deprived Chevron of its right to fully respond to the Cabrera Report. 501
Despite Judge Núñez’s misconduct, his decisions in this case inexplicably still stand,
perpetuating the violations of Chevron’s right to due process.
3.5 The Submissions of September 16, 2010, Fail to Resolve the Due Process
Violations That Plagued the Evidentiary Phases of This Case and The
Case in its Entirety
It is evident that, not being able to substantiate their claims with transparent,
credible, scientific evidence, the plaintiffs attempted to give it the imprimatur of validity
through Mr. Cabrera, who they falsely described as being neutral and independent and
who signed a report actually authored by plaintiffs. Despite plaintiffs’ misconduct, which
reflected both the unethical actions of their attorneys and the lack of merit in their case,
this Court arbitrarily and illegally offered them a second and artificial ad hoc opportunity
in its order of August 2, 2010 at 9:00 a.m., despite the fact that the evidentiary period
and the expert assessment were over. In that order, the judge directed the parties to
497 See Order of Sept. 30, 2008, filed at 5:00 p.m., Record at 151093-96v, 151096v; Number 8 of
the Order of Oct. 8, 2008, filed at 3:30 p.m., Record at 151329-31, 151329v; Number 6 of Order of Oct.
23, 2008, filed at 9:00 a.m., Record at 151454-56, 151454v.
498 Chevron’s Motion to Modify Order of Sept. 30, 2008, number 9, filed Oct. 6, 2008 at 11:45
a.m., Record at 151128-134.
499 Order of Oct. 8, 2008, filed at 3:30 p.m., number 8, Record at 151329-331, 151329v. This
criterion was reiterated in number 6 the Order of Oct. 23, 2008, filed at 9:00 a.m., Record at 151454-56,
151454v: “[T]he report on the results of the expert assessment and the report on the control samples
must be analyzed jointly, which is why it is necessary to open the envelopes as provided for in the
previous ruling . . . .”
500 Order of May 28, 2009, filed at 11:00 a.m., number 9, Record at 156691-93v, 156691-91v.
501 Article 76(7)(l) of the current Constitution states that “[r]easons must be stated for all rulings by
the public authorities. The reasons shall be deemed unstated if the ruling does not set forth rules or legal
principles on which it is based and does not explain why they are relevant to the facts. Administrative
acts, orders or rulings that do not state the grounds on which they are based shall be deemed null and
void.” Because the Court’s reasoning considered neither the facts nor the actual grounds for the petition,
it is therefore null and void.
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present, by September 16, 2010, a technical filing not contemplated by the law nor
requested by the parties at the appropriate time. Those filings, however, do nothing to
remedy, and in fact only magnify, the due process violations discussed above.
By authorizing the technical filings on September 16, 2010 at 5:15 p.m., the
judge merely substituted one illegal order for another. As discussed above, Mr. Cabrera
should never have been appointed as the sole global expert in this case. See supra §
3.4.1. That appointment occurred only after plaintiffs were unable to prove their case
through the judicial-inspection process sought by the parties and ordered by the judge
within the evidentiary period; plaintiffs then pressured the Court to accept their waiver of
64 of the judicial inspections that they had requested, thus prematurely terminating this
stage of taking evidence in this trial and waiving judicial inspections that they attempted
to replace with the global expert assessment. The plaintiffs then used this opportunity to
obtain an expert they could control, enabling them to commit fraud on a staggering
scale in an effort to give credence to their plainly unscientific evidence. Undeterred by
the overwhelming evidence of impropriety submitted by my client, this Court afforded
plaintiffs yet another opportunity to manufacture a case against Chevron. See supra §
3.1. This was a deus ex machina for a story that should have ended in the legal
nullification of the entire proceeding.
But even setting aside the fact that there was no basis in law for this Court to
decide as it did, see supra § 3.1, the fact remains that the evidence upon which the
report relies was collected during the judicial-inspection process and by Mr. Cabrera. 502
Those estimates, therefore, are deficient for all the reasons discussed above. See
supra §§ 3.3–3.4. This is confirmed by the testimony of the authors of the reports
themselves. 503 Several of them have conceded under oath that their reports cannot be
relied upon to make any damages calculations. Douglas Allen, for example, agreed that
he has no experience assessing costs to remediate sites contaminated by crude oil and
that he does not consider himself an expert in remediation of petroleum sites. 504 In
addition, in many cases, they simply assumed the accuracy of the Cabrera Report,
without having been made aware of its fraudulent preparation or Chevron’s rebuttals of
it. Dr. Lawrence Barnthouse stated that he was under the impression that Mr. Cabrera
“would be neutral” as a court-appointed expert, adding that, had he known the extent to
which plaintiffs prepared Mr. Cabrera’s Report, he “might not have wanted to get
involved” in the case. 505 The authors also acknowledged severe limitations in their
conclusions, citing the absence of expertise, questionable methodologies, and reliance
upon unrealistic assumptions. Among other things, Jonathan Shefftz admitted that he
502 See infra §§ 7.3-7.4.
503 This testimony is discussed in further detail in my client’s filings of December 21, 2010 at
11:00 a.m. and Dec. 22, 2010 at 5:40 p.m.
504 See Chevron’s Motion Regarding Plaintiffs’ Reports of September 16, 2010, filed Dec. 22,
2010 at 5:40 p.m.
505 See Chevron’s Motion Regarding Report of Lawrence Barnthouse, filed December 21, 2010 at
11:00 a.m.
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“was not engaging in any exercise to verify [Mr. Cabrera’s] data series or his cost
figures.” 506 As the depositions have not yet been completed, I will be filing this new and
relevant evidence with the Court as it becomes available.
Indeed, those reports only exacerbate and perpetuate the due process violations
to which my client has been subjected. Plaintiffs’ attorneys not only continue to rely on
evidence which they know to be flawed, fraudulent, and unscientific, but they also have
the audacity to grossly inflate their damages estimates based on that same tainted and
unreliable evidence. Accordingly, no court concerned in the least with protecting my
client’s constitutional rights could possibly base a damages award on the plaintiffs’ most
recent submission of September 16, 2010 at 5:15 p.m. The flaws in these reports have
been confirmed by depositions in the United States of the individuals who submitted
them. My client will continue filing this new and relevant evidence before you as it
becomes available; I hope that in accordance with the obligations imposed on you by
law, this Court should carefully consider it before proceeding to judgment.
Additionally, the reports of the "specialists," including the plaintiffs in their
submission of September 16, 2010 at 5:15 p.m., are plainly insufficient to meet the
plaintiffs' burden of proof. Article 43 of the Environmental Management Act provides
that this Court rule “in accordance with the experts’ reports that were ordered.” As
plaintiffs have acknowledged, this provision “contains an imperative for the judge, not a
mere recommendation, thus showing that the determination of the amount required for
remediation of the damage MUST be made by the judge, in accordance with the expert
reports ordered.” 507 Plaintiffs have further recognized that “the lack of an evaluation
may well be grounds for invalidating the trial.” 508 The Cabrera Report—nothing more
than a fraud and the plaintiffs’ own work product—obviously can no longer serve as the
basis for this Court’s judgment. The same is true of evidence collected during the
judicial inspection process, which, in addition to being marred by plaintiffs’ fraud, was
never completed. See supra §§ 2.1, 3.3.1. And as Chevron argued in its motion of
August 5, 2010, at 4:30 p.m., the plaintiffs’ new submissions cannot fill the resulting void
in the record. The reports of the plaintiffs' "specialists" are simply not expert proof, as
defined by Articles 250 to 263 of the Code of Civil Procedure. For example, contrary to
Article 252’s requirement that a judge appoint as an expert “a person of his own
choosing,” these individuals are the plaintiffs’ paid consultants, chosen by the plaintiffs
alone. Additionally, contrary to Article 256’s requirement that an expert “swear to
perform his duties faithfully and lawfully,” these authors have given no such oath to this
Court. Any judgment handed down on the basis of these reports, therefore, would
violate my client’s due process rights.
506 See Chevron’s Motion Regarding Plaintiffs’ Reports of September 16, 2010, filed Dec. 22,
2010 at 5:40 p.m.
507 Plaintiffs’ Motion, filed Sept. 16, 2008 at 11:30 a.m., § 5.2, at 9, Record at 150878-995,
150886.
508 Id.
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My client’s due process rights would be further violated if plaintiffs follow through
on their plans to submit additional “economic assessment criteria” in their alegato, as
my client would be effectively denied the opportunity to respond and rebut the
methodology plaintiffs employ. 509 Depriving my client of its right to a defense
constitutes a clear violation of due process.
Moreover, to the extent plaintiffs’ September 16, 2010 filing includes estimates
for damages that lie beyond the scope of the complaint, those estimates are extra petita
and should not be considered by this Court. For all the reasons discussed infra Chapter
VI, my client’s due process rights would also be violated by any award of damages for
extra petita claims.
In short, the ad hoc, supplemental, technical filings submitted to this Court by the
plaintiffs in so-called "legal briefs" on September 16, 2010 at 5:15 p.m. are not
responsive to, and cannot cure, the fundamental problems that nullify, both in terms of
substance and procedure, the reports submitted by Mr. Cabrera and the reports by
plaintiffs' nominated experts (and we know that both reports were defined and/or
prepared and/or supervised by the plaintiffs themselves). The fact that the plaintiffs’ socalled
"legal brief" filed on September 16, 2010 at 5:15 p.m. and the technical reports
attached to it used the fabricated, fraudulent expert reports from the expert assessment
and the judicial inspections to reach damages estimates that can only be described as
fanciful, is further proof of plaintiffs’ bad faith and should be deemed not acceptable,
and as a result, should be rejected in its entirety.
3.6 Further Evidence of Bias and A Rush to Judgment
In addition to all the procedural irregularities discussed above, this trial has been
tainted by a biased rush to judgment against Chevron, particularly after the evidence of
plaintiffs’ fraud came to light.
The case has been tried through a summary verbal proceeding, a procedure
ordinarily reserved for straightforward commercial or labor disputes. The use of the
summary verbal procedure in this factually complex environmental tort case was wholly
inappropriate, contrary to law, and deprived my client of its right to due process. Among
other things, the procedure has been relied upon by this Court to (i) deny prompt
resolution of dispositive legal defenses; (ii) proceed to subsequent stages of the trial
despite the failure to fulfill necessary procedural prerequisites; (iii) preclude immediate
appeal to correct orders that have injured my client; (iv) prevent the filing of
counterclaims and the inclusion of necessary third parties.
For example, violating the procedure for summary verbal proceedings, the Court
first proceeded to the evidentiary phase of the case without even determining it had
509 See Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 2, 18. Chevron strongly objects to
such submissions by the plaintiffs, as it will deny Chevron its due process right to respond. Accordingly,
Chevron reserves the right to file all necessary rebuttals.
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jurisdiction over Chevron. Then, as discussed supra § 3.3.1, this Court abandoned its
own procedural rulings and allowed the plaintiffs to relinquish more than half of the
judicial inspections previously ordered. Once this relinquishment was complete, the
Court granted the plaintiffs’ request to proceed to the damages phase without first
determining liability. Thus, the Court heard evidence without determining jurisdiction
and assessed damage without finding liability. 510
The premature termination of environmental assessment and the appointment of
a “global” expert has created inconsistent and untenable results as the litigation has
progressed. The Court instructed Mr. Cabrera to determine the cause of and damages
related to any contamination at Consortium sites. Yet the evidentiary phase that was
meant to occur before the appointment of the “global” expert was far from complete. At
the time of Mr. Cabrera’s appointment, there were countless outstanding judicialinspection
reports, and not only that, but also in spite of the discrepancies between the
reports submitted by the plaintiffs' nominated experts and the reports of the defendant's
nominated experts, only one of them was settled. Also, the many allegations of
essential error asserted by my client, which affect the probative value and call into
question the legality of these reports, have not been ruled on, which means that these
reports are incomplete. At least eight locations were subject to judicial inspections well
after Mr. Cabrera was appointed: Auca-17 (03/10/09), Auca-19 (03/10/09), Auca Central
Production Station (03/11/09), Auca South Production Station (03/12/09), Yulebra
Production Station (03/24/09), Culebra Production Station (03/24/09), Yuca Central
Production Station (03/25/09), and Guanta Central Production Station (03/26/09). In
addition, the Court-appointed expert for these locations (Mr. Muñoz) did not submit his
judicial-inspection reports until June 5, 2009, months after the submission of the
supplemental Cabrera Report.
In addition to judicial-inspection reports, the Court had not yet appointed a
countless number of experts to investigate and submit reports on evidentiary issues
identified by Chevron in its requests of October 2003. For example, Chevron requested
that the Court appoint an expert to assess the drilling practices and use of “pits” in the
Oriente since 1992. This request was directly related, and would serve as a source, to
the global assessment because Mr. Cabrera was ordered to specify the source of the
environmental damage in the former concession area. However, the Court did not even
appoint an expert (Dr. Barros) until May 29, 2009. Given the broad scope of the expert
assessment, Dr. Barros was unable to submit an initial report until December 21, 2009,
510 The summary verbal procedure was also manipulated to deprive my client of due process by
curtailing its right to meaningfully respond to and produce evidence. In one instance, Chevron’s final
eight judicial inspections were carried out over the course of four weeks by a single expert who was
required to complete all eight reports in half the time previously allotted to experts for a single site. And in
one particularly egregious example, Chevron originally had only seven days to review and draft a rebuttal
to a 4,500-page expert report on Petroecuador’s operational practices. Order of Jan. 5, 2010 at 3:30 p.m.,
Record at 164366-369, 164368v. The right to review and respond to evidence is at the foundation of due
process, and by these actions, this Court has abandoned the most basic notions of that fundamental
principle.
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almost an entire year after the submission of the final supplemental Cabrera Report on
February 5, 2009. Chevron also requested that the Court appoint an expert to evaluate
the fishing techniques used by settlers and natives in the rivers of the Oriente. This
request was related, and would serve as a source, to the global assessment because
Mr. Cabrera was charged with determining whether substances in the environment
could constitute a hazard for living beings. The Court did not appoint a fisheries expert
(Mr. Bermeo) until May 29, 2009. Chevron also requested the appointment of three
agricultural experts to assess: (i) techniques of land management and the erosive
impacts of settlement in the Oriente; (ii) contamination caused by the use of fertilizers,
herbicides, insecticides, and other agrochemicals; and (iii) the impact of deforestation
and soil use/management. These requests directly relate to the Cabrera Report’s
fraudulent conclusions on the source of damage to flora and fauna and should have
served as a basis for that report, yet the Court did not appoint these experts until late
2009, and the reports themselves were not submitted until May 2010, over a year after
the submission of the supplemental Cabrera Report.
Lacking both the information and the experience and professional expertise to
develop it, Mr. Cabrera—even if he had written the report submitted in his name—could
not have made an accurate assessment of causation and damages on each of these
issues. Recommending damages prior to the conclusion of the evidentiary phase put
the cart before the horse. He did not and could not determine that Chevron was the
responsible party without an assessment of Petroecuador’s operations after TexPet left
the region. He could not establish a causal link between Consortium activities and
conditions in the former concession without assessments of fishing techniques, land
management and settlement practices, or the use of agrochemicals in the region.
Although Chevron has repeatedly identified conflicts between the Cabrera Report and
the reports of these experts, these conflicts have not been resolved by a competent
expert. It is important to note that because these discrepancies are technical matters,
and therefore are not part of a judge's role, under Articles 259 and 262 of the Code of
Civil Procedure, they cannot and must not be resolved by Your Honor; therefore the
evidence and the record are incomplete, as Your Honor lacks the scientific expertise
necessary to resolve the discrepancies yourself.
These problems were only compounded by the Court’s response to the
compelling and incontrovertible evidence, presented by my client, of fraud on the part of
Mr. Cabrera and the plaintiffs. Even after it became clear that all of the plaintiffs’
“evidence” was tainted by fraud, collusion, and deception, and that Mr. Cabrera’s report
had in fact been secretly written by plaintiffs’ consultants and then translated into
Spanish for submission under Mr. Cabrera’s signature, this Court astonishingly kept
pressuring my client to close the taking of evidence, refusing to take the necessary time
to deal with Chevron's motion for an investigation of plaintiffs’ pattern of malfeasance,
which had tainted the lawsuit since the very filing of the complaint. Instead, this Court
proceeded as if nothing had happened, ordering the parties to submit briefs concerning
the calculation of alleged environmental remediation damages. But the plaintiffs have
not submitted any reliable evidence of damages, and the procedure ordered by this
Court on August 2, 2010 at 9:00 a.m. in order to “replace” the Cabrera Report with the
so-called "legal brief" was without any basis in law or logic, and was invented solely to
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hasten a large judgment against Chevron, heedless of the truth or the facts. Supra
§ 3.1. This was compounded by the Court’s decision to impose new and ridiculously
short time frames for my client to file key submissions and to respond to the allegations
of plaintiffs and the experts. 511 This obviously hindered my client’s right to present a
defense, which was evidently Your Honor’s intention as you went so far as to sanction
two of Chevron’s lawyers for seeking redress for the plaintiffs’ fraudulent conduct. 512
Finally, this Court declared autos para sentencia in this case while key pieces of
evidence were still outstanding and the evidence was incomplete and as further
concrete evidence of the plaintiffs’ fraudulent activities was coming to light. Contrary to
the order of the law and what was initially decided by this Court, the independent
settling experts have yet to resolve the divergent conclusions reached by the parties’
experts during any of the judicial inspections other than Sacha-53. 513 Supra § 3.3.1.
Hearings have been denied on a number of essential-error petitions filed by Chevron.
Supra § 3.3.3. In addition, Chevron is in the process of obtaining and reviewing
important evidence from individuals in the United States, pursuant to Section 1782 of
Title 28 of the United States Code of Civil Procedure [sic], including, but not limited to,
evidence about the activities of Mr. Cabrera in this case. 514 See supra §§ 2.1–2.2.
Accordingly, Chevron filed a motion asking that you revoke autos para sentencia, but
this was denied in an apparent rush to a predetermined result, thus ignoring evidence
with regard to the facts at issue. 515 It would violate due process for this Court to issue a
judgment before the evidence has been fully gathered and confronted by the parties,
particularly in the face of concrete evidence of a fraud perpetrated upon the Court by
the plaintiffs and Mr. Cabrera.
3.7 The Plaintiffs Intend the Judgment to Be the Result of the Pressure
Exerted by them on the Court
The documentary evidence shows that any judgment in this case would be the
result of concerted pressure tactics on Ecuadorian courts, planned and executed by the
511 See Orders dated Oct. 27, 2010 at 10:10 a.m. at No. 15, 21; Nov. 9, 2010 at 5:32 p.m. at No.
3; Dec. 1, 2010 at 5:50 p.m. at No. 5; Dec. 3, 2010 at 4:50
512 See Order dated Oct. 27, 2010 at 10:10 a.m. at No. 1, 2, 5 and 7.
513 Mr. Cabrera was not, and was never intended to be, a substitute for the settling experts.
Order of May 30, 2008, filed at 10:30 a.m., Record at 140405-11v, 140405v-06. To treat him as such
would be a flagrant violation of my client’s due process rights. My client has presented overwhelming
evidence demonstrating that Mr. Cabrera was nothing but a mouthpiece for the plaintiffs. Accordingly,
this Court cannot possibly regard him as a disinterested arbiter to resolve conflicts between the evidence
submitted by plaintiffs’ and Chevron’s nominated experts.
514 Chevron’s Motion, filed July 9, 2010 at 11:30 a.m. (summarizing evidence of fraud revealed
during U.S. proceedings under 28 U.S.C. § 1782).
515 Chevron’s Motion to Revoke Autos Para Sentencia, filed Dec. 22, 2010 at 5:48 p.m.
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plaintiffs and their representatives. 516 A decision based on external pressure, rather
than the law and the facts, violates basic principles of due process.
Many outtakes from the documentary Crude depict Mr. Donziger and the
plaintiffs’ representatives discussing the need to add political pressure on this Court in
order to secure a favorable judgment. In one such clip, a woman accompanying
Mr. Donziger observes that no judge would rule against plaintiffs because “[h]e’ll be
killed.” Mr. Donziger agrees, and then comments, “He might not be, but he’ll think—he
thinks he will be . . . Which is just as good.” Mr. Donziger then states, “You can solve
anything with politics as long as the judges are intelligent enough to understand the
politics . . . . [T]hey don’t have to be intelligent enough to understand the law, just as
long as they understand the politics.” 517
That sentiment is repeated throughout the outtakes. At one point, Mr. Donziger
explains that his goal is to “really mobiliz[e] the country, politically, so that no judge can
rule against us and feel like he can get away with it in terms of his career.” 518
Mr. Donziger sought to make it “politically and personally impossible [for a judge] to
survive” ruling against the plaintiffs. 519 Such actions are in accord with Mr. Donziger’s
belief that “the only language” that a judge “is gonna understand is one of pressure,
intimidation, and humiliation.” 520 Or, as Mr. Donziger recorded in his diary, the received
wisdom was that “the only way we will win this case is if the judge thinks he will be
doused with gasoline and burned if he rules against us.” 521
516 One court in the United States aptly described plaintiffs’ scheme: “So the name of the game is,
arguably, to put a lot of pressure on the courts to feed them a record in part false for the purpose of
getting a big judgment or threatening a big judgment, which conceivably might be enforceable in the U.S.
or in Britain or some other such place, in order to persuade Chevron to come up with some money.” See
Hearing Transcript, In re Chevron Corp., No. 10 MC 00002 (LAK) (S.D.N.Y. Sept. 23, 2010), at 23-24,
attached as Annex 19 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m. The same court noted that Mr.
Donziger’s statements on film are “flat-out admissions . . . that what’s going on in Ecuador is mud
wrestling, not bona fide litigation. That’s what he says. Political mud wrestling.” Id. at 13-14.
517 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 129-00-02).
518 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 032-00-01).
519 Transcript of Crude Outtakes, attached as Annex 8 to Chevron’s Fourth Supplemental Motion
for Terminating Sanctions, filed Dec. 22, 2010 at 5:45 p.m. (CRS 083-00-01).
520 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 052-00-06).
521 Diary of Steven Donziger, entry dated Mar. 11, 2006, at 10, attached as Annex 1 to Chevron’s
Third Supplemental Motion for Terminating Sanctions, filed December 20, 2010 at 4:30 p.m.
(DONZ0023089).
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Mr. Berlinger recently corroborated what my client has long reported to this Court:
“[Mr. Donziger] was organizing people to put pressure on the court.” 522 Other
documents, including a Selva Viva action plan and another of the plaintiffs’ internal case
planning documents, emphasize the same pressure strategy. 523 Thus, in an email from
February 2006, Mr. Fajardo suggested to a colleague who was planning to meet with
the judge to make clear to judge that the communities were monitoring his actions. 524
The plaintiffs’ “pressure” strategy accords with Mr. Donziger’s view that “this is
not a legal case, this is a political battle that’s being played out through a legal case.” 525
According to Mr. Donziger, the way to win the case is to “talk to influential people who
talk to the judge.” 526 For example, he recommends having “[President] Correa and
important people" speak out, to "put pressure on the judge.” 527 That view was
effectively endorsed by a high-ranking officer of the Government, who advised the
plaintiffs’ representatives (in an exchange captured on video) that in order to be
successful, the plaintiffs should orchestrate “a demonstration . . . that’s how this country
works. Close República Street.” 528
The clips show that the plaintiffs applied pressure not only in general, but as to
specific matters and decisions before this Court. For example, one outtake shows the
plaintiffs’ representatives discussing how they need to put pressure on the Court in
order to ensure that their request for appointment of a global expert would be accepted.
Mr. Fajardo agrees that “political pressure” is necessary, along with pressure “through
the media, too, that’s another type of pressure.” 529 A subsequent meeting, during which
522 Official Transcript of Deposition of Joseph Berlinger, at 602:8-10, dated Nov. 6, 2010, attached
as Annex 12 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at
4:12 p.m.
523 Document entitled: Action Plan - Selva Viva, dated Jan. 5, 2009, attached as Annex 1 to
Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m.
(DONZ0036220) (“Constant pressure on the judge and the court for a fast decision.”); Document entitled:
Timeline for Case Activity Plan, attached as Annex 1 to Chevron’s Third Supplemental Motion for
Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ00037146) (listing “political pressure” to
include “constantly visit[ing] and watch[ing] the Court to prevent CV from stopping the global
assessment”).
524 Attached as Annex 1 to Chevron’s Fourth Supplemental Motion for Terminating Sanctions,
filed Dec. 22, 2010 at 5:45 p.m. (DONZ00028223).
525 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 060-00-04).
526 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 187-01-01).
527 Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Second Supplemental Motion
for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 376-03-12).
528 Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Second Supplemental Motion
for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 221-02-01).
529 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 158-02-07). For example, plaintiffs’ representatives state that they hope a press release
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Mr. Donziger and Mr. Fajardo actually meet ex parte with Judge Yánez and pressure
him to appoint the global expert, was actually captured on film. 530 Ms. Atossa Soltani,
the founder and director of Amazon Watch, is also shown on tape pressing and asking
Judge Yánez as to why he has not yet appointed a global expert. 531
In another clip, which depicts a June 6, 2007 meeting, Mr. Donziger states that
plaintiffs “were getting, like, everything, for a while, that we wanted. You know, we got
the cancellation of the inspections. You know, . . . we’re getting the peritaje global, the
final phase.” He then outlines the next steps that need to be taken: “[W]e need to do
more, politically, to control the court, to pressure the court. We believe they make
decisions based on who they fear the most, not based on what the laws should dictate.
So, what we want to do is take over the court with a massive protest . . . .” 532
Newly uncovered evidence proves that the plaintiffs’ lawyers and representatives
privately met and pressured Your Honor’s predecessors on multiple occasions to accept
the plaintiffs’ demands. For example, on January 27, 2006, Mr. Donziger wrote that he
was “furious” regarding the inaction of the judge. Mr. Donziger wrote that “[w]ithin
minutes, [Yanza] had called the judge and they were meeting for lunch at 1—in an hour.
Gave him [Yanza] $40 out of my pocket.” 533 On March 11, 2006, Mr. Donziger records
another meeting with the judge the “day before SC inspection”: “This was second
meeting with the judge—had lunch with him the previous Friday in the Cangrejo Rojo. I
love it—this lobbying. I am good at it.” 534 After this meeting, Mr. Donziger also
commented that the judges in Ecuador are “not very bright,” and he “took advantage of
the situation to explain our theory of the case.” 535 On January 19, 2007, Mr. Donziger
wrote that he met with Judge Yánez at the judge’s house. After this meeting,
Mr. Donziger wrote that despite him previously wanting the judge off the case, “[w]e
saved him, and now we are reaping the benefits.” However, Mr. Donziger noted that
“Guerra will be the judge to decide the case. We have to start lobbying him, working
(continued…)
helps “[p]ut pressure on the judge.” Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s
Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 202-02-01).
530 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 345-02-05).
531 Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Second Supplemental Motion
for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 347-00-02).
532 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 350-04-01).
533 Diary of Steven Donziger, entry dated Jan. 27, 2006, at 16, attached as Annex 1 to Chevron’s
Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ0023089).
534 Diary of Steven Donziger, entry dated Mar. 11, 2006, at 10, attached as Annex 1 to Chevron’s
Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ0023089).
535 Diary of Steven Donziger, entry dated Mar. 11, 2006, at 10, attached as Annex 1 to Chevron’s
Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ0023089).
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with him.” 536 The plaintiffs even went so far as to attempt to influence the appointment
of presiding judges of this Court; indeed, Mr. Donziger wrote saying that his team was
“working to get Alberto Guerra apptd President again in Dec so he can take over case.
He told PF (Pablo Fajardo) that he wants to impose the sentence in the case. This
means he will push it along and we will end in two years.” 537
In furtherance of their strategy of pressuring this Court, the plaintiffs considered
some incredible proposals. For example, at the same June 6, 2007 meeting,
Mr. Donziger states that plaintiffs need their “own army,” a “specialized group” detailed
“to watch over the court.” 538 Atossa Soltani, the founder and director of Amazon Watch,
asks if “anybody can, uh, subpoena these videos.” Mr. Donziger responds, “We don’t
have the power of subpoena in Ecuador.” Ms. Soltani asks, “What about U.S.” She
continues, “I just want you to know that it’s—it’s illegal to conspire to break the law.” 539
Also at the same meeting, Mr. Donziger says that the plaintiffs need “a force, a
political force that the judges can see. Then, we start with five hundred people at the
court and after that—all that, followed by twenty, thirty people, paid by us . . . .” Luis
Yanza, the coordinator for plaintiffs and a representative of the Amazon Defense Front,
adds that these people would need “minimal training . . . so they do a good job for us.
That’s it. And then, if it goes well, and we need, uh, if we need weapons, we can
provide weapons.” Mr. Donziger then adds that this project will be expensive and that
they “need, like, a hundred grand,” referring to US$100,000. Mr. Donziger then states,
“[W]hile we can do all the legal briefs in the world and host all the visitors who want to
come, if we don’t show power in the court, we’re not gonna finish this case . . . . The
meetings with the judge, like you guys had yesterday, I think, are of minimal effect.” He
continues, “The army project is not a new project. I mean, it’s—it’s—it’s an effort to step
up the political power we have in the court, at the point of contact, where they’re gonna
feel it the most.” 540 Other evidence confirms that Mr. Donziger viewed the plaintiffs'
536 Diary of Steven Donziger, entry dated Jan. 19, 2007, at 19, attached as Annex 1 to Chevron’s
Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ00027256).
537 Diary of Steven Donziger, entry dated Oct. 5, 2005, at 33, attached as Annex 1. to Chevron’s
Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ0023089).
538 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 350-04-02). Mr. Donziger also notes the need “to organize pressure demonstrations
at the court.” Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 16,
2010 at 4:35 p.m. (CRS 346-00-02).
539 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 350-04-02).
540 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 350-04-02).
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"private ‘army’" as "a critical part of our strategy that is allowing the case to keep
progressing." 541
Another clip also demonstrates the lengths to which the plaintiffs were willing to
go to pressure courts. In that clip, Mr. Donziger and one of his colleagues accuse an
Ecuadorian judge in a different proceeding of corruption and claim that “the court is
bought” simply because the judge properly enforced a procedural rule. 542 Mr. Donziger
goes on to suggest that they falsely claim the judge called Mr. Donziger a “gringo.”
“We’ll just make it up,” Mr. Donziger says. 543 As Mr. Donziger says in an earlier clip, he
“could have been a propagandist.” 544
The plaintiffs clearly understood how wrong it was to pressure the courts in this
way. Mr. Donziger admits on video that “this is something you would never do in the
United States . . . this is just out of bounds.” 545 In another clip, Mr. Donziger discusses
how one court yielded to his tactics (“fight, and yell, and scream, and make a scene”),
conceding that “that would never happen in the United States. That would never
happen in any judicial system that had integrity.” 546 But in Ecuador, “this is how the
game is played, it’s dirty,” and so “we have to, occasionally use, um, pressure
tactics.” 547 Plaintiffs apparently believe that this Court is so “institutionally weak” 548 and
lacking “integrity,” 549 that it will continue to succumb to these thuggish tactics. They
repeatedly decry the Ecuadorian courts, claiming that “‘there are almost no rules
here’” 550 and that “the courts are so utterly weak.” 551 According to plaintiffs, Ecuador
541 E-mail from Steven Donziger to Michael Bonfiglio, dated June 27, 2007 at 6:19 p.m., attached
as Annex 4 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at
4:21 p.m.(MB-STIP0069567).
542 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Oct. 1, 2010 at
2:30 p.m., (CRS 046-01-03).
543 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., (CRS-046-02-01).
544 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., (CRS 009-17-01).
545 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 052-00-05).
546 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 053-02-01).
547 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 052-00-05).
548 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 187-01-01).
549 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 053-02-01).
550 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 052-00-05).
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has “the most ridiculous legal culture,” “encrusted” with “[h]undreds of years of . . .
judicial weakness and corruption.” 552
The plaintiffs’ “pressure tactics” clearly worked as planned. From the Court’s
about-face on the question of relinquishing the judicial inspections and cancelling the
settling experts; to the Court’s agreement to appoint Mr. Cabrera as the global expert
(which Mr. Donziger admitted the judge “never would have done had we not really
pushed him” 553 ); to the Court’s order of August 2, 2010, accepting plaintiffs’ lawyers’
proposal for a new round of reports following the exposure of Mr. Cabrera as a fraud,
the Court has consistently sided with plaintiffs while ignoring my client’s key arguments.
Those prejudicial and biased decisions were the product of intense political and external
pressure orchestrated by the plaintiffs, and they have irredeemably tainted the entirety
of these proceedings. All of this constitutes a gross violation of my client’s right to due
process and a fair trial.
3.8 This Case Has Been Prejudicially Influenced by the Government of
Ecuador
The denials of due process that have marred this trial also result from intense
political pressure brought to bear on this Court to expedite a ruling in favor of the
plaintiffs. That political pressure is part of an apparent quid pro quo in which the
Government is, in various respects, supporting the plaintiffs’ suit against Chevron in
return for the plaintiffs’ agreement not to sue the Government. 554 This is because the
(continued…)
551 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 053-02-01). Likewise, plaintiffs had no respect for the evidentiary process before
Ecuadorian courts, noting that "[i]t's not like a US court in that respect, things are really loose here. . . .
Rules of evidence are, like, not even close to what they are in the US. People can just say whatever the
'f' they want". Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Second Supplemental
Motion for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 042-14-05).
552 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010
at 4:35 p.m. (CRS 187-01-01).
553 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 361-11-01).
554 The quid pro quo arrangement between the plaintiffs and the State apparently began well
before the Lago Agrio complaint was filed. In 1997, the plaintiffs’ then-lead attorney, Cristóbal Bonifaz,
publicly stated that “the plaintiffs and their attorneys have agreed—in legal documents—to not sue the
State should it be found that the State was jointly responsible with Texaco for causing environmental
damage,” Texaco—The Time Has Come, Hoy (Apr. 14, 1997), attached as Annex H to Chevron's Second
Rebuttal to the Barros Report, filed Jan. 29, 2010 at 3:30 p.m., Record at 166932-33; Petroecuador will
not be harmed, El Comercio (Apr. 22, 1997), attached as Annex I to Chevron's Second Rebuttal to the
Barros Report, filed Jan. 29, 2010 at 3:30 p.m., Record at 166935 (noting that the plaintiffs had provided
“notarized documents” to the Ecuadorian Attorney General waiving any claims against the State). Less
than a year after the Lago Agrio complaint was filed, the Government accepted an offer of free legal
services from Mr. Bonifaz (and Terry Collingsworth) to resist Chevron’s assertion of its rights under the
settlement in related litigation in the U.S. District Court for the Southern District of New York. See Letter
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state-owned oil company, Petroecuador, was the majority owner of the Consortium and
has been the sole operator of the former concession area since 1992, in which time it
has acquired an atrocious environmental record. 555 The pressure exerted by various
officials in the Ecuadorian Government violates the fundamental principle of judicial
independence, as well as my client’s right to due process. 556
The plaintiffs’ strategy has always depended heavily on undue influence and
pressure exerted by the Government in their favor. Outtakes from Crude confirm that
the plaintiffs—clearly understanding the political influence over judges that can be
imposed by the Government—viewed the State’s support as crucially important to their
case. 557 For example, in one clip, Mr. Donziger explains that the plaintiffs’ “biggest
problem right now is we have to pressure the judge and the court.” Particularly effective,
he says, would be “the President of the country calling him out, you know. The
President of the Supreme Court calling him out, for how slow the case is going.”
According to Mr. Donziger, such tactics would be necessary to ensure that the plaintiffs
did not “lose control of the judge.” 558 Likewise, Mr. Donziger wrote in his diary that “[w]e
can have the best proof in the world, and if we don’t have a political plan we will surely
lose. On the other hand, we can [have] mediocre proof and a good political plan and
stand a good chance of winning.” 559
In a similar vein, Mr. Donziger rejoices at the election of the current Government,
stating that the plaintiffs gained a “huge . . . leg up” because these new “friends” in the
(continued…)
from C. Bonifaz to Hon. L. Sand dated Jan. 26, 2006, attached as Annex 32 to Chevron’s Motion filed
Sept. 16, 2010 at 4:35 p.m.
555 Remediation Contract dated May 4, 1995 at 2, filed on July 15, 2004 at 9:10 a.m., Record at
7855-7882v, 7856.
556 Article 167 and Article 168(1) of the Constitution, concordant with Articles 8 and 123 of the
Organic Judiciary Code.
557 Indeed, Mr. Donziger worries that if the Bilateral Investment Treaty Arbitration panel orders the
State to pay any judgment against Chevron, the Government could put “huge pressure” on the court to
rule against the plaintiffs. Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed
Sept. 16, 2010 at 4:35 p.m., (CRS 164-00-01).
558 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 376-04-01).
559 Diary of Steven Donziger, entry dated May 31, 2009, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m., at 4 (DONZ00023089).
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Government “already [knew] about this case before they came into office.” 561
Mr. Donziger reiterates the point, explaining that “all the politics of Ecuador really turned
our way” 562 because “we already have connections with” the current administration, and
“they love us and they want to help us . . . they’re actually asking us to come and asking
what they can do.” 563 Mr. Donziger states that “with Correa’s victory, like we’ve never
been tighter with the government, you know,” 564 and repeats on another occasion that
“we are in a significantly improved position . . . because of that election result” because
President Correa is “a friend of ours.” 565 Mr. Donziger evidently planned to exploit the
presence of his new “friend[s]” in government to the advantage of the plaintiffs,
remarking “what good is it if a friend gets elected, if he doesn’t do anything for you” 566
Indeed, Mr. Donziger describes his efforts as being “hand-in-hand” with the
Government, 567 even to the point of collaborating with the Government’s lawyers in
responding to a suit against Ecuador in the United States. 568
The plaintiffs in fact acted upon their strategy of collusion with the State, as other
Crude outtakes confirm, engaging in the “political work at the highest level” that
Mr. Donziger says is needed in order “to make things happen.” 569 The outtakes, for
example, include video of a meeting between the plaintiffs’ attorneys; a high-ranking
561 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 163-02-02). In the weeks before President Correa’s inauguration in January 2007, Mr.
Donziger claimed that he had “a very quiet meeting in a coffee shop” in April 2006 with the thenpresidential
candidate on behalf of the plaintiffs, which led Mr. Donziger to conclude that President Correa
“loves us.” Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010
at 4:35 p.m. (CRS 162-03-01).
562 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 305-01-03).
563 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 138-01-01). Mr. Donziger also states the plaintiffs will “take advantage” of the opportunity
presented by President Correa’s election by “meet[ing] with ministers” in the Government. Transcript of
Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m. (CRS 156-00-
01). Mr. Donziger has also reiterated that President Correa “loves” the plaintiffs and expressed his desire
to “get all [the plaintiffs] can out of that situation.” Transcript of Crude Outtakes, attached as Annex 1 to
Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m. (CRS 162-03-01).
564 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 138-01-02).
565 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 130-00-01).
566 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 162-03-01).
567 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 167-01-01).
568 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 169-05-10).
569 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 104-01-01).
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official of the Government; and Monica Mason, a delegate from the Attorney General’s
Office. 570 The official began the meeting by inquiring “how we can help each other,” and
the parties proceeded to discuss how the Republic could assist the plaintiffs in nullifying
the Release Agreements that Texaco Petroleum Company and the Republic had
executed years earlier, 571 and which stand as a dispositive legal obstacle to the
plaintiffs’ case, see infra § 5.2. The plaintiffs’ representatives explain to the official that
“although we could mobilize people, the—the official nature of the President could do
much more in this case . . . an interest by the Executive Branch—and pressure on the
Public Prosecutor’s Office . . . could do a lot on this subject.” 572 They described how
they, “with [Deputy Attorney General] Mart[h]a Escobar, were . . . working on this
subject [undermining the Release Agreements], specifically on the subject of nullity.” 573
They confirmed that they had been working with the Attorney General’s Office on “some
pretty bold theories to get around the statute of limitations,” 574 but the official himself
recognized during the meeting that this belated strategy to nullify the Settlement and
Release Agreements was not legally “sustainable.” 575 As soon as he realized that his
remark was caught on film he said: “Why are they filming That seems to me to be a—
completely improper.” 576 And the film went dark. 577
To be specific, the Republic has tangibly supported the plaintiffs’ case in at least
four different respects: (i) vocally, through public statements and representations to this
Court, designed to influence the judgment; (ii) financially, through payments and related
assistance to the plaintiffs and their affiliates; (iii) strategically, through the bogus use of
its power to pursue criminal charges; and (iv) directly, by apparently managing this
Court and even assisting in the drafting of the judgment. 578
First, openly interfering with this case, the President of the Republic has publicly
given the plaintiffs “the National Government’s full support,” including “assistance in
570 Transcript of Crude Outtakes, attached as Annex 3 to Chevron’s Second Supplemental Motion
for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m. (CRS 221-02-01).
571 Id.
572 Id.
573 Id.
574 Id.
575 Id.
576 Id.
577 Id.
578 Documents in the record also hint at other forms of official support. For example, Mr.
Donziger at one point suggested that consultants Mr. Beltman and Ms. Maest “define the norms of cleanup,”
and then the team could “propose these norms to the Ministry of Energy which governs these norms
and whose Minister is a good friend of ours, so that the Ministry issues them as an official decree before
the trial ends.” E-mail from Steven Donziger to Doug Beltman, et al., dated Sept. 19, 2007 at 8:07 p.m.,
attached as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20,
2010 at 4:30 p.m. (DONZ00025160).
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gathering evidence” against Chevron. 579 Members of the Constituent Assembly also
have unequivocally supported the plaintiffs. 580 Ecuador’s Attorney General has thus
confirmed that “the Correa administration’s position on the case is clear: ‘The pollution
is result of Chevron's actions and not of Petroecuador.’” 581 In particular, one of
President Correa’s top advisors actually submitted a brief in this case during the
presidential campaign. See supra § 3.3.1. Echoing the arguments of the plaintiffs’
representatives, the brief criticized the Court for not moving the case along more quickly
and, in particular, for not allowing the plaintiffs to cancel most of the remaining judicial
inspections that the Court had ordered at the outset of the case. The Court then, ceding
to these pressures and contradicting its previous orders, illegally permitted the plaintiffs’
lawyers’ relinquishment request. 582
Second, documentary evidence indicates that government entities have directly
supported the plaintiffs’ litigation with financial contributions of hundreds of thousands, if
not millions, of dollars.
• Testifying about his own notes taken at the time, one of the plaintiffs’
consultants acknowledged that, at one point, Mr. Donziger was in
“communication” with a government official on using US$3.5 million in
579 The Government Backs the Assembly of People Affected by Texaco, Press Release from the
Government of Ecuador (Mar. 20, 2007), attached as Annex G to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 141274-87, 141285; see Chevron’s
Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 141082-203,
141092; see also President Correa says he is “furious” about the damages Texaco caused in the Amazon
Region, Agencia EFE – Servicio Económico (Apr. 28, 2007), (“Accompanied by attorneys for the plaintiffs,
President Correa said that he was ‘furious’ about the damage caused, in his opinion, by the American
company Texaco during its 20 years of operations in the Amazon forests, and he labeled the
representatives of TexPet who signed the Final Release Document ‘traitors’ . . . ‘who would sell their
souls, the country [and] their families for a handful of dollars.’”).
580 For example, Assembly member Manuel Mendoza stated that we “provide frontal support to
the unceasing struggle of” the plaintiffs. Noticias TV, Cable Noticias Estelar, Feb. 12, 2008 at 9:56 p.m.,
attached as Annex G of Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at
2:14 p.m., Record at 141274-87, 141277. At the same time, they accused TexPet of being responsible
for all the problems in the Oriente region: “The economic, social and cultural damage caused to the Siona,
Secoya, Cofán, Kichwa and Huaorani indigenous people, including colonists, is extensive. Concerning
these facts, the largest disaster caused or registered in our country is that caused by Texaco.” Ecuador
TV, The Assembly from Inside, June 6, 2008 at 12:53 p.m. (quoting Assembly Member Nelson López),
attached as Annex G to Chevron’s Objection to Expert Cabrera’s Global Report, filed Sept. 14, 2008 at
2:14 p.m., Record at 141274-87, 141276.
581 ORDONEZ, Isabel, Amazon Oil Row: US-Ecuador Ties Influence Chevron Amazon Dispute,
Dow Jones (Aug. 7, 2008).
582 See Order of Jan. 22, 2007 at 9:00 a.m., Record at 125656-59, 125656; see also Transcript of
Swearing In of Expert Richard Cabrera, filed June 13, 2007 at 9:45 a.m., Record at 130169-69v, 130169.
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funds from Petroecuador and the Ministry of the Environment to obtain
evidence that “would be used in [the Lago Agrio] court case.” 583
• Shortly before Mr. Cabrera began his work, the Ministry of Environment
gave the Frente US$160,000 purportedly in exchange for, among other
things, information and laboratory samples. 585
• In August 2008, the Ministry of Environment awarded a five year, US$30
million contract to the Frente, pursuant to President Correa’s relocation
plan for inhabitants of the former concession area. 586 That is a substantial
583 Official Transcript of Deposition of Richard A. Kamp, at 283:5-286:8, Oct. 8, 2010, attached as
Annex 11 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8, 2010 at
4:21 p.m.; Notes by Richard Kamp dated Nov. 29, 2005, presented as Exhibit No. 72 in the Deposition of
Richard Kamp, dated Oct. 7-8, 2010, attached as Annex 18 to Chevron’s Second Supplemental Motion
for Terminating Sanctions, filed Dec. 8, 2010 at 4:21 p.m.
584 See Annex 1 of Chevron’s Fourth Supplemental Motion for Terminating Sanctions, filed Dec.
22, 2010 at 5:45 p.m. (DONZ00027285);
see also E-mail from
Steven Donziger to Joseph Kohn, dated Jan. 24, 2005 at 2:50 p.m., attached as Annex 1 to Chevron’s
Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ0027538)
(noting that Manuel Pallares “is confident he can extract 250,000 from PetroEcuador to carry out the
work” for the “Global inspection”); E-mail from Manuel Pallares to Steven Donziger, dated May 29, 2005
at 10:17 a.m., at 2, attached as Annex 1 to Chevron’s Third Supplemental Motion for Terminating
Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ0026841) (“Esperanza talked with the Ministro de
Finanzas and he is willing to help with this. It could be via Petroecuador, ECORAE or some other or
various government institutions. I really see this happening”).
E-mail from Steven Donziger to Joseph Kohn,
dated Oct. 26, 2006 at 2:40 p.m., attached as Annex 1 to Chevron’s Third Supplemental Motion for
Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ0023743) (reporting “good news” that “we
have succeeded in setting up a working technical committee with Petroecuador—this will help us on a
number of fronts”).
585 Ministry Agreement No. 164, published in Official Gazette 26, Feb. 22, 2007.
586 See SANDOVAL, María A., Environmental Remediation Plan in Motion, El Telegrafo, Aug. 12,
2008, attached as Annex 19 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed
Dec. 8, 2010 at 4:21 p.m.; see also The Remediation Took a First Step, El Comercio (Dec. 24, 2008),
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amount of money, and there are no assurances that the Frente has not
used it to pursue this case.
Relatedly, an outtake from the movie Crude shows a meeting between the
plaintiffs’ representatives and Ms. Anita Alban, then Ecuador’s Minister of the
Environment. She is seen explaining that the Government was “helping” the plaintiffs
by, among other things, setting up a corporation with them to manage all of the
remediation work flowing from a future (and assumed) Lago Agrio judgment and
providing “the support that we can.” 587
Third, and even more significantly, the Government is attempting to promote the
plaintiffs’ cause through bogus criminal charges. As discussed below, the plaintiffs’
demand for remediation is barred by the Settlement Agreement signed with the
Government of Ecuador and the respective local Governments (the municipalities in the
concession area and the Provincial Council), which released TexPet from any
responsibility for environmental conditions in the former concession area. See infra
§ 5.2. The plaintiffs and the Government of Ecuador thus attempted from the early
stages of the lawsuit to nullify such Settlement Agreement, claiming that they were
“fraudulent.” In one email to the Attorney General’s Office, an attorney for the plaintiffs
wrote: “If at some point we want the Government and the Attorney General to play for
our side, we must give them some ability to maneuver.” 588 During the same exchange,
Deputy Attorney General Martha Escobar stated:
[T]he Attorney General’s Office and all of us working on the
State’s defense were searching for a way to nullify or
undermine the value of the remediation contract and the final
acta and . . . our greatest difficulty [lies] in the time that has
passed . . . . The Attorney General remains resolved . . . to
criminally try those who executed the contract (that also
seems unlikely to me, since the evidence of criminal liability
established by the Comptroller’s Office was rejected by the
prosecutor). 589
(continued…)
attached as Annex 20 to Chevron’s Second Supplemental Motion for Terminating Sanctions, filed Dec. 8,
2010 at 4:21 p.m.; President Correa’s Radio Address, Radio Caravana (Apr. 28, 2007).
587 Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. (CRS 421-00-03).
588 E-mail from A. Wray dated Aug. 5, 2005 at 4:33 p.m., attached to Chevron’s Objections to
Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 141204-07, 141207.
589 E-mail from M. Escobar dated Aug. 10, 2005 10:58 a.m., attached to Chevron’s Objections to
Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 141204-07, 141206-07.
Attempting to conceal the Government’s coordination with and assistance to the Lago Agrio plaintiffs,
Deputy Attorney General Escobar falsely testified under oath that she, in her official capacity, had not had
any contact with the plaintiffs’ representatives. Before being confronted with the e-mails discussed in the
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Consistent with this scheme, and at the express urging of the President of the
Republic, Prosecutor General Washington Pesántez pursued baseless criminal
prosecutions against two former TexPet representatives for alleged yet unspecified
“fraud” with respect to the settlement contracts. 590 These charges previously were
investigated and rejected not just by the Prosecutor General’s office, but by the very
official who ultimately instituted the proceedings, Dr. W. Pesántez. 591 In May 2004,
based upon a complaint filed by the Comptroller General alleging fraud in the
remediation approval process, the Prosecutor General, Dr. Mariana Yepez Andrade,
opened two criminal investigations—one for fraud and one for environmental crimes—
and assigned two separate prosecutors to each charge. 592 In August 2006, the new
Prosecutor General, Dr. Cecilia Armas, provided an opinion to the Criminal Court
recommending dismissal of the fraud complaint given that “the report by the Office of
the Comptroller General does not find any evidence of criminal liability.” 593 Likewise, in
September 2006, the Public Prosecutor of Pichincha, Marianita Vega Carrera,
(continued…)
text, she even stated that such contact would be “completely” improper and that the Attorney General
“must stay to the side.” Official Transcript of Deposition of Martha Escobar dated Nov. 21, 2006
(“Escobar Dep.”) at 14:21-15:5, 128:21-129:17, 144:12-145:8, attached as Exhibit 6 to Chevron’s Motion
filed Sept. 14, 2010 at 11:10 a.m. In addition, the Attorney General referenced in the e-mail—who was
“resolved” to bring a criminal prosecution—later admitted under oath that he had no knowledge of
evidence supporting an allegation of fraud. Official Transcript of Deposition of José Maria Borja dated
Sept. 14, 2006 (“Borja Dep.”) 65:12-66:14; 67:19-24; 73:1-10; 84:17-85:4, attached as Exhibit 7 to
Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.
590 Office of the Prosecutor General of Ecuador, Notice Reopening Investigation, Mar. 25, 2008 at
4:00 p.m.; Office of the Prosecutor General of Ecuador, Criminal Indictment No. 09-2008 at 6, Aug. 26,
2008, attached as Exhibit 18 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.; see also Prosecutor
General formally charges Chevron attorneys, Hoy (Sept. 13, 2008); Prosecutor General opens new case
in Texaco litigation, El Universo (Sept. 16, 2008).
591 District Prosecutor of Pichincha, Opinion of Dr. Washington Pesántez Munoz Ratifying Motion
To Dismiss, addressed to the Third Judge of Criminal Judge of Napo, Mar. 13, 2007, at 10, attached as
Exhibit 15 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.
592 See Prosecutor General’s order to initiate preliminary investigations of crimes alleged by the
Comptroller General, May 10, 2004, attached as Exhibit 8 to Chevron’s Motion filed Sept. 14, 2010 at
11:10 a.m. On June 20, 2006, the Ecuadorian State sought permission to assert an affirmative defense
of fraud in related litigation in the U.S. District Court for the Southern District of New York. On October 10,
2006, the State’s attorneys confirmed their withdrawal of the affirmative fraud defense. See Plaintiffs'
Memorandum of Law in Support of their Motion to Amend their Reply to Defendants' Counterclaims in
order to Assert One Additional Affirmative Defense, Republic of Ecuador and Petroecuador v.
ChevronTexaco and Texaco Petroleum Co., No. 04-CV-8378 (S.D.N.Y. Jun. 20, 2006), attached as
Annex 30 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.; Stipulation and Order re: Plaintiffs'
Withdrawal of Affirmative Defense in Their Reply to Defendant's Counterclaims, Republic of Ecuador and
Petroecuador v. ChevronTexaco and Texaco Petroleum Co., No. 04-CV-8378 (S.D.N.Y. Oct. 10, 2006),
attached as Annex 31 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
593 Office of the Prosecutor General of Ecuador, Opinion and Motion To Dismiss the Complaint of
the Comptroller General by Dr. Cecilia Armas Erazo de Tobar at 6-7, addressed to the President of the
Former Supreme Court of Justice, Aug. 9, 2006 at 5:00 p.m., attached as Exhibit 9 to Chevron’s Motion
filed Sept. 14, 2010 at 11:10 a.m.
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ecommended dismissal of the 2003 criminal complaint’s environmental charges for lack
of evidence. 594 Shortly thereafter, the Public Prosecutor’s decision was affirmed by her
superior, then District Prosecutor of Pichincha, Dr. Washington Pesántez. 595
Dr. Pesántez found that “there was not sufficient evidence to continue with the
prosecution of the representatives of the Ministry of Energy and Mines, Petroecuador[,],
Petroproducción and Ricardo Reis Veiga and Dr. Rodrigo Pérez Pallares,
representatives of TexPet. Therefore, I ratify the dismissal requested by the
Prosecutor.” 596 The environmental charges were ultimately dismissed and archived by
a lower criminal court, based on the prosecutors’ opinions. 597
The Code of Criminal Procedure requires archiving the case when the
Prosecutor General recommends dismissal. 598 But, despite the opinions of the
prosecutors, the former Supreme Court of Justice returned the criminal complaint on the
fraud charge to the Comptroller General for further opinion. 599 Objecting to this course
of action, the new Prosecutor General, Dr. Jorge German, again requested (twice) that
the fraud charges be dismissed and archived. 600 In so doing, Dr. German contradicted
President Correa, who, in April 2007, publicly began to call for a lawsuit and charges
against the “corrupt persons and traitors” who “stat[ed] that the remediation was
594 Office of the Prosecutor of Ecuador, Opinion and Motion To Dismiss at 9, Sept. 4, 2006,
attached as Exhibit 10 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.
595 District Prosecutor of Pichincha, Opinion Ratifying Motion To Dismiss at 10, addressed to the
Third Judge of the Criminal Court of Napo, Mar. 13, 2007, attached as Exhibit 15 to Chevron’s Motion
filed Sept. 14, 2010 at 11:10 a.m., ALVARO, Alvaro, Ecuador: Prosecutor Recuses Himself in Chevron
Case, Dow Jones (Dec. 16, 2008) (emphasis added) (reporting Dr. Pesántez’s finding that there “were no
indications of civil, administrative or criminal liability against the officers of the Ecuadorian Government
and the representatives of Texaco in relation to environmental damages which may have taken place in
the Amazon region”).
596 District Prosecutor of Pichincha, Opinion of Dr. Washington Pesántez Munoz at 10, addressed
to the Third Judge of the Criminal Court of Napo, Ratifying Motion To Dismiss, Mar. 13, 2007, attached as
Exhibit 15 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.
597 Order of the Third Criminal Court of Napo Dismissing Environmental Crimes, filed Mar. 16,
2007 at 10:20 a.m., attached as Exhibit 16 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.
598 Under Art. 39 of the Code of Criminal Procedure, when the prosecutor recommends dismissal,
the judge must either archive the case or send the case to a superior prosecutor. In this case, the
Prosecutor General (the state's highest level prosecutor) recommended dismissal. As such, the law
required the archiving of this case. See Art. 39 of Code of Criminal Procedure; see also Motion of the
Office of the Prosecutor General of Ecuador, addressed to the President of the Supreme Court of Justice,
Requesting Dismissal of the Case, filed Mar. 1, 2007 at 9:20 a.m., attached as Exhibit 14 to Chevron’s
Motion filed Sept. 14, 2010 at 11:10 a.m.
599 Order of the Supreme Court of Justice of Oct. 27, 2006 at 3:10 p.m., attached as Exhibit 11 to
Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.; see Comptroller General’s Pleading in Opposition to
Dismissal, Nov. 1, 2006, attached as Exhibit 12 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.;
see also Order of the Supreme Court of Justice of Jan. 12, 2007, attached as Exhibit 13 to Chevron’s
Motion filed Sept. 14, 2010 at 11:10 a.m.
600 Second Request of the Office of the Prosecutor General of Ecuador to Ratify Dismissal, dated
June 14, 2007, attached as Exhibit 17 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.
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complete.” 601 In November 2007, the newly formed Constituent Assembly issued
“Mandate 1,” which, among other things, removed Dr. German as Ecuador’s Prosecutor
General and replaced him with Dr. Pesántez. 602
In March 2008, contrary to his earlier findings as District Prosecutor that no fraud
or environmental crimes had been committed in TexPet’s procurement and signing of
the settlement and release, Dr. Pesántez reopened the investigation on alleged new
evidence. 603 In July 2008, the attorneys and sponsors of the plaintiffs held a press
conference in Quito about the supposedly sealed criminal investigation, and urged Dr.
Pesántez to indict TexPet representatives immediately. 604 President Correa followed up
in his weekly radio address, praising Dr. Pesántez for “open[ing] an investigation to
punish those people [involved in the Settlement and Release].” 605 Dr. Pesántez then
promptly issued criminal charges against, among others, TexPet’s legal representative
in Ecuador, Rodrigo Pérez, and Chevron’s attorney overseeing the Lago Agrio litigation
from the United States, Ricardo Reis Veiga. 606 After nearly eighteen months of
supposed investigation, on April 29, 2010, Acting Prosecutor General Alfredo Alvear
Enriquez issued a Prosecutor’s Accusation against Mr. Reis Veiga and Mr. Pérez,
among others, which initiates criminal proceedings. 607
This history demonstrates that the criminal charges lack support and are the
product of political pressure applied jointly by the plaintiffs and the executive branch. Mr.
Donziger actually admitted in deposition testimony that he “ha[d] a strategy of [publicly]
asking for a criminal investigation of Texaco’s top managers,” in order to push Chevron
601 Correa declares he is “furious” about the damage Texaco caused in the Amazonian Region,
Agencia EFE – Servicio Economico (Apr. 28, 2007), attached as Annex 21 to Chevron’s Motion filed Dec.
8, 2010 at 4:21 p.m.; see also Transcript of Crude Outtakes, attached as Annex 19 to Chevron’s motion
filed Dec. 20, 2010 at 5:50 p.m. (CRS 277-02-01) (recording President Correa “ask[ing] the Attorney
General to get that report going in the Comptroller’s Office to judge whether . . . [w]hat they accepted . . .
[d]efrauded the country”).
602 Mandate 1, published in the supplement to Official Gazette 223, Nov. 30, 2007.
603 Office of the Prosecutor General of Ecuador, Notice Reopening Investigation, Mar. 31, 2008,
attached as Exhibit 19 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m. Dr. Pesántez later
acknowledged the inconsistency, but did not offer any explanation for it. He then recused himself from
the case, but did not justify his failure to do so before initiating the criminal proceedings, which remain
pending. ALVARO, Mercedes, Ecuador: Prosecutor Recuses Himself in Chevron Case, Dow Jones (Dec.
16, 2008).
604 See Press Release of the Frente de Defensa de la Amazonía (FDA) dated July 31, 2008,
attached as Annex B to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at
2:14 p.m., Record at 141208-211, 141210-11.
605 Weekly Presidential TV and Radio Address, State TV Channel (Aug. 9, 2008), at 10:00 a.m.;
see also Office of the Prosecutor General of Ecuador, Criminal complaint No. 09-2008, Aug. 26, 2008 at
11:00 a.m., attached as Exhibit 20 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.
606 See Office of the Prosecutor General of Ecuador, Criminal complaint No. 09-2008, Aug. 26,
2008, attached as Exhibit 20 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.
607 Office of the Prosecutor General of Ecuador, Prosecutor’s Opinion, Apr. 29, 2010, attached as
Exhibit 21 to Chevron’s Motion filed Sept. 14, 2010 at 11:10 a.m.
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to settle the civil case. 608 Documents produced by the plaintiffs, along with outtakes
from Crude, confirm the plaintiffs’ key role: Indeed, it was Mr. Donziger who first
“pitched the criminal case” to Ramiro Avila Santamaria, a member of the Catholic
University team of lawyers assisting the plaintiffs’ counsel. “Idea to pressure the
company, get major press in U.S. via Lehane, and compel the Ec gov to act against the
company legally to nullify the remediation contract.” 609 This was followed by meetings
between the plaintiffs and senior figures in the Government. 610 Further, Mr. Donziger
admits in a Crude clip that the plaintiffs had been pushing "for a couple of years . . . to
get the Attorney General to do something about [the alleged fraud]” and were working
closely with his office. 611 And video also shows that the plaintiffs worked directly with
President Correa in order to advance the bogus criminal charges. In one clip,
Mr. Fajardo describes how he spoke with President Correa about the matter, and that
“the President thinks that if we put in a little effort, before getting the public involved, the
Prosecutor will yield, and will re-open that investigation into the fraud of—of the contract
between Texaco and the Ecuadorian Government.” 612 At another point, Mr. Donziger
calls it “awesome” that President Correa “said the right things. . . basically calling for the
heads of government officials that signed off on the remediation . . . he’s totally with
us.” 613 He wonders aloud whether “perhaps it is time to ask for the head of Pérez
Pallares—given what the President said.” 614 Of course, that is just what subsequently
transpired.
Tellingly, both the plaintiffs and the Government sought to keep their
collaborative relationship a secret. In an email from Julio Prieto, one of the plaintiffs’
attorneys, to Mr. Donziger, Mr. Prieto recounted details of his meeting with the Attorney
608 Transcript of the Deposition of Steven Donziger, dated Dec. 2, 2010, at 551:6-19, 552:14-
554:7, attached as Annex 2 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec.
20, 2010 at 4:30 p.m.; see also Transcript of the Deposition of Steven Donziger, dated Dec. 2, 2010, at
453:4-456:19, attached as Annex 2 to Chevron’s Third Supplemental Motion for Terminating Sanctions,
filed Dec. 20, 2010 at 4:30 p.m.
609 Diary of Steven Donziger, entry dated Oct. 4, 2006, attached as Annex 1 to Chevron’s Third
Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ00036268).
610 See, e.g., E-mail from Julio Prieto to Steven Donziger, dated Jan. 31, 2006, attached as
Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30
p.m. (DONZ00028129) (meeting between Julio Prieto and the Attorney General); E-mail from Pablo
Fajardo to Steven Donziger, dated June 20, 2008, attached as Annex 1 to Chevron’s Third Supplemental
Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ00026465) (plan for meeting
with President Correa).
611 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 170-00-00).
612 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 376-03-01).
613 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 268-00-01).
614 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 268-00-01).
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General concerning the attempts to nullify the settlement. He described how the
Attorney General “also told me that he does not want our meetings to be made public
until the appropriate time.” 615 Showing a similar fear of exposure, another of the
plaintiffs’ lawyers, Juan Pablo Saenz, reported in an email to Mr. Donziger about a mixup
in which “what we have now, is an Amicus presented by purportedly independent
institutions, that reproduces, almost verbatim, a document that’s available on our
website.” 616 Mr. Saenz worried about what this error would reveal: “Dude, if the guys at
Jones Day get a hold of this, it’s gonna hurt us. It’s pretty much irrefutable evidence of
us collaborating with the fiscalia to get Reis Veiga and Perez convicted.” 617 As Mr.
Saenz explained: “The problem is that in Ecuador, we’ve maintained that we have
NOTHING to do with the proceeding in the prosecutor’s office . . . . What’s more, . . .
we had to resort to very sophisticated means to disassociate ourselves from the matter
(Amicas Curiae submitted by third parties, etc.). Therefore, to publically say that the
discovery comes from one of our collaborators associates us somehow with the
prosecutor’s opinion. And we all agree that we don’t want that to happen.” 618 Very
bluntly: “I don’t understand how you can’t see a problem in that.” 619
The criminal proceedings interfere directly with Chevron’s ability to utilize key
personnel in defending this case. They also are representative of the political pressure
that has infected the entire case and deprived it of any legitimacy. The charges forced
Mr. Pérez and his wife to flee their native Ecuador, separating them from their children
and grandchildren; they also hindered Mr. Reis Veiga’s primary work of litigating
Chevron’s defense in Ecuador, where he could no longer travel, thus interfering with
and compromising the integrity of Chevron’s right to mount a counseled defense.
Fourth, additional evidence suggests that the Government has moved beyond
attempting to taint this case with illegitimate criminal charges and has directly
intervened with this Court on the plaintiffs’ behalf. As discussed above, supra § 2.3,
audiovisual recordings of meetings involving Judge Núñez and purported
representatives of the Government in May and June 2009 indicate, among other things,
615 E-mail from Julio Prieto to Steven Donziger, dated Jan. 31, 2006, attached as Annex 1 to
Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m.
(DONZ00028129).
616 E-mail from Juan Pablo Saenz to Steven Donziger, dated Feb. 4, 2009 at 12:39 p.m., attached
as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at
4:30 p.m. (DONZ00028908).
617 E-mail from Juan Pablo Saenz to Steven Donziger, dated Feb. 4, 2009, attached as Annex 1
to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m.
(DONZ00028908).
618 E-mail from Juan Pablo Saenz to Steven Donziger, dated Feb. 4, 2009 at 12:39 p.m., attached
as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at
4:30 p.m. (DONZ00028908).
619 E-mail from Juan Pablo Saenz to Steven Donziger, dated Feb. 4, 2009, attached as Annex 1
to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m.
(DONZ00028908).
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that the Government was managing Judge Núñez, had instructed him on how to
distribute the money in the judgment, and had provided lawyers to help craft the opinion
against Chevron. Incredibly, in immediate response to these recordings, Prosecutor
General Pesántez asked Judge Núñez to recuse himself from the case—not because of
the improper conduct reflected in the recordings, but rather to “ensure that the ruling will
not be delayed any longer” and to “avoid any artful device that may be used by the
North American oil company to avoid paying the compensation we believe is more than
fair because it caused a lot of damage in our country.” 620 And President Correa again
confirmed “[o]f course I want our indigenous friends to win.” 621
As a whole, the evidence leaves no doubt about the close collaboration between
the plaintiffs and the State, or about the central role of the Government in pressuring the
Court toward a large and speedy judgment in the plaintiffs’ favor. One outtake from
Crude is particularly revealing on this score: During a conversation, Mr. Donziger
comments on my client’s allegations of a “conspiracy” between the plaintiffs and the
Ecuadorian Government, to which Mr. Kohn—a partner at the U.S. law firm funding the
plaintiffs’ litigation—responds: “If only they knew.” 622 By virtue of this conspiratorial
collusion and pressure, Chevron’s due-process rights were violated and the fairness of
the trial was irreparably impaired.
CHAPTER IV.
SYSTEMATIC CONSTITUTIONAL VIOLATIONS AND SUBSTANTIAL
PROCEDURAL DEFECTS RENDER THESE PROCEEDINGS A LEGAL NULLITY
For many of the reasons discussed throughout this brief, this case suffers from
several insurmountable procedural defects and constitutional irregularities that, in
accordance with constitutional and procedural regulations, require you, Your Honor, to
declare the entirety of these proceedings to be legally null and void. The most critical
violation in these proceedings is, of course, is the fraud perpetrated by the plaintiffs
throughout this trial, as shown above in Chapter II. In addition, this trial has been
marked by the violation of Chevron’s due process rights, including, among others, the
refusal to punish the plaintiffs’ malfeasance and fraud committed throughout this
proceeding; and the systematic violation of substantial solemnities required in every
proceeding, processing a complaint that was ratified with forged signatures of at least
20 of the alleged plaintiffs and was incomplete (failure by the supposed plaintiffs who
could not or did not know how to sign to appear before the Court clerk to stamp their
fingerprints), which kept the judge from taking jurisdiction over them, as well as the
improper joinder of actions and the inclusion of subject matters that are beyond the
620 Press Conference with Washington Pesántez , Prosecutor General of Ecuador, Sept. 4, 2009,
attached as Annex 10 to Chevron’s Motion, filed July 13, 2010 at 8:48 a.m.
621 Citizen Link Number 137, Ecuador TV, Sept. 12, 2009 at 11:40 a.m. (commentary of President
Rafael Correa); BRONSTEIN, Hugh, Ecuador Says Had No Role in Alleged Bribery Case, Reuters, Sept.
12, 2009.
622 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion filed Sept. 14, 2010
at 11:10 a.m. (CRS 169-05-09).
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complaint and outside the jurisdiction and competence of this Court. These
fundamental legal violations render all proceedings in this matter flawed by nullity and
therefore render any judgment this Court issues against my client null and void.
As the Constitutional Court has determined in several decisions, due process is
“the focal point of procedural validity,” and the absence of due process results in the
nullity of a judicial proceeding. 623 In the words of Professor Couture, due process is the
embodiment of the jurisdictional guarantee in itself: “The right to due process consists,
ultimately, of not being deprived of life, liberty or property, without the guarantee
entailed in the processing of a case conducted in the manner established by law. . . .” 624
Due process includes, among other things, the right to present a defense; sufficient time
and means to prepare the defense; public proceedings; the ability to present evidence
and to challenge the evidence presented by the other party; the chance to verbally
question experts and witnesses; the right to be judged by an independent and impartial
judge having competence and jurisdiction; the requirement that grounds be stated for
judicial decisions; and the opportunity to appeal judicial decisions. 625 To have legal
effect, the acts of members of the judiciary 626 must conform to these constitutional rights
of due process. 627 Indeed, one of the principal duties of a judge is to ensure procedural
validity 628 so as to guarantee that all parties’ due process rights are respected. 629
Furthermore, Article 346 of the Code of Civil Procedure lists the minimal common
formalities required for a proceeding to comply with due process. These formalities
include the right to be heard before a judge possessing competence over the subject
matter of the lawsuit and the need for all representatives to have the appropriate legal
capacity. The Code of Civil Procedure expressly penalizes the absence of these
623 Judgment of the Constitutional Court at 71-72, Case 003-2009-SEP-CC, May 14, 2009,
published in the supplement to Official Gazette 602, June 1, 2009. The Constitutional Court, in decisions
made in extraordinary actions for injunction, has held that the violation of constitutional rules related to
due process, results in the nullity of the proceeding from the point in time the violation occurred. See
Judgment of the Constitutional Court at 11, Case 388-09-EP, Feb. 24, 2010, Sentence 4-10-SEP-CC.
Once the violation is established, everything reverts to the moment of said violation. See Judgment of the
Supreme Court of Justice at 11, Second Civil Division, Case 32, published in Official Register 82, May 15,
2003 (“The effect of nullity is to revert back to the status of things prior to the cause of the nullity, by
reason of which nullity is declared of the judgment entered by Division Four of the Superior Court of
Guayaquil in the ordinary proceeding for nullity of judgment filed by the Municipality of Playas against
Inmobiliaria ORS S.A.”).
624 COUTURE, Eduardo, Estudios de Derecho Procesal Civil, Third Edition, Ediciones Depalma,
Buenos Aires, 1998, Vol. I, p. 51.
625 See Article 76 of the 2008 Constitution; see also Article 24 of the 1998 Constitution; Article
19(16) of the 1978 Constitution.
626 See Article 129(1) of the Organic Code of the Judiciary (“COFJ”).
627 See Article 424 of the 2008 Constitution.
628 See Article 129(9) of the Organic Code of the Judiciary and Article 349 of the Code of Civil
Procedure.
629 See Article 130(1) of the Organic Code of the Judiciary.
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essential formalities with nullity of the proceeding. 630 Likewise, in accordance with
Article 352 of the Code of Civil Procedure, nullity shall be declared “for failure to comply
with any other substantive solemnity” provided that such failure “could influence the
decision of the case” and “[n]ullity must have been alleged by one of the parties, at the
proper level of jurisdiction.” 631 Thus any proceeding or judgment based on an
uncorrected nullity is also null and void and lacks any legal effect whatsoever.
In short, disregard of the guarantees of due process or of the substantial
solemnities set forth in the Code of Civil Procedure unavoidably gives rise to the nullity,
whether total or partial, of the proceeding. This trial has been characterized by the
continual disregard and violation of these guarantees and substantial solemnities, which
renders this entire proceeding a nullity.
4.1 Nullities Due to Violations of the Constitutional Right to Due Process
As discussed in more detail above, supra Chapter III, it is evident that this trial
was not conducted in accordance with the due process rights established in the
Ecuadorian Constitutions that have been in effect and also reflected in international
treaties. Thus, any decision against my client would also be a nullity and, pursuant to
the authorities listed below, and in accordance with the provisions of Article 352 of the
Code of Civil Procedure, this Court has no choice but to declare these proceedings (and
therefore the fruits of these proceedings) null and void and revert the trial to the moment
before they occurred. Any judgment that does not correct these nullities would itself be
null and void. Among other nullities, this case includes the following:
• Nullity for forgery of plaintiffs signatures in the complaint – As clearly
demonstrated in the motion filed on December 20, 2010, at 8:50 a.m.,
twenty plaintiffs signatures were forged when ratifying the complaint and
appointing Dr. Alberto Wray as their joint representative. This creates a
number of procedural nullities by violation of substantial solemnities such
as lack of legitimacy of the appointment of the joint representative, but
also absolute nullity of the whole proceeding due to the fraud regarding
the complaint.
• Nullity due to unlawful appointment of global expert – The numerous
procedural irregularities surrounding Mr. Cabrera’s appointment as global
expert are detailed supra § 3.4.1, and they render his appointment and all
the subsequent procedural steps that derive from it, a nullity. To purge
this nullity, this Court must declare the nullity of these proceedings and
revert the case to the moment before the appointment, and it obviously
may not rely upon his report when rendering judgment.
630 See Articles 344 and 346 of the Code of Civil Procedure.
631 See Article 352 of the Code of Civil Procedure.
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• Nullity due to denial of right to open essential error summary
proceedings – As discussed, supra §§ 3.3.3, 3.4.6, Chevron’s right to
present a full and fair defense was violated when its right to initiate
essential-error investigations of several expert reports was denied,
causing a nullity. Among other consequences of this violation, are that
Chevron could not depose Mr. Cabrera and review evidence directly from
him that would have shown that the report had been ghostwritten by
plaintiffs. To purge this nullity, this Court must declare these resolutions
null and void and revert to the stage of the case before this, agreeing to
open these essential-error proceedings, as requested.
• Nullity due to predetermined liability – As has been irrefutably proven
through evidence in the proceedings to date, supra § 2.3, the bias shown
by Judge Núñez deprived Chevron of its right under Article 24 (17) of the
1998 Constitution and Article 76 of the 2008 Constitution to an impartial
and fair judge. This invalidates all resolutions issued by this judge for said
period, and all others which are derived from said proceedings. This party
has filed a motion to have this judge’s biased rulings declared null and
void 632 but it was denied without any legal basis whatsoever. 633 Unless
Judge Núñez’s rulings and the resolutions derived from them are now
declared null and void, and the trial reverts to the stage prior to when they
were issued, it will irretrievably render any judgment handed down by this
Court null and void.
• Nullity due to ex parte meetings with Judge Yánez– As detailed supra
§ 2.2.1, the plaintiffs’ attorneys met ex parte with Judge Yánez when he
presided over this case to discuss his rulings, including the appointment of
Mr. Cabrera as global expert. These meetings plainly show the Judge’s
bias. Therefore, unless all of Judge Yánez’s rulings are declared null and
void, they will taint any judgment handed down by this Court.
• In general, my client has pointed out order by order, from among those
issued in this case, those that were issued without stating the grounds,
which, pursuant to Art. 76(7)(l) of the Constitution, consistent with
Art. 130(4) of the Organic Code of the Judiciary, suffer from nullity, as do
each and every one of the acts taken on the basis of them.
632 See Chevron’s Motion (Requesting the Annulment of All Rulings Entered by Judge Juan
Evangelista Núñez) filed Sept. 11, 2009 at 5:50 p.m., in the Record at pages 158430-438.
633 Order of Oct. 21, 2009, filed at 4:05 p.m., number 13, Record at 159061-63v, 159062.
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4.2 Nullity Due to This Court’s Lack of Competence over Non-Environmental
Matters
The substantive formalities set forth in Article 346 (2) of the Code of Civil
Procedure only permit a Court to hear and rule on matters within its competence. 634
Article 76(3) of the current Constitution reiterates that “[i]t shall only be possible to try a
person before a judge or authority with jurisdiction and in compliance with the
procedures applicable to each legal proceeding.” The complaint not only violated the
requirements that it must be clear (which includes lack of precision) and complete, as
required by section 3 of Art. 67 of the Code of Civil Procedure, so that it can be
classified, and in accordance with Art. 69 of that Code, so that the judge can take
jurisdiction over the case, but also, as we will discuss below, the complaint was filed
with obvious fraud, as it was ratified with the forged signatures of at least 20 of the
plaintiffs, and was also ratified with failure to meet the specific formality provided for in
Art. 1010 of the Code of Civil Procedure (six of the alleged plaintiffs who do not know
how to or could not write were required to appear before the Court clerk to stamp their
fingerprints).
In addition to the foregoing defects, the plaintiffs based their complaint both on
the second paragraph of Art. 42 of the Environmental Management Act (the rule
governing the jurisdiction of the Presidents of the Provincial Courts to hear
environmental lawsuits), and on Art. 43 of that law (the rule governing establishment of
the proper procedure–a summary verbal proceeding—for the civil actions for damages),
thereby not only committing another act of procedural fraud, in order to avoid suing the
party directly obligated to guarantee the diffuse rights related the environment (i.e., the
State), and instead suing someone else (i.e., Chevron, a company that has no
relationship to the facts covered by the complaint), but also, by filing the lawsuit in this
manner, the cause of action provided for in Art. 42 of the EMA, based on the exercise of
diffuse rights to the enjoyment and protection of the environment was substituted for the
personal action for damages contemplated in Art. 43 of that Act. Finally, as was pointed
out in the answer to the complaint, the President of the Provincial Court of Sucumbíos
lacks subject-matter jurisdiction over the complaint. 635
634 The foregoing is also supported by Article 129(9)(2), of the COFJ, which establishes:
“Article 129.- In addition to the duties of every judicial servant, female and male judges, as may
be applicable, have the following general powers and duties:
(. . .)
9. (. . .) If the lack of jurisdiction is because of the subject matter, the judge will declare nullity and
will order the case to be referred to the court or judge of competent jurisdiction, for the proceedings to be
initiated. . . .”
635 "TWO.- ... Our procedural system, as set forth in Art. 74 (67) of the Code of Civil Procedure,
requires among things that the complaint contain the 'factual and legal grounds, stated with clarity and
precision'; 'the item, amount or act being demanded.' These indispensable procedural prerequisites are
what allow the judge to define the dispute, because only then is he in a position to determine the nature of
the legal issue in the case. Moreover, the context of the complaint filed by G., which is incomplete and
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There is also another nullity, i.e., the fact that even though the action was filed in
the manner described in the paragraphs above, i.e., as a civil action for damages, it
does not include any claim for personal injury, which not only results in a lack of
standing, i.e., the indispensable requirement is not met that the action be filed by “those
directly affected by the wrongful act or omission” (which excludes third parties), but
there is also another link in the procedural fraud, which also results in a lack of standing
on the defendant's side, because Chevron was sued for acts committed by TexPet as
the operator–the agent—of the former Petroecuador–Texaco Consortium, i.e., without
all elements of the substantive legal relationship being present, i.e., the concession
agreement for the production of petroleum (Petroecuador and the Ecuadorian State),
which constitutes another reason why the complaint must be dismissed and why the
judge cannot hear the merits of the case, since any judgment that he might issue would
be unenforceable 636 .
For the reasons indicated in the above paragraphs, any judgment that you might
hand down, Mr. Subrogate President, that does not declare the nullity of the suit from its
inception and/or dismiss the complaint in full would be null and void.
This case presents an improper joinder of actions, which was asserted as a
defense when the complaint was answered. 637 The plaintiffs have based their complaint
(continued…)
irresolute, does not establish the acts at issue that would determine whether the case is an action to
recover possession or one to retain possession [in this case it would say "an action for environmental
harm or a civil action for damages"], (…) Given this situation, there is not doubt but that the action fails,
because failure means that it is not in accordance with the law, and a complaint may not be in
accordance with the law in terms of procedure or in terms of substances: either because the right claimed
by the plaintiff never existed as a matter of law, or because it has already been extinguished, or because
the claim was not filed properly or heard using the proper procedure. In sum, this is a generic concept,
equivalent to inadmissible, unlawful, etc., as indicated by Professor Víctor Manuel Peñaherrera". - 31-V-
1984 (G.J. S. XIV, No. 6, pp. 1327-8)
636 “it has been said that lack of defendant's standing is grounds for dismissal of a case, because
if all the parties to the substantive legal relationship are not present, any judgment on the merits would be
unenforceable, because it would be binding on one party without being binding on the others, and would
also violate the right to a defense; a judgment on the merits handed down in these circumstances is
unenforceable due to the indivisible nature of the substantive legal relationship, and therefore, even
though it is not invoked as a defense by the parties when they answered the complaint or counterclaimed,
the Judge must declare it on his own motion, for the enforceability of a judgment depends on the having
the proper parties, and it is up to the Judge to ensure this. This opinion is shared by the Uruguayan
author Enrique Véscovi, who in his book Teoría General del Proceso states: 'standing is a procedural
prerequisite (to judgment), and according to the majority view of legal scholars and the courts, the judge
himself may raise this issue even if the parties have not pointed it out' (Editorial Temis, Bogotá, 1984, p.
197).” - 20-III-2000 (Res. 139-2000, R.O. 65, 26-IV-2000)
637 See Answer as Read into the Record § IV.3.1, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-
67, (page 265) (“[I]nappropriate accumulation of actions, they have presented in the summary verbal
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oth on the provisions of the Civil Code and on the provisions of the EMA, and this
situation generates what legal scholarship refers to as the problem of concurrent rules
for determining liability. 638 Although it is clear from Chapter VI of the complaint that
plaintiffs are only seeking relief for environmental claims, 639 to the extent the complaint
contains any non-environmental and Civil Code-based claims, this Court is without
power to resolve them because any claim under the EMA could not be joined with
claims arising under the Civil Code in a summary oral proceeding. As far as it seeks
non-environmental damages, this case could only properly be heard in an ordinary
proceeding, and this Court therefore lacks both subject-matter jurisdiction and personal
jurisdiction to proceed under a summary oral proceeding. Under Article 344 of the Code
of Civil Procedure, in correlation with Article 346 (2) of the same code, failure to comply
with the substantial formality of competence of the judge or court leads to the nullity of
the entire proceeding.
This same Court recently held that environmental claims under the EMA cannot
be joined with other civil claims. The plaintiffs, in the case known as Red Amazónica,
claimed environmental damages in a summary oral proceeding under the EMA, and
also requested civil compensation as owners of certain properties allegedly affected by
hydrocarbon operations. The panel hearing the case, of which you, Your Honor, were a
member, held that this constituted an inappropriate joinder of environmental and civil
actions. 640 Article 24 of the Code of Civil Procedure provides: “Every person has the
right to not be sued except before the competent judge determined by the law.”
Environmental and civil actions, according to the court, defend completely different legal
interests, so they must be heard in different proceedings. 641 Only environmental, not
civil, claims can be heard in a summary oral proceeding, such as were initiated against
Oleoducto de Crudos Pesados and in this case against Chevron. The court, in the Red
Amazónica case, held that any matter related to civil damages was not admissible in the
environmental lawsuit, and that, consequentially, it was without authority to consider any
claim related to compensation for civil damages. 642
(continued…)
proceeding actions that require distinct substantiation and whose knowledge does not correspond to you,
Your Honor.”).
638 This issue is generally analyzed by scholars as the “problem of concurrence of liabilities.” See
ALONSO TRAVIESA, María Teresa, “The Problem of Concurrent Liability, A Chilean Law Perspective”,
LexisNexis, Santiago de Chile, 2d ed., 2007 (containing an extensive study on the subject).
639 See Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, (79-80).
640 Red Amazónica vs. Oleoducto de Crudos Pesados S.A., Judgment of the Superior Court of
Justice of Nueva Loja, dated July 29, 2009, Case 218-2008.
641 Id., at numeral 5.
642 Id. at numeral 10; see also Article 24 of the Code of Civil Procedure provides: “Every person
has the right to not be sued except before the competent judge determined by the law.”
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The appropriate remedy here is to declare the entire proceeding null and void. If
in this case the court attempts to sever the allegations based on the Civil Code from
those based on the EMA, it would be even more clear that applying it is applying the
EMA in flagrant violation of non-retroactivity of the law. See infra § 5.3. In other words,
to the extent that the lawsuit is based both on the EMA and the Civil Code, this Court is
incompetent and therefore the case is null and void, and a judgment that does not
declare as such shall also be so; if the lawsuit were only to be based on the EMA, which
did not go into effect until 1999, 643 the principle of non-retroactivity of the law would also
be violated, making the judgment null and void due to error in the application of the law.
Consequently, any judgment which is not a declaration of nullity of the proceedings
would lead to the nullity of the judgment.
4.3 Nullity of the Complaint Due to Failure to Appear Before the Court Clerk
by Those Who Do Not Know How to Read and Write, in Order to Stamp
Their Fingerprints as Required by Law
As set forth in my client’s motion of December 22, 2010 at 3:49 p.m., the failure
to appear before the Court Clerk by those plaintiffs who did not or could not sign their
own names, in order to stamp their fingerprints on the document ratifying the complaint
and appointing Dr. Alberto Wray as their joint representative gives rise to the nullity of
the entire proceeding because it renders invalid both the complaint and Dr. Wray’s
designation as joint representative.
Article 1010 of the Code of Civil Procedure requires, “when a person does not
know how or cannot sign his name the first time he appears before the court . . . he will
go to the competent clerk to stamp his fingerprint at the bottom of the motion.”
Pursuant to Article 1010, those plaintiffs that could not or did not know how to
sign their names were required to appear before the Clerk of this Court to stamp their
fingerprints when ratifying the complaint. According to Article 69 of the Code of Civil
Procedure, this Court should have refrained from processing the complaint because it
did not meet this substantive legal requirements established by Articles 67 and 68 of the
same Code in order to be deemed clear and complete. As this is a substantial
requirement of the complaint, it cannot be admitted and, pursuant Article 352 of the
Code of Civil Procedure, nullifies not only the complaint but the whole case.
The same failure to properly stamp the fingerprints in plaintiffs’ appointment of Dr.
Wray as joint representative also violates Article 1010 and Article 40(2) of the Code of
Civil Procedure. Therefore, Dr. Wray’s appearance in this case and all his acts are void
for lack of legal capacity and must be declared null and void under Article 346(3), in
connection with Article 344, of the same Code.
643 Law 99-37 (Official Gazette 245, 30-VII-99).
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4.4 Nullity Due to the Lack of Legal Capacity of the Plaintiffs’ Joint
Representative
Article 43 of the Code of Civil Procedure, in connection with Art. 346 (3) of that
same Code, mandates that all counsel appearing before a court possess and justify
their legal capacity to act on behalf of a party from the moment of their appearance. 644
The Supreme Court (now the National Court) has categorically stated that nullity must
be declared where “one appears as a legal representative without authority [or power of
attorney],” where “the authority [or power of attorney] provided by the legal
representative is insufficient,” or where “someone intervenes on behalf of another
without authority [or power of attorney] but offering a ratification [or authorization]
(authorized agent) and whose intervention is not ratified [or authorized].” 645 To prevent
a nullity, the judge must ensure that all attorneys appearing before him possess
appropriate authorization from the parties they claim to represent.
Attorney Pablo Fajardo, who claims to be the joint representative of the plaintiffs,
twice disregarded this substantive solemnity, and the Court has not required him to
comply with it by proving that all of his clients had consented to (i) being represented by
Mr. Pablo Fajardo as joint legal representative and (ii) relinquishing the judicial
inspections, though there is no such evidence in the record.
4.4.1 Nullity for Lack of Legal Capacity of the Joint Counsel of Record
Pursuant to Art. 52 of the Code of Civil Procedure, the plaintiffs initially appointed
Dr. Alberto Wray, and then Mr. Pablo Fajardo who replaced him, as their alleged joint
counsel of record, to represent them in this case. Moreover, under Art. 53 of that same
Code, it was the obligation of the alleged joint counsel of record to provide evidence of
their right to represent their clients from their first appearance in this lawsuit;
additionally, they had to have a sufficient power of attorney to act, such as with respect
to relinquishing the judicial inspections, and also had to abide by the terms established
by their clients in their powers of attorney, pursuant to Art. 44 of the Code of Civil
Procedure. Pursuant to Art. 52 of that Code, the appointments as joint counsel of record
had to come from each and every one of the plaintiffs, without any exceptions
whatsoever.
These appointments suffer from defects of nullity that render them invalid, and in
turn vitiate and invalidate each and every one of the acts of the alleged joint counsel of
record in this lawsuit. In the first case, as shown in the filing of December 20, 2010, at
8:50 a.m., Dr. Wray was appointed as joint counsel of record with the forged signatures
of at least 20 of the alleged plaintiffs, as well as failure to comply with specific formality
644 Article 346 provides: “The following are essential procedural formalities common to all
proceedings and levels of appeals:… 3. Legitimacy of the right of representation.” See also Article 43 of
the Code of Civil Procedure.
645 Judgment of the Supreme Court of Justice, First Civil and Commercial Division, Oct. 25, 2004,
Case 245-2004, published in Official Gazette 41, June 17, 2005, at 23.
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contemplated in Art. 1010 of the Code of Civil Procedure, i.e., without the appearance
before the Court clerk of six of the alleged plaintiffs, who could not or did not know how
to sign, so that they could stamp their fingerprint on the document ratifying the
complaint and appointing Dr. Alberto Wray as joint counsel of record. Moreover, Mr.
Fajardo, who replaced Dr. Wray, was not appointed as joint counsel of record by one of
the plaintiffs, i.e., by Mr. Esteban Lusitante Yaiguaje. 646 In accordance with Art. 346(3)
of the Code of Civil Procedure, these defects and this omission, respectively, mean that
each of the alleged joint counsels of record lacked, and in the case of Mr. Fajardo,
currently lacks, the right to represent their clients, thereby making all of their acts in this
case null and void.
4.4.2 Nullity Due to Lack of Sufficient Authority to Relinquish the Judicial
Inspections For Lack of Authorization from Each of the Plaintiffs
This case also suffers from nullity due to a violation of the essential formality
provided under Article 346(3) of the Code of Civil Procedure; namely the lack of legal
capacity of the representative due to lacking the sufficient authority to relinquish, on
behalf of the plaintiffs, 64 of the judicial inspections requested by them and ordered by
the judge within the evidentiary period. The fact that Mr. Fajardo relinquished 64 of the
judicial inspections on behalf of the 48 plaintiffs, even though there is no such authority
within the plaintiffs' motion appointing him as their joint counsel of record, and even
though there is no rule authorizing it, and the fact that after such relinquishment, the
Court, before accepting it, ordered that it be ratified by each and every one of the
plaintiffs, and that such relinquishment has not been ratified by eight of the 48 plaintiffs,
shows that attorney Pablo Fajardo lacks legal capacity to make such relinquishment.
As discussed supra § 3.3.1, the plaintiffs’ joint counsel of record succeeded in obtaining
a waiver of sixty-four of the judicial inspections the plaintiffs had requested. 647 Then, in
response to Chevron’s objections, 648 the Court ordered each of the individual plaintiffs
to personally ratify the purported relinquishment. 649 However, eight plaintiffs never
provided the requisite ratification. 650
646 See the submission by Alberto Wray, filed on February 7, 2006 at 10:10 a.m. with attachments,
which is on the record at 92,873 to 92,884v (appointing Pablo Fajardo as Joint Counsel of Record for the
plaintiffs and attaching the plaintiffs' signatures granting approval, with the exception of Esteban Lucitante
Yaiguaje).
647 See Plaintiffs’ Motion, filed July 21, 2006 at 9:10 a.m., Record at 116431-435, (page 116434);
Order of Jan. 22, 2007, filed at 9:00 a.m., Record at 125656-659, 125657.
648 See, e.g., Chevron’s Motion, filed Feb. 7, 2006 at 5:30 p.m., Record at 93007-11, 93010;
Chevron’s Motion, filed Feb. 22, 2006 at 9:38 a.m., Record at 95411-21, 95421; Chevron’s Motion, filed
Aug. 16, 2006 at 5:40 p.m., Record at 117.234-244, 117243; Chevron’s Motion, filed Aug. 25, 2006 at
5:00 p.m., Record at 118518-26, 118526; Chevron’s Motion, filed Sept. 13, 2006 at 4:00 p.m., Record at
120012-016, 120014-16.
649 Order of Oct. 2, 2006, filed at 3:30 p.m., Record at 120552-54v, 120552v.
650 Chevron’s Motion, filed Feb. 27, 2007 at 5:42 p.m., Record at 126252-53, 126253; see
Plaintiff’s Motion and exhibits, filed Dec. 15, 2006 at 3:00 p.m., Record at 124894-908; see also Plaintiffs’
Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 73-73v).
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The common legal representative’s inability to obtain the ratification of these
eight plaintiffs deprives the relinquishment of legal effect and makes the evidence and
the record incomplete. As explained above, supra § 3.3.1, once evidence has been
requested, it must be produced for the benefit of all parties and the Court. Under Article
44 of the Code of Civil Procedure, for the relinquishment of the inspections proposed by
Fajardo as the alleged joint counsel of record for the plaintiffs to be valid, there must not
only have been a rule authorizing him to file it, but also, even assuming that it were
proper (which is expressly denied, since it was not), to file such relinquishment either he
had to have the prior express authorization of each and every one of his clients, or
otherwise he had to have a power of attorney authorizing him to do so, or instead, once
he filed it, he had to have the ratification of each and every one of his 48 alleged
clients. 651
Here, the alleged joint counsel of record for the plaintiffs, Pablo Fajardo, did not
have any rule authorizing him to relinquish the judicial inspections, nor was he
authorized by the plaintiffs to do so, nor did he obtain their ratification once the
relinquishment was made. His clients never granted him special authorization, and, to
this day, there are eight plaintiffs who have not ratified the relinquishment of judicial
inspections. Therefore, unless Cecilia Irene Cusangua, Fermín Piaguaje Ayaguaje,
Luisa Delia Tangilla Narváez, Lourdes Beatriz Chimbo Tanquila, Segundo Ángel
Amanta Milán, Rosa Teresa Chimbo Tanguila, Esteban Lucitante Yaiguaje, and José
Gabriel Revelo Llore ratify the relinquishment of the 64 judicial inspections filed by
Pablo Fajardo, said relinquishment suffers from nullity, and the acceptance of it by this
Court will cause irreparable harm to my client, because it will affect the final outcome of
the case, and therefore, the relinquishment suffers from nullity, as would any judgment
against Chevron that fails to declare the entire case null and void for this reason, among
other things.
This nullity is also based on the inadmissibility in allowing the record to remain
incomplete due to acceptance of the plaintiffs' illegal waiving of the judicial inspections.
The absence of evidence whose production had been requested by the plaintiffs and
already ordered by the Court prevents you, Your Honor, from issuing a duly-founded
and reasoned decision in accordance with Article 76(7) (l) of the 2008 Constitution
because it would lack the discussion of necessary elements of the case on facts that
had to be covered by your ruling since they are at issue in the case. By unduly
consenting to the relinquishment of nearly two-thirds of the inspections ordered by this
Court, this Court improperly relieved the plaintiffs of their burden of proof and left the
record incomplete. The acceptance of this relinquishment constituted a form of
malfeasance of office, because it mean that you prematurely accepted, without any
reasons for doing so, the insubstantial argument of the plaintiffs that the already
inspected sites were representative of the general condition of the area. The decision
on this argument could only be the subject of a judgment and included a decision on the
very merits of the case, thereby not only causing irreparable harm to my client, but also
651 See Article 44 of the Code of Civil Procedure.
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irremediably preventing you from issuing a valid judgment, and thus in all cases you
must declare the nullity of the trial. In addition, this relinquishment was not only with
regard to the performance or non-performance of the 64 judicial inspections covered by
the non-ratified relinquishment, but it also violates Chevron's right to a defense, since
Chevron was not able to examine the plaintiffs' evidence and discuss it, or to present its
own evidence to rebut it, since, as indicated above, the evidence regarding the sites
covered by the illegal, arbitrary relinquishment of the judicial inspections had already
been the subject of the malfeasance of office by a judge, as discussed above.
The only way to remedy this procedural defect is to declare the nullity of the
entire proceeding, from the order that granted the plaintiffs’ illegal, non-ratified
relinquishment of the judicial inspections and instead issue a new order ordering that
each and every inspection be completed, as the Court had ordered during the
evidentiary period. Any decision that fails to declare this nullity, among other things, or
rules on the merits of the case will not only be based on an incomplete record, i.e., the
waived judicial inspections, which were supposed to be discussed, but would also be
replacing it with assumptions based on inferences and extrapolations, and would also
be a void judgment with no value whatsoever.
4.5 All Acts of Judge Ordóñez in the Case Taken After August 26, 2010 Are
Null and Void
Pursuant to Art. 164 of the Organic Code of the Judiciary, which provides that
judges' jurisdiction is suspended when a motion for recusal is filed against them (and
this suspension takes effect without the need for the motion to be served), it is
determined that all orders issued by Judge Leonardo Ordóñez Piña as of August 26,
2010 at 2:45 p.m., when Chevron filed a motion to recuse him with the Office of the
Clerk of the President of the Provincial Court of Sucumbíos, were null and void,
because he had no jurisdiction to issue them. Any interpretation and application
contrary to the rule cited above violates an express rule and constitutes fraud on the law,
since it would mean allowing conduct that the legislator has expressly prohibited.
All rulings issued by Judge Ordóñez in this case after that date were taken
without jurisdiction and are therefore null and void. As one of the plaintiffs’
representative admitted, these orders were issued despite the fact that Judge Ordóñez
“was fully aware that he could not make more rulings.” 652 See supra § 3.2. This is also
true even if Judge Ordóñez had not been aware of the recusal suit because the law, as
we shall see, makes no distinction in this regard.
After a litigant files a motion to recuse a judge, the Code of Civil Procedure
makes clear that “[the judges] who are to take the place of the recused judges shall
652 Interview of Luis Yanza, Radio Amazonas, Sept. 25, 2010. By arguing that “[t]he next judge
that takes up the case has to declare autos para sentencia,” Mr. Yanza admitted that Judge Ordóñez’s
declaration was invalid. Id.
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continue to hear [the case] until the recusal is decided upon.” 653 Article 164 of the
Organic Code of the Judiciary clarifies the point, providing that the judge’s competence
is suspended in the case of a recusal “from the moment that it is requested up to the
time that the ruling denying the recusal is enforced.” The Code also expressly prohibits
the recused judge from taking further action in the case until the matter is resolved:
“Justices, judges and other court employees who were recused shall not participate in
the principal case until the recusal is ruled upon in a separate proceeding.” 654 Therefore,
from the moment Chevron filed its motion to recuse Judge Ordóñez on August 26, 2010,
at 2:45 p.m., the judge lacked competence to act on this case. All actions taken by the
judge after the filing of the recusal, as per Article 864 of the Code of Civil Procedure,
“shall be null and void”.
In violation of these express provisions of the Code of Civil Procedure, Judge
Ordóñez proceeded to issue three rulings without jurisdiction to do so, the first dated
August 31, 2010, at 4:00 p.m., the second dated September 17, 2010, at 8:05 a.m.,
which declared autos para sentencia, and the third dated September 23, 2010 at 9:10
a.m.
The fact that these rulings are null and void is consistent with Article 346 of the
Code of Civil Procedure, which makes clear that the “[j]urisdiction of the court hearing
the case” is an “essential procedural formality,” and Article 344 of the same Code, that
states that a proceeding shall be null and void when an “essential procedural
formalit[y] . . . has been omitted.” Although Judge Ordóñez’s entry of autos para
sentencia was later revoked, as we have seen, this is not the legal penalty under
Ecuadorian Law. Therefore, until this Court recognizes the nullity of the rulings by Judge
Ordóñez after August 26, 2010, at 2:45 p.m., this case will continue suffering from nullity
consisting of court orders which affect my client’s rights. Any ruling which does not
declare the nullity of those court orders will also suffer from nullity.
CHAPTER V.
THE PLAINTIFFS HAVE NO VIABLE CLAIM
Multiple and independent legal reasons preclude any valid assessment of
damages from being issued against my client in this case. First, Chevron is an
independent corporation and plaintiffs have provided no basis for holding Chevron liable
for the alleged actions of Texaco and TexPet. On the contrary, both Texaco and TePet
have their own legal existence and assets and have the legal and financial capacity to
defend themselves and/or answer for any outcome in this case, and there is no logical
or legal reason for the plaintiffs to have chosen to sue Chevron and not Texaco and
TexPet. Second, the lawsuit is barred by res judicata since it brings the same diffuse
claims that were already vindicated and settled by the State and the relevant localities in
the concession area, on behalf of the entire population of the Republic of Ecuador,
653 Art. 865 of the Code of Civil Procedure.
654 Art. 864 of the Code of Civil Procedure.
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including the plaintiffs and those who allegedly represent them. Third, the complaint is
premised upon the EMA, which cannot be applied retroactively to conduct that preceded
its enactment in 1999.
5.1 Chevron Is Not Liable for the Alleged Actions of Its Subsidiaries
There is no basis in law or fact for this Court to hold Chevron liable for the acts of
a third company, TexPet, an indirect subsidiary with which it had no relationship during
the time of the alleged activity about which plaintiffs complain. As discussed supra
Chapter I, Chevron was never part of the Consortium, nor did it have any connection
whatsoever with TexPet’s activities as the operator of the Consortium, which ended
eleven years before Texaco became a subsidiary of Chevron. 655 Chevron is therefore
not the “successor” of Texaco or TexPet, as falsely alleged in the complaint. Even after
Chevron acquired Texaco’s stock, the two remained distinct corporate entities, and
there is no evidence in the record that would allow this Court to pierce Texaco’s
corporate veil or otherwise hold its parent liable for the prior activities of either it or its
subsidiary, TexPet. Therefore, even if this Court were to erroneously conclude that it
had jurisdiction over Chevron, the fundamental point remains that Chevron, Texaco,
and TexPet are all distinct corporate entities, and Chevron is therefore not liable for the
actions of TexPet. 656
5.2 The Plaintiffs’ Complaint Is Barred by the Res Judicata Effect of the
Government Settlements
Even if Chevron could be liable for the long-past actions of TexPet, the plaintiffs
still have no cause of action because their claims were asserted by the proper party and
then conclusively settled over a decade ago. A conclusive end to litigation, and the
corresponding repose of finality, is a basic principle of law—and that is precisely what
the Government of the Republic of Ecuador, the municipalities in the former concession
area and the Provincial Council granted to TexPet, its predecessors, successors,
affiliates, subsidiaries, etc. back in the mid-1990s, after it honored its environmental
obligations under the petroleum concession agreement for the area of the former
Petroecuador-Texaco concession. Before the EMA, private individuals could not seek
damages for a violation causing a direct impact on diffuse rights related to the
environment and/or health, as shown infra § 5.3.2. The duty to protect those rights fell
exclusively to the State and relevant local governments acting on behalf of their citizens.
Here, the forty-eight named plaintiffs invoke diffuse environmental rights that they share
with the unnamed thousands whom they purport to represent. 657 But, as noted in the
answer, the Ecuadorian State and the relevant local governments previously exercised
655 Answer as Read into the Record § I.1.5, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67,
244; see also Superintendent of Companies Response to RFP, filed Apr. 30, 2004 at 4:15 p.m., Record at
7279.
656 See Answer as Read into the Record §§ 1.1-5, I.7, filed Oct. 21, 2003 at 9:10 a.m., Record at
243-67, 243-43v, 244-44v.
657 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 76-77.
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the right to bring all indivisible environmental claims based on TexPet’s activities in the
former Consortium area—in so doing, they released TexPet and its principals and
affiliates from all responsibility for the facts alleged in those complaints. 658 In return, the
government institutions and those they represented received, among other things,
TexPet’s performance of substantial remediation corresponding to its share in the
former Consortium. This left Petroecuador, as the majority owner of the Consortium,
solely responsible for any remaining remediation, and terminated any liability for TexPet
or its affiliates, whether joint or several. The plaintiffs cannot legally recover yet again
on the same claims, and their complaint is therefore barred.
5.2.1 The Municipal and Provincial Settlements
In 1994, four municipalities within the former concession area—the municipalities
of Joya de los Sachas, Orellana, Shushufindi, and Lago Agrio—brought separate suits
against TexPet and Texaco seeking to address alleged “possible ecological damages”
arising from the Consortium’s operations. 659 These suits were intended to protect “the
community at large” 660 and the “the health of all citizens, animals, species, flora, fauna,
rivers, water sources and soil.” 661 Given their character as “local governments . . . in
each of their respective jurisdictions,” 662 these municipalities sought to fulfill their duties
658 See Answer as Read into the Record § I.9, filed Oct. 21, 2003 at 9:10 a.m., Record at 243-67,
245; Contract for Implementing of Environmental Remedial Work and Release from Obligations, Liability
and Claims (“Remediation Contract”), filed July 15, 2004 at 9:10 a.m., Record at 7855-82v, 7862.
659 See Contract of Settlement and Release from Obligations, Responsibilities and Claims,
executed between the Municipality of Joya de los Sachas and Texaco Petroleum Company dated May 2,
1996 (“La Joya de los Sachas Municipal Settlement”), filed May 4, 2004 at 10:08 a.m., Record at 7384,
7425v, 7385; Contract of Settlement and Release from Obligations, Responsibilities and Claims,
executed between the Municipality of Orellana and Texaco Petroleum Company dated May 2, 1996
(“Orellana Municipal Settlement”), filed May 4, 2004 at 10:09 a.m., Record at 7426-68, 7427; Contract of
Settlement and Release from Obligations, Responsibilities and Claims, executed between the
Municipality of Lago Agrio and Texaco Petroleum Company dated May 2, 1996 (“Lago Agrio Municipal
Settlement”), filed May 4, 2004 at 10:04 a.m., Record at 7300-40v, 7301; Contract of Settlement and
Release from Obligations, Responsibilities and Claims, executed between the Municipality of Shushufindi
and Texaco Petroleum Company dated May 2, 1996 (“Shushufindi Municipal Settlement”), filed May 4,
2004 at 10:06 a.m., Record at 7341-83v, 7342.
660 Shushufindi Municipal Complaint at 2, attached as Annex 5 to Chevron's Evidentiary Request
No. 1.3.1 for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m., (seeking to
vindicate “the rights of the community at large” with respect to environmental pollution); see also
Judgment Approving the Settlement, First Court of Civil Matters of Sucumbíos, Nueva Loja, Sept. 19,
1996, attached as Annex 9 to Chevron's Evidentiary Request No. 1.4.2 for the Lago Agrio 2 Essential
Error Petition, filed July 30, 2010 at 5:52 p.m., (characterizing the relief sought by the municipality as the
“clean-up of the contaminated areas” and “the restoration of health of the affected population, animals
and species” when approving the settlement of the action).
661 See La Joya de los Sachas Municipal Complaint at 6, attached as Annex 3 to Chevron's
Evidentiary Request No. 1.3.2 for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.
662 See, e.g., Shushufindi Municipal Complaint, attached as Annex 6 to Chevron's Evidentiary
Request No. 1.3.2 for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.
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to protect the health and safety of their inhabitants 663 and to assist the Ecuadorian
Government in meeting its environmental obligations to all Ecuadorians. 664
The purpose of the complaints can be ascertained from the Organic Municipal
Regime Law cited therein, from which the municipalities derive their governmental
authority. Article 1 of that Law states that municipalities have as their primary purpose
the “local common weal and, within it and principally, taking care of the requirements of
the city, the metropolitan area and the rural parishes.” 665 Specifically mentioned in the
law is their power, and duty, to “[c]ar[e] for the . . . health of the canton,” 666 and “ensur[e]
faithful compliance with the legal rules on [the] environment[] . . . and especially those
rules related to noise, unpleasant odors, smoke, toxic gases, atmospheric dust,
emissions and other factors that may affect the health and well-being of the
population.” 667 Each municipality also has “the capacity to perform the necessary legal
acts to accomplish its purposes.” 668 Provinces, too, have the authority to “cooperate
with the State and the municipalities” in achieving these objectives. 669
663 See Orellana Municipal Complaint at 5, attached as Annex 1 to Chevron's Evidentiary Request
No. 1.1.1 for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m., (citing Articles 159,
160 and 164 of the Municipal System Law); La Joya de los Sachas Municipal Complaint at 6, attached as
Annex 3 to Chevron's Evidentiary Request No. 1.2.1 for the Lago Agrio 2 Essential Error Petition, filed
July 30, 2010 at 5:52 p.m.; Lago Agrio Municipal Complaint at 2, attached as Annex 8 to Chevron's
Evidentiary Request No. 1.4.1 for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52
p.m.; Shushufindi Amended Municipal Complaint at 1, attached as Annex 6 to Chevron's Evidentiary
Request No. 1.3.2 for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.
664 See Article 19 of the Organic Municipal Regime Law (discussed in La Joya de los Sachas
Municipal Complaint at 6, attached as Annex 3 to Chevron's Evidentiary Request No. 1.2.1 for the Lago
Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.; Shushufindi Amended Municipal
Complaint at 1, attached as Annex 6 to Chevron's Evidentiary Request No. 1.3.2 for the Lago Agrio 2
Essential Error Petition, filed July 30, 2010 at 5:52 p.m.; Orellana Municipal Complaint at 5, attached as
Annex 1 to Chevron's Evidentiary Request No. 1.1.1 for the Lago Agrio 2 Essential Error Petition, filed
July 30, 2010 at 5:52 p.m.; Lago Agrio Municipal Complaint at 2, attached as Annex 8 to Chevron's
Evidentiary Request No. 1.4.1 for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52
p.m., (mentioning the law in general)).
665 Article 1 of the Organic Municipal Regime Law.
666 Article 164(a) of the Organic Municipal Regime Law.
667 See Article 164(j) of the Organic Municipal Regime Law (discussed in La Joya de los Sachas
Municipal Complaint at 6, attached as Annex 3 to Chevron's Evidentiary Request No. 1.4.1 for the Lago
Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.; Shushufindi Amended Municipal
Complaint at 1, attached as Annex 6 to Chevron's Evidentiary Request No. 1.3.2 for the Lago Agrio 2
Essential Error Petition, filed July 30, 2010 at 5:52 p.m.; Orellana Municipal Complaint at 5, attached as
Annex 1 to Chevron's Evidentiary Request No. 1.1.1 for the Lago Agrio 2 Essential Error Petition, filed
July 30, 2010 at 5:52 p.m.; Lago Agrio Municipal Complaint at 2, attached as Annex 8 to Chevron's
Evidentiary Request No. 1.4.1 for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52
p.m., (mentioning the law in general)).
668 See Article 2 of the Organic Municipal Regime Law.
669 Article 1 of the Provincial Regime Law provides: “The Provincial Council is a public law
institution enjoying autonomy and representing the province. It has legal capacity and is able to perform
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Each municipal suit was settled in 1996 on terms designed to “meet the interests
of The Community and of its citizens as to any claims they may have against
TEXPET.” 670 In return for funding of “social interest works selected in accordance with
community interest proposals,” the municipalities “exempt[ed], release[d], exonerate[d]
and relieve[d] forever” TexPet and its affiliates “from any responsibility, claim, request,
demand or complaint, be it past, present or future, for any and all reasons related to” the
Consortium’s operations, “especially concerning damages possibly caused to the
environment in said cantonal jurisdiction of the Municipality.” 671 Each of the municipal
settlement agreements was incorporated into a judgment in each of the different trials 672
and stated that, “pursuant to Article 2306 [currently Article 2362] of the Civil Code, this
settlement shall have for the parties the effect of res judicata before the highest
court.” 673 The Province of Sucumbíos executed a similar agreement releasing TexPet
(continued…)
the necessary acts to accomplish its purposes in the manner and according to the conditions specified in
the Constitution and the law. It has legal capacity and its mission is principally to foster the social, cultural
and material development of the province, giving special attention to rural areas, and to cooperate with
the State and the municipalities in the respective district for a harmonious accomplishment of national
expectations.”
670 See, e.g., Affidavit of Raúl Avilés Puente (Lago Agrio – Nueva Loja), May 2, 1996, filed May
25, 2004 at 2:20 p.m., Record at 7708-08v. In addition to the representative of the Municipality of Lago
Agrio, an official from each of the other local governments executed an identical affidavit in support of the
settlements. See Affidavit of Adolfo Barcenas Mejía (La Joya de los Sachas), May 2, 1996, filed May 25,
2004 at 2:22 p.m., Record at 7711-11v; Affidavit of Daniel David Pauker Gutiérrez (Orellana – Coca), May
2, 1996, filed May 25, 2004 at 2:21 p.m., Record at 7710-10v; Affidavit of Eliceo Azuero (Sucumbíos
Province), May 2, 1996, filed May 25, 2004 at 2:19 p.m., Record at 7709, 7709v; Affidavit of Jorge E.
Cajas Garzón (Shushufindi), May 2, 1996, filed May 25, 2004, Record at 7712-12v.
671 See, e.g., La Joya de los Sachas Municipal Settlement & Release dated May 2, 1996, filed
May 4, 2004 at 10:08 a.m., Record at 7384-7425v, 7386-87. Each municipality settlement contained
identical terms. See also Lago Agrio Municipal Settlement & Release, May 2, 1996, filed May 4, 2004 at
10:04 a.m., Record at 7300-40v, 7302-03; Orellana Municipal Settlement & Release, May 2, 1996, filed
May 4, 2004 at 10:09 a.m., Record at 7426-68, 7428-29; Shushufindi Municipal Settlement & Release,
May 2, 1996, filed May 4, 2004 at 10:06 a.m., Record at 7341-83v, 7343-44.
672 See Judgment Approving the Settlement, Second Court of Civil Matters of Sucumbíos,
Shushufindi, May 8, 1996, at 4:55 p.m., attached as Annex 7 to Chevron's Evidentiary Request No. 1.3.3
for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.; Judgment Approving the
Settlement, Court of Civil Matters of Napo, Joya de los Sachas, June 12, 1996, at 3:20 p.m., attached as
Annex 4 to Chevron's Evidentiary Request No. 1.2.2 for the Lago Agrio 2 Essential Error Petition, filed
July 30, 2010 at 5:52 p.m.; Judgment Approving the Settlement, Court of Civil Matters of Orellana, June
25, 1996, at 9:35 a.m., attached as Annex 2 to Chevron's Evidentiary Request No. 1.1.2 for the Lago
Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.; Judgment Approving the Settlement, First
Court of Civil Matters of Sucumbíos, Nueva Loja at 5, Sept. 19, 1996, at 11:00 a.m., attached as Annex 9
to Chevron's Evidentiary Request No. 1.4.2 for the Lago Agrio 2 Essential Error Petition, filed July 30,
2010 at 5:52 p.m.
673 Judgment Approving the Settlement at 5, First Court of Civil Matters of Sucumbíos, Nueva
Loja, Sept. 19, 1996, at 11:00 a.m., attached as Annex 9 to Chevron's Evidentiary Request No. 1.4.2 for
the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.; see also Article 2362 of Civil
Code (“Settlement shall constitute res judicata determined by a court of last resort, but a declaration of
nullity or rescission may be sought, in accordance with the preceding articles.”).
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and Texaco from any liability concerning environmental remediation. 674 That agreement
also had the effect of res judicata 675 and was approved by a popular assembly in which
all citizens of the province (including many of the purported plaintiffs in this case) were
invited to express their views. 676
The validity and preclusive force of one of these settlements was subsequently
challenged and affirmed in litigation. Shortly after the settlement with the Municipality of
Lago Agrio was signed, the (new) mayor of that Municipality sought to have the
agreement “rescinded.” The First Court in Civil Matters for the Province of Sucumbíos
denied that request pursuant to former Article 2386 (formerly Article 2362) of the Civil
Code because “the defendant ha[d] indicated its desire to perform under th[e]
agreement” 677 and because the agreement was “legally signed by the litigants” with “no
issue in dispute in the case remain[ing] unresolved.” 678 The mayor’s request for further
review by the Supreme Court was denied. 679 This constitutes further evidence of the
validity and res judicata effect of the settlements.
Each of the forty-eight named plaintiffs in Lago Agrio, and all of the “affected
communities” they purport to represent, reside within these four municipalities and the
Province of Sucumbíos. 680
5.2.2 The Settlement with the Government of Ecuador and Petroecuador
The settlements with the municipalities and the province supplemented a broader
settlement between TexPet, the Government of Ecuador, and Petroecuador in 1995. 681
674 See, e.g., Sucumbíos Provincial Settlement & Release, dated May 2, 1996, filed May 4, 2004
at 10:12 a.m., Record at 7469-7510, 7471v, 7507-07v. In addition, a broad release of liability was also
given to TexPet by a Consortium of Municipalities in the Province of Napo. See Final Release from
Obligations, Liability and Claims from Consortium of Napo Municipalities, dated Apr. 27, 1996, filed Oct.
19, 2004 at 4:15 p.m., Record at 10341.
675 Remediation Contract dated May 4, 1995, filed July 15, 2004 at 9:10 a.m., Record at 7855-82v,
7863-64.
676 See Sucumbíos Provincial Settlement & Release, dated May 2, 1996, filed May 4, 2004 at
10:12 a.m., Record at 7469-510, 7507-08v; Final Release from Obligations, Liability and Claims dated
May 2, 1996, filed May 25, 2004 at 2:24 p.m., Record at 7713-13v, 7713.
677 See Judgment of the First Court of Civil Matters of Sucumbíos, Nueva Loja, dated Oct. 10,
1996, at 9:35 a.m., attached as Annex 13 to Chevron's Evidentiary Request No. 1.4.6 for the Lago Agrio 2
Essential Error Petition, filed July 30, 2010 at 5:52 p.m. Article 2362 (formerly Article 2386) of the Civil
Code provides: “The settlement shall have the effect of res judicata without any further appeal, but a
motion for nullity or rescission may be filed in accordance with the foregoing articles.”
678 Judgment of the First Court of Civil Matters of Sucumbíos, Nueva Loja, dated Oct. 23, 1996, at
8:20 a.m., attached as Annex 14 to Chevron's Evidentiary Request No. 1.4.7 for the Lago Agrio 2
Essential Error Petition, filed July 30, 2010 at 5:52 p.m.
679 See Judgment of the Supreme Court of Justice, First Civil and Commercial Division, May 15,
1997, at 3:00 p.m., attached as Annex 19 to Chevron's Evidentiary Request No. 1.4.12 for the Lago Agrio
2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.
680 See Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 73-73v, 76-76v.
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Like the local governments, the Government of Ecuador entered into this settlement in
its representative capacity to vindicate the diffuse rights of all persons living in the
former concession area.
In a 1994 Memorandum of Understanding, the Government of Ecuador agreed
that TexPet would “not be responsible for the environmental impacts . . . and shall be
released from any liability concerning such impact” arising from the Consortium’s
operations. 682 The resulting settlement agreement expressly covers “causes of action
under Article 19(2) of the [1978] Political Constitution of the Republic of Ecuador,” 683
which, as discussed below, infra § 5.3.2, guaranteed all Ecuadorians the “right to live in
an environment free of contamination” and placed the “duty [on] the State to assure this
right and take responsibility for the protection of nature.” 684 Consistent with this duty,
the settlement specifically noted that the scope of work for which TexPet was
responsible “t[ook] into consideration the inhabitants of the Oriente region.” 685
In the settlement with the State, TexPet agreed to perform extensive
“Environmental Remedial and Mitigation Work,” as well as to establish various programs
and projects “to improve the overall quality of life.” 686 The scope of the remediation
work comprised the following broad categories: (i) closure of pits at the well locations; (ii)
refurbishing equipment within production stations; (iii) abandoned installations; (iv)
remediation of soil contaminated with hydrocarbons; (v) re-planting; (vi) building
containment dikes; (vii) socio-economic compensation; and (viii) negotiations with the
municipalities of Lago Agrio (Nueva Loja), Shushufindi, Joya de los Sachas and
Francisco de Orellana (Coca). 687 The categories of work performed by TexPet coincide
with the claims contained in plaintiffs’ complaint. 688
In exchange for TexPet’s promise to perform remedial work at the specified sites,
the State and Petroecuador released TexPet and its affiliates from liability at any other
(continued…)
681 Scope of Work § VII.c, filed as Annex A to Remediation Contract dated May 4, 1995, filed July
15, 2004 at 9:10 a.m., Record at 7868-82v, 7873-74.
682 Memorandum of Understanding § IV.a dated Dec. 14, 1994, filed May 24, 2004 at 2:18 p.m.,
Record at 7705-07v, 7705v-06.
683 Remediation Contract dated May 4, 1995, filed July 15, 2004 at 9:10 a.m., Record at 7855-82v,
7862.
684 Article 19 of the Constitution of Ecuador.
685 See Memorandum of Understanding dated Dec. 14, 1994, filed May 24, 2004 at 2:18 p.m.,
Record at 7705-07v, 7706.
686 See Remediation Contract dated May 4, 1995, filed July 15, 2004 at 9:10 a.m., Record at
7855-82v, 7868-79.
687 Scope of Work, filed as Annex A to Remediation Contract dated May 4, 1995, filed July 15,
2004 at 9:10 a.m., Record at 7855-82v, 7868-74.
688 See Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79-80.
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sites in the former concession area. 689 In 1998, the Government of Ecuador certified
TexPet’s adequate performance of its remedial obligations and finally “release[d],
absolve[d] and discharge[d] TexPet” and its parent companies from “any liability and
claims.” 690 (Even one of plaintiffs’ own consultants acknowledged internally that he “did
not find any clear instances where Texpet did not meet the conditions required in the
cleanup.” 691 ) The release left Petroecuador and the Government solely responsible for
environmental conditions in the former concession area. This corresponded with its
exclusive control over the area after the Consortium ended in 1992.
5.2.3 The Government of Ecuador and the Local Governments Acted on Behalf
of Their Citizens
In settling any potential claims for environmental remediation arising out of the
Consortium’s operations, the local governments and the State were acting on behalf of
their respective citizenries, including the plaintiffs in this action. According to a well
settled principle of Ecuadorian legislation that arises from Art. 12 of the Civil Code, laws
that regulate specific matters prevail with regard to those matters over the general
legislation. At the time when the settlement agreements were signed, the State was
exclusively responsible for regulation of the environment and was tasked with
redressing any “violation of the respective regulations and technical provisions” of the
Law on Prevention and Control of Environmental Contamination. 692
The various settlement agreements between TexPet and the municipal
governments contained specific provisions expressly intended to benefit the populations
of the former concession area. 693 Thus, TexPet provided equipment (including an
airplane) and money for medical clinics, education centers, and other social services. 694
689 See Final Release, dated Sept. 30, 1998, filed May 4, 2004 at 10:02 a.m., Record at 7294-99v,
7298v; Remediation Contract dated May 4, 1995, filed July 15, 2004 at 9:10 a.m., Record at 7855-82v,
7857.
690 Final Release dated Sept. 30, 1998, filed May 4, 2004 at 10:02 a.m., Record at 7294-99v,
7298v.
691 E-mail from Douglas Beltman to Pablo Fajardo and Steven Donziger, dated August 1, 2008 at
4:27 p.m., filed as Annex 10 to Chevron's Motion filed October 29, 2010 at 5:20 p.m. (STRATUS-
NATIVE063668).
692 Article 6 of the Hydrocarbons Law gives the Ministry for Industry responsibility for
environmental issues relating to the oil industry. This role was reaffirmed in Article 5 of Executive Order
2982 of August 24, 1995, which provided that “[t]he Office of Undersecretary of the Environment (SMA) of
the Ministry of Energy and Mines, through the National Environmental Office” will “monitor, evaluate and
approve Environmental Studies throughout the Ecuadorian Territory” and will “verify compliance with
these Regulations and, in the event of noncompliance, it will require the persons responsible to restore
the affected areas and to provide the pertinent compensation to the affected population.”
693 See, e.g., Airplane Sales Contract Between TexPet and Indigenous Groups dated Dec. 9,
1996, filed June 28, 2004 at 4:35 p.m., Record at 7759-62v, 7759v-61; Lago Agrio Municipal Settlement &
Release dated May 2, 1996, filed May 4, 2004 at 10:04 a.m., Record at 7300-40v.
694 See, e.g., Acta of Receipt of Equipment from TexPet, Mar. 30, 1998, Record at 7725-29,
7727-28; Release of TexPet upon Receipt of Payment dated June 24, 1998, filed May 25, 2004 at 2:30
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These services were to be administered through state entities (the Ministries of
Education, Health, and Energy) with direct participation by representatives of the
indigenous and colonist populations in the former Consortium areas. 695
Related documents, too, demonstrate that the local governments (municipalities
and Provincial Council) were acting with the interests of their citizens in mind. For
example, an official congressional report on the settlement agreement signed by the
Government of Ecuador explained that its purpose was to “indemnify or alleviate the
negative environmental affects caused . . . to the Ecuadorian population living in [the]
Amazonian region.” 696 In addition, various Ecuadorian officials have repeated, under
oath, that the negotiations leading to these settlements were “open for all those who
wanted to attend,” and members of many environmental organizations, including the
Frente, did attend. 697 These government officials saw themselves as the “facilitator[s]”
of an open dialogue between the communities and Texaco, 698 and followed orders from
the “National Congress to take into account the problems that the Amazonian groups
were having.” 699 As a result of this dialogue, the environmental groups were “behind
everything that was being done,” 700 leading to a final instrument that fully considered
and accounted for the interests of individuals and communities in the concession
areas. 701
The State’s role as a representative of its citizens was particularly clear with
respect to the natural resources in the former concession area. Pursuant to the
(continued…)
p.m., Record at 7734-38, 7734v; Remediation Agreement between Government of Ecuador and TexPet
dated Nov. 13, 1997, filed May 25, 2004 at 2:27 p.m., Record at 7720-24v, 7721-21v.
695 These representatives included FOISE (Federación de Organizaciones Indígenas de
Sucumbíos), FCUNAE (Federación de Comunas Unión de Nativos de la Amazonía Ecuatoriana), OPIP
(Organización de Pueblos Indígenas de Pastaza), and ONAHE (Organización de la Nacionalidad
Huaorani del Ecuador).
696 Report of the Special Permanent Environmental Commission of the National Congress (Nov. 9,
1994), attached as Annex I to Chevron’s Objections to Expert Calmbacher’s Report on Sacha-94, filed
May 26, 2005 at 10:00 a.m., Record at 68452-651v, 68639, 68641 (explaining also that settlements were
intended “to compensate, actually and rapidly, the inhabitants of the affected areas”).
697 Deposition of Giovanni Rosania Schiavone, dated Oct. 19, 2006 (“Rosania Dep.”) at 73:1-14;
94:1-94:12; 95:9-15; 103:1-10, attached as Annex 115 to Chevron's Motion, filed May 21, 2010 at 4:35
p.m. (“Cabrera Omnibus”); Deposition of Galo Abril Ojeda, dated Oct. 10, 2006 (“Abril Dep.”) at 70:6-22,
attached as Annex 114 to Cabrera Omnibus.
698 Rosania Dep. at 78:4-79:3, attached as Annex 115 to Cabrera Omnibus.
Omnibus.
699 Abril Dep. at 76:2-77:7, attached as Annex 114 to Cabrera Omnibus.
700 Abril Dep. at 94:13-95:3, attached as Annex 114 to Cabrera Omnibus.
701 Rosania Dep. at 86:6-87:5, 88:21-89:21, 112:5-113:10, attached as Annex 115 to Cabrera
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provisions of Article 605 of the Civil Code, 702 the lands used for oil production in the
former concession area, for purposes such as the construction of wells, stations, and
encampments, were declared to be of public utility and appropriated for this purpose,
thereby becoming property of the Ecuadorian State through Petroecuador. 703 Likewise,
under Article 604 of the Civil Code, the public roads, which were constructed in the
former concession area in order to carry out oil production activities, were deemed
national assets whose use belongs to all of the inhabitants of the nation. 704 The
resource of water has been declared by the current Constitution to be “inalienably and
imprescriptibly owned by the State” 705 and is also considered a national asset for public
use in accordance with Article 2 of the Water Act [Ley de Aguas]. 706 Indeed, during the
negotiation of the settlement agreement, the Government of Ecuador confirmed these
points to the court in New York by representing that it was the sole “legal owner of the
rivers, streams and natural resources and all public lands where the oil producing
operations involved in this litigation are located,” and thus the sole “legal protector of the
quality of the air, water, atmosphere and environment within its frontiers.” 707 Because
the settlements addressed environmental impact on public resources, they plainly were
executed by the State on behalf of the People.
702 Article 604 of the Civil Code provides: "All land that is located within the boundaries of
Ecuador and has no other owner is State-owned property.”
703 See JI Acta for Sacha-18, filed Feb. 16, 2005 at 9:30 a.m., Record at 51455-86, 51460.
704 Article 604 of the Civil Code provides: “National assets are those that belong to the Nation as
a whole. If their use also belongs to all the inhabitants of the Nation, such as the streets, plazas, bridges
and roadways, the neighboring sea and beaches, they are called public use national assets or public
assets . . . .” Article 6 of the Organic Law on Land Transportation, Transit and Road Security provides:
“The State is the owner of the public roadways, it shall administer and regulate the use thereof.”
705 Article 318 of the 2008 Constitution of Ecuador. See also the last paragraph of Article 247 of
the Constitution of 1998, which provides: “Waters are national assets for public use; their ownership shall
be inalienable and not subject to time barring; their use and enjoyment shall belong to the State or to any
persons who obtain these rights, in accordance with the law.” Article 12 of the current Constitution relates
access to water with human rights and describes it as “a strategic national asset for public use,
inalienable, not subject to time barring, not subject to liens or encumbrances, and essential for life,”
consistent with Art. 408 of that Constitution, which refers in general to “nonrenewable natural resources.”
Constitution, Article 318 provides: “Water is a strategic national patrimony for public use, inalienably and
imprescriptibly owned by the State, and constitutes a vital element for nature and for the existence of
human beings. All forms of privatization of water are prohibited.”
706 Article 2 of the Water Act provides: “The waters of rivers, lakes, lagoons [and] springs that
originate and end within the same property, natural waterfalls and other sources, and subterranean
waters, whether or not they emerge, are national assets for the public use, are outside of commerce, and
the ownership thereof is inalienable and imprescriptible; they are not susceptible to possession,
accession or any other manner of appropriation. There are no rights of ownership thereof that exist or are
recognized, and preexisting rights are only limited to the use thereof to the extent that they are efficient
and in accordance with this Law.”
707 See Letter from Amb. E. Terán to Hon. J. Rakoff (June 10, 1996), attached as Annex 4 to
Chevron’s Motion to Dismiss, filed Oct. 8, 2007 at 8:10 a.m., Record at 132975-77, 132975.
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5.2.4 The Settlement Agreements Signed with the Government of Ecuador and
the Local Governments Are Res Judicata
By operation of Article 2362 of the Civil Code, 708 the settlement agreements have
the effect of res judicata. 709 Thus, later actions that present (i) the same parties; (ii) the
same grounds [causa petendi], and (iii) the same objective, will be barred by the prior
settlements. 710 The former Supreme Court of Justice of Ecuador (now the National
Court) has been very clear on this point: “Pursuant to Art. 297 of the Code of Civil
Procedure no new action may be instituted that shares subjective identity, constituted
by the same parties participating, and objective identity, meaning that the same thing,
sum or act is being claimed, based on the same cause, reason or right.” 711 These
principles have constitutional magnitude, as Article 24(16) of the 1998 Constitution
provides that “no person can be tried more than once for the same cause,” which has its
parallel in letter i) of Art. 76(7) of the current Constitution: "No one may be tried more
than once for the same cause and subject matter."
Whether the parties are identical turns on the real parties in interest, not the
nominal persons involved. 712 The environment belongs to the nation as a whole, 713
such that all citizens share an indivisible right to a clean environment and public health.
The Government of Ecuador had (and still has) the specific and constitutional duty to
represent the interests of the community in environmental matters. 714 The local
governments, too, were (and still are) obliged to “strive for [the] collective material wellbeing”
of their citizens, 715 “look after the sanitation and health” of the local
708 Article 2362 of the Civil Code provides: “Settlement shall constitute res judicata determined by
a court of last resort, but a declaration of nullity or rescission may be sought, in accordance with the
preceding articles.”
709 Case Law, Mar. 26, 1990, Prontuario de Resoluciones of the Supreme Court of Justice No. 3,
p. 116: “Under the legal scholarship and the case law, a settlement is a civil contract that replaces a
judgment because it ends a lawsuit, with the effect of res judicata for the opposing parties. Settlement
and arbitration, although different within the procedural area, have analogous objectives with respect to
settling the claims of the litigants, without incurring the expense and delay that occurs with a lawsuit.”
710 See VODANOVIC, Antonio, Treatise on Civil Law, Vol. I, Editorial Jurídica de Chile. Santiago,
1996, p. 83.
711 Supreme Court Reporter, Year: CVII. Series XVIII, No. 2, p. 503.
712 DEVIS, Hernando, Compendium of Procedural Rights, General Theory of Procedure, 10th
edition, 1985. Editorial ABC. Bogotá. Vol. I, pp. 325, 504 and 505.
713 Article 604 of the Civil Code provides: “National assets are those that belong to the Nation as
a whole. If their use also belongs to all the inhabitants of the Nation, such as the streets, plazas, bridges
and roadways, the neighboring sea and beaches, they are called public use national assets or public
assets . . . .”
714 Article 19(2), of the 1993 Constitution of the Republic of Ecuador, Law No. 25, published in
Official Gazette 183, May 5, 1993, reads: “the State guarantees [to each citizen] 2. The right to live in an
environment free of contamination. It is the duty of the State to ensure that this right is not violated and
take charge of the preservation of the environment . . . .”
715 Article 12 of the Organic Municipal Regime Law.
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communities, 716 and “contribute to the achievement of the State’s goals” 717 —“whose
main purpose is the local common weal.” 718 Thus, the “People” were the real parties in
interest in these prior settlements, which have erga omnes effect. Here, too, invoking a
1999 law, the forty-eight named plaintiffs admittedly seek to vindicate only “collective
rights” 719 in a clean environment that are “shared by the community.” 720 Like the
Government of Ecuador and the local governments, the plaintiffs here seek to represent
the “People,” which means that the parties are legally identical.
The causa petendi 721 —or the factual background and legal basis for the claims—
is likewise identical between the settlements and this action. A comparison of the
settlements and the Lago Agrio complaint shows that they both have the same factual
basis and legal grounds: the alleged impacts of the Consortium’s operations on the
citizenry’s right to live in a clean environment. The plaintiffs here argue that
“environmental damages” were caused by the “methods and procedures introduced,
established and applied by TEXACO” during the Consortium. 722 The settlement
agreements also aimed “[t]o establish the mechanism whereby Texpet will be released
from any claim . . . for environmental impact as a consequence of the operations of the
former PETROECUADOR – TEXACO Consortium.” 723 Plaintiffs’ legal claim purports to
be based on the “collective right” to live in a “healthy, ecologically balanced environment
that is free of contamination.” 724 The settlement agreements expressly purported to
716 Article 164 of the Organic Municipal Regime Law.
717 Article 19 of the Organic Municipal Regime Law; see also Provincial Regime Law, art. 1 (the
Province’s “mission is to . . . work with the State and the municipalities of the respective area toward the
harmonious furtherance of the national interest”).
718 Article 1 of the Provincial Regime Law.
719 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 78v-79; see also
Article 12 of the Provincial Regime Law.
720 EMA, Glossary of Definitions (definition of “Collective Environmental Rights”) and Article 41.
721 DEVIS ECHANDÍA, Hernando. General Notions of Civil Procedure. 1966. Editorial
Selecciones Graficas. Madrid, Spain. pp. 218-219 and DEVIS ECHANDÍA, Hernando. Compendium of
Procedural Rights, General Theory of Procedure. 10th edition, 1985. Editorial ABC . Bogotá. Vol. I, p. 502.
722 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 74.
723 Memorandum of Understanding I(d) dated Dec. 14, 1994, filed May 24, 2004 at 2:18 p.m.,
Record at 7705-07v, 7705.
724 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 78v. In like manner,
the complaints filed by the relevant municipalities against TexPet had, as their factual basis, the alleged
“ecological catastrophe which degraded the environment and its forest biodiversity, contaminated its
water sources, in streams and rivers which the population use . . . .” Orellana Municipal Complaint at 2,
attached as Annex 1 to Chevron's Evidentiary Request No. 1.1.1 for the Lago Agrio 2 Essential Error
Petition, filed July 30, 2010 at 5:52 p.m.; see also La Joya de los Sachas Complaint at 2, attached as
Annex 3 to Chevron's Evidentiary Request No. 1.2.1 for the Lago Agrio 2 Essential Error Petition, filed
July 30, 2010 at 5:52 p.m.; Lago Agrio Complaint at 1, attached as Annex 8 to Chevron's Evidentiary
Request No. 1.4.1 for the Lago Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.;
Shushufindi Complaint at 1, attached as Annex 5 to Chevron's Evidentiary Request No. 1.3.1 for the Lago
Agrio 2 Essential Error Petition, filed July 30, 2010 at 5:52 p.m.
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elease collective claims based on the citizenry’s right to a healthy and clean
environment, “including but not limited to any causes of action under Article 19-2 [] of
the Political Constitution of the Republic of Ecuador.” 725
Finally, the Government of Ecuador and the local governments (municipalities in
the area of the former Concession and the Provincial Council) sought the same
objective in settling their claims with TexPet that the plaintiffs seek here; in the words of
the former Ecuadorian Supreme Court (now the National Court), they each had the
same “final result . . . in mind when filing their claims” or settling them. 726 In the
complaint in the present case, the plaintiffs demand the remediation of environmental
impact, specifically claiming (i) “[t]he elimination or removal of contaminating elements
that still threaten the environment and the health of residents,” 727 and (ii) “[t]he
remediation of the environmental damage caused.” 728 This was the same objective that
the Government of Ecuador and the local governments pursued and resolved in the
settlements, which secured specific environmental remediation for alleged
environmental harm arising out of the Consortium operations and funds for
socioeconomic programs. In turn, the Government of Ecuador and the local
governments released TexPet and its parent companies, subsidiaries and affiliates,
among others, from responsibility for any “environmental impact,” broadly defined as
“[a]ny solid, liquid or gaseous substance present or released into the environment in
such concentration or condition, the presence or release of which causes, or has the
potential to cause harm to human health or the environment.” 729 It would be absurd to
suggest that the same collective rights, based on the same factual predicate, and
seeking the same relief, could be litigated again and again by different members of the
same collectivity. As shown in this record, other groups—including members of the
“affected communities” purported to be represented by the plaintiffs in this action—have
725 Remediation Contract dated May 4, 1995, filed July 15, 2004 at 9:10 a.m., Record at 7855-82v,
7862. The text of Article 19-2 of the Political Constitution of the Republic of Ecuador, as it was written in
1995, demonstrates that the State had the authority—and indeed, the “duty”—to protect and vindicate the
citizenry’s right to a healthy and clean environment. See Article 19-2 of the 1978 Constitution of Ecuador
(as codified in 1993) (establishing the citizenry’s “right to live in an environment free from contamination,”
but placing the “duty [on] the State to ensure that this right is not abridged.”) The vindication of that
constitutional “right” was accomplished through the execution of the settlement contract, which the State
was constitutionally authorized, and obligated, to pursue. Any assertion that the State could not settle
this constitutional right on behalf of its citizenry runs squarely against the clear text of the then-extant
Constitution.
726 Rosa Elena Rey Orozco vs. Arcesio Volívar Morocho Erráez, Judgment of the Supreme Court
of Justice, Second Labor and Social Division, June 7, 2004, Case 98-2004, published in Official Gazette
506, Jan. 18, 2005. Similarly, according to Hugo Alsina: “The object of a lawsuit . . . is the thing
requested; . . . not in a physical sense but rather the sense of the usefulness or advantage sought.”
ALSINA, Hugo, Tratado Teórico Práctico de Derecho Procesal Civil y Comercial, 2d ed., Volume IV,
Editorial Ediar, Buenos Aires, 1961, p. 147.
727 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79.
728 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79v.
7857.
729 Remediation Contract dated May 4, 1995, filed July 15, 2004 at 9:10 a.m., Record at 7855-82v,
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also filed suit against Chevron for the same alleged indivisible harms to the
environment. 730 If the settlement agreements signed with the Government of Ecuador
and the local governments do not bar this litigation, then there is no principled reason
why a judgment in favor of the plaintiffs here would have the effect of res judicata with
respect to these other groups who say that they are not represented by the plaintiffs. In
the absence of res judicata, this type of litigation would continue indefinitely, and my
client would potentially be subject to numerous overlapping and potentially inconsistent
judgments without ever having the repose of finality of legitimate court orders and
settlements. This would be anathema to due process.
Because the Government of Ecuador and the local governments were acting on
behalf of the citizens in their respective jurisdictions, the only claims that survived the
settlements were those for personal injury and individual property damage. This is
reflected in the carve-out provision of the State’s settlement, which was understood to
preserve the rights of third parties to bring claims for alleged individual injuries. 731 But
the plaintiffs in this case did not allege any individual injuries. As Mr. Donziger admitted,
the plaintiffs “did not sue for” “personal damages.” 732 Their complaint demands the
removal of alleged contaminants that “threaten the environment and health of the
inhabitants,” 733 seeks money for the repair of alleged “environmental damages,” 734 and
thus seeks to redress the same alleged harm covered by the governmental settlements.
As we have seen, such claims have been vindicated and released by the Government
of Ecuador and the local governments acting on behalf of all Ecuadorian citizens, and
the plaintiffs, as Ecuadorian citizens, cannot bring them again.
This conclusion is only reinforced by the fact that the release granted in
September 1998 was also an official act of the State, which, under administrative law,
“acquires binding force” and is “effective erga omnes.” 735 The “immutability of . . . the
administrative action is just a part of the stability of legal rules in general (certainty—
finality, or order) as a means of achieving certainty and protection.” 736 The binding
730 The record includes a written declaration from leaders of the Huaorani and Kichwa indigenous
groups protesting their inclusion in this lawsuit and stating that neither the plaintiffs nor the Frente has
been authorized to represent them. Chevron’s Motion regarding Plaintiffs’ Representation of Kichwa and
Huaorani Communities, filed Jan. 17, 2007 at 3:00 p.m., Record at 125652-54, 125653.
731 See Memorandum of Understanding dated Dec. 14, 1994, filed May 24, 2004 at 2:18 p.m.,
Record at 7705-07v, 7706v.
732 Diary of Steven Donziger, entry dated Oct. 27, 2006, at 30, attached as Annex 1 to Chevron’s
Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m. (DONZ00027256).
733 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79.
734 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79v.
735 FRAGA, Gabino, Administrative Law, 38 th Edition, Porrúa, México, 1998, pp. 275, 279.
736 LINARES, Juan Francisco, Administrative Res Judicata, Ed. Kraft, 1945 ed., p. 91. See also
MERKL, Adolfo, General Theory of Administrative Law, Ed. Nacional, 1980 ed., p. 263 (“The certainty of
legal rulings makes the immutability of administrative actions imperative, even against the exigencies of
the public interest”).
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effect of administrative acts “is explained and justified by taking into consideration that
in administrative law, the State carries out actions to satisfy collective needs, and that
objective could hardly be attained if it were required that the actions entrusted to the
State could not be binding on all members of the community, regardless of whether they
are represented when the action is carried out.” 737 In particular, “[t]he unilateral and
specific declaration of the executive branch is manifested in the production of legal
effects, i.e., in creating, modifying, transmitting, recognizing, declaring, or extinguishing
rights and obligations.” 738 Here, the Ecuadorian State took official legal action that bars
this lawsuit: the release of TexPet and its affiliates from any liability for environmental
impacts. As the State then enjoyed exclusive jurisdiction over environmental matters,
its decision was tantamount to a final judgment: “[T]he rules and principles of res
judicata can be applied to an administrative action when they have jurisdictional content,
insofar as they are declarative acts that are similar to judicial decisions, also due to their
application of a legal rule to a legal situation.” 739 The release is thus “inherently
binding” 740 and there is no basis for either the plaintiffs or this Court to ignore its erga
omnes effect. 741
737 FRAGA, Gabino, Administrative Law, 38 th Edition, Porrúa, México, 1998, p. 280.
738 ACEVEDO RAMOS, Jairo. General and Colombian Administrative Law. Ed. Jurídicas Gustavo
Ibáñez. Medellín. 2003. p. 439.
739 RODRIGUEZ, Gustavo H - General Administrative Law - Ed. Ciencia y Derecho, Santa fe de
Bogota, 2nd Edition, p. 265. See also LINARES, Juan Francisco, Administrative Res Judicata, Ed. Kraft,
1945 ed., p. 68 (“Substantive administrative res judicata consists of immutable jurisdictional and
administrative validity and effectiveness. And we also see this type of validity and effectiveness in the
final decisions of ordinary lawsuits.”).
740 DROMI, Roberto, Administrative Law, Science and Culture, 2001 ed., page 277.
741 The plaintiffs recently conceded that “the 1995 Agreement is in force because it has not been
declared otherwise by an authority with jurisdiction.” Plaintiffs Motion, filed Dec. 6, 2010 at 5:50 p.m.
Indeed, the Settlements are valid and they have not and cannot be challenged in this proceeding.
According to Ecuadorian law, contracts are valid unless their nullity has been legally declared by a
competent court. See Articles 1561, 1699 and 1700 of the Civil Code. Plaintiffs have never filed an
action for annulment of the Settlement, which would have had to have been filed before a contentiousadministrative
court, and not this Court. See Articles 1 and 3 of the Contentious Administrative Law;
Article 10 of the Hydrocarbon Law; see also Decision of the Supreme Court of Justice, Administrative
Division, Feb. 3, 1997 at 10:00 a.m., Case 33-97, published in Official Register 45, dated April 16, 1997.
No basis exists to annul the Settlement and, even if it did, the time period by which a private party could
bring such an action has long since passed. See id., Art. 65 of the Administrative Proceedings Act. As
the Republic in Ecuador acknowledged in a recent filing before an international arbitral body,
“Government representatives advised counsel for the Lago Agrio plaintiffs that, in their view, nullification
would be time-barred by the courts under the applicable statute of limitations.” Reply Memorial on
Jurisdictional Objections of the Republic of Ecuador, In the Arbitration under the UNCITRAL Arbitration
Rules between Chevron Corporation and Texaco Petroleum Company and The Republic of Ecuador (Oct.
6, 2010) at 12, 19, attached as Annex 9 to Chevron’s Motion filed Dec. 20, 2010 at 5:50 p.m. (citing
transcript of CRS-221-02-01 (Mar. 29, 2007) and describing it as follows: “five-year statute of limitation
for a Public Contract would be applicable; President Correa’s legal advisor of the opinion that ‘I don’t see
[a nullity suit] as a very . . . sustainable issue”). Plaintiffs’ allegation in their complaint that the work
performed under the Settlement was somehow insufficient or inadequate (Plaintiffs’ Complaint, filed May
7, 2003 at 11:30 a.m., Record at 73-80v, 75) is both erroneous, since the competent evidence establishes
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In sum, because TexPet and its affiliates and principals have already been
exonerated of blame by the only entity competent to judge environmental matters, Your
Honor has no authority to—and therefore cannot—grant the relief that plaintiffs seek in
their complaint.
5.3 The Plaintiffs’ Request for Damages Is Also Barred by the Principle of
Non-Retroactivity
This Court lacks subject matter jurisdiction because the current lawsuit is the
result of a substantive change in the law. The EMA cannot serve as a basis for judging
acts by TexPet prior to its enactment, because to do so would mean applying it
retroactively. The plaintiffs in these proceedings can only purport to represent the
community, and seek damage on its behalf, by invoking the terms of Article 43 of the
EMA; otherwise, each of them would have to file the lawsuit individually and separately.
The EMA was enacted in 1999, nearly a decade after TexPet stopped serving as the
Consortium’s operator. Because of the possibility for "persons directly affected by the
wrongful act or omission [may file] … suits for damages and for the deterioration caused
to health or the environment, including biodiversity with its constitutive elements,"
authorized by this law, it marks a substantive (or material) change in the law, and its
application to Chevron would violate the principle of non-retroactivity of the law, as
argued in the answer. 742 Thus, in addition to the fact that these collective claims were
settled over a decade ago, the relief for damages sought by the plaintiffs is premised
entirely upon the retroactive application of a law enacted after TexPet ceased its
operations in Ecuador, and is therefore barred under the principle of non-retroactivity.
5.3.1 The Principle of Non-Retroactivity
Article 7 of the Ecuadorian Civil Code provides that laws are enacted “only for the
future: they have no retroactive effect.” Because a party bases its conduct and
arranges its affairs in accordance with the law in existence at the time, the party’s
legitimate expectations and acquired rights are upset by subsequent changes in the law
that create new obligations or increase the scope of potential liabilities for prior conduct.
This is a settled and fundamental principle of the law, as acknowledged by Dr. Wray,
the plaintiffs’ former legal representative: “In the writings of legal scholars, the concept
alludes to the set of conditions required to anticipate the legal consequences of
personal and third-party conduct. Proposed as a constitutional principle, it means that
the legal order proscribes any practice in the exercise of power that leads to uncertainty,
(continued…)
that TexPet met the applicable standards, and beside the point, since the legal bar to plaintiffs’ claim is
the release itself, which is an authorized, valid, and binding act of the State. At bottom, neither plaintiffs
nor this Court can ignore the legal effect of the release, which bars plaintiffs’ lawsuit.
742 Answer as Read into the Record §§ II.C.1-II.C.1.3, filed Oct. 21, 2003 at 9:10 a.m., Record at
243-67, 261v.
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i.e., to the inability to anticipate or foresee the legal consequences of the conduct.” 743
This principle holds such importance that it has been embodied in the Constitution. 744
5.3.2 The Plaintiffs’ Claim for Damages Is Based upon the Impermissible
Retroactive Application of the EMA
The plaintiffs acknowledge that the principle of non-retroactivity applies to the
EMA, but say that they fall within an exception for purely procedural changes to the law.
The plaintiffs are wrong: their claim for damages is based on new substantive rules that
cannot be given retroactive effect.
Article 7 of the Civil Code provides that new procedural laws can be applied
immediately to proceedings that begin after the adoption of the new rule. The legistor's
concerns about disruption of settled expectations are not present with mere procedural
changes in the law. As explained in the legal scholarship, a procedural rule “arises as a
means, as a secondary right, which supposes the existence of pre-existing legal rules
that regulate human conduct and that have been violated.” 745 “Procedural rules do not
have a life of their own, but only by reason of or based on the substantive right whose
effectiveness it protects . . . .” 746 If the underlying substantive rules remain the same,
then no significant uncertainty or unpredictability arises from a change in the procedure
for enforcing those substantive rules, so long as the new procedural rule is not applied
in a proceeding that began before the rule’s adoption. 747
Here, Chapter VI(2) of the complaint requests that Chevron be ordered to pay
money to the Frente to repair alleged “environmental damages” caused by TexPet.
Plaintiffs are thus relying upon Article 43 of the EMA to give them relief that could not
have been obtained under Ecuadorian law at the time of TexPet’s alleged acts and
743 WRAY, Alberto, Due Process in the Constitution, Iuris Dictio, vol. 1, No. 1, Quito, 2000, p. 39,
cited in the Judgment of the Supreme Court of Justice, First Division, May 29, 2002, Case 80-2002,
published in Official Gazette 626, July 25, 2002.
744 See Article 24(1) of the 1998 Constitution of Ecuador (“No one may be judged for an act or
omission which at the time it was committed was not legally classified as a criminal, administrative, or any
other type of violation . . . . Neither shall a person be judged except in accordance with preexisting
laws[.]”); Article 76(3) of the 2008 Constitution (materially identical to Article 24(1) of the 1998
Constitution).
745 José Octavio Moncerrate Zambrano Vera vs. Juan Bautista Auhing Medina, Judgment of the
Supreme Court of Justice, First Civil and Commercial Division, Mar. 10, 2000, at 3:15 p.m., Decision No.
123, Case No. 62-2000, published in Official Gazette 66, April 26, 2000 (citing VÉSCOVI, Enrique, Teoría
General del Proceso, Editorial Temis, Bogotá, 1984, p. 11).
746 José Alfredo Cóndor vs. Héctor Hugo Irigoyen Jurado y otros, Judgment of the Supreme Court
of Justice, First Civil and Commercial Division, Sept. 7, 1999, Decision 473-99, published in Official
Gazette 332, Dec. 3, 1999.
747 Article 7(20) of the Civil Code provides: “Laws related to the proceedings and rituals of trials
prevail over the previous ones from the moment they enter into force. But terms that have already started,
and procedural steps that have already been initiated, shall be governed by the law which was valid at
that moment.”
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omissions. This retroactive application of a substantive change in the law is not
permitted by Ecuadorian law.
Chapter V of the complaint sets forth several statutory and constitutional bases
that purportedly give rise to the plaintiffs’ claims. These legal bases are set forth
chronologically in order to demonstrate the substantive change in Ecuadorian law
wrought by the EMA.
5.3.2.1 Pre-1990 Causes of Action
The following causes of action existed in Ecuador before TexPet ceased its
operations there on June 30, 1990:
i. Before 1990, private plaintiffs could bring individual claims for damages to
their persons or property. Current Articles 2214 and 2229 of the
Ecuadorian Civil Code provide entitlement to individualized damages
against “[a] person who has committed an intentional tort or an
unintentional tort that causes damage to another.” 748 A plaintiff under
these articles must allege and prove 749 the existence of personal harm
and/or harm to their property, as well as a causal nexus between such
harm and an action or omission on the part of the defendant. 750 Because
claims for alleged indivisible and diffuse injuries cannot be pursued under
Articles 2214 and 2229, a plaintiff who has not suffered divisible and
individualized injury lacks standing to bring this cause of action.
Furthermore, Ecuadorian law does not permit joinder of individual claims
in a “class action.” 751
748 Article 2214 provides: “A person who has committed an intentional tort or an unintentional tort
that causes damage to another is obligated to make compensation; notwithstanding any penalties
imposed on him by the laws for the intentional or unintentional tort.” See also Article 2229 of the Civil
Code, which provides: “As a general rule, any harm that may be attributed to another person’s intentional
misconduct or negligence must be repaired by that person.”
749 “[H]arm that is possible, hypothetical, [or] based on assumptions or conjectures, no matter
how seemingly well-founded, whether present or future, does not give the right to compensation.” Angel
Isaac Gutierrez vs. Molinos Champion S.A., Judgment of the Supreme Court of Justice, Civil and
Commercial Division, Sept. 29, 1993, published in Judicial Gazette, year XCIV, series XVI, no. 1, pág. 11
(dissenting opinion of Drs. Miguel Macias Hurtado and René Bustamante Muñoz).
750 “[T]he existence of an unintentional tort gives rise to civil obligations based on responsibility,
subject to the conditions of the existence of a harm, of negligence, of a relationship of causality between
the negligence and the harm, and the capacity of the active subject. As regards harm, we should add
from the conceptual point of view ‘all loss that an individual experiences in their person or property, the
loss of a pecuniary or non-pecuniary benefit, whether material or moral.' Ramón Meza Barros, Civil Law
Handbook.” Miguel Macías Hurtado vs. Inchalela Cia. Ltda. y Constructora Chalela Cia. Ltda., Judgment
of the Court, Nov. 12, 1990, published in Judicial Gazette, year XCI, series XV, no. 10, p. 3048, Nov. 12,
1990 (emphasis added).
751 “[T]he so-called ‘class actions’ are still not recognized in our system of positive law.” Comité
Delfina Torres vda. De Concha vs. Petroecuador y otros, Judgment of the Supreme Court of Justice, First
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This was expressly acknowledged by the plaintiffs’ counsel in the New
York case. Dr. Wray, then-lead attorney for the plaintiffs, explained in an
affidavit that, under Ecuadorian law, “nothing exists that can be compared
to the United States’ ‘class action.’” 752
ii.
Before 1990, private plaintiffs could only report alleged violations of an
environmental rule or precept to the State, which had the exclusive power
and duty to seek remediation and take other appropriate actions (e.g.,
fines and sanctions). Pursuant to the 1978 Constitution, individuals in
Ecuador had a constitutional right “to live in an environment free from
contamination.” 753 However, that constitutional right was not directly
enforceable by private individuals; rather, it was the “duty of the State to
ensure that this right is not abridged.” 754 This provision confirmed the
substance of Ecuadorian law at the time: the State is the owner of all
subsurface mineral and natural resources, as well as virtually all of the
land and waters in the oil-producing region of the Ecuadorian Amazon,
and thus only it could bring a claim for damage to that environment. See
supra § 5.2.3. Individuals had only the right to denounce environmental
violations and request an official investigation by the State.
This was also expressly acknowledged by the plaintiffs’ counsel in the
New York Aguinda case. Dr. Wray explained in an affidavit that, under
Ecuadorian law, “[t]he application of laws regarding the prevention and
control of environmental contamination falls within the purview of the
administrative agencies of the executive [branch],” such that “if a person
feels harmed by environmental infractions, he must file a complaint in front
of those officials and not in front of judges.” 755
iii.
Before 1990, private plaintiffs could file a lawsuit seeking the intervention
of an authority to eliminate an imminent threat to indeterminate persons.
In fact, current Article 2236 of the Civil Code entitles these plaintiffs to give
notice of a threatening condition and seek, through a “popular action,” an
(continued…)
Civil and Commercial Division, Oct. 29, 2002, Case 31-2002, published in the Official Gazette 43, Mar. 19,
2003.
752 Affidavit of Alberto Wray (Mar. 8, 1994), attached as Annex 1-A to Chevron’s Motion to
Dismiss, filed Oct. 8, 2007 at 8:10 a.m., Record at 132897-996, 132948.
753 Article 19(2) of the 1978 Constitution of Ecuador (as codified in 1993).
754 Article 19(2) of the 1978 Constitution of Ecuador (as codified in 1993).
755 See Affidavit of Alberto Wray (Mar. 8, 1994), attached as Annex 1-A to Chevron’s Motion to
Dismiss, filed Oct. 8, 2007 at 8:10 a.m., Record at 132946-954, 132953; see also Aguinda v. Texaco Inc.,
142 F. Supp. 2d 534 (S.D.N.Y. 2001), aff’d, 303 F.3d 470 (2d Cir. 2002), attached to Texaco Inc.’s
Response to RFP, Record at 9521-66, 9535.
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appropriate injunctive order from the Court to eliminate it. 756 This Article
applies exclusively to “contingent” harm, that is, harm that has not yet
occurred, and it gives individuals a mechanism to prevent the harm, by
means of a suit against the party that is negligent in failing to remove the
threat. Article 2237 entitles plaintiffs to be reimbursed for the expenses
they have incurred in their preventive lawsuit under Article 2236, 757 but it
does not otherwise permit the recovery of any monetary damages.
Repeated decisions of the former Constitutional Tribunal (now the
Constitutional Court) confirm this principle in a similar context dealing with
injunctive relief (amparo): “[I]t is inappropriate to request compensation by
means of a claim for constitutional relief [amparo].” 758
5.3.2.2 Post-1990 Causes of Action
The plaintiffs cite several legal provisions that post-date TexPet’s operations in
Ecuador:
i. In 1998, Ecuador adopted a new Constitution. Articles 23 and 86, cited in
the complaint, reiterated each citizen’s right to live in a clean environment,
with the State having the obligation to “protect” this right. This is
equivalent to the provision in the prior Constitution, which is discussed in
the preceding section. The plaintiffs also allege that, under Chapter 5,
Title III of the 1998 Constitution, a person may file a claim for violation of
this right and may demand reparation. But this provision does not itself
create a cause of action for private parties; one must instead be provided
by law. This did not occur until the enactment of the EMA in 1999. To the
extent that the changes in the 1998 Constitution allowed an environmental
action by a private party, it would only authorize injunctive relief necessary
to “protect[]” the environment, and not the recovery of alleged damages. 759
Moreover, even if the 1998 Constitution otherwise provided a basis for the
756 Article 2236 of the Civil Code provides: “As a general rule, a ‘public action’ is granted in all
cases of contingent harm that threatens indeterminate persons because of imprudence or negligence.
However, if the harm only threatens determinate persons, only one of them may file the action.”
757 Article 2237 of the Civil Code provides: “If the public actions granted by the preceding articles
seem well founded, the plaintiff shall be compensated for all the costs of the action, and he shall be paid
for the value of the time and energy spent on them, without prejudice to the specific remuneration granted
by the law in specific cases.”
758 Judgment of the Constitutional Tribunal, Third Chamber, Mar. 18, 2003, Decision No. 0334-
2003-RA, published in Official Gazette 195, Oct. 22, 2003. Regarding this issue, an illustrative judgment
states that “popular actions, although they sort out the judicial protection of these concrete interests and
collective rights, cannot be established or exercised to obtain subjective or plural remedy of the possible
damages that may be caused to them by the action or omission of the public authority or of the
individual.” Judgment of the Council of the State, Administrative Division, Third Section, dated April 25,
2002, Filing No. 05001-23-31-000-2001-2012-01 (AP-0388) (citing Decision No. T-508 of 1992).
759 Article 91 of the 1998 Constitution references “Without prejudice to the rights of those directly
affected . . . [an individual] may file the suits provided for in the law for protection of the environment .”
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plaintiffs’ alleged claims, it could not be applied retroactively to authorize
claims that did not previously exist, for alleged conduct that pre-dated its
adoption.
ii. In 1999, Ecuador enacted the “Indigenous and Tribal Peoples
Convention.” 760 Article 15 of the Convention creates a cause of action for
indigenous peoples against the Government. Because the plaintiffs
include numerous colonists who have no standing under the Convention,
and because the defendant in this case is Chevron rather than the
Government, the Convention may not serve as a legitimate basis for a
judgment in the plaintiffs’ favor. As with the 1998 Constitution, moreover,
new causes of actions under the Convention could not be applied
retroactively.
iii.
In 1999, Ecuador enacted the EMA. Article 43 of the EMA expressly
provides a statutory right of action for a private person to seek damages
based upon a diffuse harm to the environment as a whole, as opposed to
the violation of an individual right. As explained below, the creation of this
cause of action marked a major change in Ecuador’s substantive law.
5.3.2.3 The Plaintiffs’ Request for Damages Necessarily Is Premised upon the
1999 EMA
Given the nature of their allegations, it is plain that the plaintiffs’ request for
monetary damages in Chapter VI of the complaint does not proceed under any law that
was in effect when TexPet operated in Ecuador. See supra § 5.3.2.1. Indeed, in their
submission of September 16, 2010 at 5:15 p.m., plaintiffs themselves concede that
"Article 43 of the Environmental Management Act establishes the faculties of the judge
when the time comes to render judgment, with respect to what payments he can
sentence the defendant to make in this type of lawsuit." 761
First, Chapter VI(2) of the plaintiffs’ complaint seeks monetary damages, and the
only pre-1990 law cited by the plaintiffs that provides for monetary damages is Article
2214 of the Civil Code. 762 But Article 2214 is plainly inapplicable to this case since the
760 Convention 169 on Indigenous and Tribal Peoples Convention, 1989, Conference of the
National Organization of Labor, published in Official Gazette 206, June 7, 1999.
761 Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 5; see also id. at 8 ("[I]n the complaint
we request that environmental damage be repaired in accordance with the provisions of Article 43 of the
EMA.").
762 Given that the EMA cannot be applied retroactively to facts that allegedly occurred years
before its promulgation, the plaintiffs have claimed that their right to sue is based on the Civil Code and
not the EMA. See, e.g., Affidavit of Alejandro Ponce-Villacis, dated Dec. 18, 2006, attached as Annex 5
to Chevron’s Motion to Dismiss, filed Oct. 8, 2007 at 8:10 a.m., Record at 132897-996, 132978, 132985
(speaking as "one of the counsel for the [Lago Agrio] plaintiffs," and representing that the lawsuit is
"primarily based on preexisting civil law concepts" including the "core Ecuadorian civil law extracontractual
duty" contained in Article 2214).
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plaintiffs have not alleged, and have not proven, the existence of any individualized
harm to any particular individual or legally cognizable entity. The complaint alleges
harm to “communities” that the plaintiffs purport to represent, but these communities are
only vaguely defined. There is, furthermore, no proof that the plaintiffs have been duly
authorized to represent them with respect to any claims for divisible injuries. 763 In all
events, although Chapter III of the complaint 764 contains general and imprecise
allegations of environmental effects, in the operative part of the complaint (Chapter VI)
the plaintiffs do not request damages for specific injuries—either to individuals or to the
vaguely defined communities. 765 Thus, their request for damages cannot be premised
on any relevant provision of the Civil Code; it necessarily is premised on the 1999 EMA
instead.
The absence of any basis in the Civil Code for the plaintiffs’ damages claim is
further confirmed by the fact that any such claim under the Civil Code plainly is time
barred. 766 The concept of a statute of limitations has been defined legally as the
“manner of extinguishing a right as a result of failure to exercise such right during the
time period established by law.” 767 Section 1583(11) of the Civil Code generally refers
to the statute of limitations as a means of extinguishing obligations, whereas Section
2392 of the Civil Code refers to it as means of extinguishing “causes of action.” As
Ecuador’s former Supreme Court (now the National Court) has stated: “The defense of
the statute of limitations is a way to extinguish the substantive aspects of a cause of
action, and if it is found to apply, then the Judge cannot rule on the claims set forth in
763 It is unclear from the complaint and the evidence who is included in the supposed 30,000
persons that the plaintiffs purport to represent. Their identities and addresses are unknown, so it is
impossible to know whether they belong to the communities that the plaintiffs say they represent, whether
they are located within or outside of the former concession area, and whether they were affected by the
oil operations.
764 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 76-77.
765 See Plaintiffs’ Complaint, filed May 7, 2007 at 11:30 a.m., Record at 73-80v, 79-80. This case
therefore contrasts with Delfina Torres case, Comité Delfina Torres Vda. de Concha vs. Petroecuador y
otros, Judgment of the Supreme Court of Justice, First Civil and Commercial Division, Oct. 29, 2002,
Case 229, published in Official Gazette 43, Mar. 19, 2003, where the named plaintiff—proceeding under
the Civil Code (Article 2214) in an ordinary proceeding—appeared in “the capacity of legal representative
of a private law legal entity” to redress the direct injuries to that entity that were pleaded and proved with
particularity and specificity. (Nos. 5, 15 and 27) Indeed, the Supreme Court expressly noted that “[i]f the
action had been brought as a legal representative of the ‘public interest’ or of society in general,
doubtless this would have been procedurally barred, or there would be no standing to sue according to
the terminology adopted by our Code of Civil Procedure.” (No. 5)
766 This defense was expressly raised by my client when it answered the complaint, based on
Section 2259 (currently 2235) of the Civil Code. See Answer as Read into the Record § IV.3.4, filed Oct.
21, 2003 at 9:10 a.m., Record at 243-67, 265. The assertion of the defense cannot be interpreted as a
recognition that the plaintiffs have a cause of action of any kind. The statute of limitations would bar the
alleged causes of action if they existed, which they do not.
767 Dictionary of the Spanish Language, Royal Spanish Academy, Madrid, Spain (22nd ed. 2001).
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the complaint.” 768 Accordingly, even if the plaintiffs at one time had causes of action
against Chevron (which they did not), those claims would have been extinguished by
the passage of time, as described above, and they cannot now be raised by the
plaintiffs or adjudicated by this Court. The complaint in this case is based on TexPet’s
alleged acts and omissions as operator of the Consortium. In Chapter I of the complaint,
the plaintiffs admit that TexPet served as operator from January 1, 1965, until June 30,
1990 (and also that its participation in the Consortium ended in June 1992). 769 The
complaint, however, was not filed until 2003. Thus, the plaintiffs seek payment for acts
and omissions that allegedly occurred between thirteen and thirty-eight years before
they filed their complaint. The lawsuit plainly is time-barred.
Specifically, any claim under Article 2214 of the Civil Code is subject to the four
year statute of limitations established under Article 2235 of the same Code for
intentional and unintentional tort actions. According to Article 2235, 770 the four year
statute-of-limitations period would run as of the date of TexPet’s allegedly wrongful
acts. 771 As noted above, TexPet’s alleged acts and omissions as operator occurred
768 Edgar Antonio Mite Salas v. Miguel Arostegui, Judgment of the Supreme Court of Justice,
First Civil and Commercial Division, Mar. 27, 2006, Case 110-06, published in Official Gazette 379, Oct.
18, 2006. The Supreme Court explained: “Case law equally considers that the defense based on the
time-barring of the action by the statute of limitations extinguished the action and the right of the party and
that, upon it being alleged, the judge must establish whether it is pertinent and if so, order the termination
of the proceedings, without delving in the issues at stake in the proceedings. From a legal scholarship
point of view, the purpose of the statute of limitations is to consider a right as extinguished where it has
not been timely exercised, since the authority of the owner is not, and cannot be, indefinite in time and it
is necessary to establish a deadline for it to be exercised and enforced under applicable legal formulae.
This legal defense is, all in all, a means to annihilate the action in its substantive aspects. Thus, its
declaration entails an issue of substance that requires to be stated in the judgment. (GJ XIV-No. 2 p.
324).”
769 Plaintiffs’ Complaint, filed May 7, 2009 at 11:30 a.m., Record at 73-80v, 73v-74.
770 Article 2235 prevails over the general statute of limitations that applies where no specific
limitations period is established for a particular cause of action. Article 2235 provides: “The causes of
action provided for in this chapter for damages or intentional misconduct are time barred in four years,
counted from the date on which the act was perpetrated.” Ecuadorian courts thus apply Article 2235’s
four-year statute of limitations to claims for intentional or unintentional torts: “The plaintiff bases its
complaint on the provisions of Book Four, Title XXIII, on intentional and unintentional torts, in its Sections
2241, 2242 [currently 2214, 2215] et seq. of the Civil Code currently in force, and on those grounds the
complaint is admitted in both instances. By virtue of the above, even if the plaintiff’s claim to damages in
tort were granted, Section 2439 [2415] of the Civil Code would not apply, but instead Section 2259 [2235]
would apply . . . .” Medardo Alfredo Luna Narváez v. Compañía Aérea Servicios Aéreos Ecuatorianos
C.A., Case 20-2004, First Chamber, published in Official Gazette 411, Sept. 1, 2004.
771 An important Chilean legal scholar who is renowned throughout Latin America, has explained
the rule contained in Article 2235 of the Ecuadorian Civil Code, which is identical to Article 2332 of the
Chilean code: “The cause of action to obtain relief for damage caused by an intentional or unintentional
tort is extinguished by the statute of limitations in four years, counted from the perpetration of the act, that
is, from the day on which the intentional or negligent act was committed (5) and not from the day when
the damage arises, if that day and the act are not contemporaneous (art. 2332).” ALESSANDRI
RODRÍGUEZ, Arturo, Tort Liability Under Chilean Civil Law, Editorial Ediar, Santiago, Chile, 1983, No.
432, p. 522.
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efore July 1990. Thus, any claims regarding operations in the Consortium area—
including any alleged acts or omissions concerning the condition of the area—from that
point forward would have had to be brought against Petroecuador.
As a condition of dismissal of the Aguinda case in New York, Texaco agreed to
toll the statute of limitations between the time that a claim was filed against it before the
New York court (which occurred in November 1993) and any re-filing of the same claim
against it in Ecuador within a year after the completion of the Aguinda case in New
York (that is, until late 2003). 772 As demonstrated supra §§ 1.2, 1.4, this agreement is
inapplicable because the complaint in this lawsuit is against Chevron, not Texaco, and
asserts different claims than the New York case. Even if the tolling agreement applied,
it would not revive claims that already were barred before the New York case was filed
in November 1993. Under the four-year statute of limitations, the only claims not barred
by November 1993 were for alleged acts or omissions beginning in November 1989—
less than eight months before TexPet’s role as operator ended.
Second, the only pre-1990 claim that would allow a private party to plead a
violation of the laws regarding the prevention and control of environmental
contamination is an action in front of administrative agencies of the executive branch. 773
These bodies were the only authorities that could provide any sort of relief when an
individual or a group of individuals “fe[lt] harmed by environmental infractions”
untethered to specific allegations of personal injury or property damages. 774 This is
because the citizenry’s constitutional right to a clean and pollution-free environment was
entrusted to the Ecuadorian State, in article 19(2) of the Constitution, “to ensure that
th[at] right is not abridged.” 775 In 1998, when a new constitution came into force, that
State duty was moved to Article 86, which stated even more clearly that:
The State shall protect the peoples’ right to live in a healthy
and ecologically balanced environment . . . . It [the State]
shall see that this right is not affected and shall guarantee
the preservation of nature. The following is declared to be of
public interest to be regulated in accordance with the law: 1.
Preservation of the environment, conservation of the
ecosystems, the biodiversity and the integrity of the country’s
genetic heritage; [and] 2. Prevention of environmental
pollution, reclamation of degraded natural areas, sustainable
772 Aguinda v. Texaco Inc., 303 F.3d 470 (2d Cir. 2002), attached to Texaco Inc.’s Response to
Request for Production, Record at 9567-84, 9581.
773 See Affidavit of Alberto Wray (Mar. 8, 1994), attached as Annex 1-A to Chevron’s Motion to
Dismiss, filed Oct. 8, 2007 at 8:10 a.m., Record at 132946-54, 132953.
774 Affidavit of Alberto Wray (Mar. 8, 1994), attached as Annex 1-A to Chevron’s Motion to
Dismiss, filed Oct. 8, 2007 at 8:10 a.m., Record at 132946-54, 132953.
775 Article 19(2) of the 1978 Constitution of Ecuador (as codified in 1993).
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management of natural resources, and requirements to be
met by public and private activities for that purpose . . . . 776
Plaintiffs have filed neither an action before the Executive, nor against the Executive, to
denounce a specific environmental infraction that infringed their constitutional right to a
clean environment.
Finally, Chapter VI(1) of plaintiffs’ complaint seeks certain injunctive relief, but the
only pre-1990 legal basis for this claim—Article 2236 of the Civil Code—is plainly
inapplicable to this case. Article 2236 allows a “popular action . . . in all cases of
contingent damages that threaten unspecified persons because of the negligence or
imprudence of another. But if the damage only threatens specified persons, only they
will be able to initiate proceedings.” By its terms, it applies only to “contingent” harm
that has not yet occurred, and the only proper defendant is the party that can address
the contingency and is negligent in failing to do so.
Plaintiffs’ complaint effectively concedes that there are no “contingent” damages
that they can plead here. Presumably attempting to draw a parallel to Article 2236—
though opting not to cite it—they request “[t]he elimination or removal of the
contaminating materials that still threaten the environment and the health of
residents.” 777 The alleged existence of “contaminating materials,” however, presumes
the existence of actual, present harm—not potential, future harm. In their submission of
September 16, 2010, at 5:15 p.m., they argue that "the immediate presence of
contaminating substances in given points in the ecosystem.” 778 But the allegation of
actual damage is not the province of Article 2236; it can be addressed only through an
action for personal injury or individualized property damages (e.g., under Article
2214) 779 or through a specific environmental claim (e.g., EMA Article 43). 780 The
obvious overlap between plaintiffs’ specific claims in Chapters VI(1) and VI(2)
demonstrate this point: the request for “removal” in VI(1) is subsumed by the request
for “repair”—under the EMA—in VI(2). If, for instance, the plaintiffs prove an entitlement
to monetary damages for the “conditions [of] the soil of [the] surrounding
environment” 781 of “the pits opened by Texaco,” 782 there is no need for an injunctive
order for “the treatment and disposal of the contamination wastes and materials that are
still in the pits opened by Texaco.” 783 If the plaintiffs had proven, which they have not,
776 Article 86 of the 1998 Constitution of Ecuador.
777 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79.
778 Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15p.m., at 5.
779 Article 2214 of the Civil Code.
780 Article 43 of the Environmental Management Act.
781 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79v.
782 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79v.
783 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79v.
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an entitlement to monetary damages for “a plan to regenerate aquatic life,” 784 an
injunctive order for the “cleanup of rivers, streams, lakes, marshes and natural and
manmade waterways” 785 is superfluous. Because plaintiffs have not even attempted to
prove an action for individualized damages under the provisions Article 2214, the only
legal basis for the claims asserted here is—as is expressly pled in Chapter VI(2)—the
EMA.
In any event, for any injunctive claim brought under these facts for contingent
damages, Petroecuador is the only proper defendant. An action to prevent potential
future harm must be brought against either the owner of the property or the party
currently engaged in the activity that causes the threat or contingent harm, since they
are the only ones who can prevent the challenged activity and the threatened harm.
Such an action cannot logically be brought against a third party who has no control over
the activity or the property. That is the case here with respect to Chevron. First,
Petroecuador alone has operated the former Consortium fields for almost twenty years.
It is thus responsible for any threatening condition that presently exists in the area—as
the current owner and operator, it alone is “negligent” under Article 2236 of Civil Code in
failing to remove any threat to unspecified persons. Second, the nature of the claim is
injunctive, in that it requires the elimination of the threatening condition. The current
operator and holder of rights over the area where the allegedly threatening condition
exists (here, Petroecuador) is the only party that is capable of fulfilling the terms of the
requested injunction. 786 Third, as discussed above, supra § 5.2.2, Petroecuador
released TexPet and itself assumed all remaining responsibility for environmental
impact in the former Consortium area. The structure of the settlement, under which
TexPet performed remediation commensurate with its minority share of the Consortium,
reflected the parties’ understanding that Petroecuador would have to answer for any
continued environmental threats in the former concession area, where it continues to
operate today. Because Petroecuador is the proper defendant, the plaintiffs have no
cause of action against Chevron for the injunctive relief they seek.
5.3.3 The Cause of Action Granted by the EMA Constitutes a Substantive
Change in the Law and Thus Cannot Be Applied Retroactively
Because no pre-existing provision of the law authorized an equivalent cause of
action, Article 43 of the 1999 EMA substantively changed the law. As demonstrated
above, such provisions cannot be applied retroactively to conduct that occurred prior to
the change in the law, especially in the face of the settlement agreement releasing
TexPet and its affiliates from any liability for environmental impacts in the area of the
former Petroecuador-TexPet concession.
784 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 80.
785 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79v.
786 Article 1569 of the Civil Code is not applicable because the defendant is not currently in
default. Chevron has not failed to perform any preexisting legal obligation; to the contrary, the
Government of Ecuador certified that TexPet fulfilled all of its contractual remediation responsibilities.
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Article 43 created a new course [sic] of action that did not previously exist, i.e.,
the right of those directly affected by a wrongful act or omission to file a civil suit,
individually or collectively, for damages resulting from a harmful act or omission against
the environment and/or health. Before this law was enacted, private individuals had no
right to file a civil suit for damages for direct harm to them as persons, or for an injury to
health or the environment, originating in the wrongful act or omission against the
environment or health; what existed was an action for identifiable harm to a specific
individual or his property. By authorizing claims for damage to the environment in
general, the EMA went beyond Article 2236 of the Civil Code, which authorizes only
injunctive relief to eliminate possible future threats to indeterminate persons. Clearly,
therefore, the EMA did not merely change the procedure for litigating a pre-existing
cause of action. 787 It instead gave a cause of action to persons who never before had
one, and entitled them to relief that they could not previously request or receive. As it
creates new liabilities, the EMA constitutes a substantive change in the law that cannot
be retroactively applied.
The fact that the EMA substantively changed Ecuadorian law is confirmed in the
legislative debate leading to its enactment. For example, Representative Vela Puga
explained that “[t]his law establishes very important modifications to the Ecuadorian
legal system” because “[t]he possibility is established that any civil, natural or artificial
person may file an action for damages against any other person, including the
Ecuadorian State, in order to claim the effect of a violated right which is not his own and
this is indeed a modification which totally changes the bases of the Ecuadorian legal
system.” 788 Representative Saltos Galarza viewed the EMA as “a historic step,” and he
argued that “we must not only proceed through individual rights, as it is established now,
but we must give way to a different conception, which other countries are already
adopting.” 789 One legislator, Representative Fernando Rosero, opposed enactment of
the new law, saying it was outrageous that “with no previous recourse or previous
background, all of the sudden twelve and a half million Ecuadorians would be able to be
heard in an administrative criminal proceeding.” 790
787 The EMA also contains procedural provisions that may be applied to a case properly
proceeding under a preexisting cause of action. For example, in the Calva case, Case 286-2001, the
plaintiff based his complaint upon Article 2214 of the Civil Code and—unlike the plaintiffs here—proved
individualized injury in the form of damage to his cattle and crops. To the extent that the EMA provided
procedures for the plaintiffs’ claim under preexisting law, therefore, no retroactivity problem existed. See
Alfonso Calva Castillo vs. Petroproduccion, Judgment of the Supreme Court of Justice, Second Civil and
Commercial Division, Mar. 12, 2008, Case No. 286-2001.
788 Acta No. 8, Ordinary Evening Session of Congress, Aug. 19, 1996, “Continuation of First
Debate on the Environmental Management Act,” p. 39.
789 Acta No 8., Ordinary Evening Session of Congress, Aug. 19, 1996, “Continuation of First
Debate on the Environmental Management Act,” p. 40.
790 Acta No. 105, Ordinary Morning Session, June 10, 1999, “Continuation of Second Debate on
the Project of the Environmental Management Act,” p. 32.
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It is legally impermissible for the plaintiffs to rely upon this fundamental legal
change in their effort to obtain monetary damages for TexPet’s alleged conduct many
years earlier, particularly where TexPet entered into comprehensive settlements to
resolve all environmental claims with the only parties, at the time, capable of bringing
them.
In fact, the plaintiffs’ attorneys themselves recognized years ago that several
judges had already ruled that the EMA “can not be applied to cases based on
contamination which occurred before 1999.” 791 In their words, that ruling implies that
“this case is moving inexorably towards dismissal.” 792 The plaintiffs in that respect were
correct; this case must be dismissed.
CHAPTER VI.
THIS COURT IS LIMITED TO THE CLAIMS MADE BY THE PLAINTIFFS
6.1 The Principle of Congruency
As noted at the outset of this brief, the principle of congruency limits the
jurisdiction of the judge, who can only decide matters raised by the plaintiffs in their
complaint. Furthermore, neither the plaintiffs, nor their conduit Mr. Cabrera, nor the
judge may amend the complaint after it has been filed. Yet the plaintiffs and their
conduit, Mr. Cabrera, have ignored the complaint and requested a series of damages
that sweep far beyond the original claims asserted by them when they filed suit. Under
Ecuadorian law, basing a judgment on claims that were not pled in the complaint
constitutes a basis for nullity of the judgment.
Section 273 of the Code of Civil Procedure provides that “[t]he judgment shall
decide only the issues regarding which the case was filed and answered and any
collateral issues arising during the trial that may have been saved for decision in the
judgment, without causing any harm to the parties.” Consequently, “it is only in the
complaint and in the answer to the complaint that the terms of the debate and the scope
of the judgment are definitively established.” 793
Furthermore, Section 834 of the Code of Civil Procedure provides that in oral
summary proceedings, “once the complaint has been filed in this proceeding, the
791 E-mail from Cristobal Bonifaz to Alejandro Ponce Villacis, et al., dated Jun. 4, 2006 at 1:27
p.m., at 2, attached as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed
Dec. 20, 2010 at 4:30 p.m. (DONZ00028557).
792 E-mail from Cristobal Bonifaz to Alejandro Ponce Villacis, et al., dated Jun. 4, 2006 at 1:27
p.m., at 2, attached as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed
Dec. 20, 2010 at 4:30 p.m. (DONZ00028557).
793 Mentor Eliecer Chico Villacrés y otra vs. Alba Chamba Quevedo, Judgment of the Supreme
Court of Justice, First Civil and Commercial Division, Oct. 11, 1999, Resolution 509-99, Case 38-98,
published in Official Gazette 334, Dec. 8, 1999.
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plaintiff shall not amend it, nor shall any counterclaim be filed, although this shall not
affect the right to file the related action separately.” 794
The principle of congruency therefore imposes “the requirement that court
decisions should actually respond to all claims submitted by the parties in the
prescribed manner and within the prescribed period for hearing by the courts.” 795
Furthermore, the principle “delimits the contents of the judgment, since the judgment
must be rendered in accordance with the meaning and scope of the claims or
challenges and the defenses duly asserted in order for what was requested and what is
resolved to be legally identical.” 796 Incongruence exists in the form of ultra petita,
“[w]hen what is granted is more than what was requested,” and extra petita, “[w]hen
something other than what was requested is granted.” 797 This same principle of
congruence is violated when the court resolves something other than the specific claims
brought before it.
On this point, the Supreme Court of Justice has held that
when rendering judgment, the judge must limit himself to the
matters at issue in the lawsuit, that is, the specific claims
brought by the plaintiff in the complaint and the explicit
points raised as defenses by the defendant. The judge may
not diverge from the matters at issue as raised in either the
complaint or the answer to the complaint; infringing this
prohibition leads to one of the defects set forth in premise
794 Ecuadorian law leaves no doubt that the principle of congruency applies to both evidence and
expert reports. Article 116 of the Code of Civil Procedure, consistent with Article 273 of that Code,
provides that “the evidence [such as the expert examination] must be limited to the matter at issue and
the facts submitted for the court’s decision.” In addition, under Article 117 of the Code of Civil Procedure,
“only evidence that has been properly taken, i.e., that has been requested, presented and produced in
accordance with the law, shall be valid in court.”
795 “The parties establish the purpose of the case, and it is within those limits that the Judge must
decide . . . . Consequently, the Court must enter a judgment in accordance with what was argued and
proven by the parties . . . its judgment must be limited by Plaintiffs’ petitions and what the Defendant has
admitted or contradicted. . . . This is the principle called congruency of judgments; according to which, the
Court must resolve what the parties request, but nothing more; in other words, according to (congruently)
the parties’ requests.” VÉSCOVI ENRIQUE, Teoría General Del Proceso, Temis, II Edición, Bogotá p.
44-45.
796 Alberto Vásconez Gavilanez vs. Manuel Tobar Mayorga, Judgment of the Supreme Court of
Justice, First Civil and Commercial Division, Resolution 246-2000, Case 150-97, published in Official
Gazette 133, Aug. 2, 2000.
797 Alberto Vásconez Gavilanez vs. Manuel Tobar Mayorga, Judgment of the Supreme Court of
Justice, First Civil and Commercial Division, Resolution 246-2000, Case 150-97, published in Official
Gazette 133, Aug. 2, 2000.
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four of article 3 of the Cassation Law, called the doctrine of
incongruence . . . . 798
An Argentinean court similarly has held that “[t]he dispositive principle
establishes the rule that it is the parties who determine the thema decidendum, and
judgments must perforce be congruent with the manner in which the issues were raised
or risk nullity.” 799
Therefore, in any proceeding, and particularly in an oral summary proceeding
such as this one, the principle of congruency limits judgment to those facts with respect
to which the litigation or controversy was brought, that is, to the claims contained in the
complaint and answer as originally filed.
A comparison of the plaintiffs’ specific claims in their complaint with the
exorbitant damages requested in their September 16, 2010 filing at 5:15 p.m. and
proposed (by them) in Mr. Cabrera’s fraudulent reports shows that Mr. Cabrera greatly
exceeded his mandate, in such an absurd manner as to clearly demonstrate his
manifest bias, and that the plaintiffs have strayed far from their complaint. 800 Indeed,
Mr. Cabrera’s assertions with respect to the alleged damages track almost identically
those identified by the plaintiffs’ counsel on a Crude outtake filmed several months
before Mr. Cabrera’s appointment; this is not surprising in light of the revelations that
plaintiffs’ lawyers, consultants, and affiliated activists secretly wrote Mr. Cabrera’s report
for him and simply sent it to him for signature and filing, supra § 2.2.1. In that clip, the
plaintiffs’ Ecuadorian counsel acknowledge that by virtue of the doctrine of “extra petita,”
they cannot request “anything more than what has been petitioned in the lawsuit.” 801
798 Judgment of the Supreme Court of Justice, Second Civil and Commercial Division, Case 398-
06 published in Official Gazette E-17, Feb. 21, 2008; see also Judgment of the Supreme Court of Justice,
First Division, Case 273-2000, published in R.O. 134, Aug. 3, 2000, citing a judgment issued by the same
Chamber that was published in the Judicial Gazette, Series VII, No. 5, on page 1486, which stated: “in
light of the dispositive principle, the judge cannot grant the plaintiff what was not asked in the complaint;
and in virtue of the principle of congruency, which requires a juridical identity between what is resolved in
any sense, by the judge in the judgment, and the requests for relief and the exceptions filed by the parties,
which form the basis of the controversy (suit), the judge cannot go ahead with an action that has not been
filed, nor resolve anything beyond what has been the subject of the controversy, otherwise it would fall
under the vice of ultra petita.”
799 Sosa, Liliana et al. vs. Novacovsky, Alejandro, Judgment of the Court, CCCom. De Mar del
Plata, First Division, Nov. 19, 2002, (cited by ENDERLE, Guillermo Jorge, Procedural Congruency,
Editorial Rubinzal – Culzoni Editors. 2007, p. 35.).
800 All the activities of the Expert acting on behalf of the Court, must by necessity be related to the
assignment entrusted to him by the Judge. He does not have any discretionary capacity to do what was
not ordered or to not perform the work ordered. "The decision of the experts cannot be spontaneous . . .;
it is indispensable that it be preceded by a legal assignment by means of a ruling issued and notified in a
legal manner." DEVIS ECHANDÍA, Hernando. Compendium of Judicial Evidence. Editorial Rubinzal -
Culzoni. Buenos Aires. 2007. Volume II. pp. 103 and 107.
801 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., (CRS-159-00-10).
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Because the complaint sought compensation only for environmental remediation and
health improvement, the plaintiffs acknowledged in internal discussions that they could
not subsequently request “damages to the affected individuals” or money representing
supposed “immoral profit.” 802 Nonetheless, the plaintiffs insist on requesting these
types of damages anyway on the cynical theory that if Chevron “say[s] that in a, in their
response,” and this Court lowered the amount, it would appear to be giving Chevron a
“huge victory.” 803
6.2 The Plaintiffs Asserted Specific and Limited Claims in Their Complaint
Chapter VI of the complaint includes the plaintiffs’ specific requests for relief.
Those specific requests fall within three categories: (i) prevention of threatened harm to
the environment; (ii) damages to repair harm to the environment and for health
improvement and monitoring; and (iii) a ten percent bounty.
Specifically, in Chapter VI.1 of their complaint, they first seek:
[T]he elimination or removal of the contaminant elements
that still threaten the environment and health of the
inhabitants. Consequently, the sentence shall dispose:
a. Removal and adequate treatment and disposal of
waste and contaminant materials still existing in pits
or ditches opened by TEXACO . . .
b. Sanitation of rivers, lakes, swamps wetlands and
natural and artificial streams . . .
c. Removal of all the structural elements and machinery
that stand out in wells, facilities . . .
d. In general, cleaning of lands, crop fields, crops,
streets, roads and buildings . . . . 804
802 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., (CRS-159-00-09); Transcript of Crude Outtakes, attached as Exhibit 5 to Chevron’s
Supplemental Motion for Terminating Sanctions filed Sept. 14, 2010 at 11:10 a.m., (CRS-159-00-06). As
Mr. Donziger admits, plaintiffs are “only asking for . . . clean-up"; two of plaintiffs’ attorneys candidly affirm
"[c]ompensation [for damages] is not admissible here.” Transcript of Crude Outtakes, attached as Annex
1 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., (CRS-159-00-09). Nonetheless, Luis Yanza
wanted the damages award "to be big-time" and to "cause[] a huge impact." Id.
803 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., (CRS 159-00-10; CRS-159-00-06a); Transcript of Crude Outtakes, attached as Exhibit 5 to
Chevron’s Supplemental Motion for Terminating Sanctions filed Sept. 14, 2010 at 11:10 a.m., (CRS-196-
01-01).
804 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79-79v.
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Then, in Chapter VI.2, the plaintiffs seek:
[T]he reparation of environmental damages according to
article 43 of the Ley de Gestión Ambiental [Environmental
Management Act]. Consequently, the sentence shall order:
a. Execution of necessary works in the pits opened by
TEXACO, in order to recover the natural
characteristics and conditions of the soil and the
surroundings . . .
b. Contract on charge of the defendant, specialized
persons or institutions in order to design and carry out
a recuperation plan for the native fauna and flora . . .
c. Contract on charge of the defendant, specialized
persons or institutions in order to design and carry out
a plan for the regeneration of aquatic life;
d. Contract on charge of the defendant, specialized
persons or institutions in order to design and carry out
a plan for the health improvement and medical
monitoring . . .
The resources necessary to cover the cost of activities
whose execution is demanded, in the amount that shall be
determined by an expert, as according to the penultimate
clause of article 43 of the Ley de Gestión Ambiental
[Environmental Management Act], shall be delivered to the
Amazon Defense Front (Frente de Defensa de la Amazonia),
with the purpose of using them exclusively for the ends
determined in the sentence, with the concourse and
assessment of specialized international institutions. 805
Under the doctrine of extra petita, no award of damages in this case could go
beyond the scope of those claims, a fact recognized by the plaintiffs’ lawyers
themselves. As noted, in outtakes from the film Crude, the plaintiffs' lawyers admit that
“in the beginning we always felt like the case was only for, to get money to do a proper
cleanup.” 806 At that time, even Mr. Donziger stated that there were “no damages other
than cleanup.” 807 They only belatedly decided to expand the case to include “every
805 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79v-80v.
806 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m. (CRS-269-00-01).
807 Transcript of Crude Outtakes, attached as Annex 8 to Chevron’s Fourth Supplemental Motion
for Terminating Sanctions, filed Dec. 22, 2010 at 5:45 p.m. (CRS 076-05-1A).
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category of damages we possibly can.” 808 The Crude outtakes make clear that this was
part of a concerted strategy to so inflate the monetary amount of asserted damages that
a necessarily reduced judgment would appear reasonable by comparison. As
Mr. Donziger put it, “[w]e ask for much more than we expect”—mentioning as much as
“eighteen billion”—so that the judge can award “three billion” and say “‘I can give
Texaco about 80 percent of what they want.’” 809
6.3 Improper Attempts to Amend and Expand the Complaint in Violation of
the Code of Civil Procedure
The plaintiffs, both through their conduit, Mr. Cabrera, and through their own brief
dated September 16, 2010 at 5:15 p.m., willfully ignore that their complaint fixed the
parameters of this lawsuit. In a cynical attempt to grossly inflate the requested
damages so that any reduced award by this Court appears to be a “victory” for
Chevron, 810 the plaintiffs have attempted to add myriad claims, which they never pled in
their complaint, for huge damage amounts, which run contrary to logic. These claims,
aside from being unproven and based on fraudulent evidence, should therefore be
rejected out of hand as extra petita.
The plaintiffs first attempted to introduce extra petita claims by conspiring with
the supposedly “neutral” court-appointed expert, Mr. Cabrera. This Court ordered
Mr. Cabrera to perform a broad but nonetheless circumscribed investigation:
• To assess “the environmental damage, if any, sustained by primary
resources; the soil, water resources, plant cover, fauna and other
elements of the environment, and to describe the characteristics thereof”
(letter a);
• To specify “if possible, the source of such damage, both causally and
chronologically” (letter b);
• To determine “the possible current existence of substances affecting the
environment and which constitute or may constitute a hazard for living
beings or a threat to their survival and way of life” (letter c);
• To specify “the works, activities and technical measures that should be put
into practice first, to remediate the environment, and to restore it, to the
808 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m. (CRS-269-00-01).
809 Transcript of Crude Outtakes, attached as Exhibit 5 to Chevron’s Supplemental Motion for
Terminating Sanctions filed Sept. 14, 2010 at 11:10 a.m., (CRS-159-00-06).
810 Transcript of Crude Outtakes, attached as Exhibit 5 to Chevron’s Supplemental Motion for
Terminating Sanctions filed Sept. 14, 2010 at 11:10 a.m., (CRS-196-01-01); see also Transcript of Crude
Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., (CRS-159-00-06a).
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extent technically possible, to the state it was in prior to sustaining the
damage” (letter d); and
• To determine “the methodological parameters of the restoration and the
environmental standards or targets to be achieved, depending on the
features of each environment” (letter e). 811
Despite this clear guidance from the Court and despite Chevron’s objections,
Mr. Cabrera’s report absurdly addressed a litany of additional topics, ranging from
compensation for excess deaths allegedly caused by cancer, to improvements to
Petroecuador’s infrastructure, to drinking water systems. 812 Although Chevron
repeatedly objected to the inclusion of claims outside those in the complaint, 813 and
denounced Mr. Cabrera’s report as a fraud, the plaintiffs have refused to disavow any of
his damages claims, including those that are plainly extra petita. Instead, in their brief
of September 16, 2010 at 5:15 p.m., the plaintiffs continued, and exacerbated, their
fraud by significantly increasing the already unsustainable figure from Mr. Cabrera’s
report which was itself absurd and contrary to logic.
Specifically, through Mr. Cabrera and their ad hoc submissions, the plaintiffs
request at least six categories of damages that they never pled in their complaint:
i. “Compensation for excessive deaths from cancer”– The report attributed
to Mr. Cabrera estimated US$9.527 billion, 814 which the plaintiffs
increased in their submission of September 16, 2010, at 5:15 p.m., to
between US$12.1 and US$69.7 billion. 815 No claim in the complaint
relates to compensation for individual cancer deaths, which the plaintiffs’
representatives have repeatedly acknowledged. 816 Furthermore, the only
party that has standing to bring such a claim would be the allegedly
injured individual or his heirs, and neither the plaintiffs nor their counsel
can bring claims on behalf of unnamed third parties. Moreover, any
811 Transcript of Swearing In of Expert Cabrera, filed June 13, 2007 at 9:45 a.m., Record at
130169-69v, 130169.
812 Expert Cabrera’s Response to Plaintiffs’ Questions regarding Global Report, filed Nov. 17,
2008 at 8:25 a.m., Record at 152949-153000, 153000.
813 See, e.g., Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at
2:14 p.m., Record at 141082-203, 141112-16; Chevron’s Objections to Expert Cabrera’s Supplemental
Report, filed Feb. 10, 2009 at 5:35 p.m., Record at 154322-360, 154353-54.
814
Expert Cabrera’s Response to Plaintiffs’ Questions regarding Global Report, filed Nov. 17,
2008 at 8:25 a.m., Record at 152949-153000, 152986.
815 Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 13.
816 See Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept. 16,
2010 at 4:35 p.m., (CRS-027-18-01) (Mr. Donziger stating that allegations of cancer is “not that relevant
legally . . . because we’re only suing for environmental clean-up”); see also YANZA, Luis, Clarification, La
Hora, Oct. 2, 2009; see also Radio Cristal, Informative Cristalino, Sept. 11, 2009, at 10:33 a.m.; BOLTON,
Clare, Rumble in the Jungle: Interview with Steven Donziger, Latin Lawyer Online, Mar. 28, 2008.
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ecovery for such a claim must go directly to the injured person or his
heirs, not a third party that is not authorized to act on behalf of any specific
individual, who allegedly died of cancer, as would be the case here with
the Frente. Indeed, the plaintiffs have admitted through their attorneys
that no evidence links individual cases of cancer to the Consortium’s
operations: “‘It’s true that the exact correlation cannot be proved.’” 817
Instead, the plaintiffs base their absurd US$69.700 billion figure on a
convoluted and illogical combination of flawed studies and inapposite
valuations taken from unrelated litigation which occurred in the United
States.
ii.
“Unlawful profit” and “Punitive damages” – The report attributed to
Mr. Cabrera estimated US$8.420 billion, 818 which the plaintiffs increased
in their so-called "legal brief" of September 16, 2010, at 5:15 p.m. to
between US$4.570 and US$37.860 billion. 819 No claim in the complaint
relates to this proposal of the plaintiffs and Mr. Cabrera’s report. The
plaintiffs through their counsel, Julio Prieto, have even acknowledged that
“unfair profits” damages were “not demanded” in the complaint. 820 In
addition, without basis in Ecuadorian law for such damages, the plaintiffs
have improperly imported this concept from the U.S. legal system.
Indeed, as shown in the Crude outtakes, this claim originated with
plaintiffs’ lead U.S. attorney, who described it as a “creative” way to
“punish the company.” 821 In all events, the calculation of such damages is
factually baseless, as shown, infra § 7.4.6, and in Chevron’s rebuttal to
Mr. Cabrera’s report. 822
817 MCCOWAN, Karen, Ecuadorian Lawyer Battles Big Oil, The (Eugene, OR) Register-Guard,
Aug. 27, 2009. See Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Sept.
16, 2010 at 4:35 p.m. (CRS-159-00-10) (plaintiffs’ representative conceding that “it cannot be determined
with certainty that the people who fell ill with cancer fell ill due to the oil”); Radio Quito, Ecuadoradio News,
Sept. 4, 2009, at 7:34 a.m. (“Never, never in this life will it be possible to demonstrate that a cancer case
has been caused by Chevron or by a product produced or exploited by Chevron.”); Radio Cristal,
Informative Cristalino, Sept. 11, 2009, at 10:33 a.m. (Julio Prieto, counsel for the plaintiffs, stating that
“[w]hat we are claiming in this lawsuit has never been indemnification for damages to individuals due to
health reasons, or for the death of a particular person”; “[d]amages to public health cannot be proved with
medical certificates”; “[w]e are not suing for millions as indemnifications for sick persons, but rather we
are demanding a compensation system for public health: monitoring, treatment and all this type of
measure”).
818
Expert Cabrera Response to Plaintiffs’ Questions regarding Global Report, filed Nov. 17, 2008
at 8:25 a.m., Record at 152949-153000, 152978.
819 Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 17.
820 Radio Cristal, Informative Cristalino, Sept. 11, 2009, at 10:33 a.m.
821 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010 at 2:50 p.m., (CRS-193-00-01).
822 See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m.,
Record at 141082-203, 141125-26.
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iii.
iv.
“Improvement of the oil infrastructure of Petroecuador” – The report
attributed to Mr. Cabrera estimated US$375 million, 823 and the plaintiffs
apparently abandon this claim in their submission of September 16, 2010,
at 5:15 p.m. No claim in the complaint covers this proposal from
Mr. Cabrera’s report, nor, like the others, was it a matter he was asked to
assess. The Frente certainly cannot bring a claim on behalf of
Petroecuador, which is not a party to the complaint and which reached a
comprehensive settlement with TexPet with respect to all potential
environmental liabilities. In apparent recognition of the impropriety of this
claim, the plaintiffs failed to raise it in their "legal brief" of September 16,
2010, at 5:15 p.m. and therefore appear to have abandoned it.
“Provi[sion] of potable water” – The report attributed to Mr. Cabrera
estimated US$428.000 million, 824 which the plaintiffs increased in their
submission of September 16, 2010, at 5:15 p.m. to between US$326.000
and US$541.500 million. 825 No claim in the complaint relates to
compensation for the construction of drinking water systems. This is
completely different from the plaintiffs’ request in Chapter VI.1.b of the
complaint for the “sanitation of rivers, lakes, swamps wetlands and natural
and artificial water streams.” 826 Mr. Cabrera’s proposal includes the
construction of three water supply systems, 827 but such in-kind damages
go beyond this Court’s order, which required Mr. Cabrera to specify “the
works, activities and technical measures that should be put into practice
first, to clean up the environment, and to restore it, to the extent
technically possible, to the state it was in prior to sustaining the
damage.” 828 The plaintiffs’ new figure simply adjusts Mr. Cabrera’s
estimation to account for increased population and inflation, while leaving
all his flawed assumptions unchanged. Notably, neither the ECORAE, the
Inter-American Development Bank, the National Development Plan of the
Sector for Drinking Water and Basic Sanitation, nor any other relevant
entity has ever proposed such a preposterous approach to supplying
potable water to the residents of Sucumbíos and Orellana provinces. 829
823 Expert Cabrera’s Global Report, filed Apr. 1, 2008 at 8:30 a.m., Record at 134228-89, 134234.
824
Expert Cabrera’s Global Report, filed Apr. 1, 2008 at 8:30 a.m., Record at 134228-89, 134234.
825 Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 12.
826 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79v.
827 Evaluation of Costs for the Provision of Water in the Provinces of Sucumbíos and Orellana
Ecuador at 9-19, attached as Annex R to Expert Cabrera’s Global Report, Sucumbíos, filed Apr. 1, 2008
at 8:30 a.m., Record at 139882-906, 139893-903.
828 Transcript of Swearing In of Expert Cabrera at letter (d), filed June 13, 2007 at 9:45 a.m.,
Record at 130169, 130169v, 130169.
829 See Chevron’s Objections to Expert Cabrera’s Global Report at 81-82, filed Sept. 15, 2008 at
2:14 p.m., Record at 141082-203, 141162-63.
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v. “Recovery of the land and culture of indigenous communities” – The report
attributed to Mr. Cabrera estimated US$430.000 million, 830 which the
plaintiffs increased in their submission of September 16, 2010, at 5:15
p.m. to at least US$481.500 million. 831 No claim in the complaint relates
to this proposal by the plaintiffs and Mr. Cabrera’s report. In response to
the Cabrera Report, Chevron submitted evidence establishing that the
alleged loss of territory of the indigenous population and the alleged
cultural changes thereof are due to the policies and sovereign decisions of
the Ecuadorian Government, which has encouraged the colonization of
the Ecuadorian Oriente since the middle of the twentieth century. 832 This
process runs parallel, but is not caused by independent Consortium
activities, which lawfully occupied only a minimal fraction (one percent) of
the approximately 440,000 hectares of what became the former
concession area. 833
vi.
“Compensation for loss of ecosystem” – The report attributed to
Mr. Cabrera estimated US$1.697 billion, 834 but the plaintiffs changed this
figure in their submission of September 16, 2010, at 5:15 p.m. to between
US$874.000 million and US$1.700 billion. 835 No claim in the complaint
relates to compensation calculated on the basis of the areas that had to
be cleared by the Consortium to develop the oil infrastructure, such as
platform stations, wells, and access roads. 836 This same area is still in
use by Petroecuador and has in fact been expanded by this government
830 Expert Cabrera’s Response to Plaintiffs’ Questions regarding Global Report, filed Nov. 17,
2008 at 8:25 a.m., Record at 152949-153000, 153000; see Evaluation of Damages Suffered By
Indigenous Peoples and Remediation Plan for Affected Indigenous Peoples, attached as Annex M to
Expert Cabrera’s Global Report, filed Apr. 1, 2008 at 8:30 a.m., Record at 139752-70, 139770; see also
Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at
141082-203, 141144-46.
831 Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 14.
832
SOUTHGATE, Douglas, Response to the Assertions of Mr. Cabrera Regarding Supposed
Damages to the Indigenous Communities, included in Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 146888-991v, 146892-895. The law
on the Colonization of the Ecuadorian Amazon Region, promulgated in 1978, had a special nature given
that it promoted the colonization of the Amazon as a national priority, and it was situated above any other
law.
833 SOUTHGATE, Douglas, Response to the Assertions of Mr. Cabrera Regarding Supposed
Damages to the Indigenous Communities, included in Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m., Record at 146888-991v, 146892
834 Value of Losses to Tropical Forest Ecosystems, filed as Annex O to Expert Cabrera’s Global
Report, filed Apr. 1, 2008 at 8:30 a.m., Record at 139781-96, 139795.
835 Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 9-10.
836 See Value of Losses to Tropical Forest Ecosystems at 15, filed as Annex O to Expert
Cabrera’s Global Report, filed Apr. 1, 2008 at 8:30 a.m., Record at 139781-96, 139795; see also
Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 79-79v.
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company to more than double the number of oil wells in the former
concession area. 837 Despite any superficial similarity to the plaintiffs’
allegations of environmental damage, this claim cannot be related to this
litigation because an activity promoted, authorized, and supervised by the
Ecuadorian Government cannot be considered damage unless this Court
is to declare all hydrocarbon production illegal. And this hypothesis
certainly cannot be compensation for the Frente, which does not own the
lands in question and has not suffered any specific damages. Yet it would
receive nearly US$1.7 billion for this item under the judgment expected by
the plaintiffs, their attorneys, and their financial backers.
Any judgment based on the six claims discussed above—or any judgment which
sweeps beyond the plaintiffs’ claims in their complaint—would flagrantly violate the
principle of congruency, and therefore, in addition to its possible nullity, should be
revoked. Your Honor recently applied this principle in the Red Amazónica case, which
stated: “Summary oral hearing proceedings do not admit amendments to the
lawsuit, . . . consequently, the decision issued may touch only on the plaintiffs’ petitions,
i.e. compensation for the damage mentioned in the lawsuit.” 838 As clips from the
documentary Crude show, plaintiffs’ lawyers themselves realized that damages not
requested in the complaint would be barred because they did not “ask for [them] from
the beginning.” 839
The plaintiffs attempt to justify these extra petita claims in their September 16,
2010 filing at 5:15 p.m. by arguing that they constitute “indirect impacts” to the
“environment,” which they define, citing a single dictionary, as “the compendium of
natural, social and cultural values existing in a place at a given moment, which influence
the physical and psychological life of man.” 840 The plaintiffs more recently attempted to
buttress this capacious definition by citing the 1999 EMA and the 2008 Political
Constitution, contending that “all the elements that make up an ecosystem” and “each
and every component interrelated with the environment” necessarily “form part of the
environment.” 841 According to the plaintiffs, then, everything that is “interrelated” to the
earth’s ecosystem or “affect[ed]” by it, including the “life, diet and economy” 842 of
anyone living within it, is encompassed within Chapter VI.2 of their Complaint.
837 See Annex A of Environmental Impacts Associated with the Deficient Operational Practices of
Petroecuador, filed as part of Appendix A to Chevron’s Rebuttal to the Barros Report, filed on Jan. 14,
2010 at 5:55 p.m., Record at 164461-69.
838 Red Amazónica vs. Oleoducto de Crudos Pesados S.A., Judgment of the Superior Court of
Justice of Nueva Loja, July 29, 2009, Case 218-2008 (in the twelfth paragraph).
839 Transcript of Crude Outtakes, attached as Exhibit 5 to Chevron’s Supplemental Motion for
Terminating Sanctions, filed Sept. 14, 2010 at 11:10 a.m., (CRS-159-00-06).
840 Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 3, 6.
841 Plaintiffs’ Motion, filed Nov. 12, 2010 at 5:22 p.m., at 2.
842 Id. at 3.
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Plaintiffs’ argument is wrong on multiple levels. Many of the damages categories
now claimed by plaintiffs were not pled in the Complaint—Chapter VI.2 of the complaint
contains four specific requests for relief that bear no resemblance to the amorphous
definition of “environment” that plaintiffs now offer in a transparent attempt to increase
damages. It is, of course, those specific requests for relief that govern under the
doctrine of congruency. They have defined the contours of this litigation since its
inception, and it would be grossly inequitable and unfair and would violate the right to a
defense to substantially expand the scope of this litigation on the eve of judgment. To
do so would deny my client its due-process rights to notice and the opportunity to
defend itself. Despite the plaintiffs’ illegal effort to expand their claims by cherry-picking
a broad and capricious dictionary definition of “environment,” it remains that none of the
six damage categories discussed above are encompassed in the specific terms of the
complaint.
Furthermore, plaintiffs’ broad definition of the “environment” is not even
supported by the text of the EMA, which cabins its scope to physical and tangible
objects like water, air and soil, and not intangible and highly personal matters that might
be “interrelated” or “affected” by their contamination. The EMA’s Glossary of Terms
defines “environmental damage” as harm to “pre-existing environmental conditions or
any of its components.” The term “component” refers to something which is “part” of the
environment, 843 and not, as plaintiffs suggest, things that might be merely “interrelated”
to the environment—like the inhabitants’ “life, diet and economy.” Indeed, the
“Institutional Framework” that defines the scope of the Act limits “environmental
management” to policies designed to “conserv[e] . . . natural heritage and . . . natural
resources,” and not the intangible and highly personal elements that plaintiffs would
include. 844 Indeed, consonant with plaintiffs’ complaint, but contrary to their current
assertions, the EMA even treats “human health” and “the environment” separately,
which confirms that the former is not included within the definition of the latter. 845
843 See Royal Spanish Academy Dictionary (22d ed. 2001)
844 EMA, art. 7.
845 See id. art. 43 (creating a cause of action for “damages . . . caused to health or the
environment”); see also EMA, Glossary of Terms (defining “environmental quality” as aiming to monitor
“activities causing harmful or dangerous effects for human health or degrading the environment and
natural resources”). The natural consequence of the plaintiffs’ argument that an action under the EMA
can include compensation for things like heath, diet and economy is that individual causes of action under
the Civil Code—like, for instance, a tort claim under Article 2214—could be entirely supplanted by the
action of a diffuse group. Under plaintiffs’ formulation of the present lawsuit, the latter would deprive the
former of any recovery whatsoever. But this Court obviously cannot negate large swaths of the Civil
Code and twist the EMA for the plaintiffs’ purposes, swallowing a myriad of other personal torts. As Your
Honor previously held, “[i]t is contrary to law and a violation of law to use environmental suits to bring
claims for ordinary civil compensation. Consequently, when deciding [environmental] case[s], the Court
should analyze only the presence or absence of environmental damage, considering that any matter
related to civil damages is not admissible in the environmental lawsuit, leaving the parties at liberty to
exercise those rights through civil channels,” Red Amazónica vs. Oleoducto de Crudos Pesados S.A.,
Judgment of the Superior Court of Justice of Nueva Loja, July 29, 2009, Case 218-2008, at 14.
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Your Honor has recently articulated that the EMA “signals the elements that
should be evaluated in determining environmental impact,” namely “biodiversity, soil, air,
water, landscape . . . odors . . .[and] temperature changes.” 846 In an “environmental
lawsuit” like this case, the Court is “incompetent to judge anything related to the
damage that could have been caused to the plaintiffs’ assets, particularly the loss of
infrastructure, commercial value of the land, plantations, . . . houses, ponds or agrofishing
infrastructure, fences, crops or domestic animals,” because those matters “are
covered by Civil Law, not Environmental Law.” 847 This reading is also confirmed by the
same Constitutional provisions cited by the plaintiffs. Article 66 of the 2008 Constitution
guarantees the right to a “balanced environment, free of pollution,” which suggests that
the “environment” is limited to physical things, like the water, soil and air, that can
actually be “polluted.” If there were any remaining doubt, Article 276(4) refers to a
“healthy and sustainable environment” as one that provides “quality access to water, air
and soil.” 848
Plaintiffs' limitless definition of environmental damage under the EMA, in addition
to being erroneous, demonstrates that their claims violate Ecuador's clear rule against
retroactive application of substantive law. Plaintiffs do not even attempt to suggest that,
during the time the Consortium operated, there was any legal basis for them to claim
the types of expansive damages they now seek. (Indeed, as my client has
demonstrated in multiple prior submissions, the law did not previously allow any of
plaintiffs' claims.) Thus, even if the 1999 EMA and the 2008 Constitution heralded a
new definition of the “environment” and “environmental damage” to encompass
intangible aspects of indigenous life, diet and economy, Chevron cannot—consonant
with Ecuadorian law and fundamental notions of due process—be held accountable for
alleged damages to those objects. Article 7 of the Civil Code establishes clearly that
“the law . . . does not have any retroactive effect.” This rule is a basic component of
fairness and due process; according to plaintiffs’ own counsel, “the legal order
proscribes any practice exercising a power that leads to uncertainty, i.e., to the inability
to anticipate or foresee the legal consequences of the conduct. 849 By broadening the
definition of the “environment” to cover a broad array of intangible and highly personal
objects that were not protected under the rubric of environmental laws and regulations
in the past, this Court would impose new liability, and expose the defendant to new
846 Red Amazónica vs. Oleoducto de Crudos Pesados S.A., Judgment of the Superior Court of
Justice of Nueva Loja, July 29, 2009, Case 218-2008, at 13; see also Article 23 of the EMA.
847 Id. at 13-14.
848 Plaintiffs' claim that "all elements that make up an ecosystem form part of the environment" is
wrong. In fact, the opposite is true: The environment is part of an ecosystem. See also EMA, Glossary of
Terms (defining the “ecosystem” as “[t]he basic . . . integration between organisms and the environment”).
So, while the pollution of water, air and soil may conceivably affect the broader ecosystem, those
interrelated effects do not themselves constitute “environmental damage.”
849 Alberto Wray, ‘El debido proceso en la Constitución’, en Iuris Dictio, revista del Colegio de
Jurisprudencia de la Universidad San Francisco de Quito, vol. 1, No. 1, January 2000, p. 39), cited in the
decision of May 29, 2002, Decision No. 80-2002, First Chamber of the Supreme Court of Justice, Official
Gazette 626, July 25, 2002.
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damages, based on conduct preceding the enactment of that new statutory definition.
Such a change is plainly a matter of substantive concern, which cannot be retroactively
applied.
In sum, the principle of congruency is fundamental to the Ecuadorian procedural
system, and if the Court were to include matters in its judgment beyond those in the
complaint, then the judgment would be null and must be revoked under the provisions of
Article 273 of the Code of Civil Procedure. The judge may not amend the complaint
itself because if it were to do so, it would become a party to the case rather than a
neutral arbiter. Impartiality of a judge is the essence of the judicial function and the
basis for society’s respect for the rule of law. Indeed, such impartiality gives the Court
the moral authority needed to settle the disputes submitted to it by the parties.
Therefore, any judgment which accepts the claims in Mr. Cabrera’s report or the
plaintiffs’ so-called "legal brief" of September 16, 2010, at 5:15 p.m., which greatly
exceed the specific claims pled in the complaint, violates the principle of congruence
and constitutes extra petita, which would permit revocation and nullity of the judgment.
This Court must rule according to the law and cannot consider the plaintiffs’ interests to
be its own.
CHAPTER VII.
THE PLAINTIFFS HAVE NOT PROVEN ESSENTIAL FACTUAL ELEMENTS OF
THEIR TORT CLAIM
Even assuming, contrary to the law and facts, that the Court had jurisdiction over
Chevron, that plaintiffs had not committed fraud and had their own lawyers and paid
consultants draft the Cabrera Report, that Chevron’s due process rights had not been
systematically violated, and that the plaintiffs had stated a viable claim, the complaint
must be rejected because the plaintiffs have not proven their tort claim. 850
7.1 The Plaintiffs Have Failed to Prove Negligence, Damage, and Causation
The plaintiffs seek to prove alleged damage that occurred and to prove alleged
contingent damage to the environment and public health based upon alleged “acts or
omissions . . . directly imputable to [Texaco’s] wrongful intention or to its negligence.” 851
The plaintiffs’ claims for alleged environmental damage are contained in Chapters VI.1,
VI.2.a, VI.2.b, and VI.2.c of their complaint. 852 Under Ecuadorian law, environmental
rights are “diffuse” or “collective” rights or interests. See supra § 1.4. 853 Therefore, the
850 My client reserves the right to supplement this filing with additional evidence as it becomes
available.
851 Plaintiffs’ Complaint, filed May 7, 2003, at 11:30 a.m., Record at 73-80v, 78v.
852 See Plaintiffs’ Complaint, filed May 7, 2003, at 11:30 a.m., Record at 73-80v, 78-80.
853 The final part of Article 397 of the current Constitution classifies the right to live in a healthy,
ecologically balanced environment, as both an individual and a collective right: “To guarantee the
individual and collective right to live in a healthy and ecologically balanced environment, the State is
committed . . . .” Article 86 of the prior Constitution, in effect until October 2008, described the right to live
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plaintiffs must prove that my client was negligent and caused specific harm to a diffuse
right.
The plaintiffs’ claim for damages related to the public health is contained in
Chapter VI.2.d of their complaint. This claim seeks the hiring, at the defendant’s
expense, of “specialized persons or institutions in order to design and carry out a plan
for the health improvement and medical monitoring.” 854 Unlike the “diffuse” interest in
the environment, claims for harm to health typically seek to vindicate individual rights,
which when claimed by a group are referred to as “individual homogenous rights” that
are both “individual” and “divisible,” 855 yet it is clear that the plaintiffs have neither pled
nor proved any such personal injuries. To the extent that the plaintiffs are claiming
some generalized interest in public health, they cite no authority for bringing such claims
and, in all events, must prove that my client caused such harm.
Given that plaintiffs are seeking compensation for tort liability, they must, under
Ecuadorian law, prove (i) negligence or intent; (ii) damage; and (iii) a causal nexus
between Chevron’s conduct and the alleged damage. 856 The Supreme Court (now the
National Court) has held that for there to be civil liability, especially tort liability, these
elements must exist and be proven. 857 As discussed below, the plaintiffs have not
established these elements with respect to their claims for environmental remediation or
healthcare costs. 858 The remainder of their requested damages are extra petita and, in
all events, baseless.
(continued…)
in a healthy environment free from pollution as a collective right, a distinction not contained in the current
Constitution.
854 Plaintiffs’ Complaint, filed May 7, 2003, at 11:30 a.m., Record at 73-80v, 80.
855 GIDI, Antonio. Collective Actions and Protection of the Collective and Individual General
Rights in Brazil: A Model for Civil Law Countries, Universidad Nacional Autónoma de México, Instituto de
Investigaciones Jurídicas, Doctrina Jurídica Núm. 151. Mexico, 2004. p. 52.
856 Plaintiffs themselves admit they bear the burden of proof. They argued that “the assertions in
the complaint are to be proven only and exclusively by the Plaintiffs . . . and therefore, if the Plaintiffs
consider the practice of certain evidentiary proceedings to be adequate and others to be unnecessary,
this will should prevail.” Plaintiffs’ Filing, Feb. 15, 2006, at 5:45 p.m., Record at 93628-30, 93628; see
also Judgment of the Supreme Court of Justice, First Civil and Commercial Division, Aug. 29, 2001,
published in Judicial Gazette, series XVII, no. 7, p. 1853.
857 See Judgment of the Supreme Court of Justice, First Civil and Commercial Division, Aug. 29,
2001, published in Judicial Gazette, series XVII, no. 7, p. 1853 (“There must be a causal link between
such misdeeds and the damage.”).
858 The monetary award that the plaintiffs are seeking further illustrates their failure to prove an
actionable tort. While the typical remedy in cases of diffuse harm is to order the defendant to perform a
specific actions to remedy the proven damage—such as remedial work to the public lands—or to revert
money to a government-run fund that would apportion such work, the plaintiffs’ complaint instead seeks to
deliver those funds to a third-party private entity that has not suffered any alleged harm.
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7.2 Plaintiffs Have Failed to Prove Negligence or Intent
With respect to all of their legal claims, the plaintiffs allege that TexPet’s
operational practices were negligent. 859 But this bald allegation fails as a matter of law:
all of TexPet’s work was overseen and approved by the State, and it complied with the
regulations and standards in force during the Consortium’s existence. 860 In fact, the
same operating practices that TexPet used when it was the operator of the Consortium
were used in other countries at the time, 861 and many of those practices and standards
are still authorized in Ecuador and around the world. The TexPet remediation, too,
complied with the remediation standards established by the Ecuadorian State in the
remediation agreement signed by both parties, and were consistent with standards and
practices in comparable regions at the time. 862
Still, plaintiffs, with the complicity of Mr. Cabrera, insist on holding Chevron to a
standard that far exceeds even the strictest Ecuadorian environmental standards today.
Premising liability on this basis would violate the principle of the non-retroactive
application of the law. See supra § 5.3. First, the Cabrera Report purports to apply the
standards of Decrees 3516 and 1215, both of which were published years after TexPet
transferred the operations of the former Consortium to Petroecuador and the
remediation work was completed. Then, when applying those regulations, it disregards
the authority of the National Environmental Protection Agency (“DINAPA”), which has
determined that the remediation of the concession areas (currently being carried out by
the Unit for Mitigation and Remediation (“UMR”) project, see infra §§ 7.3.1, 7.5) need
only comply with the standards suggested for soils for “agricultural use,” and not those
designated for “sensitive ecosystems,” as are arbitrarily included in Table 3.2 of the
Cabrera Report. 863 Yet the supplemental Cabrera Report goes even further, using an
859 See Plaintiffs’ Complaint, filed May 7, 2003, at 11:30 a.m., § IV.9, Record at 73-80v, 78v
(“Because the acts and omissions described above are directly imputed to its manifest intention or to its
negligence, TEXACO Inc. made itself civilly responsible for the damages caused, and acquired the
obligation to repair them.”).
860 Answer as Read into the Record §§ II.A.1.2-3, II.A.1.15, II.B.1, filed Oct. 21, 2003 at 9:10 a.m.,
Record at 243-67, 246, 247-47v, 253-53v. See also Hydrocarbons Law, Art. 29(t) (stating that the
standard that TexPet needed to fulfill since this article was enacted in 1982 was to “[c]onduct the
petroleum operations in accordance with the laws and regulations of environmental protection and
security of the country and in relation to international practice in the preservation of the rich on fish and
agricultural industry.”).
861 Chevron’s Objections to Expert Bianchi’s Judicial Inspection Report on Sacha-13, filed Nov.
29, 2005, at 3:20 p.m., Record at 86002-14, 86011; Chevron’s Objections to Expert Robalino’s Judicial
Inspection Report on Shushufindi-13, filed Apr. 17, 2006, at 2:50 p.m., Record at 103678-104083, 103737.
862 See Woodward-Clyde International, Remedial Action Project, Oriente Region, Ecuador, Final
Report, Volume I, dated May 2000, attached as Annex 44 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., at ES-1; see also, Evidence submitted at JI of Sacha-6: Remediation Contract dated May 5,
1995, filed Aug. 18, 2004, at 9:10 a.m., Record at 8579-8607, 8585; Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 141082-203, 141134-35.
863 Plaintiffs’ own consultant admitted the impropriety of the “sensitive ecosystems” standard,
explaining that he was searching for ways to “justify” its use. See Email from Douglas Beltman to Juan
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unprecedented 100 ppm standard for TPH, and it is only on the basis of this retroactive
and arbitrary application of soil-use tolerance limits that the Cabrera Report improperly
concludes that the remediation carried out by TexPet was “insufficient.” This Court
cannot justify damages against Chevron based upon the illegal retroactive application of
entirely new and inapplicable environmental standards. 864
7.3 Plaintiffs Have Not Proven the Allegations of Damages Pled in Their
Complaint
The complaint includes only two claims for which plaintiffs now request damages:
(i) soil and groundwater remediation and (ii) healthcare costs. 865 Plaintiffs, in their
submission of September 16, 2010, at 5:15 p.m., asserted that Chevron is responsible
for performing up to US$1.86 billion in soil and groundwater remediation. Although
astronomical, this figure marks a reduction from recommendation in the Cabrera Report
for damages of over US$6 billion for soil and groundwater remediation. However, on
the subject of healthcare costs, the plaintiffs—without submitting any new evidence—
(continued…)
Pablo Sáenz dated Mar. 04, 2008, at 9:25 a.m. (STRATUS-NATIVE066073), attached as Annex 16 to
Chevron’s Motion filed Dec. 20, 2010 at 5:50 p.m. (“Thanks for the info on the ‘ecosistemas sensibles.’
Somewhere along the line someone decided that the 1,000 mg/kg TPH standard for ‘ecosistemas
sensibles’ is the one to use for our case, and I’m trying to write up a justification for it. Since the area isn’t
officially a Patrimonio Nacional de Areas Naturales, we need to find a way to still justify using the 1,000
mg/kg. Would you be able to ask Pablo or Luis about their thoughts as to how we can justify using the
1,000 mg/kg”).
864 In a telling indication that they cannot prove their allegation of negligence, the plaintiffs floated
the notion that Chevron could be held liable “even in the event that Texaco had acted with diligence,
without guilt or fraud.” Plaintiffs Motion, filed Sept. 16, 2008 at 11:30 a.m., § 5.7.2.1, at 24, Record at
150878-995, 150901. But the source for this argument, a 2002 decision of the Supreme Court, is not the
law and does not and cannot be applied to this case. According to the Ecuadorian legal system, to
change the current legal structure of civil liability it is necessary to enact a new law abrogating the
provisions of the Civil Code on negligence and enacting new ones regarding strict liability. Pursuant to
Article 3 of the Civil Code, a judicial decision is only binding in the case in which it was issued. The only
exception to this would be that this ruling is cited three times in other Supreme Court rulings, which has
not happened, and even if it happens, the decision is not applicable here as it refers only to personal
injury claims brought under the Civil Code, and not diffuse environmental claims brought under the EMA.
See Comité Delfina Torres Vda. de Concha vs. Petroecuador y otros, Judgment of the Supreme Court of
Justice, First Civil and Commercial Division, Oct. 29, 2002, published in Official Gazette 43, Mar. 19, 2003.
In all events, the application of this admittedly “new” theory in the Ecuadorian Law cannot be applied
retroactively to conduct that ended in 1990 as it would violate my client’s right to a defense. See supra
§ 7.7.
865 Plaintiffs’ complaint also pled other claims for which the plaintiffs have presented no evidence
and requested no damages. For example, in Chapter VI.II.c of the complaint, the plaintiffs request the
hiring, at the defendant’s expense, of “specialized persons or institutions in order to design and carry out
a plan for the regeneration of aquatic life.” Plaintiffs’ Complaint, filed May 7, 2003, at 11:30 a.m., Record
at 73-80v, 80. Yet plaintiffs present no specific evidence of any specific damage to aquatic life. The
plaintiffs also purport to reserve the right to submit additional damage estimates. Chevron strongly
objects to such submissions by the plaintiffs, as it will deny Chevron its due process right to respond.
Accordingly, Chevron reserves the right to file all necessary rebuttals.
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tripled the requested damages from US$480 million to US$1.4 billion. None of these
bloated figures can be justified by the fraudulent, unreliable, and incomplete data
submitted by the plaintiffs.
For the reasons given above, supra Chapters II-III, neither the evidence
submitted by the plaintiffs’ nominated experts nor the Cabrera Report is credible or
trustworthy, and there is therefore no competent evidence upon which Your Honor could
base judgment against Chevron. For example, the plaintiffs in an acknowledgment that
they are unable to prove their case with scientific evidence falsified at least two expert
reports. 866 See supra § 2.1. And even if its fraudulent nature could somehow be
ignored, the plaintiffs’ evidence lacks both credibility and evidentiary value. During the
truncated judicial-inspection process, the plaintiffs’ nominated experts failed to abide by
the sampling and analytical protocols established by this Court in performing their
fieldwork. See supra § 3.3. For example, much of their sample analysis was done at
the then-unaccredited 867 HAVOC laboratory, to which the Court was repeatedly denied
access. 868 Other analyses were done at the “Selva Viva” lab, which one of the plaintiffs’
nominated experts, Charles Calmbacher, has since testified was actually a hotel room
that plaintiffs’ technical team used as a makeshift testing area. 869
The fabricated Cabrera Report, of course, was a complete fraud, as it was in
reality drafted by plaintiffs’ attorneys, paid consultants, and affiliated activists. See
supra § 2.2. Moreover, Mr. Cabrera’s fieldwork during the global-assessment process
was even less probative than the work of plaintiffs’ nominated experts during the
judicial-inspection process. See supra § 3.4.3-3.4.6. In addition to his conflict of
interests, his undisclosed work with the plaintiffs’ representatives, and his clear bias
against my client, see supra § 3.4, Mr. Cabrera performed only limited sampling at fortyfive
of the 335 well and 19 production sites in the former concession area. 870 In
violation of this Court’s orders 871 and basic scientific protocol, half of the samples were
collected in secret so that Chevron could not observe either the sampling process or the
866 Chevron’s Motion to Strike Dr. Calmbacher’s Judicial Inspection Reports, filed Apr. 14, 2010,
at 3:42 p.m., Record at 168681-99, 168681; see also Official Transcript of Deposition of Dr. Charles W.
Calmbacher at 112:1-8, 116:3-18, dated Mar. 29, 2010, filed as Annex 5 to Chevron’s Motion to Strike Dr.
Calmbacher’s Judicial Inspection Reports, filed Apr. 14, 2010, at 3:42 p.m., Record at 168970-169158v,
169028, 169030 (the Spanish translation is included at Record at 169072-157, 169127v, 169129v).
867 See Ecuadorian Accreditation COAE Letter filed July 12, 2006, at 5:50 p.m., Record at
114413-14.
868 See Chevron’s Motion Regarding Collusion between Plaintiffs and HAVOC Laboratory, filed
Sept. 18, 2007, at 3:05 p.m., Record at 132637-40, 132637.
869 Official Transcript of Deposition of Dr. Charles W. Calmbacher at 133:15-19, dated Mar. 29,
2010, filed as Annex 5 to Chevron’s Motion to Strike Dr. Calmbacher’s Judicial Inspection Reports, filed
Apr. 14, 2010, at 3:42 p.m., Record at 168970-169158v, 169038v (the Spanish translation is included at
Record at 169072-157, 169138).
870 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m.,
Record at 141082-203, 141088.
871 See, e.g., Order of Oct. 3, 2007, filed at 11:00 a.m., Record at 132846-55v, 132847.
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methodology used. 872 Indeed, over US$1 billion of the soil-remediation damages in the
initial Cabrera recommendation would go towards sites Cabrera never visited, and the
Cabrera Report made no attempt to establish that any observed hydrocarbon impacts
were the result of Consortium activities, as opposed to subsequent activities by
Petroecuador or third-party operators. 873 Additionally, while the relevant hydrocarbon
compounds for surface water are benzene, toluene, ethylbenzene, and xylene (“BTEX”)
and polycyclic aromatic hydrocarbons (“PAHs”), the Cabrera Report included no testing
for BTEX and only two water samples for PAHs, all of which fell below the permissible
drinking water limits established by the World Health Organization (“WHO”) and the U.S.
EPA for hydrocarbons and metals. 874
While plaintiffs have attempted to present their September 16, 2010 filing at 5:15
p.m. as a panacea, it is in fact an audacious extension of their fraudulent conduct, as
shown in my client’s submission of October 29, 2010, at 5:20 p.m. Without providing
new evidence, the plaintiffs recommended a four-fold increase in the amount alleged in
damages. 875 Even if their fraud could somehow be ignored, plaintiffs have not proven
their case against my client. The specialist reports the plaintiffs presented in this filing
lack a reliable foundation and do not follow a scientific method. As discussed below,
and as has been shown previously in my client’s submissions of September 16, 2010 at
4:35 p.m. and October 29, 2010 at 5:20 p.m., the plaintiffs' new reports by alleged
specialists should be accorded no weight because, as confirmed under oath by the
authors themselves, 876 they (i) are premised largely on the fraudulent and unreliable
Cabrera Report and the judicial-inspection experts nominated by plaintiffs; (ii) do not
employ methodologies that are generally accepted in the field, that are controlled by
scientific standards, or that can be replicated by independent experts; and (iii) contain
obvious and essential errors. Reports with these fatal flaws should not be considered
and cannot possibly have any relevance to this Court’s determination of liability or
872 DOUGLAS, Gregory S., Rebuttal of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling Program and Analytical Program, attached as Appendix to Chevron’s Objections
to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148199.
873 See Chevron’s Objections to Expert Cabrera’s Global Report at 44-45, filed Sept. 15, 2008, at
2:14 p.m., Record at 141082-203, 141089 141095, 141096; see Expert Cabrera’s Global Report, filed Apr.
1, 2008, at 8:30 a.m., Record at 134228-89, 134236, 134277; see also Costs of Soil Remediation,
attached as Annex N to Expert Cabrera’s Global Report, filed Apr. 1, 2008, at 8:30 a.m., Record at
134771-80, 134771.
874 See DOUGLAS, Gregory S., Rebuttal of Mr. Cabrera’s Analytical Data and Evaluation of the
Validity of his Sampling Program and Analytical Program, attached as Appendix to Chevron’s Objections
to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148180-267, 148192-193.
875 Indeed, the procedure allowing the plaintiffs’ submission was invented by the prior presiding
judge and is contrary to both the Civil Code and the EMA. See supra § 3.1. Because it merely
repackaged the flawed material previously drafted by their consultants and fraudulently submitted as the
work of Mr. Cabrera, this Court should strike the plaintiffs’ September 16, 2010 submission, including the
accompanying “specialist” reports, from the record and disclaim any reliance on these unreliable and
irrelevant materials.
876 This testimony is discussed in further detail in my client’s filings of Dec. 21, 2010 at 11:00 a.m.
and Dec. 22, 2010 at 5:40 p.m.
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damages. Moreover, the new reports of the specialists hired by the plaintiffs have
limited utility because they offer a vast range of damages that spans tens of billions of
dollars; as this Court lacks the requisite technical expertise, any figure that it might
select from this vast range would be arbitrary and illegal.
7.3.1 Plaintiffs Have Failed to Prove That Chevron Is Responsible for
Environmental Remediation
The plaintiffs’ US$1.86 billion claim for soil and groundwater remediation has no
factual basis. First, audits conducted at the end of the Consortium indicated limited
environmental impact, and TexPet successfully remediated its share of this limited
impact based on the Remediation Agreement signed with the Ecuadorian Government.
Second, TexPet’s remediation was certified by the Ecuadorian Government and met the
standards applicable at the time of its performance. Third, any further remediation in
the former concession area became the sole responsibility of Petroecuador, and since
that time there has been no joint and several liability that could have existed with
TexPet. These and other grounds for rejecting the plaintiffs’ demand for damages are
further explained below.
Contemporaneous audits of the Oriente showed limited and manageable
environmental impacts arising from the Consortium’s operations: As shown in
Chevron’s filings of September 16, 2010 at 4:35 p.m. and October 29, 2010 at 5:20 p.m.,
the first reliable data related to the environmental conditions in the former concession
area comes from the audits that were conducted in the early 1990s at the time when the
Consortium’s operations had just come to an end. 877
In 1992, TexPet and Petroecuador hired HBT AGRA Limited (“HBT AGRA”), an
independent environmental consulting firm, to identify, assess, and estimate the cost of
any necessary remediation, and to help allocate responsibility for the Consortium’s
environmental liabilities. 878 TexPet, Ecuador, and Petroecuador also formed an
Environmental Audit Technical Committee composed of representatives from
Petroecuador, TexPet, Petroamazonas, and Ecuador’s Ministry of Energy. This
committee established HBT AGRA’s Scope of Work and the environmental audit scope,
oversaw the technical aspects of HBT AGRA’s environmental fieldwork, and had final
approval authority to accept or reject HBT AGRA’s reports. 879 TexPet also
independently hired a second environmental audit company, Fugro-McClelland (West),
877 Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., at 62.
878
HBT Agra Contract of Environmental Investigation Services for the Oilfields of the CEPE-
Texaco Consortium, dated April 15, 1992, attached as Annex 46 to Chevron’s Motion filed Sept. 16, 2010
at 4:35 p.m., at 1-6.
879
HBT AGRA Limited, Environmental Assessment of the Petroecuador-Texaco Consortium
Oilfields, Volume I: Environmental Audit Report, dated October 1993, at § 1.2, Record at 10784v-11029
(10793v).
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Inc. (“Fugro-McClelland”) 880 to obtain an independent assessment of the environmental
conditions in the former concession area. Taken together, the HBT AGRA and Fugro-
McClelland audits provide the most accurate assessment of the environmental impacts
that may have resulted from TexPet’s operations.
In October 1993, after completing its fieldwork, HBT AGRA prepared a twovolume
draft Environmental Assessment Report. It concluded that there was little
evidence of widespread or unconfined contamination either in the surface or subsurface
soil. 881 It also found little evidence of subsurface contamination migration beyond the
boundaries of the production stations and wellsites, because the impervious clayey soil
of the area largely prevented contamination from moving away from the pits and
ponds. 882 With respect to water, HBT AGRA found little evidence of contamination of
groundwater (i.e., subsurface water) that might serve as a drinking water supply. 883
Furthermore, HBT AGRA found that, as the Consortium’s Operator, TexPet had
adhered to standard industry practices of the time related to environmental
management. 884 In the end, it estimated a cost of US$13,274,000 to remediate spills
and pits at the 22 production stations and 163 well sites that it had assessed. 885
In 1992, Fugro-McClelland performed both a quality assurance/quality control
(“QA/QC”) assessment of HBT AGRA’s work 886 and a parallel audit of environmental
880
Fugro-McClelland (West), Inc. is part of Fugro N.V., an international company based in The
Netherlands that provides geotechnical, engineering and other services to various industries, including
the oil and gas industry.
881
HBT AGRA Limited, Environmental Assessment of the Petroecuador-Texaco Consortium
Oilfields, Volume I: Environmental Audit Report, dated October 1993, at § 8.6, Record at 10784v-11029
(10860, 10861v).
882
HBT AGRA Limited, Environmental Assessment of the Petroecuador-Texaco Consortium
Oilfields, Volume I: Environmental Audit Report, dated October 1993, at § 8.6, Record at 10784v-11029
(10861v).
883
Indeed, HBT AGRA found “groundwater samples from domestic water wells and springs . . . to
be near or below the assessment criteria standards.” HBT AGRA Limited, Environmental Assessment of
the Petroecuador-Texaco Consortium Oilfields, Volume I: Environmental Audit Report, dated October
1993, at § 8.6, Record at 10784v-11029 (10861v).
884
HBT AGRA Limited, Environmental Assessment of the Petroecuador-Texaco Consortium
Oilfields, Volume I: Environmental Audit Report, dated October 1993, at § 5.6.2, Record at 10784v-11029
(10819v-20v).
885
HBT AGRA Limited, Environmental Assessment of the Petroecuador-Texaco Consortium
Oilfields, Volume II: Environmental Management Plan, dated Oct. 1993, at § 4.3.2, Record at 11032-99,
11067-67v.
886
Fugro-McClelland (West), Inc., Final Joint Environmental Field Audit of Petroecuador-Texaco
Consortium, Quality Assurance/Quality Control (QA/QC) HBT AGRA Ltd. Fieldwork Oriente Ecuador
dated September 1993, attached as Annex 45 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at
4, .
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conditions and liabilities within the Consortium’s oilfields. 887 Fugro-McClelland
concluded that HBT AGRA’s environmental assessment practices were generally
acceptable, but that TexPet was responsible for only a portion of the identified
hydrocarbon contamination because of the presence of new contamination that had
occurred after Petroecuador took over operations in 1990. 888 Fugro-McClelland also
889
found no evidence of any groundwater contamination. Fugro-McClelland
recommended certain remediation and restoration measures, including cleanup of spills
associated with residential base camp activities, well site activities, production stations,
and pipeline leaks; proper closure of pits; and modification of produced water
management practices. 890 The estimated cost of the remediation recommended by
Fugro-McClelland was US$8,482,000. 891
These two contemporaneous audits performed shortly after TexPet completely
ceased operations in the Consortium thus found that the environmental impacts in the
former Consortium area were manageable and were the normal result of oil operations
at the time. Indeed, they found that remediating the entire concession area would cost
only a fraction of the amount claimed by the plaintiffs in this litigation, and less than
what TexPet actually spent remediating forty percent of the area in exchange for a full
release of all environmental claims. In sum, these reports demonstrate that there was
no widespread environmental disaster and that any contamination existing today is not
Chevron's responsibility.
TexPet fulfilled its remedial obligations arising from the Consortium’s
operations: 892 As detailed in Chevron’s filings of September 16, 2010 at 4:35 p.m. and
October 29, 2010 at 5:20 p.m., based upon the findings of the contemporaneous audits,
TexPet entered into a series of settlement agreements with several local governments,
Petroecuador, and the Republic of Ecuador.
887
Fugro-McClelland (West), Inc., Final Environmental Field Audit For Practices 1964-1990
Petroecuador-Texaco Consortium, Oriente, Ecuador, dated October 1992, at § 1.2.1, Record at 10642v-
10782 (10649).
888 Fugro-McClelland (West), Inc., Final Environmental Field Audit for Practices 1964-1990
Petroecuador-Texaco Consortium, Oriente, Ecuador, dated October 1992, at § 7.1, Record at 10642v-
10782 (10726-10727v).
889
Fugro-McClelland (West), Inc., Final Environmental Field Audit for Practices 1964-1990
Petroecuador-Texaco Consortium, Oriente, Ecuador, dated October 1992, at § 6.4.4, Record at 10642v-
10782 (10697).
890
Fugro-McClelland (West), Inc., Final Environmental Field Audit for Practices 1964-1990
Petroecuador-Texaco Consortium, Oriente, Ecuador, dated October 1992, at § 7.1, Record at 10642v-
10782 (10726).
891 Fugro-McClelland (West), Inc., Final Environmental Field Audit for Practices 1964-1990
Petroecuador-Texaco Consortium, Oriente, Ecuador, dated October 1992, at § 7.3, Record at 10642v-
10782 (10731-10732).
892 For additional discussion of remediation requirements, see Chevron’s Motion filed Sept. 16,
2010, at 4:35 p.m., § II.B.3.b, at 69-85.
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The 1995 Settlement and Release Agreement required TexPet to prepare a
Remedial Action Plan (“RAP”) to implement the Scope of Work (“SOW”). 893 TexPet
hired a contractor to prepare the RAP from a list of independent environmental
engineering companies approved by the Ministry of Energy and Mines on behalf of
Ecuador and Petroecuador. The company TexPet hired was Woodward-Clyde
International, Inc. (“Woodward-Clyde”).
In July 1995, Woodward-Clyde conducted an environmental investigation of the
specific sites and facilities listed in the SOW in order to develop the RAP. After
reviewing and amending the draft RAP submitted by Woodward-Clyde, Petroecuador,
the Minister of Energy and Mines (acting on behalf of Ecuador), and TexPet signed and
accepted the RAP on September 8, 1995. In addition, the Minister of Energy and Mines
issued a letter to TexPet’s legal representative confirming that Ecuador accepted the
RAP and agreeing that the RAP met Ecuador’s requirements.
The RAP set out specific and detailed requirements governing sampling
measures, testing procedures, and numerical acceptance criteria that the parties agreed
were to be used to determine what, if any, remediation would be required at a particular
location and whether completed remediation work had been successful. For those pits
requiring remediation, the RAP set forth a physical process required to remediate a
particular pit. 894 The standard applicable to TexPet’s remediation for these pits was to
893 Remediation Contract dated May 4, 1995, filed July 15, 2004, at 9:10 a.m., at 3-5, Record at
7855-82v, 7857-59.
894 Woodward-Clyde International, Remedial Action Project, Oriente Region, Ecuador, Final
Report, Volume I, dated May 2000, attached as Annex 44 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., § 3.3, at 3-4 to 3-10.
Remediation consists of eight steps:
1. Prepare the pit by clearing vegetation to gain access to the pit;
2. Remove, clean, and burn or landfill the pit’s debris;
3. Remove and process pumpable crude oil prior to injection in Petroecuador’s pipeline and
remove non-pumpable (asphalt-like) crude oil and dispose of it in concrete vaults;
4. Treat water using filtration, flocculation, or aeration to remove solids, introduce oxygen
into the water, and discharge it to a water body when post-treatment testing showed
compliance with the applicable Ecuadorian water discharge standards;
5. Treat soil and sludge by performing bioremediation, stabilization, encapsulation, or
surfactant-enhanced recovery (washing to remove oil) on soil removed from pits and spill
zones;
6. Sample remediated soils to ensure compliance with applicable cleanup standards;
7. Backfill and grade the remediated pits; and
8. Revegetate and regrade pits with native plants appropriate for the region and the
identified land use.
The RAP also required Woodward-Clyde to wash, burn or transport to a landfill any trash in the area.
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ing them below 1,000 mg TCLP-TPH per liter. 895 The RAP’s remediation process was
consistent with methods used by the industry for pit remediation at the time, and
remains so today.
The RAP also required environmental remediation for identified areas of soil
contamination, likely from spills, not contained within pits. As to these identified areas,
TexPet was required to remediate the areas presumed to pre-date June 30, 1990, with
soil contamination that tested above 5,000 mg/kg TPH. 896 In such cases, Woodward-
Clyde treated the soil and backfilled and regraded the treated area. In addition,
Ecuador made TexPet responsible for helping to change designated produced-watermanagement
systems from surface-treatment-and-discharge systems to undergroundinjection
systems. Furthermore, the RAP required that secondary containment dikes
around above-ground storage tanks be built at three designated sites. It specified the
size of the required dikes and the dike construction materials.
In March 1997, when the remediation was well underway, the Government
requested an additional cleanup criterion. For a pit to be considered closed after that
date, it had to meet the existing 1,000 mg TCLP-TPH standard and also not exceed a
TPH standard of 5,000 mg/kg of soil. 897 TexPet agreed to use these dual cleanup
standards going forward, but the Government and TexPet agreed that TexPet would not
be required to re-remediate any of the pits that had already been remediated and
closed. 898
After remediating each site, consistent with the RAP’s specifications (including
amendments thereto), 899 Woodward-Clyde collected multi-point composite soil samples
to confirm that the cleanup was successful. Moreover, the responsible Government
ministries and agencies oversaw, inspected, and approved all of the environmental
remediation work that Woodward-Clyde performed on TexPet’s behalf, and they fully
documented their activities in a series of Actas. Specifically, auditors from the Ministry
895 Woodward-Clyde International, Remedial Action Project, Oriente Region, Ecuador, Final
Report, Volume I, dated May 2000, attached as Annex 44 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., § 3.3.5, at 3-8, .
896
Woodward-Clyde International and Smith Environmental Technologies Corporation, Remedial
Action Plan for the Former Petroecuador-TexPet Consortium, dated Sept. 8, 1995, attached to Chevron’s
Motion filed Sept. 15, 2008, at 2:14 p.m., § 3.4, at 20, Record at 148626-148694, 148669.
897 Woodward-Clyde International, Remedial Action Project, Oriente Region, Ecuador, Final
Report, Volume I, dated May 2000, attached as Annex 44 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., § 3.3.5, at 3-8.
898 Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.3.b,ii, at 76; Chevron’s Motion filed
Apr. 15, 2010 at 10:14 a.m., Record at 170226-170250, 170235; Acta dated Mar. 20, 1997, Record at
11560-11562. Woodward-Clyde International, Remedial Action Project, Oriente Region, Ecuador, Final
Report, Volume I, dated May 2000, attached as Annex 44 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., § 3.3.5, at 3-8.
899 For a detailed discussion of TexPet’s remediation, see Chevron’s Motion filed Sept. 16, 2010,
at 4:35 p.m., § II.B.3.b.ii, at 74-85.
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of Energy and Mines, Petroecuador, and Petroproducción monitored and reported to
senior Government officials on Woodward-Clyde’s field work, and auditors certified and
approved whether a pit was declared an NFA or COC pit. In fact, one of plaintiffs’
consultants has acknowledged that “[t]he Woodward Clyde report was very
comprehensive in identifying the well fields and identifying wells that had pits associated
with the closure, and I think there was some description about whether or not, you
know, they were TexPet operations.” 900
The auditors prepared fifty-two inspection Actas (inspection reports or work
certificates) detailing their observations and conclusions. The reports summarized the
auditors’: (i) personal inspections of the TexPet remediation sites; (ii) review of the sitespecific
sampling and laboratory analytical data; (iii) assessment of Woodward-Clyde’s
cleanup work; and (iv) confirmation that TexPet had complied with its equipment
donation, cash contribution, and other socio-economic obligations under the parties’
agreements. From October 1995 to September 1998, Ecuador issued more than fifteen
approval Actas documenting its acceptance of Woodward-Clyde’s cleanup work and
TexPet’s other remedial actions. Nine approval Actas addressed specific lists of pits
and other areas, described the work that had been performed, and certified Ecuador’s
agreement that TexPet had remediated the identified areas in accordance with the
parties’ agreement. Each of these approval Actas was supported by test data collected
from the remediated sites, photographs, and other documentation.
In the end, TexPet fully complied with its remediation obligations by completing
the remediation and re-vegetation of 162 pits and six oil spill areas at eighty-eight
wellsites, bringing those sites in compliance with the parties agreed-upon 1,000 mg per
liter TCLP-TPH standard. Pits remediated after March 1997 not only met this standard,
they also conformed to the government’s additional 5,000 mg/kg TPH standard. The
1998 Final Release Agreement certified that TexPet had performed all of its obligations
under the 1995 Settlement Agreement and fully released TexPet from any and all
environmental liability arising from the Consortium’s operations. 901
900 Official Transcript of Second Deposition of Mark A. Quarles at 257:22-258:1, dated Oct. 12,
2010, attached as Annex 11 to Chevron Motion, filed Oct. 29, 2010 at 5:20 p.m..
901 See Final Compliance Document of the Contract for Implementing of Environmental Remedial
Work and Release from Obligations, Liability and Claims, dated Sept. 30, 1998, filed May 4, 2004, at
10:02 a.m., Record at 7294-99v, 7298v; Remediation Contract dated May 4, 1995, filed July 15, 2004, at
9:10 a.m., Record at 7855-82v, 7857. In exchange for TexPet’s completion of the agreed tasks, the
parties agreed to “negotiate the full and complete release of TexPet’s obligations for environmental
impacts arising from the operations of the Consortium.” TexPet and its affiliates would therefore receive a
two-fold release. First, TexPet would immediately be released from all environmental impacts or effects
not expressly included in the SOW. Second, TexPet would be released and discharged from any
responsibility for the remediation of those tasks allocated to it in the SOW once TexPet completed that
work. Memorandum of Understanding dated Dec. 14, 1994, filed Aug. 19, 2004, at 9:10 a.m., Record at
8930-34v, 8931-8932; see also Remediation Contract dated May 4, 1995, filed July 15, 2004, at 9:10 a.m.,
Record at 7855-82v, 7857.
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The areas remediated by TexPet require no further remediation: As explained at
length in Chevron’s filings of September 16, 2010 at 4:35 p.m. and October 29, 2010 at
5:20 p.m., TexPet satisfied its remediation and socio-economic responsibilities under
the various settlement agreements and was thus released from any and all further
remediation responsibilities. Responsibility for any remaining environmental impact and
remediation work was assumed by the State and Petroecuador. Nonetheless, plaintiffs
assert that Chevron should pay damages to remediate the areas that are
Petroecuador’s responsibility. However, this claim has no factual merit for the following
reasons.
First, the data collected by experts nominated by both Chevron and the plaintiffs
during the judicial-inspection process supports the conclusion that the remediation
performed by Woodward-Clyde was proper. Soil test results conducted during the
judicial-inspection process by all experts show no exceedance of the applicable
remediation criteria for all but one RAP pit. 902 Second, the settling experts’ opinion
supports Chevron’s position that there is no need for remediation at the RAP site
Sacha-53. Specifically, the settling experts found that the available data showed that
TexPet’s remediated pits posed a low risk to nearby residents and water supplies. Third,
peer-reviewed studies support the conclusions reached by experts nominated by
Chevron. For example, a 2010 scientific study of the impact of weathering on
Ecuadorian crude oil in soils, conducted by Kirk O’Reilly and Waverly Thorsen and
published in the scientific journal Soil and Sediment Contamination, supports the
findings of the experts nominated by Chevron, concluding that soils in Ecuador are
unlikely to result in groundwater contamination. 903
In sum, the evidence gathered during the judicial-inspection process
demonstrates that the RAP sites were properly remediated. The evidence shows full
completion of RAP work items at RAP sites and compliance with applicable cleanup
criteria for RAP pits. However, despite this overwhelming evidence, plaintiffs now seek
damages for remediation of soils (i) at RAP sites that were already properly remediated,
(ii) at non-RAP sites that were not TexPet’s responsibility; and (iii) applying incorrect
remediation standards—resulting in wildly inflated remediation estimates. Plaintiffs’
position cannot withstand serious scrutiny.
902 As detailed more fully in Chevron’s Motion filed September 16, 2010, none of the experts
involved in the judicial-inspection process found any evidence of the need for further remediation of either
soil or groundwater at RAP sites previously remediated by TexPet except for one pit (Pit 4 at well site
SSF-48) identified by experts nominated by Chevron for which the soil test results indicated an
exceedance of applicable RAP criteria. And for this one pit, it is important to note that the soil test results
obtained at the time of the TexPet remediation (August 1997), as well as the more recent soil test results
obtained by experts nominated by plaintiffs during the judicial inspection (September 2004), indicated no
exceedance of the TPH limit (i.e., TPH < 5000 mg/kg on a composite soil sample). See Chevron’s Motion
filed Sept. 16, 2010 at 4:35 p.m., at 95.
903 For additional details, see Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.3.c.vi, at
106-109.
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Mr. Cabrera—in a fraudulent report authored by the plaintiffs’ attorneys and paid
consultants—initially estimated that the cost of soil remediation in the former concession
area would be US$1.7 billion. The plaintiffs inflated this gross miscalculation to
US$2.743 billion (or US$3.08 million per pit) in the supplemental Cabrera Report, by
arbitrarily applying a more stringent remediation standard (100 ppm TPH) that does not
exist in Ecuadorian law. Both of these estimates are based on incorrect assumptions
leading to fatally flawed conclusions.
The errors in approach in the Cabrera Report are enormous. 904 For example, the
Cabrera Report fails to account for TexPet’s previously completed environmental
remediation work in the former concession area and Petroecuador’s responsibility to
remediate sites that did not fall within the scope of TexPet’s obligations—remediation
that it has recently started to perform. The Cabrera Report also does not rely on field
data to determine the number, dimensions, or even the existence of pits but instead
bases its findings solely on incompetent and error-filled interpretations of aerial
photographs. The Cabrera Report also arbitrarily assumes that there is an additional
area around the pits requiring remediation, with an estimated span of an additional fifty
percent of the total area of the pits themselves. This assumption is completely
unfounded, as there is no evidence that any alleged contamination migrated beyond the
pits. These errors resulted in gross over-estimations of the number of pits and volume
of soil to be remediated. Additionally, the supplemental Cabrera Report utilizes an
incorrect and unnecessarily stringent cleanup standard (100 ppm TPH) that is not based
on Ecuadorian law, that is not applicable to upstream oil pit remediation, and that is
contrary to the standard utilized in Petroecuador’s remediation efforts.
The plaintiffs also rely on the flawed report of Douglas C. Allen, submitted with
their filing of September 16, 2010 at 5:15 p.m. Mr. Allen does not attempt to support the
exorbitant recommendations of the Cabrera Report and his report has no evidentiary
value. As detailed in Chevron’s filing of December 22, 2010 at 5:40 p.m., Mr. Allen’s
report fails to establish that Chevron is responsible for any further remediation of the
former concession area; fails to account for both TexPet’s past remediation and
Petroecuador’s recent remediation efforts; and relies solely on the Cabrera Report for
an inflated estimate of the number of pits, an overestimate of the volume of soil
requiring remediation, and improper cleanup standards. As a result, Mr. Allen’s report
relies exclusively on pre-remediation field audits and data supplied by the plaintiffs,
ignoring all other relevant data. As a result of these fundamental errors, Mr. Allen
estimates the cost of soil remediation in the former TexPet concession area to be
between US$487 million and US$949 million. These cost estimates are not only
unwarranted, but are also greatly exaggerated for the following reasons:
First, Mr. Allen fails to follow appropriate cost estimation procedures. The most
appropriate and most reasonable basis for estimating the cost of remediation is to
examine the actual cost of remediation currently being incurred by Petroecuador in the
100-104.
904 For a full discussion, see Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.3.c.iv, at
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cleanup of the very sites in question; Mr. Allen ignores this. Although he purports to use
the ASTM E2137-06 Standard Guide for Estimating Monetary Costs and Liabilities for
Environmental Liabilities “range of values method” for cost estimation, this procedure
should be used when the “expected value” approach is not practicable or feasible. In
the Oriente, the ongoing Petroecuador remediation activities provide the basis for the
more comprehensive and robust expected value approach, which should therefore be
used if properly applying ASTM E2137-06. The ASTM E2137-06 expected value
approach is very feasible and appropriate for this case since sites have been
remediated by Petroecuador at an estimated average cost of US$85,000 per pit site. 905
Second, Mr. Allen also appears to rely on the U.S. Comprehensive
Environmental Response, Compensation, and Liability Act (“CERCLA”) or Superfund
process in support of cost estimates. This is inappropriate as the Oriente sites could
have been eventually affected predominately with crude oil and not with the more toxic
and more difficult to remove or remediate hazardous materials typically found at U.S.
Superfund sites. Mr. Allen could not identify a single oil field site in the U.S. that has
been classified as a Superfund site. Moreover, if the Oriente oil fields were under U.S.
jurisdiction, they would not be classified as Superfund sites. 906
Third, to arrive at cost estimates, Mr. Allen appears to rely on almost twentyyear-old
U.S. data for estimating bioremediation and thermal desorption rather than
using the documented, publicly available, and current cost data for remediation of the
sites in question. He then applies U.S.-based costs from a basic engineering cost
manual to estimate cost items such as excavation, trucking, and heavy equipment
usage. Mr. Allen, however, ignores the more appropriate and more reliable publicly
available current local costs. 907 Moreover, it does not appear that Mr. Allen considered
or was even aware of all of the reports filed with the Court. Although they contain
significant amounts of relevant information, none of the judicial inspection reports and
none of the reports of Chevron’s nominated experts were cited; in fact, none of the
rebuttal briefs by Chevron were given to him. 908
905 ALVAREZ, Pedro J., MACKAY, Douglas M., and HINCHEE, Robert E., Expert Report on
Remedial Cost: Rebuttal to Environmental Damages Valuation – Texpet-Ecuador Concession Area
Authored by Douglas C. Allen, dated September 2010, at 9, attached as Annex 2 to Chevron Motion, filed
Oct. 29, 2010 at 5:20 p.m.
906 ALVAREZ, Pedro J., MACKAY, Douglas M., and HINCHEE, Robert E., Expert Report on
Remedial Cost: Rebuttal to Environmental Damages Valuation – Texpet-Ecuador Concession Area
Authored by Douglas C. Allen, dated September 2010, at 9, attached as Annex 2 to Chevron Motion, filed
Oct. 29, 2010 at 5:20 p.m.
907 ALVAREZ, Pedro J., MACKAY, Douglas M., and HINCHEE, Robert E., Expert Report on
Remedial Cost: Rebuttal to Environmental Damages Valuation – Texpet-Ecuador Concession Area
Authored by Douglas C. Allen, dated September 2010, at 10, attached as Annex 2 to Chevron Motion,
filed Oct. 29, 2010 at 5:20 p.m.
908 Astoundingly, rather than relying on his own independent search of the factual record in this
case for his assertion that “more than 100 expert reports and . . . tens of thousands of chemical sampling
results [are] now before the court,” Mr. Allen cites a third party publication. See ALLEN, Douglas C.,
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In summary, Mr. Allen’s soil remediation estimate is inaccurate because he used
plaintiffs’ incorrect values for remedial standards, overestimated the number of pits
requiring remediation, overestimated the volume of soil requiring remediation, and
overestimated of the unit cost of remediation—all without doing any of his own research
on these topics. Mr. Allen’s conclusions regarding the costs of soil remediation are
wholly erroneous and this Court should not award any such damages against
Chevron. 909
There is also no reliable evidence of groundwater contamination in the former
concession area: A comprehensive risk evaluation performed by Chevron’s nominated
experts indicates that there is no groundwater contamination in the former concession
area that could pose any petroleum-related health risks to local residents or workers. 910
During the judicial-inspection process, Chevron’s nominated experts collected a total of
458 water samples at RAP sites and analyzed them for petroleum-related chemicals.
Ninety-six percent (or 440) of the water samples taken at RAP sites were found to
contain no petroleum-related chemicals at concentrations in excess of health-based
screening levels based on daily consumption of the water as a drinking water supply.
Of the eighteen water samples found to exceed health-based levels, only ten were from
locations (i.e., surface water streams) that could be considered as a potential future
(continued…)
Environmental Damages Valuation, attached as Annex A to Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15
p.m., at 1, (citing Energy & Ecology Business (2010)).
909 Although Mr. Allen’s proposed remediation costs are far too high, his upper limit of US$1.86 is
US$4.1 billion lower than Mr. Cabrera’s wholly outrageous assessment. No matter what number plaintiffs
advocate, their assertions regarding the costs of the soil and groundwater remediation as well as the
impacts on the ecosystem are egregious when considered in light of the February 14, 2006 letter from
David L. Russell to Steven Donziger. Mr. Russell, who at one time worked for the plaintiffs, writes in his
capacity as president and sole employee of Global Environmental Operations, Inc. In that letter, Mr.
Russell urges Mr. Donziger to “[c]ease and [d]esist” from using the remediation cost estimate prepared by
that company in 2003 for the plaintiffs. After observing that he had “deliberately chose[n] the most
expensive remedial options available and applicable to the work in Ecuador because [Mr. Donziger]
wanted a ‘large’ number,” Mr. Russell ultimately concludes that “the 2003 cost estimate is too high by a
substantial margin, perhaps by a factor of ten, or more” (emphasis in original). In his letter, Mr. Russell
clearly expresses his conviction that his more recent assessment of the costs is based on “hard evidence
that [he] cannot ignore” based on his attendance at “several technical conferences, both inside and
outside the US” where he met “individuals who [had] convinced [him] that alternative remedial techniques
applicable to Ecuador are just as effective as those [he] proposed, and are far less costly.” Mr. Russell
further states that he had “seen no data which would indicate that there is any significant surface or
groundwater contamination caused by petroleum sources in Ecuador.” Letter from David L. Russell to
Steven Donziger, February 14, 2006, attached as Annex 20 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m. This letter stands as further, documented proof not only that the remediation costs proposed by
plaintiffs are wildly inflated, but also that plaintiffs’ lawyers are fully aware of the true costs, yet have
persisted in perpetrating a fraud on this Court, through their own submissions and the report they wrote
for Mr. Cabrera’s signature. See also Official Transcript of the Second Deposition of Mark A. Quarles at
338:5-23, dated Oct. 12, 2010, attached as Annex 11 to Chevron Motion, filed Oct. 29, 2010 at 5:20 p.m.
910 For additional details, see Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.3.c.v, at
104-106.
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water resource, under any hypothetical scenario. All ten of these sampling locations are
within streams that, at the time of sample collection, were impacted due to ongoing
leaks or discharges by Petroecuador, which has undertaken actions to terminate these
leaks. Local residents in those areas stated that the affected portions of these streams
are not used for drinking water. Consequently, the water at these locations would not
reasonably result in a measurable health risk.
For its part, the Cabrera Report excluded groundwater from its damages
recommendation, stating that “sufficient information [wa]s not available” to assess the
costs groundwater cleanup. 911 Indeed, Mr. Cabrera collected only six “groundwater”
samples that complied with the administrative procedures established by the Court
(such as advance notification, presence of observers for the defendants, chain of
custody forms signed by Mr. Cabrera). Those six samples were collected from
boreholes located within oilfield pits and therefore are not representative of groundwater
conditions in the vicinity of the pits. Those samples contained no petroleum or
produced water constituents exceeding the most stringent drinking water standards or
guidelines established by the WHO or the U.S. EPA at the time of TexPet’s operations.
In fact, sampling results in the Cabrera Report confirmed that the pits are not a source
of groundwater contamination.
Yet, at the plaintiffs’ direction, the supplemental Cabrera Report attributed an
astounding figure of over US$3.236 billion for such clean-up efforts. However, this
analysis is flawed and contradictory for the following reasons: 912
First, the supplemental Cabrera Report’s cost assessment stands in direct
contradiction to the unequivocal statement in the same supplemental report that the
report was unable to define the cost of cleaning up the groundwater because it “will
require a substantial effort over an extensive period and will cost millions of dollars for
collecting the data needed for developing the groundwater clean-up plan.” 913 Notably,
Mr. Cabrera did no additional field work between the original and supplemental reports
(nor did he author either of his reports). Second, the supplemental Cabrera Report’s
US$3.2 billion figure was not accompanied by an actual groundwater remediation plan,
and his “methodology” is absurd. As stated above, Mr. Cabrera collected a handful of
muddy water samples from open boreholes inside pits and improperly called them
“groundwater samples.” 914 That supplemental report then assumed, without basis, that
100 percent of the wellsites and production stations will require groundwater
111-114.
911 Expert Cabrera’s Global Report, filed Apr. 1, 2008, at 8:30 a.m., Record at 134228-89, 134234.
912 For additional details, see Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.3.c.viii, at
913 Expert Cabrera Supplemental Report, filed Nov. 17, 2008, at 8:25 a.m., Record at 152949-
153167, 152961-62.
914
ALVAREZ, Pedro J., MACKAY, Douglas M., and HINCHEE, Robert E., Expert Report on
Remedial Cost: Rebuttal to Environmental Damages Valuation – Texpet-Ecuador Concession Area
Authored by Douglas C. Allen, dated September 2010, at 22, attached as Annex 2 to Chevron’s motion,
filed Oct. 29, 2010, at 5:20 p.m.
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emediation because of petroleum operations. Third, the supplemental Cabrera Report
was founded on incorrect assumptions in assessing the costs of cleaning up
groundwater in the Oriente region. The report derived its US$8.45 million per site
estimate by averaging the costs of four groundwater cleanup projects in the United
States and assuming (with no justification) that remediation would take twenty years.
But no petroleum operations had occurred at those sites. And those sites involved
remediation that was unrelated to crude oil production and that was considerably more
complex.
For his part, Mr. Allen, hired by the plaintiffs for their September 16, 2010 filing,
at 5:15 p.m., erroneously assesses US$396 million to US$911 million to remediate
groundwater when in fact there is no evidence that groundwater contamination exists
due to TexPet’s operations, and there is no basis for assuming any groundwater
remediation is required. 915 Mr. Allen’s report makes the same assumptions as the
fraudulent Cabrera Report, and therefore, his damage estimates suffer the same flaws
as the Cabrera estimates. Likewise, his groundwater remediation estimates are flawed
for the same reasons as his soil remediation estimates, discussed immediately above.
Ignoring more reliable groundwater analyses, and experience elsewhere in similar oil
field settings, Mr. Allen assumes that groundwater contamination exists, when in
actuality it does not, and then estimates the cost to remediate this fictitious
contamination. 916
In contrast to these assertions of damages related to groundwater contamination,
evidence collected from the outtakes to the documentary Crude clearly show that the
plaintiffs’ attorneys were well aware of the fact that there is no evidence to support the
need for groundwater remediation. For example, one of the plaintiffs’ nominated
experts admits that “what we know we don’t have is the extent of the [groundwater]
contamination.” 917 And, under oath, plaintiffs’ consultant Mr. Charles Champ confirmed
that, to this day, he has not seen any data that indicates the extent or existence of
groundwater contamination in the former concession area. 918 Further, Mr. Champ
testified that other consultants agreed with his assessment that there was not sufficient
data showing the extent of alleged groundwater contamination away from the pits. 919
915 See ALLEN, Douglas C., Environmental Damages Valuation, attached as Annex A to
Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 19. See also Section 7.4.5 below, which addresses
the complete lack of data showing the contamination of water supplies by petroleum hydrocarbons.
916 ALVAREZ, Pedro J., MACKAY, Douglas M., and HINCHEE, Robert E., Expert Report on
Remedial Cost: Rebuttal to Environmental Damages Valuation – Texpet-Ecuador Concession Area
Authored by Douglas C. Allen, dated September 2010, at 21-23, attached as Annex 2 to Chevron’s
Motion, filed Oct. 29, 2010 at 5:20 p.m.
917 Transcript of Crude Outtakes, attached as Exhibit 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010, at 2:50 p.m. (CRS 195-05-01); see also Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010, at 2:50 p.m., at 21.
918 See Deposition of Charles Champ at 193:19-24, Sept. 9, 2010, attached as Exhibit 35 to
Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
919 See id. at 264:14-22.
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None of this could have been a surprise to the plaintiffs, whose former counsel,
Mr. Bonifaz, reminded the plaintiffs’ team in an email in 2004 that “[w]e all agreed that
there is no scientific valid way that we are willing to use to determine the value of
reparation of underground water because there is no scientific way of attributing
groundwater contamination to Texaco without a multimillion dollar study that could cost
millions and result in nothing.” 920
In a particularly egregious outtake, Mr. Donziger discusses the evidence of
groundwater contamination with others on his team. Ms. Maest tells Mr. Donziger that
the only samples that show any evidence of contamination are those collected from the
actual pits, and that “nothing has spread anywhere at all.” Mr. Donziger, undaunted by
this simple truth, states, “The reports are saying the ground water is contaminated
because we’ve taken samples from ground water.” When Ms. Maest replies, “That’s
just right under the pits,” Mr. Donziger tells her, “Yeah, but, that is evidence.” Another
consultant replies, “Well, you need more.” At this point, Mr. Donziger states,
Hold on a second, you know, this is Ecuador, okay . . . You
can say whatever you want and at the end of the day, there’s
a thousand people around the courthouse, you’re going to
get what you want. Sorry, but it’s true. . . . Therefore, if we
take our existing evidence on groundwater contamination
which admittedly is right below the source . . . [a]nd we
wanted to extrapolate based on nothing other than our, um,
theory that it is, they all, we average out to going 300 meters
in a radius, depending on the . . . gradient . . . [w]e can do it.
And we can get money for it. 921
Following further discussion, Mr. Donziger states, that “at the end of the day, this
is all for the Court just a bunch of smoke and mirrors and bullshit. It really is. We have
enough, to get money, to win.” 922 This alarming exchange among members of plaintiffs’
team not only further exposes the fraud perpetrated on this Court, but also clearly
shows that the plaintiffs’ lawyers were well aware that there is insufficient evidence to
show the need for groundwater remediation in the former concession area.
920 E-mail from Cristobal Bonifaz to Alberto Wray, et al., dated Dec. 12, 2004 at 2:34 p.m.,
attached as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20,
2010 at 4:30 p.m. (DONZ0027310).
921 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010, at 2:50 p.m., (CRS 195-05-01). As one of the plaintiffs’ consultants, Mr.
Champ, recently testified, such an extrapolation is baseless and completely unscientific. Deposition of
Charles Champ, Sept. 9, 2010, attached as Annex 35 to Chevron’s Motion filed Sept. 16, 2010 at 4:35
p.m., at 265:6-16.
922 See Transcript of Crude Outtakes, attached as Annex 2 to Chevron’s Motion for Terminating
Sanctions, filed Aug. 6, 2010, at 2:50 p.m., (CRS 195-05-01).
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All remaining remediation is the sole responsibility of the State and
Petroecuador: As shown above, all pits for which TexPet was responsible were
remediated in compliance with the RAP. According to the terms of the Settlement
Agreement, the duty to remediate the remaining pits fell to Petroecuador. 923 In explicit
recognition of this continuing duty, Petroecuador has engaged in efforts to remediate oil
field pits, both within and outside the former concession area, in a state-sanctioned, pitremediation
program called Project for the Elimination of Pits in the Amazon District
(“PEPDA”), now called UMR. In testimony before Ecuador’s Congress in May 2006,
Ecuador’s National Director of Environmental Protection Management (“DINAPA”),
Manuel Muñoz, confirmed that TexPet “completed the remediation of the pits that were
their responsibility . . . but Petroecuador, during more than three decades, ha[s] done
absolutely nothing with regard to those that were the [state-owned] company’s
responsibility to remediate.” 924
Specifically, in October 2002, and in compliance with the regulations set forth in
Article 59 of Decree 1215, Petroecuador created PEPDA to carry out remedial activities
in Petroecuador oilfields, including the former Consortium fields. 925 PEPDA’s objective
is to “eliminate all of the pits” in Petroecuador’s area of operation. 926 When publicly
announcing the program on October 5, 2006, Petroecuador published a special
supplement in El Comercio explaining that the project was aimed in part at remediating
Petroecuador’s share of the Consortium pits as required by the settlement and release
923 See Petroproducción eliminará 264 piscinas con desechos en la Amazonia, El Comercio, Oct.
5, 2006, attached as Annex D to Chevron’s Rebuttal to the Barros Report, filed Jan. 14, 2010, at 5:55
p.m., Record at 165381-82, 165382; see also Chevron’s Motion regarding Petroecuador’s
Responsibilities and TexPet’s Release under the PEPDA Remediation Plan, filed Dec. 5, 2007, at 5:46
p.m., Record at 133840-43, 133840-42; Ministerial Accord No. 164, published in Official Gazette 26, Feb.
22, 2007.
924 Testimony of Manuel Muñoz, before the National Congress, Extraordinary Session of the
Permanent Specialized Commission on Health, Environment and Ecological Protection, May 10, 2006,
appearance of Congress, submitted as evidence during the judicial inspection of Auca 1, filed Nov. 15,
2006, at 9:30 a.m., Record at 122947-65, 122955.
925 As noted above, PEPDA’s work has since been taken over by a new entity within
Petroecuador’s Vice Presidency for the Environment, Social Responsibility, Security and Health, which
has created the Unit for Mediation and Remediation. Despite the name change and restructuring, the
objective remains the same: to clean up Petroecuador’s Oriente oilfields. See Petroecuador: Report of
the Vice-President, dated Oct. 21, 2009, attached as Annex 5 to Attachment I of Appendix A to Chevron’s
Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at 164742-47, 164743; see
also Official Letter No. 674-SPA-DINAPA-CSA-0705769, filed Nov. 16, 2007, at 10:02 a.m., Record at
133651-52, 133651.
926 Official Letter No. 674-SPA-DINAPA-CSA-0705769, filed Nov. 16, 2007, at 10:02 a.m., Record
at 133651-52, 133651: “The objective of the PEPDA is to eliminate all of the contaminated pits within their
areas of operation . . . . [T]he project has two basic components, which are: the elimination of the
sources of contamination and the recovery of [weathered] crude. The first case deals with the pits with
crude and other contaminants, which have been catalogued as Environmental Liabilities that form a part
of the environmental policy of the National Government . . . .”
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with TexPet. 927 In September 2007, Petroecuador requested funding from the
InterAmerican Development Bank for, among other things, US$24 million for equipment
to be used in remediating some 360 pits associated with forty years of operations, which
can only be understood to include the former Consortium pits. 928 Petroecuador’s
responsibility has also been confirmed by the Ministry of the Environment, which in
2007 assigned its Unit for Project Coordination with the administrative and financial
execution of social and environmental remediation projects that included cleaning up
pits and spills at former Consortium fields. 929
Ironically, plaintiffs, who publicly claim to be champions of the environment,
repeatedly sought to halt PEPDA’s remediation efforts. Mr. Donziger, recognizing that
Petroecuador’s remediation “is about fulfilling their contract, their cleanup contract, with
Texaco," worries aloud in the Crude outtakes that these cleanup efforts will “undermine
our legal position.” 930 In October 2006, the plaintiffs’ counsel criticized the PEPDA
program as destroying evidence and thus “tamper[ing]” with the lawsuit. 931 In June 2007,
Mr. Donziger and Mr. Fajardo met with Petroecuador to “confront” them regarding the
remediation, explaining that they were only able to get the meeting because “there’s a
new government and they’re forcing the meeting on Petroecuador.” 932 Mr. Donziger’s
stated goal at that meeting was “to get some sort of control over what they [PEPDA are]
doing . . . maybe even stop them . . . from doing their cleanup operation.” 933 Within
weeks of this meeting, Mr. Cabrera asked the Court to suspend all PEPDA remediation
at 120 specified sites, 934 and the Court complied on October 3, 2007. 935 The plaintiffs
expressed support for the Court’s order, stating that “the plaintiffs believe, as does
Expert Cabrera, that the sites that were going to be the subject of the judicial test should
not be altered.” 936 The plaintiffs thereafter renewed their request to halt the PEPDA
927 See Petroproducción eliminára 264 piscinas con desechos en la Amazonia, El Comercio (Oct.
2, 2006), attached as Annex D to Chevron’s Objections to Expert Villacreces’s Report on GU 7, filed Jan.
14, 2010, at 5:55 p.m., Record at 165381-82, 165382.
928 Petroecuador Impacts Report, Attachment G, attached as part of Appendix A to Chevron’s
Rebuttal to the Barros Report, filed on Jan. 14, 2010 at 5:55 p.m., Record at 164502-19, 164515.
929 See Ministerial Accord No. 164, published in Official Gazette 26, Feb. 22, 2007. The
resolution specifically mentioned the following fields: Sacha, Auca, Lago Agrio, and Shushufindi.
930 See Transcript of Crude Outtakes, attached as Exhibit 1 to Chevron’s Motion filed Sept. 16,
2010 at 4:35 p.m., (CRS-162-03-01).
931 Petroecuador Is Set to Clean 230 Pits, DIARIO LA HORA, Oct. 20, 2006.
932 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Oct. 1, 2010 at
2:30 p.m., (CRS-355-28-01).
933 Transcript of Crude Outtakes, attached as Annex 1 to Chevron’s Motion filed Oct. 1, 2010 at
2:30 p.m., (CRS-355-28-02).
934 Expert Cabrera’s request to halt Petroecuador remediation, filed on July 12, 2007 at 10:15
a.m., Record at 131336-37.
935 Order of Oct. 3, 2007, filed at 11:00 a.m., Record at 132846-56, 132849v.
936 Plaintiffs’ motion, filed Oct. 29, 2007, at 5:46 p.m., Record at 133434.
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program, evidencing their continuing efforts to terminate the very remediation they have
demanded from Chevron. 937
In 2008, PEPDA was replaced by UMR, which continues remediation efforts to
this day, albeit at a much slower pace than promised by Petroecuador in 2007. And on
June 21, 2009, Ecuador’s Ministry of the Environment announced an expansion of this
plan, focusing on all areas in Ecuador impacted by petroleum production, again
including former Consortium sites. 938 President Correa, in his November 7, 2009
weekly broadcast, likewise confirmed the Government’s responsibility, explaining that
“[the Government] will not only clean new spills, but will remediate all environmental
liabilities.” 939
Notably, the PEPDA/UMR program appears to involve generally the same steps
that Woodward-Clyde employed when carrying out its remediation work for TexPet. 940
After all steps are completed at a particular site, the owner of the remediated land signs
an Acta Entrega—Recepción (Remediated Pit Acknowledgement Certificate) together
with the PEPDA/UMR coordinator and representatives from DINAPA and
Petroproducción. 941 This document certifies that pit remediation was completed to the
satisfaction of all interested and competent parties. 942
Petroecuador’s remediation costs are substantially lower than the enormous
amounts suggested by the plaintiffs: 943 Mr. Cabrera, in “his” supplemental report dated
November 26, 2008, estimates US$3.08 million per site, and in their submission of
September 16, 2010, the plaintiffs request from US$531,080 to US$1,034,896 per pit. 944
However, as shown in my client’s filings of September 16, 2010 at 4:35 p.m. and
October 29, 2010 at 5:20 p.m., these astronomical remediation cost estimates are far in
937 Plaintiffs’ motion, filed June 4, 2008, Record at 140460-62.
938 See State Assumes Environmental Remediation, El Universo, June 21, 2009, attached as
Annex E to Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at
165383-84, 165384.
939 See Transcript, President Rafael Correa’s Broadcast, at Joya de Los Sachas (Sucumbíos)
(Nov. 7, 2009), attached as Annex C to Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010,
at 5:55 p.m., Record at 165378-380, 165379.
940
See Woodward-Clyde International, Remediation Action Project, Oriente Region, Ecuador,
Final Report, Vol. I, May 2000, attached as Annex 44 to Chevron’s Motion filed Sept. 16, 2010 at 4:35
p.m., at 3-4 through 3-10.
941 BACA, Ernesto, Response to Mr. Cabrera Regarding his Evaluation of Petroecuador’s Pit
Remediation Program (PEPDA), attached as an appendix to Chevron’s Objections to Expert Cabrera’s
Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146992-148128, 147043.
942 See id.
943 For a more detailed discussion of the costs associated with the remediation of sites in the
former concession area, see Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., § IV, at 213-23.
944 Plaintiffs’ Motion filed Sept. 16, 2010 at 5:15 p.m., § 4.1.1, at 8.
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excess of what any similar remediation has ever cost, are without technical basis, and
are not realistic estimates of the actual cost of remediation.
Oilfield pit-remediation costs are well known and well understood by everyone in
the oil industry. This is because the approved cleanup processes are well established
and have been employed at many sites worldwide. Information on many of these sites
and the associated cleanup costs are publicly available. For example, Petroecuador
has remediated oilfield pits both within the former concession and in other areas where
Petroecuador operates, through the PEPDA/UMR program. According to
Petroecuador’s 2007 Annual Report, the average remediation cost per pit is US$85,000
and the approximate cost of PEPDA’s pit remediation project is expected to be
US$46.75 million (through 2010) for the 550 pits located within and outside the former
concession area.
For the pits within the former concession area, PEPDA/UMR estimated the total
remediation cost to be US$31.45 million in 2007. 945 On June 21, 2009, the Ministry of
the Environment announced that a comprehensive remediation plan for all areas in
Ecuador affected by petroleum production, including sites formerly operated by the
Consortium, will cost a total of US$97 million and will be conducted from 2009 to 2013.
Furthermore, as part of the PEPDA/UMR remediation process, Petroecuador publicly
revealed bids from four Ecuadorian remediation companies that sought to do soil
remediation work. These bids ranged from US$29 per cubic meter to US$45 per cubic
meter. These costs are similar to the costs incurred by PEPDA/UMR, and are less than
ten percent of amount suggested by the Cabrera Report, as discussed below. 946 Dr.
945 Similarly, one of plaintiffs’ consultants internally estimated in 2004 that remediation would cost
about US$30 million. See Annex 1 to Chevron’s Fourth Supplemental Motion for Terminating Sanctions,
filed Dec. 22, 2010 at 5:45 p.m. (DONZ00027273).
946 Petroecuador’s own costs are reported to be only US$22 per cubic meter of treated soil and
water, and its remediation, as shown at Shushufindi 17, has been independently confirmed to meet
applicable standards. See Petroecuador Report, “Applications of Biotechnology for Bioremediation of Soil
and Water Contaminated by Oil Spills,” attached as Annex 12 to Chevron’s Fourth Supplemental Motion
for Terminating Sanctions, filed Dec. 22, 2010 at 5:45 p.m.; see also Freire Acosta, Franklin,
“Environmental Remediation Techniques for Soil Contaminated by Hydrocarbons in the Area of Influence
of Petroproducción’s Operations in the Ecuadorian Northeast at the Shushufindi 17-1 Pit (PEPDA),”
attached as Annex 14 to Chevron’s Fourth Supplemental Motion for Terminating Sanctions, filed Dec. 22,
2010 at 5:45 p.m. Another region where remediation costs are well known is in the U.S. states of Texas
and Louisiana, where significant oil production activity occurs and where remediation of old wellsites
occurs under “Orphan Well” programs. Compliance with those programs is documented, and the costs
are publicly available. In Louisiana, for example, where thousands of wellsites have been remediated,
the Louisiana Office of Conservation database shows 774 sites as of 2008 (most of these sites are old
abandoned oil wells containing one or more pits) where final closure has been achieved. The total
remediation cost has ranged from US$100 to US$242,000 per site, with an average cost of approximately
US$20,000 per site. Another study conducted an analysis of approximately 210 pits at these sites
remediated between the years 2003 and 2008, and found that the cost of remediation of those
contaminated pits ranged between approximately US$10,000 and US$37,000 per pit at a unit cost of
between US$13 and US$99 per cubic meter of contaminated soil. Finally, a detailed cost analysis of the
closure and cleanup of an oilfield in the Netherlands that the oil company Schoonebeek operated
between the years 1943 and 1996 indicates that the cost of remediating oil-contaminated soil averaged
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Robert Hinchee, an environmental expert specializing in petroleum remediation, agrees
that PEPDA’s remediation costs and estimates are reasonable. 947
7.3.2 Plaintiffs Have Failed to Prove That Chevron Is Responsible for Public
Costs of Healthcare in the Oriente.
Plaintiffs, through the Cabrera Report and Carlos E. Picone, 948 have requested
funding for a “comprehensive public health infrastructure and health/environmental
monitoring.” 949 As extensively discussed in Chevron’s filings of September 16, 2010 at
4:35 p.m. and October 29, 2010 at 5:20 p.m., this claim for damages, however, is
unsupported by the evidence presented in this case.
First, ordinarily, such a claim would seek to vindicate the “individual homogenous
rights” that belong to the “residents” of the allegedly affected communities. Yet no
individualized proof has been offered of any harm or threat of harm to the health of such
residents. To the extent that the plaintiffs seek relief for alleged harm to the “public
health,” not to any particular individual, they have offered no legal basis (or, once again,
evidence) for doing so. Second, there is no reliable scientific evidence showing that any
alleged adverse health impacts are attributable to petroleum activities. As Chevron has
repeatedly explained, the health studies and health surveys claiming to find a causal
link between various ailments and petroleum operations are riddled with methodological
errors and biases and cannot form the basis of an inference of causation. 950 Third, the
(continued…)
between US$32 and US$81 per cubic meter of soil. See Chevron’s Motion filed Sept. 16, 2010 at 4:35
p.m., at 218-19.
947 See ALVAREZ, Pedro J., MACKAY, Douglas M., and HINCHEE, Robert E., Expert Report on
Remedial Cost: Rebuttal to Environmental Damages Valuation – Texpet-Ecuador Concession Area
Authored by Douglas C. Allen, dated September 2010, at 15-16, attached as Annex 2 to Chevron’s
Motion, filed Oct. 29, 2010 at 5:20 p.m. And it is, of course, the State and Petroecuador which bear
exclusive responsibility for alleged environmental impacts in the former concession area, and any
injunction against them would have to be narrowly tailored to address the specific items requested by the
plaintiffs and any damages award against them would have to be tethered to a concrete work plan that
identifies, among other things, the companies that would perform the remediation and their actual costs.
The EMA, even when it applies, authorizes an award only in the amount required to repair the alleged
environmental damage. Yet neither Mr. Cabrera nor the plaintiffs has offered anything even approaching
a viable work plan, and their remediation estimates are grossly exorbitant.
948 See PICONE, Carlos E., Estimated Cost of Delivering Health Care to the Affected Population
of the Concession Area of Ecuador, attached as Annex C to Plaintiffs’ Motion filed Sept. 16, 2010 at 5:15
p.m.
949 See KELSH, Michael A., Rebuttal to Mr. Cabrera’s Excess Cancer Death and Other Health
Effects Claims, and His Proposal for a New Health Infrastructure, filed as Appendix to Chevron’s
Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146378-423,
146382.
950 See discussion of plaintiffs’ claimed damages for excess cancer deaths in Chevron’s Motion
filed Sep. 16, 2010 at 4:35 p.m., § II.B.4.c., at 149-164, including but not limited to all references cited
therein.
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plaintiffs’ proposed plans to institute a healthcare program to address the purported
health impacts allegedly attributable to the Consortium are baseless and logically
unsound.
Chevron has already (and repeatedly) addressed the Cabrera Report’s proposed
plan, 951 noting, for example, that the report upon which he based the alleged harm to
health is plainly deficient. 952 Among other things, because the report does not identify
any specific individuals, it is impossible to confirm or disprove whether any individual’s
health has been affected by the Consortium’s conduct. 953
For his part, Dr. Picone states that there is “minimal existing health care
infrastructure” and what does exist is “inadequate for meeting the needs” of the
population. 954 He goes on to note that “[t]here are insufficiencies at all levels of health
care, including basic sanitary and preventive services.” 955 Dr. Picone, however, provides
no justification whatsoever for why Chevron should fund any needed reform—particularly
when there is no reliable evidence of adverse health impacts as a result of the
Consortium’s operations. 956 Dr. Picone, for example, suggests funding for the prevention
of communicable diseases, such as tuberculosis and HIV. 957 Neither of these ailments,
however, could even theoretically be attributable to petroleum exposure. Indeed, many of
951 See discussion of plaintiffs’ claimed damages for funding of a health care plan in Chevron’s
Motion filed Sept. 16, 2010 at 4:35 p.m., at 181-89, including but not limited to all references cited therein.
952 See KELSH, Michael A., Rebuttal to Mr. Cabrera’s Excess Cancer Death and Other Health
Effects Claims, and His Proposal for a New Health Infrastructure at 4-7, filed as Appendix to Chevron’s
Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146378-423,
146381-84.
953 See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14
p.m., Record at 141082-203, 141134; see also Proposed Comprehensive Health Program in Response to
Oil Operations in Sucumbios and Orellana, attached as Annex P to Expert Cabrera’s Global Report, filed
Apr. 1, 2008, at 8:30 a.m., Record at 139797-874, 139805.
954 PICONE, Carlos E., Estimated Cost of Delivering Health Care to the Affected Population of the
Concession Area of Ecuador, attached as Annex C to Plaintiffs’ Motion filed Sept. 16, 2010 at 5:15 p.m.,
at 3.
955 PICONE, Carlos E., Estimated Cost of Delivering Health Care to the Affected Population of the
Concession Area of Ecuador, attached as Annex C to Plaintiffs’ Motion filed Sept. 16, 2010 at 5:15 p.m.,
at 4.
956 See, generally, LEAMER, Edward, Evaluation of Economic Analysis Contained in Summary
Report of Expert Examination and Answers to the Plaintiffs’ Questions About the Expert Report in the
Case of Maria Aguinda y otros v. Chevron Corporation, No. 002-2003, attached as Annex 11 to
Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at 38; KELSH, Michael A., Cancer Risk and Oil
Production in the Amazon Region of Ecuador - A Review of the Epidemiologic Evidence, attached as
Annex 8 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., 73, at 40-41; CHRISTOPHER, John P.,
Evaluation of the Scientific Value of the Published Work of Plaintiffs’ Experts, Dr. Miguel San Sebastian
and Colleagues, attached as Annex 10 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
957 PICONE, Carlos E., Estimated Cost of Delivering Health Care to the Affected Population of the
Concession Area of Ecuador, attached as Annex C to Plaintiffs’ Motion filed Sept. 16, 2010 at 5:15 p.m.,
at 4.
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the health conditions in the Amazon region relate to socioeconomic issues: malnutrition,
sanitation, access to preventive care, prenatal care, economic resources, and other
factors unrelated to petroleum operations and that are common to all of rural Ecuador. 958
Nevertheless, Dr. Picone calculates that Chevron should pay a total cost of
approximately US$1.4 billion for providing comprehensive health care and public health
services to the people of the Amazon region over an arbitrary period of thirty years. 959
Further, he justifies the amount by comparing it to the costs associated with providing
health care services to individuals exposed to contaminants as a result of the World
Trade Center disaster and the clean-up that followed. 960 However, Dr. Picone identifies
no similarities that would justify the comparison. 961
In sum, this Court should not order Chevron to pay to fund allegedly necessary
improvements to a healthcare system not proven to be burdened by petroleum
operations in the former concession area, and that are the sole responsibility of the
Government of Ecuador.
7.4 The Damages Sought by Plaintiffs Apart from Those Pled in the
Complaint Are Extra Petita and Unsupported by Both the Law and the
Evidence
Aside from claims for soil and groundwater remediation and healthcare costs, all
the plaintiffs’ damage claims—now totaling over US$100 billion—were not included in
their original complaint. As explained in my client’s filings of September 16, 2010 at
4:35 p.m. and October 29, 2010 at 5:20 p.m., these claims are extra petita, and this
Court should reject them on that basis alone. See supra Chapter VI. However, even if
the plaintiffs had included these claims in their complaint, they have no underlying merit.
Indeed, their inclusion in the plaintiffs’ damage requests of September 16, 2010 at 5:15
p.m. is baseless and libelous, as they are founded on fraudulent evidence.
7.4.1 There Is No Credible Evidence of Excessive Cancer Deaths in the Oriente
Plaintiffs have not pled any personal injury claims and therefore have no standing
to seek damages for “excessive” cancer deaths. For the same reason, this claim is also
958 KELSH, Michael, Response to Reports of Dr. Daniel Rourke and Dr. Carlos Picone, dated Oct.
5, 2010, at 18, attached as Annex 6 to Chevron’s motion, filed Oct. 29, 2010 at 5:20 p.m.
959 See PICONE, Carlos E., Estimated Cost of Delivering Health Care to the Affected Population
of the Concession Area of Ecuador, attached as Annex C to Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15
p.m., at 8. Dr. Picone’s estimate is derived by taking multiplying the Ecuadorian average annual per
capita health-care expenditure in 2008 of US$231 per person by his estimates of the combined
population of Sucumbios and Orellana over a 30-year period (to 2039). Id. at 5-6.
960 See PICONE, Carlos E., Estimated Cost of Delivering Health Care to the Affected Population
of the Concession Area of Ecuador, attached as Annex C to Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15
p.m., at 6-8.
961 KELSH, Michael, Response to Reports of Dr. Daniel Rourke and Dr. Carlos Picone, dated Oct.
5, 2010, at 18, attached as Annex 6 to Chevron’s motion, filed Oct. 29, 2010 at 5:20 p.m.
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extra petita. In all events, any such claim should not be compensated because, as
discussed more fully in Chevron’s filings of September 16, 2010 at 5:15 p.m. [sic] and
October 29, 2010 at 5:20 p.m., 962 there is no scientific evidence to support the
conclusion that people in the former concession area suffer from excess cancer
attributable to petroleum exposure. Accordingly, this Court should not award any
damages based on such alleged injury, and certainly not to the plaintiffs, none of whom
has the authority to bring personal claims on behalf of third parties.
The only known facts about the claim for damages resulting from alleged excess
cancer deaths are that it is based solely on misused or incorrect statistics and not, as a
claim for personal injury must be, on the actual experience of the specific individuals
making the claim. In fact, plaintiffs cannot even agree on the number of claimed excess
cancer deaths: the Cabrera Report arrives at an ultimate figure of 1,401 alleged excess
cancer deaths, while Daniel Rourke’s report, submitted with the plaintiffs’ September 16,
2010 filing at 5:15 p.m., arrives at an ultimate figure of 9,950 alleged excess cancer
deaths.
Astonishingly, these figures include claims for personal injuries to unidentified
individuals that have not yet even allegedly occurred. For example, Dr. Rourke
assumes that the cancer rate increased shortly after commencement of petroleum
exploration in 1967 and that the last excess cancer death allegedly resulting from the
former Consortium’s historic operations will not occur until 2080—seventy (70) years
from today. Under this methodology, the individual suffering the last alleged excess
cancer death has, as of October 2010, likely not been born. Chevron cannot exercise
its fundamental right to defend itself against such amorphous claims.
Regardless, there is no valid scientific evidence to support the conclusion that
people in the former concession area suffer from excess cancer attributable to
petroleum exposure. The three main studies claiming to find an increased cancer risk in
the Oriente, all of which were conducted in undisclosed conjunction with the FDA, are
biased and flawed, and thus cannot be used to form the basis of plaintiffs’ damage
calculation. The three studies are: (i) a cluster investigation of cancer in the town of
San Carlos (San Sebastián et al. 2001); (ii) ecologic studies of adult and childhood
cancer that compared estimated cancer incidence rates in oil production regions versus
non-oil production regions (Hurtig and San Sebastián 2002); and (iii) a “study” by the
Frente, Acción Ecológica, and Oil Watch International presented in the Cabrera
962 Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at 149-164; Chevron’s Motion, filed Oct. 29,
2010 at 5:20 p.m., § 2.3.1, at 19-30; see generally, KELSH, Michael A. Kelsh, Cancer Risk and Oil
Production in the Amazon Region of Ecuador - A Review of the Epidemiologic Evidence, attached as
Annex 8 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., 10, 34, 35, 60, 73, at 4, 17, 34, 40-41;
LEAMER, Edward, Evaluation of Economic Analysis Contained in Summary Report of Expert
Examination and Answers to the Plaintiffs’ Questions About the Expert Report in the Case of Maria
Aguinda y Otros v. Chevron Corporation, No. 002-2003, at 29-37, attached as Annex 11 to Chevron’s
Motion filed Sept. 16, 2010 at 4:35 p.m.; CHRISTOPHER John P., Evaluation of the Scientific Value of
the Published Work of Plaintiffs’ Experts, Dr. Miguel San Sebastián and Colleagues, attached as Annex
10 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
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Report. 963 None of these studies are reliable due to limitations in study design, data
quality, and potential biases.
First, the San Carlos study, which purportedly found an increased cancer risk in
the town of San Carlos associated with petroleum exploration and production activities,
suffers from a number of methodological errors. 964 For example, the study
underestimates the population of San Carlos by about half and, as a result,
overestimates the occurrence of cancer in the town. Second, the 2002 Hurtig and San
Sebastián study, which compared the incidence of cancers occurring in “exposed”
cantons (i.e., cantons that had petroleum activities) to the incidence of cancers in
“unexposed” cantons, also suffers from significant errors, biases, and limitations. For
example, the study did not provide any exposure assessment, did not control for
potentially important confounding factors, and even the study’s own authors
acknowledge that it cannot be used to establish a causal link between exposure and
disease. And third, the Cabrera survey results are not only tainted by fraud but are also
fundamentally flawed and wholly unreliable; they are based on self-reported, rather than
medically diagnosed, cancer. 965 The Cabrera Report’s claim rests on mere
circumstantial evidence of “excess” cancer deaths and is largely the result of egregious
calculation errors that increase the measure of excess deaths exponentially. 966
Indeed, Chevron continues to discover evidence that the plaintiffs’ cancer studies
were tainted by fraud. As shown by new documents produced by the plaintiffs’
consultants at Stratus, portions of the original Cabrera Report relating to excess cancer
deaths were actually secretly drafted by, among other people, Adolfo Maldonado, a
963 See KELSH, Michael A., Cancer Risk and Oil Production in the Amazon Region of Ecuador, A
Review of the Epidemiologic Evidence, attached as Annex 8 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., 3-10, at 2-4; KELSH, Michael, MORIMOTO, Libby & LAU, Edmund, Cancer mortality and oil
production in the Amazon Region of Ecuador, 1990-2005, attached as Annex 29 to Chevron’s Motion filed
Apr. 30, 2010 at 5:45 p.m., at 2, Record at 174923-48, 174924; KELSH, Michael, Rebuttal to Mr.
Cabrera’s Excess Cancer Death and Other Health Effects Claims, and His Proposal for a New Health
Infrastructure, attached to Chevron’s Motion filed Sept. 15, 2008 at 2:14 p.m., at 18, Record at 146371-
146482, 146395; KELSH, Michael, Rebuttal to Mr. Cabrera’s Responses to Health-Related Questions,
attached as Annex 4 to Chevron’s Motion filed Feb. 10, 2009 at 5:35 p.m., at 16, Record at 154475-502,
154491.
964 A critical analysis of San Sebastián’s doctoral thesis, on which the San Carlos study was
based, shows that his work suffers from several errors and inaccuracies. See CHRISTOPHER, John P.,
Evaluation of the Doctoral Thesis of Plaintiffs’ Expert Dr. Miguel San Sebastian, dated Sept. 29, 2010, at
3-6, attached as Annex 4 to Chevron’s motion, filed Oct. 29, 2010 at 5:20 p.m.
965 Even plaintiffs have distanced themselves from Mr. Cabrera’s analysis. Dr. Rourke, for
example, does not even reference the faulty survey conducted by Dr. Beristain and plaintiffs appear to
have abandoned the survey results altogether. See supra § 2.2.1.
966 LEAMER, Edward., Evaluation of Economic Analysis Contained in Summary Report of Expert
Examination and Answers to the Plaintiffs’ Questions About the Expert Report in the Case of Maria
Aguinda et al v. Chevron Corporation, attached as Annex 11 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., at 30.
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epresentative of the Frente—the named beneficiary of this lawsuit. 967 Mr. San
Sebastián himself criticized the way in which Stratus, the plaintiffs’ paid consulting firm
secretly drafting Mr. Cabrera’s report, was evaluating excess cancer deaths. In a newly
discovered email, he said that the data Stratus was using had “little validity”; that
Stratus’s analysis relied on “irrelevant” statistics; and that Stratus was “incorrect[ly]”
assuming that “all potential cancer cases were due to the oil exposure,” among other
serious flaws. 968 Yet the plaintiffs pushed ahead anyway.
However, even if the deeply flawed studies cited by the plaintiffs showed an
increase in cancer rates and/or cancer deaths in the Amazon region, plaintiffs fail to
show a causal connection between that alleged increase and petroleum-related
activities generally, much less TexPet’s petroleum operations. The San Carlos study
and the Hurtig and San Sebastián study, for example, did not include any particularized
identification of a potentially toxic hazard and dose, exposure response assessment, or
risk characterization analyses, and all the studies improperly lump all types of cancer
together. 969 Moreover, a number of occupational studies among petroleum workers
have examined the risk of cancer incidence or cancer mortality associated with
exposure to crude oil, benzene, or non-specific exposures associated with drilling,
pumping, transporting, and refining crude oil or its products, and those studies do not
support a causal relationship between exposure and increased risk for cancer
outcomes. 970 Indeed, in one study specific to the Northeast region of Ecuador, no
association was found between cancer mortality rates among people living in oilproducing
regions and the oil-production activities in that region. 971
In all events, plaintiffs’ damages estimates for alleged excess cancer deaths are
marred by fraud and methodological errors. Plaintiffs have submitted two estimates for
alleged excess cancer deaths: (i) the Cabrera Report’s estimate of approximately
US$9.5 billion in damages and, (ii) Dr. Rourke’s estimate, attached to plaintiffs’
967 E-mail from Douglas Beltman to Steven Donziger, dated March 11, 2008, at 2:22 p.m.
(STRATUS-NATIVE067410, 067413, 067417) (attaching outline of report), attached as Annex 10 to
Chevron’s motion filed Oct. 29, 2010 at 5:20 p.m.
968 E-mail from Miguel San Sebastián to Dave Mills, dated Aug. 25, 2008, at 12:20 p.m.
(STRATUS-NATIVE052295, 052296), attached as Annex 10 to Chevron’s motion filed Oct. 29, 2010 at
5:20 p.m.
969
CHRISTOPHER, John, Evaluation of the Scientific Value of the Published Work of Plaintiffs’
Experts, Dr. Miguel San Sebastián and Colleagues, attached as Annex 10 to Chevron’s Motion filed Sept.
16, 2010 at 4:35 p.m., at 9-12.
970 KELSH, Michael, Cancer Risk and Oil Production in the Amazon Region of Ecuador, A Review
of the Epidemiologic Evidence, attached as Annex 8 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.,
57, at 31-32.
971
See KELSH, Michael, Cancer Risk and Oil Production in the Amazon Region of Ecuador, A
Review of the Epidemiologic Evidence, attached as Annex 8 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., 46-48, at 25-27; KELSH, Michael, MORIMOTO, Libby & LAU, Edmund, Cancer mortality
and oil production in the Amazon Region of Ecuador, 1990-2005, attached as Annex 29 to Chevron’s
Motion filed Apr. 30, 2010 at 5:45 p.m., Record at 174923-48, 174923.
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September 16, 2010 submission, of a range of damages between US$12.1 billion and
US$69.7 billion. 972 Neither of these enormous estimates is in any way reliable. 973
The Cabrera damage request (which was initially US$2.9 billion but increased at
plaintiffs’ request without any rational justification), is based not on a valid
epidemiological study, but, as noted, on an informal, anecdotal, unscientific survey paid
for and conducted by the plaintiffs, with self-reported, medically unverified, and
unverifiable information obtained from Frente-selected nearby residents, all of whom
stand to gain from a monetary award in the plaintiffs’ favor. 974 Indeed, the survey failed
to identify even one of the supposed victims or produce any valid evidence whatsoever,
such as a death certificate, medical report, or hospital record—while assessing US$9.5
billion in damages payable to the plaintiffs for “excessive” cancer deaths. 975 Moreover,
the Cabrera Report compounds the inherent mistakes and biases from Maldonado and
Beristain’s “study” by vastly overestimating the population at risk. 976
As discussed in Chevron’s submission of October 29, 2010 at 5:20 p.m., Dr.
Rourke’s report, which recommends between US$9.5 billion and US$69.7 billion in
damages on this basis, is also fundamentally flawed. Like the Cabrera Report, Dr.
Rourke’s report neither identifies a single specific cancer death nor makes any effort to
972 Expert Cabrera’s Supplemental Report, filed Nov. 17, 2008, at 8:25 a.m., at 18, Record at
152949-153167, 152986; ROURKE, Daniel, Addendum to Estimate of the Number and Costs of Excess
Cancer deaths Associated with Residence in the Oil-producing Areas of the Sucumbios and Orellana
Provinces of Ecuador, attached as Annex D to Plaintiffs’ Motion, filed Sept. 16, 2010, at 5:15 p.m., at 7.
973 In calculating his damage estimates, Dr. Rourke relies on some of the same erroneous
assumptions as Mr. Cabrera, namely that there is an excess risk of cancer among populations in the
former concession area, that exposure to toxic levels of environmental contaminants have occurred, and
that it is biologically plausible that potential contaminants from oil production activities are capable of
causing all types of cancer. See ROURKE, Daniel, Estimate of the Number and Costs of Excess Cancer
Deaths Associated with Residence in the Oil-producing Areas of the Sucumbios and Orellana Provinces
of Ecuador, attached as Annex D to Plaintiffs’ Motion, filed Sept. 16, 2010, at 5:15 p.m. Chevron has
previously addressed each of these assumptions in its Motion filed September 16, 2010 and, therefore,
incorporates by reference Section II.B.4.c. of that Motion, including all references cited therein. See
Chevron’s Motion, filed Sept. 16, 2010 at 4:35 p.m., at 149-164.
974 KELSH, Michael, Rebuttal to Mr. Cabrera’s Excess Cancer Death and Other Health Effects
Claims, and His Proposal for a New Health Infrastructure, attached as Appendix to Chevron’s Objections
to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146378-423, 146387-89.
The survey did not measure whether the survey participants were ever exposed to petroleum compounds
of potential concern. Participants were affected by recall bias because the survey sought information
about events from many years in the past. Survey questions were worded in a biased manner – with the
obvious purpose of linking TexPet to negative occurrences and adverse outcomes. Id.
975 Expert Cabrera’s Supplemental Report, filed Nov. 17, 2008, at 8:25 a.m., Record at 152949-
153167, 152986; KELSH, Michael, Cancer Risk and Oil Production in the Amazon Region of Ecuador--A
Review of the Epidemiologic Evidence, attached as Annex 8 to Chevron’s Motion filed Sept. 16, 2010 at
4:35 p.m., at 36-38.
976 For a more in depth discussion of the deficiencies in Mr. Cabrera’s damage estimate, see
Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at 149-164.
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establish a causal connection between alleged deaths and TexPet’s activities. Dr.
Rourke’s other errors include:
• Dr. Rourke relies on a flawed Hurtig and San Sebastían study, done in
conjunction with the Frente, for increased cancer risk but ignores other
relevant evidence, including a study based on information from the
Ecuador’s Instituto Nacional del Estadistica y Censos (Institute of Census
and Statistical Information (“INEC”)) that showed no excess cancer
mortality among populations living in the former concession area of the
Amazon region in Ecuador. 977
• Dr. Rourke’s actuarial methods are flawed. For example, Dr. Rourke
applies country-wide cancer mortality rates to the allegedly affected
population rather than cancer mortality rates for the Amazon region.
Studies have shown that national-level cancer mortality rates are
consistently higher than the rates observed in the Amazon region. 978 Thus,
Dr. Rourke’s use of country-wide data grossly exaggerates the number of
alleged “excess” cancer deaths in the Amazon region. 979
• Dr. Rourke makes several critical errors in his assumptions regarding
cancer latency. For example, Dr. Rourke began counting cancer events in
1967, the same year, according to Dr. Rourke, that commercially viable
reserves were found in the former concession area, and he continues
counting cancer events through 2080, up to seventy years after exposure
and ninety years after TexPet ceased operating the oilfields. 980
• Dr. Rourke’s assumption that exposure to petroleum will result in an
increase in all types of cancers is not biologically plausible. There is no
scientific evidence indicating that crude oil, acting as an environmental
agent, can cause all types of cancers. 981
977 KELSH, Michael, MORIMOTO, Libby & LAU, Edmund, Cancer mortality and oil production in
the Amazon Region of Ecuador, 1990-2005, attached as Annex 29 to Chevron’s Motion filed Apr. 30,
2010 at 5:45 p.m., at 15, 23, Record at 174923-48, 174937, 174945.
978 See KELSH, Michael, Response to Reports of Dr. Daniel Rourke and Dr. Carlos Picone, dated
Oct. 5, 2010, at 3, attached as Annex 6 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
979 See KELSH, Michael, Response to Reports of Dr. Daniel Rourke and Dr. Carlos Picone, dated
Oct. 5, 2010, at 3, attached as Annex 6 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
980 ROURKE, Daniel, Estimate of the Number and Costs of Excess Cancer Deaths Associated
with Residence in the Oil-producing Areas of the Sucumbios and Orellana Provinces of Ecuador, at 4, 19-
20, attached as Annex D to Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m.
981 KELSH, Michael, Response to Reports of Dr. Daniel Rourke and Dr. Carlos Picone, dated Oct.
5, 2010, at 7, attached as Annex 6 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
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• Dr. Rourke makes the unfounded assumption that exposure to toxic levels
of contaminants has occurred. In fact, however, there is no evidence that
such exposure has occurred. 982
Additionally, both the Cabrera Report and Dr. Rourke rely on the U.S.-based
concept of a “Value of a Statistical Life” (“VSL”) for a “unit” value per alleged excess
cancer death. 983 This VSL, however, is not an appropriate method with which to
measure damages resulting from alleged excess cancer deaths for a number of reasons.
First, a VSL estimate is typically used to gauge the potential benefits of proposed
environmental regulations in the United States and weigh the expected life savings
against the financial costs of the regulation. 984 It was not designed to be used in a U.S.
court to determine wrongful death damages. 985 Second, a U.S.-based VSL is a wholly
inappropriate measure for the case at hand and must be adjusted to apply to the
economic realities of Ecuador in general, and the Amazon region in particular. Because
VSL is ultimately used to measure the benefit of a risk-reducing investment, it stands to
reason that the VSL in the United States, which has a per capita GDP (2009) of
US$46,381, would be significantly higher than Ecuador, which has a per capita income
of US$4,059. 986 This, of course, is not to say that a life in the U.S. is inherently “worth”
more than in Ecuador: it is simply a measurement of the countries’ respective ability to
invest in risk-reducing projects. Accordingly, a more appropriate VSL for Ecuador,
although the concept is inapplicable in this case, would be about US$0.5 million. 987
982 See KELSH, Michael, Response to Reports of Dr. Daniel Rourke and Dr. Carlos Picone, dated
Oct. 5, 2010, at 7, attached as Annex 6 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
983 Expert Cabrera’s Global Report, filed on Apr. 1, 2008, at 8:30 a.m., Record at 139875-139881,
139875; ROURKE, Daniel, Estimate of the Number and Costs of Excess Cancer Deaths Associated with
Residence in the Oil-producing Areas of the Sucumbios and Orellana Provinces of Ecuador, attached as
Annex D to Plaintiffs’ Motion, filed Sept. 16, 2010, at 5:15 p.m., at 20-22.
984
LEAMER, Edward, Evaluation of Economic Analysis Contained in Summary Report of Expert
Examination and Answers to the Plaintiffs’ Questions About the Expert Report in the Case of Maria
Aguinda et al v. Chevron Corporation, No. 002-2003, at 40, attached as Annex 11 to Chevron’s Motion
filed Sep. 16, 2010 at 4:35 p.m.
985
See LEAMER, Edward, Evaluation of Economic Analysis Contained in Summary Report of
Expert Examination and Answers to the Plaintiffs’ Questions About the Expert Report in the Case of
Maria Aguinda et al v. Chevron Corporation, No. 002-2003, at 44-45, attached as Annex 11 to Chevron’s
Motion filed Sep. 16, 2010 at 4:35 p.m.
986 LEAMER, Edward, Evaluation of Economic Analysis Contained in Summary Report of Expert
Examination and Answers to the Plaintiffs’ Questions About the Expert Report in the Case of Maria
Aguinda et al v. Chevron Corporation, No. 002-2003, at 40-41, attached as Annex 11 to Chevron’s Motion
filed Sep. 16, 2010 at 4:35 p.m.
987
LEAMER, Edward, Evaluation of Economic Analysis Contained in Summary Report of Expert
Examination and Answers to the Plaintiffs’ Questions About the Expert Report in the Case of Maria
Aguinda et al v. Chevron Corporation, No. 002-2003, at 40-41, attached as Annex 11 to Chevron’s Motion
filed Sep. 16, 2010 at 4:35 p.m.
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Stratus, the paid consultants hired by plaintiffs to draft Mr. Cabrera’s report,
recognized many of these same issues with the use of VSL in the context of wrongful
death damages. Indeed, Stratus’s own economists argued that VSL was an
inappropriate measure of damage in wrongful death suits because it is a measure of
what society is willing to pay to reduce risk whereas courts only allow damages in the
form of specific losses suffered by a specific family as a result of death. 988 Stratus also
acknowledged that the US measure of VSL may be inapplicable to the residents of the
Oriente. 989
Dr. Rourke also cites U.S. wrongful death verdicts stemming from asbestosrelated
lung cancers and benzene-related leukemias. These awards from U.S. juries,
however, bear no relation to plaintiffs’ claims. Damage awards for survival claims in the
United States are highly individualized and dependent on the specific circumstances of
the decedent. Accordingly, one cannot, as Dr. Rourke has done, translate a “mean”
award in the United States to plaintiffs’ claims for alleged excess cancer deaths in
Ecuador.
In summary, there is no credible evidence of increased incidence of cancer in the
Amazon region of Ecuador, and there is no evidence of any causal connection between
the alleged increase and exposure to petroleum-related contaminants. Thus, both the
Cabrera Report’s and Dr. Rourke’s estimates of cancer-related damages are unreliable
and cannot be used to support a judgment in this matter.
Notably, in a related case against Chevron brought by plaintiffs’ former lead
lawyer, Mr. Bonifaz, similar allegations regarding cancer were proven fraudulent.
Mr. Bonifaz brought suit in the Northern District of California in 2006 on behalf of “nine
Oriente residents” who alleged they had developed cancer, or developed an increased
risk of cancer, as a result of TexPet’s former operations in Ecuador. 990 Like Mr. Cabrera
here, Mr. Bonifaz initially fought to avoid disclosure of the names of any of the alleged
cancer victims. 991 Unlike this Court, however, the U.S. district court ordered that the
alleged victims be identified. 992 During later interviews, several admitted that they had
988 E-mail from Douglas Beltman to Juan Pablo Sáenz, dated Feb. 08, 2008, at 2:27 p.m.
(STRATUS-NATIVE066693), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
989 See E-mail from Douglas Beltman to Juan Pablo Sáenz, dated Feb. 08, 2008, at 2:27 p.m.
(STRATUS-NATIVE066693), attached as Annex 10 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
990 Chevron's Supplementary Evidentiary Request for the Cononaco-6 Essential Error Petition at
1, filed July 30, 2010, at 5:49 p.m.; see Complaint, Doe v. Texaco, Inc., Texaco Petroleum Co., and
Chevron Corp., (N.D. Cal. Apr. 25, 2006), attached to Chevron’s Supplementary Evidentiary Request No.
1 for the Cononaco-6 Essential Error Petition, filed July 30, 2010, at 5:49 p.m.
991 Plaintiffs’ Ex Parte Motion to Commence and Proceed With Action Using Pseudonyms, Doe v.
Texaco, Inc., (N.D. Cal. Apr. 25, 2006), attached to Chevron’s Supplementary Evidentiary Request No. 2
for the Cononaco-6 Essential Error Petition, filed July 30, 2010, at 5:49 p.m.
992 Order, Gonzales v. Texaco, Inc. (N.D. Cal. Oct. 5, 2006), attached to Chevron’s
Supplementary Evidentiary Request No. 3 for the Cononaco-6 Essential Error Petition, filed July 30, 2010,
at 5:49 p.m.
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never been diagnosed with cancer, and some denied ever telling Mr. Bonifaz that they
had cancer. 993 The district court sanctioned Mr. Bonifaz US$45,000 for bringing the
fabricated claims, 994 noting that “[t]his is not the first evidence of possible misconduct by
plaintiffs’ counsel in this case.” 995 “It is clear to the Court that this case was
manufactured by plaintiffs’ counsel for reasons other than to seek a recovery on these
plaintiffs’ behalf. This litigation is likely a smaller piece of some larger scheme against
[Chevron].” 996
7.4.2 There Is No Credible Evidence That Chevron Is Liable for Damage to
Indigenous Territory and Culture
As my client demonstrated in its filings of September 16, 2010 at 4:35 p.m. and
October 29, 2010 at 5:20 p.m., plaintiffs’ request to obtain funding for projects to recover
indigenous territory and culture must fail, not only because it is extra petita, see supra
Chapter VI, but also because there is no scientific evidence demonstrating that TexPet’s
petroleum exploration and production activities in the former concession caused the
purported harm to indigenous communities. 997 The contrary conclusion can only be
993 Gonzales v. Texaco, Inc., No. C 06-02820 WHA, 2007 WL 2255217, at 2-5 (N.D. Cal. Aug. 3,
2007), attached as Annex 9 to Evidentiary Request No. 22.1 for the Sacha South Essential Error Petition,
filed May 3, 2010, at 10:20 a.m.
994 Rule 11 Sanction and Award of Attorney’s Fees and Expenses and Judgment Lien, Gonzales
v. Texaco, Inc., 2007 WL 3036093, at 25 (N.D. Cal. Oct. 16, 2007), attached as Annex 9 to Evidentiary
Request No. 22.2 for the Sacha South Essential Error Petition, filed May 3, 2010, at 10:20 a.m.
995 Gonzales v. Texaco, Inc., 2007 WL 2255217, at 6 (N.D. Cal. Aug. 3, 2007), attached as Annex
9 to Evidentiary Request No. 22.1 for the Sacha South Essential Error Petition, filed May 3, 2010, at
10:20 a.m.
996 Gonzales v. Texaco, Inc., 2007 WL 2255217, at 6 (N.D. Cal. Aug. 3, 2007), attached as Annex
9 to Evidentiary Request No. 22.1 for the Sacha South Essential Error Petition, filed May 3, 2010, at
10:20 a.m.
997 Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., at 174-81; see also WASSERSTROM,
Robert, Agricultural Settlement, Deforestation and Indigenous People in Ecuador, 1964-1994, attached as
Annex 7 to Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m.; Chevron’s Objections to Expert Cabrera’s
Global Report, filed on Sept. 15, 2008, at 2:14 p.m., Record at 141082-203, 141120, 141144-46. See
generally BJORKMAN, Bjorn, SOUTHGATE, Douglas and WASSERSTROM, Robert, Response to Mr.
Cabrera’s Declarations about Alleged Harm to Indigenous Communities in the Petroecuador-Texaco
Concession Area, attached as Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed
Sept. 15, 2008, at 2:14 p.m., Record at 146888-97; SOUTHGATE, Douglas and WASSERSTROM,
Robert, Response to Mr. Cabrera’s Claims about Deforestation and Alleged Violations of Indigenous
Territorial Rights in the Ecuadorian Amazon, attached as Appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146898-926; WASSERSTROM,
Robert, Response to Mr. Cabrera’s Errors Concerning Indigenous Populations in the Petroecuador-
Texaco Concession Area, attached as Appendix to Chevron’s Objections to Expert Cabrera’s Global
Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146927-949; BJORKMAN, Bjorn, Response to
Claims by Mr. Cabrera Concerning Alleged Harm to Traditional Food Production Systems and to Claims
About their Restoration, attached as Appendix to Chevron’s Objections to Expert Cabrera’s Global Report,
filed Sept. 15, 2008, at 2:14 p.m., Record at 146950-62; WASSERSTROM, Robert, Response to Mr.
Cabrera’s Claims about Alleged Harm to Indigenous Communities Regarding Their Cultural Traditions,
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eached by disregarding the data provided by historical, anthropological, economic, and
demographic research. 998 Such research demonstrates that the alleged loss of
indigenous culture and deforestation is a direct result of colonization and education
programs promoted by the Ecuadorian Government. 999 To the extent such impacts can
be attributed to the Consortium’s activities, those impacts were confined and negligible.
Plaintiffs’ request of US$481.5 million (which they claim could be increased by
more than US$200 million) in their filing of September 16, 2010 at 5:15 p.m. is similarly
unwarranted and unfounded. 1000 In support of their request, plaintiffs simply submit an
unsigned report, repackaging the Cabrera Report’s flawed recommendations to lay the
blame for alleged harm to indigenous communities at the feet of my client. Their efforts
demonstrate an appalling ignorance of both the history of Ecuador in general and of this
region in particular. 1001
My client has previously recounted this history in great detail, 1002 but for now, it
suffices to say that since the nineteenth century, Ecuador has adopted a policy of
occupying what it deemed to be “vacant lands,” and converting them into productive
agricultural regions to achieve “national integration.” 1003 The Government has made
(continued…)
attached as Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at
2:14 p.m., Record at 146963-84.
998 WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages
Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, § I.6, at 3, attached as Annex 9
to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
999 REIDER, Susan, Challenging the Standard Narrative: Myth-making accountability in
Ecuadorian Environmental and Indigenous Politics, attached as Annex 15 to Chevron’s Motion filed Sept.
16, 2010, at 4:35 p.m., at 2-3; SOUTHGATE, Douglas, National Interests, Multinational Actors and
Petroleum in the Ecuadorian Amazon, attached as Annex 16 to Chevron’s Motion filed Sept. 16, 2010, at
4:35 p.m, at 3-6; WASSERSTROM, Robert, Roads, Oil and Native People: A Controlled Comparison on
the Ecuadorian Frontier, attached as Annex 17 to Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., at
16-18. See generally WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural
Damages Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, attached as Annex 9
to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1000 See Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 14; see also Cultural Damages
Caused to Indigenous Communities of the Ecuadorian Amazon, attached as Annex G to Plaintiffs’ Motion,
filed Sept. 16, 2010 at 5:15 p.m., at 11.
1001 See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14
p.m., at 63-65, Record at 141,082-203, 141,144-46.
1002 See, e.g., WASSERSTROM, Robert, Agricultural Settlement, Deforestation and Indigenous
People in Ecuador, 1964-1994, attached as Annex 7 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m.
1003 BJORKMAN, Bjorn, SOUTHGATE, Douglas, and WASSERSTROM, Robert, Response to Mr.
Cabrera’s Declarations about Alleged Harm to Indigenous Communities in the Petroecuador-Texaco
Concession Area, included in Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed
Sept. 15, 2008, at 2:14 p.m., Record at 146888-991v, at 146893, 146900, 146903, 146928, 146966-67;
see also WASSERSTROM, Robert, Agricultural Settlement, Deforestation and Indigenous People in
Ecuador, 1964-1994, attached as Annex 7 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at 41-43;
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Amazonian colonization a “national task of urgent priority,” 1004 given free title to fifty
hectares of “unoccupied” land to settlers who cleared a portion of that land as proof of
“productive occupation,” 1005 and made road construction a major part of an overall
strategy to colonize the Amazon rainforest. 1006
Indeed, TexPet’s very presence in the Oriente was due to the sovereign choice
of the Ecuadorian State to exploit the hydrocarbons in that region. 1007 The Ecuadorian
Government has long used petroleum activities to further its colonization efforts. 1008
Accordingly, as a condition of the concession contract, the Ecuadorian Government
required TexPet to construct an infrastructure network, composed principally of
highways open to the public, aimed at improving access to the Oriente. 1009 These
projects included an airport in Lago Agrio, bridges, highways, and “twenty million
American dollars (US$ 20,000,000) in access roads” (unrelated to oil exploration). 1010
(continued…)
WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages Caused to
Indigenous Peoples by the Petroecuador-Texaco Consortium, § V, at 8-10, attached as Annex 9 to
Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1004 WASSERSTROM, Robert, Agricultural Settlement, Deforestation and Indigenous People in
Ecuador, 1964-1994 (citing Guillaume Fontaine, El precio del petróleo, Quito: FLACSO, IFEA y Ediciones
Abya-Yala, 2007, p. 275), attached as Annex 7 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at
13. The Government’s views are outlined in many documents from that period, including various National
Development Plans. Id. (citing IERAC, La regionalización; and Oswaldo Barsky et al., Políticas agrarias,
colonización y desarrollo rural en Ecuador, Quito: OEA, 1982).
1005
BJORKMAN, Bjorn, SOUTHGATE, Douglas, and WASSERSTROM, Robert, Response to Mr.
Cabrera’s Declarations about Alleged Harm to Indigenous Communities in the Petroecuador-Texaco
Concession Area, included in Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed
Sept. 15, 2008, at 2:14 p.m., Record at 146888-991v, 146893.
1006
BJORKMAN, Bjorn, SOUTHGATE, Douglas, and WASSERSTROM, Robert, Response to Mr.
Cabrera’s Declarations about Alleged Harm to Indigenous Communities in the Petroecuador-Texaco
Concession Area, included in Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed
Sept. 15, 2008, at 2:14 p.m., Record at 146888-991v, 146893, 146.900.
1007 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., at
64, Record at 141082-203, at 141145.
1008 WASSERSTROM, Robert, Agricultural Settlement, Deforestation and Indigenous People in
Ecuador, 1964-1994, attached as Annex 7 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at 11.
1009 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., at
85-86, Record at 141082-203, 141166-67; see Official Transcript of Deposition of Robert M. Bischoff at
192:18-193:1, dated Aug. 17, 1995, attached as Annex 37 to Chevron’s Motion, filed Sept. 16, 2010, at
4:35 p.m.; WASSERSTROM, Robert, Agricultural Settlement, Deforestation and Indigenous People in
Ecuador, 1964-1994, attached as Annex 7 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at 12;
see also WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages
Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, § V.33, at 10, attached as
Annex 9 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1010
1973 Concession Contract dated Aug. 6, 1973, filed on Apr. 27, 2004, at 2:30 p.m., Record at
7089-7136, 7121v; SOUTHGATE, Douglas and WASSERSTROM, Robert, Response to Mr. Cabrera’s
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As the Government had intended, colonists used those roads to migrate to the
Oriente in large numbers. 1011 In total, between 1964 and 1992, the Government
disregarded any claims the indigenous communities had to the Oriente and increased
land grants to colonists in the region from approximately fifty-five thousand hectares to
well over a million hectares. 1012 Meanwhile, the population in the Oriente grew by a
factor of six. 1013 The result of the Government’s colonization policies was deforestation.
Satellite imagery confirms that the Consortium cleared about one percent of the former
concession area to build roads and install infrastructure, while by 2000, the colonization
activities directed, approved, or promoted by the Ecuadorian Government resulted in
54.4 percent of the former concession area being deforested. 1014
In addition to impacting indigenous populations through its colonization efforts,
the Ecuadorian Government has previously focused its educational policy on
“integrating” and “assimilating” these communities. 1015 The Government’s decisions to
make Spanish the primary language for the education of all children, to require all
(continued…)
Claims about Deforestation and Alleged Violations of Indigenous Territorial Rights in the Ecuadorian
Amazon, attached as Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15,
2008, at 2:14 p.m., at 10, Record at 146898-926, 146907; see also WASSERSTROM, Robert, Disputing
the Statements Made on Alleged Cultural Damages Caused to Indigenous Peoples by the Petroecuador-
Texaco Consortium, § V.31, at 9, attached as Annex 9 to Chevron’s Motion filed Oct. 29, 2010 at 5:20
p.m.
1011
WASSERSTROM, Robert, Agricultural Settlement, Deforestation and Indigenous People in
Ecuador, 1964-1994, attached as Annex 7 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at 3-4,
15; BJORKMAN, Bjorn, SOUTHGATE, Douglas, and WASSERSTROM, Robert, Response to Mr.
Cabrera’s Declarations about Alleged Harm to Indigenous Communities in the Petroecuador-Texaco
Concession Area, included in Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed
Sept. 15, 2008, at 2:14 p.m., Record at 146,888-991v, 146,907-08, 146,914; Chevron’s Motion filed Sept.
16, 2010 at 4:35 p.m., at 178-179.
1012 WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages
Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, § V.32, at 9, attached as Annex
9 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1013
Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at 179; WASSERSTROM, Robert,
Disputing the Statements Made on Alleged Cultural Damages Caused to Indigenous Peoples by the
Petroecuador-Texaco Consortium, § V.32, at 9, attached as Annex 9 to Chevron’s motion filed [ ] at [ ].
1014
BJORKMAN, Bjorn, SOUTHGATE, Douglas, and WASSERSTROM, Robert, Response to Mr.
Cabrera’s Declarations about Alleged Harm to Indigenous Communities in the Petroecuador-Texaco
Concession Area, included in Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed
Sept. 15, 2008, at 2:14 p.m., Record at 146888-991v, 146892-93. Moreover, in another case, Mr. Cabrera
has opined that similar damages to the northern portion of the former Consortium area were actually due
to spraying of pesticides in nearby Colombia due to drug interdiction activities. See Expert Report of Mr.
Cabrera and Others in Arias, et al. v. DynCorp., No. 1:07-cv-01042-RWR-DAR (D.C. Cir.), dated January
2008, attached as Annex 15 to Chevron’s Motion filed on May 21, 2010 at 4:35 p.m.
1015 WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages
Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, § IV.19, at 6, attached as
Annex 9 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
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Ecuadorians to speak the same language, and, perhaps most significantly, to permit
foreign missionaries to provide education and healthcare in the Oriente have greatly
affected the traditional cultures of indigenous communities. 1016 The “forced
acculturation” of which plaintiffs speak resulted from these polices, not TexPet’s limited
interaction with the indigenous communities. 1017
Thus, any change to the culture of indigenous communities is the direct result of
official policies of the Ecuadorian State—policies which my client had no role in
formulating. Moreover, cultural change is not uncommon among indigenous groups in
the Amazon, who have long been influenced by interaction with their neighbors and the
outside world. 1018 In spite of these changes, indigenous populations are growing, not
disappearing. 1019 Indigenous populations in the former concession area have increased
since the mid-twentieth century, and are growing at approximately the same rate as
Ecuador’s overall population. 1020
Even if Your Honor were to ignore the evidence detailed above and hold my
client responsible for the actions of the Ecuadorian Government, plaintiffs’ damages
requests, like those of their conduit Mr. Cabrera, are wildly exorbitant and wholly
unsubstantiated. In fact, plaintiffs’ requests suffer the same flaws as the Cabrera
Report, which my client has previously refuted in detail, and are duplicative of other
1016 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., at
87, Record at 141082-203, 141168. See BJORKMAN, Bjorn, SOUTHGATE, Douglas, and
WASSERSTROM, Robert, Response to Mr. Cabrera’s Declarations about Alleged Harm to Indigenous
Communities in the Petroecuador-Texaco Concession Area, submitted as Appendix to Chevron’s
Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146888-991v,
146896-97; WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages
Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, § IV, at 6-8, attached as Annex
9 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1017 WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages
Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, § VII, at 12, attached as Annex
9 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1018
WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages
Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, § III, at 4-6, attached as Annex
9 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1019
WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages
Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, § VI, at 10-11, attached as
Annex 9 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1020 See WASSERSTROM, Robert, Response to Mr. Cabrera’s Errors Concerning Indigenous
Populations in the Petroecuador-Texaco Concession Area, attached as Appendix to Chevron’s
Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146927-49;
WASSERSTROM, Robert, Agricultural Settlement, Deforestation and Indigenous People in Ecuador,
1964-1994, attached as Annex 7 to Chevron’s Motion filed Sept. 16, 2010 at 4:35 p.m., at 28-39;
WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages Caused to
Indigenous Peoples by the Petroecuador-Texaco Consortium, § VI, at 10-11, attached as Annex 9 to
Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
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equests for damages. 1021 For example, plaintiffs propose the award of hundreds of
millions of dollars for “territorial recovery,” ignoring the fact that TexPet never owned
any of the land in the former concession, and that the land to be “recovered” is the
property of colonists, deeded to them by the Ecuadorian Government. 1022 Plaintiffs
similarly request damages for a “restoration of food resources” program which, like the
plan proposed in the Cabrera Report, is unworkable and contains seriously exaggerated
costs. 1023
In the end, this request is yet another example of plaintiffs seeking excessive
damages for claims they failed to include in their complaint. This request is particularly
egregious because the evidence demonstrates that any loss of indigenous culture and
deforestation is a consequence of the Ecuadorian Government’s actions. Because
TexPet’s activities in the former concession were completely lawful and in fact
authorized by the Ecuadorian State, the claim that Chevron should pay damages for
loss of indigenous culture is ludicrous and unsustainable.
7.4.3 There Is No Credible Evidence of Natural Resource Damages
Any claim for damage to natural resources would likewise be extra petita. See
supra Chapter VI. Moreover, such a claim must fail because the only calculation in the
record, the Cabrera Report’s recommendation of US$1.697 billion in damages, 1024 is
fundamentally flawed and grossly inflated. 1025 While plaintiffs also submit the report of
Lawrence Barnthouse to support the existence and valuation of alleged natural resource
1021 See WASSERSTROM, Robert, Disputing the Statements Made on Alleged Cultural Damages
Caused to Indigenous Peoples by the Petroecuador-Texaco Consortium, at 2-3, attached as Annex 9 to
Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1022 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., at
87, Record at 141082-203, 141167.
1023 See BJORKMAN, Bjorn, Response to Claims by Mr. Cabrera Concerning Alleged Harm to
Traditional Food Production Systems and to Claims About Their Restoration, attached as Appendix to
Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at
146950-62, 146958-962; Expert Cabrera’s Global Report, filed Apr. 1, 2008, at 8:30 a.m., Record at
134228-89, 134234.
1024 Mr. Cabrera conducted two alternative analyses of damages resulting from alleged loss of
ecosystem. For the first, which was based on restoration costs of the affected acreage, Mr. Cabrera
estimated damages of US$0.875 billion. Alternatively, he estimated US$1.697 billion as a result of his
analyses based on lost ecological services of the rainforest. Both analyses are flawed, as discussed
more fully in Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.d, at 165-174, and, specifically,
LEAMER, Edward, Evaluation of Economic Analysis Contained in Summary Report of Expert
Examination and Answers to the Plaintiffs’ Questions About the Expert Report in the Case of Maria
Aguinda et al. v. Chevron Corporation, attached as Annex 11 to Chevron’s Motion filed Sept. 16, 2010, at
4:35 p.m., at 14-29.
1025 TOMASI, Theodore, Rebuttal to the Calculation of Supposed Economic Damages Due to
Ecosystem Losses by Mr. Richard Cabrera Vega, attached as Appendix to Chevron’s Objections to
Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146650-146728, 146664-
146665; see also discussion of plaintiffs’ claimed damages for loss of ecosystem in Chevron’s Motion
filed Sept. 16, 2010 at 4:35 p.m., § II.B.4.d., at 165, including but not limited to all references cited therein.
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damage, Dr. Barnthouse simply regurgitates the Cabrera Report’s initial, flawed
analysis and, therefore, fails for many of the same reasons. 1026 As has recently been
revealed, Mr. Cabrera did not even write his own initial analysis; rather, the portions of
the Cabrera Report dealing with harm to the ecosystem were covertly drafted by,
among other people, Lorena Gamboa of an activist group supporting plaintiffs and
Stratus, and thus obviously lack any credibility. 1027 Dr. Barnthouse’s analysis must also
be disregarded because it contradicts his own prior opinions and conclusions.
As discussed in Chevron’s submission of December 21, 2010 at 11:00 a.m., the
most basic flaw in both the Cabrera Report and Dr. Barnthouse’s report is that they do
not identify the allegedly contaminated area as that which requires restoration.
However, these reports include myriad other fundamental errors:
• Neither the Cabrera Report nor Dr. Barnthouse’s analysis identifies any
ecological services lost as a result of TexPet’s activities. This, standing
alone, renders both of their respective “analyses” worthless because they
are valuing something they have not identified. 1028 And although neither
the Cabrera Report nor Dr. Barnthouse identifies any services lost as a
result of TexPet’s activities, they nevertheless attempt to calculate the
purported decrease of these phantom services—and do so over a greatly
exaggerated area that bears no relation to the area allegedly affected by
the former Consortium’s operations. 1029
• By adopting and affirming the Cabrera Report’s conclusions, Dr.
Barnthouse contradicts his own positions on the appropriate
methodologies for assessing and valuing lost ecological services. In his
report, Dr. Barnthouse simply equates exceedances of some
environmental screening levels with service losses. But Dr. Barnthouse
has previously stated that “elevated chemical concentrations are not, by
themselves, reliable indicators of adverse natural resource effects” and
has concluded that “one cannot categorically presume that elevated levels
1026 See generally, BARNTHOUSE, Lawrence, Evaluation of Natural Resource Service Losses
Related to Oil Field Development in the Concession, attached as Annex E to Plaintiffs’ Motion filed Sept.
16, 2010 at 5:15 p.m.
1027 E-mail from Douglas Beltman to Steven Donziger, dated March 11, 2008, at 2:22 p.m.
(attaching outline of report) (STRATUS-NATIVE067410, 067413, 067417), attached as Annex 10 to
Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1028 See discussion of plaintiffs’ claimed damages for loss of ecosystem in Chevron’s Motion filed
Sept. 16, 2010 at 4:35 p.m., § II.B.4.d.i., at 166, including but not limited to all references cited therein.
1029 See discussion of plaintiffs’ claimed damages for loss of ecosystem in Chevron’s Motion filed
Sep. 16, 2010 at 4:35 p.m., § II.B.4.d.ii-iii, at 170-172, including but not limited to all references cited
therein.
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of a particular hazardous substance equate to injuries or service
losses.” 1030 Yet that is precisely what Dr. Barnthouse does in his report.
• Dr. Barnthouse inexplicably identifies the area lost to roads and other
essential functions of petroleum operations (e.g., stations, well pads, pits,
etc.) for which he contends that compensation should be granted.
However, as Dr. Barnthouse himself recognizes, natural resource
damages are only compensable for unpermitted activities. 1031 TexPet’s
construction of roads and other essential facilities was authorized and
mandated by the concession agreement. The Government of Ecuador
specifically required TexPet to build roads into the former concession area
and sanctioned the building of operational facilities as a necessary
consequence of petroleum exploration and production activities. 1032
• Those roads and essential facilities should have been included in Dr.
Barnthouse’s analysis of “baseline” conditions and, therefore, excluded
from the damages assessment. 1033 The determination of baseline
conditions is a critical component of assessing natural resource damages
because it establishes a standard against which current conditions are
measured.
• Not only does Dr. Barnthouse assume service losses from both legal
construction activities and as a result of alleged exceedances of some
environmental screening levels, but he also assumes the alleged
exceedances and attributes those alleged exceedances to TexPet alone.
Dr. Barnthouse completely ignores both TexPet’s remediation efforts in
the mid-1990s as well as the fact that Petroecuador has been the sole
operator of oil production facilities in the former concession area since
1030 DESVOUSGES, William, Critique of Dr. Barnthouse’s Report: Estimation of Natural Resource
Losses Related to Oil Field Development in the Concession, at 6, attached as Annex 5 to Chevron’s
Motion filed Oct. 29, 2010 at 5:20 p.m., (citing Barnthouse and Stahl 2002).
1031 DESVOUSGES, William, Critique of Dr. Barnthouse’s Report: Estimation of Natural Resource
Losses Related to Oil Field Development in the Concession, at 5, attached as Annex 5 to Chevron’s
Motion filed Oct. 29, 2010 at 5:20 p.m.
1032 See TOMASI, Theodore D., Rebuttal to “Evaluation of Natural Resource Service Losses
Related to Oil Field Development in the Concession” by Dr. Lawrence W. Barnthouse, at 3, 7, attached as
Annex 8 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1033 See DESVOUSGES, William, Critique of Dr. Barnthouse’s Report: Estimation of Natural
Resource Losses Related to Oil Field Development in the Concession, at 9, attached as Annex 5 to
Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m., (citing Leamer 2010); TOMASI, Theodore D., Rebuttal
to “Evaluation of Natural Resource Service Losses Related to Oil Field Development in the Concession”
by Dr. Lawrence W. Barnthouse, at 7, attached as Annex 8 to Chevron’s Motion filed Oct. 29, 2010 at
5:20 p.m.
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1992, during which time it has amassed a notoriously poor safety
record. 1034
• Dr. Barnthouse adopts the Cabrera Report’s proposed cost per hectare for
rainforest restoration, US$29,180.00 per hectare, without considering that
this is thirteen and a half times higher than the Ecuadorian Forestry Law,
which provides a range of restoration costs from US$2,101.29 per hectare
to US$2,160.43 per hectare, depending on whether the forests to be
restored are “native” or “secondary native.” 1035
In summary, both the Cabrera Report and Dr. Barnthouse’s analysis are
fundamentally and irreparably flawed and cannot form the basis of a judgment against
Chevron.
7.4.4 There Is No Credible Evidence That Would Require Chevron to Pay for
Improvements to Petroecuador’s Petroleum Operations Infrastructure
The Cabrera Report recommended an estimated US$375 million in damages for
improvements to Petroecuador’s petroleum operations infrastructure. 1036 While plaintiffs
apparently abandon this claim in their September 16, 2010 filing, at 5:15 p.m., this
request, in addition to being extra petita, see supra Chapter VI, is patently absurd.
To start, Petroecuador has been the sole operator of the former concession area
since 1990. Well before that time (since 1976), the Ecuadorian Government (first through
CEPE and then through Petroecuador) was the majority owner of the rights and shares in
the Consortium, determined how the Consortium was operated, and had a decisive
influence in the Consortium’s administration. Since 1992, Petroecuador has been the
exclusive owner of the oilfield equipment. 1037 Additionally, in the 1995 Remediation
1034 DESVOUSGES, William, Critique of Dr. Barnthouse’s Report: Estimation of Natural Resource
Losses Related to Oil Field Development in the Concession, at 5, attached as Annex 5 to Chevron’s
Motion filed Oct. 29, 2010 at 5:20 p.m.
1035 DESVOUSGES, William, Critique of Dr. Barnthouse’s Report: Estimation of Natural Resource
Losses Related to Oil Field Development in the Concession, at 13, attached as Annex 5 to Chevron’s
Motion filed Oct. 29, 2010 at 5:20 p.m.
1036 Expert Cabrera’s Global Report, filed Apr. 1, 2008, at 8:30 a.m., Record at 134228-89,
134280.
1037 TexPet’s sole contractual obligation regarding the transfer of its equipment and facilities was to
deliver them “in good condition” at the termination of the concession—there was no guarantee regarding
Petroecuador’s future use. See 1973 Concession Contract, Clause 51.1, filed Apr. 27, 2004 at 2:30 p.m.,
Record at 7089-7177, 7175. This is consistent with what it is stated in Art. 29 of the Hydrocarbons Law:
“At the end of an exploration and exploitation contract . . . the contractor must deliver to PETROECUADOR,
with no cost and in good condition of production, the wells that in that moment are in activity; and, in good
conditions, all the equipments, tools, machines, installations and other goods and real state that were
acquired for the scope of the contract.” TexPet met this obligation at the termination of the concession, and
the responsibility to maintain the equipment shifted to Petroecuador. Moreover, to the extent that the
plaintiffs base their claim in the concession contracts, they do not have standing to claim breach of a
contract to which they were not a party.
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Agreement, Scope of Work, and RAP, the Ecuadorian Government and Petroecuador
acknowledged that TexPet was responsible for only its pro rata share of the
environmental liability (37.5 percent). As part of the settlement agreement signed with the
State and Petroecuador, TexPet already paid for equipment upgrades allocated to TexPet
as part of its responsibilities for the Consortium’s liabilities. It defies common sense,
therefore, to assert that someone other than the party that has been responsible for
maintaining, upgrading and replacing the oilfield equipment as necessary, and that has
received all related earnings and economic benefits (i.e., Petroecuador), should be wholly
responsible for the maintenance, upgrade, and expansion of the equipment it owns. 1038 It
makes even less sense to award such damages to plaintiffs in a case to which
Petroecuador is not even a party.
Furthermore, the costs presented in the Cabrera Report—(i) US$124 million for
improvements to produced water injection systems and (ii) US$251 million for the
capture of forty million cubic feet per day of natural gas at wellsites—are erroneous and
inconsistent with the actual costs associated with development of this oilfield. First, the
Cabrera proposal that Chevron pay US$124 million for improvements to produced water
injection systems ignores the fact that the increased use of such equipment, and the
additional costs associated with its use, are related exclusively to Petroecuador’s
operation since 1992 and not to the historical operations of TexPet. 1039 Second, the
Cabrera Report ignores the fact that Petroecuador already has the infrastructure to
inject all of its produced water. 1040 Third, the Cabrera cost estimate presented to
upgrade the existing produced water reinjection system is erroneous and exaggerates
the costs of the existing injection systems by a factor of at least three, in part because
he includes costs for equipment outside the former concession area. 1041 Fourth, the
Cabrera proposal that Chevron pay US$251 million for the capture of forty million cubic
1038 Today, many former Consortium facilities “are showing age-related damage” and “have
exceeded the useful life guaranteed by the manufacturers….” Report of Expert Gerardo P. Barros, at 17,
filed Dec. 21, 2009, at 2:50 p.m., Record at 159913-164360, 159929-30. Petroecuador’s top executives
have confirmed that after 1992, the Government assumed control of the state oil company’s budget and
failed to allocate sufficient funds to maintain oil infrastructure. Petroecuador is Experiencing Its Second
Crisis, Hoy, Feb. 6, 2007, submitted as Annex 7 to Attachment I of Appendix A, to Chevron’s Rebuttal to
the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at 164795-96, 164796 (presenting
statements by former vice presidents of Petroecuador and Petroproducción).
1039
CONNOR, John & HUTTON, William, Response to the Proposal of Mr. Cabrera Regarding
Improvement of the Infrastructure in the Former Petroecuador-TexPet Concession, attached as Appendix
to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at
146726-146887, 146733.
1040 See CONNOR, John & HUTTON, William, Response to the Proposal of Mr. Cabrera
Regarding Improvement of the Infrastructure in the Former Petroecuador-TexPet Concession, attached
as Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m.,
Record at 146726-146887, 146735.
1041
CONNOR, John & HUTTON, William, Response to the Proposal of Mr. Cabrera Regarding
Improvement of the Infrastructure in the Former Petroecuador-TexPet Concession, attached as Appendix
to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at
146726-146887, 146733-34.
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feet per day of natural gas is absurd, because it proposes to capture a volume of gas
that official records confirm does not exist, and because it presents no economic
analysis to demonstrate the profitability of capturing quantities of gas other than at the
Shushufindi field, where gas-capture plants currently exist. 1042 Fifth, the Cabrera Report
also fails to consider that Petroecuador is obligated to and fully capable of updating and
improving its own equipment, and that any claim for its failure to have done so must be
directed to Petroecuador
There simply is no basis in fact or law for any damage recommendation on this
basis, and this Court should not order Chevron to pay for petroleum infrastructure
improvements that are rightfully the responsibility of Petroecuador and the Ecuadorian
Government.
7.4.5 There Is No Credible Evidence That Would Require Chevron to Fund a New
Potable Water System
Secretly acting on behalf of plaintiffs, Mr. Cabrera also recommended that
Chevron be forced to pay US$428 million for a new potable water system in the Oriente.
In his report in support of plaintiffs’ September 16, 2010 submission at 5:15 p.m., Paolo
Scardina increased this estimate to US$541.5 million. Neither recommendation has any
basis in fact, logic, science, or law. As detailed in Chevron’s filings of September 16,
2010 at 4:35 p.m. and October 29, 2010 at 5:20 p.m., the results of over 7,000 analyses
from 253 drinking water sampling events in the Oriente region show no indication of
public health concerns related to drinking water as a result of petroleum exploration and
production activities in the former concession area, and Chevron should not be forced to
pay for improvements that are solely the Government of Ecuador’s responsibility to
undertake.
Because there are no impacts to water resources as a result of TexPet’s
operations in the former concession area, there is obviously no need for Chevron to
finance a new potable water system in the Oriente. The only drinking water samples in
the record (almost all collected by Chevron’s nominated experts) did not show any
adverse impacts associated with petroleum operations.
The drinking water findings in the record include 2,759 analytical results for the
thirteen petroleum-related compounds for which the U.S. EPA has assigned Maximum
Contaminant Levels (“MCLs”), i.e., compounds that pose a possible public health threat.
Of these 2,759 results, only one sample concentration was greater than its MCL
(containing 0.010 mg/L lead, exceeding the MCL of 0.03 mg/L). Among the 4,865
analyses performed for compounds with secondary standards and compounds for which
no public health standards exist, only five exceedances of applicable criteria were
1042 CONNOR, John & HUTTON, William, Response to the Proposal of Mr. Cabrera Regarding
Improvement of the Infrastructure in the Former Petroecuador-TexPet Concession, attached as Appendix
to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at
146726-146887, 146734.
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detected. However, none of these compounds pose a public health risk. Consequently,
there is no evidence of human health impacts associated with petroleum in drinking
water in the former concession area.
In arriving at his recommendation on a potable water system, Mr. Cabrera failed
to collect a single drinking water sample. By contrast, Chevron’s nominated experts
sampled household wells at twenty-eight sites, and concluded, based on scientific data,
that all of them were free of impacts from petroleum operations. The few water samples
Mr. Cabrera did collect were from boreholes dug in oilfield pits, and are therefore not
representative of the conditions of water that would be used for drinking in the vicinity of
those sites. Even so, none of those samples contains contaminants above even the
most stringent drinking standards set by the U.S. EPA and the WHO.
In his September 2010 report, Dr. Scardina relies on the same invalid arguments
asserted in the Cabrera Report and asserts only one new theory, which is equally as
assailable. Specifically, Dr. Scardina suggests that past activities may cause future
contamination, meaning that chemical-specific concentrations may occur at levels that
would pose a public health threat in drinking water. However, as explained in Dr.
William D. Bellamy’s September 27, 2010 report, submitted by Chevron, there are no
data indicating that this is likely to occur.
Future contamination of a drinking water source from petroleum activities cannot
occur without the transport of the contaminant from the source area to the drinking
water supply. 1043 As reported by Dr. Bellamy, transport of sufficient concentrations of
health related contaminants from oil-impacted soils or pits was unlikely to result in
concentrations that exceed health-based drinking water goals. This conclusion was
supported by the analysis of weathering effects on petroleum-related chemical fate and
transport. 1044
Additionally, Dr. Kirk O’Reilly and Dr. Waverly Thorsen studied the weathering
effect on Ecuadorian crude oil in soil to determine the possible impact on drinking water
supplies in the former concession area. 1045 The weathering index and concentration
1043 BELLAMY, William D., Relationship Between Petroleum Activities and the Need for Drinking
Water Treatment in the Oriente Region of Ecuador, at 2-3, attached as Annex 3 to Chevron’s Motion filed
Oct. 29, 2010 at 5:20 p.m.
1044 BELLAMY, William D., Relationship Between Petroleum Activities and the Need for Drinking
Water Treatment in the Oriente Region of Ecuador, at 3, attached as Annex 3 to Chevron’s Motion filed
Oct. 29, 2010 at 5:20 p.m.
1045 As Dr. Bellamy reports, the public health risk associated with crude oil contamination of
drinking water is limited to a few specific compounds. The potential for contamination of drinking water
from one of these compounds is determined by the effective solubility of the compound, and the oil-phase
concentration ratio of the compound, which is measured as milligrams of compound per kilogram of oil. A
change in the oil-phase concentration ratio can result from weathering of the crude oil and its constituents
in the contaminant source area. Common modes of weathering include volatilization, biodegradation, and
dissolution. BELLAMY, William D., Relationship Between Petroleum Activities and the Need for Drinking
Water Treatment in the Oriente Region of Ecuador, at 3-4, attached as Annex 3 to Chevron’s Motion filed
Oct. 29, 2010 at 5:20 p.m.
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factor was determined for 107 soil samples containing crude oil. This evaluation found
that the effective solubilities of the compounds in crude oil samples, with the exception
of benzene and toluene, were below those which would pose a public health issue in
drinking water. Weathering was shown to reduce the risk of exposure to benzene and
toluene, because as reported by O’Reilly and Thorsen, “these compounds were
significantly or completely depleted in all of the soil samples.” In fact, approximately
ninety-nine percent of the soil samples had calculated effective solubilities for benzene
that did not exceed health-based goals, and all of these were collected at production
stations (none were collected from wellsites). Overall, O’Reilly and Thorsen concluded:
“These results indicate that because of rapid weathering of the more soluble aromatics
and the low effective solubility of larger PAHs, Ecuadorian crude oil impacted soil is
unlikely to result in dissolved concentrations that exceed health-based drinking water
goals.” 1046
In contrast to any alleged “findings” that the plaintiffs may have in this case, the
evidence indicates that there is no need to treat drinking water to remove petroleum
compounds. However, there is a demonstrated need for water treatment due to fecal
contamination and the inferred risk from human pathogens, which is not the result of
petroleum activities in the area. For example, eighty-nine percent of the water samples
from the area were positive for E. coli. 1047 And in his December 2010 deposition, Mr.
Beltman admitted that while “the quality of the water available to the people in the
region for drinking and bathing is very poor . . . much of the problem is caused by poor
sanitation.” 1048
Simply put, the Government of Ecuador, not Chevron, is responsible for
maintaining and updating the nation’s potable water systems. In fact, the government is
involved in such efforts. 1049 Since 2001, over US$20 million has been expended in
providing clean drinking water to the Ecuadorian populace, but tellingly, none of the
water treatment systems being installed are designed to remove petroleum
contamination in the former concession area—because there has been no such
1046 BELLAMY, William D., Relationship Between Petroleum Activities and the Need for Drinking
Water Treatment in the Oriente Region of Ecuador, at 4, attached as Annex 3 to Chevron’s Motion filed
Oct. 29, 2010 at 5:20 p.m., (citing O’Reilly & Thorsen (2010)).
1047 BELLAMY, William D., Relationship Between Petroleum Activities and the Need for Drinking
Water Treatment in the Oriente Region of Ecuador, at 4, attached as Annex 3 to Chevron’s Motion filed
Oct. 29, 2010 at 5:20 p.m.
1048 Official transcript of deposition of Douglas John Beltman, dated December 16, 2010, at
130:12-13; 142:5-13, attached as Annex 7 to Chevron Motion, filed Dec. 22, 2010 at 5:45 p.m.
1049 BELLAMY, William D., Relationship Between Petroleum Activities and the Need for Drinking
Water Treatment in the Oriente Region of Ecuador, at 5-6, attached as Annex 3 to Chevron’s Motion filed
Oct. 29, 2010 at 5:20 p.m.
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contamination. 1050 This Court should not require Chevron to pay any damages for the
installation of potable water systems in the Oriente.
7.4.6 Any Request for Punitive Damages Based on an Unjust Enrichment Theory
Is Baseless
Plaintiffs, in their submission of September 16, 2010, at 5:15 p.m., and through
Mr. Cabrera, request a multi-billion-dollar award of punitive damages for what they call
“unjust enrichment.” 1051 The Cabrera Report recommends damages of US$8.42
billion 1052 on this basis, and the plaintiffs increase this figure in their filing of September
16, 2010 at 5:15 p.m. to as much as US$37.86 billion. 1053 In addition to being extra
petita, see supra Chapter VI, this request runs directly contrary to settled Ecuadorian
law and stems entirely from inapposite foreign law. Therefore, it must be rejected.
Pursuant to the Ecuadorian Civil Code, actions for torts give rise only to
compensatory damages to make the plaintiff whole. Article 1572 of the Civil Code
specifically limits tort damages to the plaintiffs’ direct consequential damages and lost
profit:
Art. 1572.- [Compensation for damages].– Damages include
consequential damages and lost profit, regardless of
whether they result from failure to comply with the obligation,
or improper performance of the obligation or delay in the
performance.
The Ecuadorian Supreme Court (now the National Court) recently confirmed that
punitive damages are not authorized under Ecuadorian law:
Remember that our legal system has accepted a system of
redress through compensation or damages—understood as
that sufficient to remedy the damage and to allow the injured
party to return to the previous state he was in before
suffering the harm—and not a punitive one, typical of legal
systems such as common law, in which, as appropriate, the
courts not only accept the claim for damages, but also and
very often condemn those who have caused the harm to a
1050 BELLAMY, William D., Relationship Between Petroleum Activities and the Need for Drinking
Water Treatment in the Oriente Region of Ecuador, at 6, attached as Annex 3 to Chevron’s Motion filed
Oct. 29, 2010 at 5:20 p.m.
1051 Cabrera Global Report, filed on Apr. 1, 2008 at 8:30 a.m., § 7.3, at 55-56, Record at 134228-
289, 134284-85; Plaintiffs’ Motion filed Sept. 16, 2010 at 5:15 p.m., § 1.3, at 16-18.
1052
Expert Cabrera Response to Plaintiffs’ Questions regarding Global Report, filed Nov. 17,
2008, at 8:25 a.m., Record at 152949-153000, 152978.
1053 Plaintiffs’ Motion filed Sept. 16, 2010 at 5:15 p.m., at 17.
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emedy as punishment to prevent the future occurrence of
similar behaviors or omissions. 1054
Even Mr. Donziger privately admitted that “[p]unitive [damages] [have] no basis
in Ecuadorian law,” adding that “we could push it and seek it anyway.” 1055 In addition,
Ecuadorian civil courts are barred from imposing penalties. In general, penalties can
only be imposed in criminal proceedings that respect the constitutional guarantee of
nullum crimen, nulla poena sine lege [there is no crime and no penalty without a law]
and the presumption of innocence, among others. Under article 132 No. 2 of the 2008
Ecuadorian Constitution, furthermore a penalty can only be established by law, and it
must precisely define the action that will be punished. Thus, the imposition by a civil
court of punitive damages without any law in force directly allowing it to do so would
violate the Ecuadorian Constitution. 1056
Ecuador’s antipathy towards punitive damages is shared in other Civil Law
countries. In Mexico, “neither the American precedent of evolving case law for moral
damages nor punitive damages exists.” 1057 The Civil Codes of Peru 1058 and Chile 1059
clearly provide that plaintiffs are entitled to only direct consequential damages and lost
profits. 1060 For these and other Civil Law countries, punitive damages contravene the
longstanding tenet that a plaintiff should be compensated but not unduly enriched. This
reflects the view that it is unjust to award greater damages than the damage itself. 1061
As the Colombian Constitutional Court explained, “compensation for damage should be
directly commensurate with the magnitude of damage caused, but can not exceed that
limit.” “[I]f the damage is compensated above that actually caused, there is an unjust
1054 Asociación de Negros del Ecuador (ASONE) y otro vs. Petroecuador y sus filiales, Judgment
of the Supreme Court of Justice, First Civil and Commercial Division, March 30, 2006, Case 120-06,
published in Official Gazette 381, Oct. 20, 2006.
1055 E-mail from Steven Donziger to Josh Lipton, dated Apr. 22, 2007, at 2, attached as Annex 1
to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20, 2010 at 4:30 p.m.
(DONZ00038322).
1056
ÁLVAREZ, Agustín, Rethinking the Incorporation of Punitive Damages,
http://www.acaderc.org.ar/doctrina/articulos/repensando-la-incorporacion-de-los-danos-punitivos, at 2
(citing PICASSO, Sebastián, New Categories of Damages in Consumer Defense Law, Sup. Esp. Reform
of Consumer Defense Law. Ed. La Ley, Buenos Aires, 2008 and also Regarding So-called Punitive
Damages, LL 2007-F-1154).
1057 Mexico Falls Behind, El Norte - Monterrey, November 2004, http://vlex.com/vid/78611048.
1058 Article 1985 of the Civil Code of Peru.
1059 See Articles 1556 and 2314 of the Civil Code of Chile.
1060 The modern doctrine in Civil Law countries, including Ecuador, also provides compensation
for moral damages, but such damages are limited to the injury caused and they have not been requested
in this case.
1061 PICAZO-DÍEZ, Luis. Law of Damages. Editorial Civitas. Madrid. 1999. p. 46.
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enrichment for the victim.” 1062 For this reason, most Civil Law countries will not enforce
foreign judgments awarding punitive damages. 1063
Since punitive damages are not possible under Ecuadorian law, the sole source
for plaintiffs’ request is the writings of Argentinean author Ramon Pizarro. This authority
is entirely misplaced. This author only analyzes punitive damages as they are
considered in the common law; he does not purport to claim that they are applicable
under the Civil Law. 1064 Indeed, punitive damages cannot be awarded in Argentina. The
Argentinean Supreme Court has categorically stated: “in our legal system punitive
damages cannot be awarded . . . [p]unitive damages are foreign to our system of civil
liability.” 1065
Completely ignoring Ecuadorian law, and Civil Law more generally, plaintiffs
attempt to justify their request for punitive damages with reference to U.S. law.
However, punitive damages have been significantly—and constitutionally—restricted in
recent years, and any award of punitive damages in this case would violate U.S.
principles of due process. Under U.S. law, “the most important indicium of the
reasonableness of a punitive damages award is the degree of reprehensibility of the
defendant’s conduct.” 1066 This is largely because due process demands that a “penalty
be reasonably predictable,” such that an actor can “look ahead with some ability to
know what the stakes are in choosing one course of action or another.” 1067 These
factors preclude an award of punitive damages here because TexPet’s work was
overseen and approved by the Ecuadorian State, and it complied with the regulations
and standards in force during the Consortium’s existence. 1068 This leaves plaintiffs to
try to justify an award of punitive damages by reference to Chevron’s alleged assets,
but U.S. courts have roundly criticized using the defendant's wealth as a proxy for
determining punitive damages. 1069 More fundamentally, unjust enrichment is not among
1062 GARCÍA, Laura and HERRERA, María, The Concept of Daños Punitivos or Punitive
Damages, Revista Estudios Socio-Juridicos, Vol. 5, No. 001, Universidad del Rosario, Bogotá, Colombia,
at 213 (citing HENAO, Juan, “Damages. Comparative Analysis of extracontractual responsibility of the
state in Colombian and French Law,” Universidad Externado de Colombia, Bogotá, at 45).
1063 LIPTAK, Adam, Courts Outside U.S. Wary of Punitive Damages, N.Y. Times, Mar. 26, 2008.
1064 See PICAZO-DÍEZ, Luis. Law of Damages. Editorial Civitas. Madrid. 1999. p. 45.
1065
Asociación Civil Club Atlético Boca Juniors v. Julian Martinez, National Court of Appeals for
Civil and Federal Commercial Matters, Second Division, Oct. 27, 2005, Case 4.808/98 (citing
BUSTAMANTE ALSINA, J. LL. 1994-B, 860).
1066 BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575 (1996), attached as Annex 15 to Chevron’s
Motion filed Oct. 29, 2010 at 5:20 p.m.
1067 Exxon Shipping Co. v. Baker, 128 S.Ct. 2605, 2627 (2008), attached as Annex 16 to
Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1068 Answer as Read into the Record §§ II.A.1.2-3, II.A.1.15, II.B.1, filed Oct. 21, 2003 at 9:10
a.m., Record at 243-67, 246, 247-47v, 253-53v.
1069 See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 427-28 (2003), attached as
Annex 17 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m., (“The wealth of a defendant cannot justify
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the recognized criteria that U.S. courts will apply to measure punitive damages. 1070
Thus, the report prepared by Jonathan S. Shefftz is irrelevant to any determination of
punitive damages—even if such damages were available under Ecuadorian law (which
they are not).
There is likewise no provision of Ecuadorian law that authorizes recovery for
unjust enrichment in the circumstances of this case. According to the Ecuadorian
Supreme Court (now the National Court), the concept of unjust enrichment “involves the
idea of monetary damage resulting from an unlawful, unjust conveyance, without any
legal basis, of an asset to the benefit of one person and the detriment of another.” 1071
For a viable claim of unjust enrichment to lie:
a) there must be enrichment, or conveyance of assets from
one person to another; b) in the opposite direction, there
must be an impoverishment; "it is therefore necessary that
an enrichment be matched by an impoverishment of another
person, in terms of quality, not quantity"; c) there must be a
causal nexus between the enrichment and the
impoverishment, i.e., both the enrichment and the
impoverishment must simultaneously be the cause and
effect of each other; d) there must not be any other available
lawsuit. 1072
With respect to this final point, jurist Oramas Gross says: "The subsidiary nature of the
claim means that [the claim] may only be asserted when no other legal means are
available for reestablishing the equilibrium of economic positions. Therefore, it is
important to note that the enrichment produced must not violate any specific legal rule,
because if it did, then the injured party could sue on the basis of the rule that had been
violated and would not be able to assert unjust enrichment.” 1073 Chilean jurists are in
(continued…)
an otherwise unconstitutional punitive damages award.”); Gore, 517 U.S. at 585 ("The fact that BMW is a
large corporation rather than an impecunious individual does not diminish its entitlement to fair notice” of
its exposure to punitive damages); see also id., at 591 (Breyer, J., concurring) ("[Wealth] provides an
open-ended basis for inflating awards when the defendant is wealthy . . . . That does not make its use
unlawful or inappropriate; it simply means that this factor cannot make up for the failure of other factors,
such as 'reprehensibility,' to constrain significantly an award that purports to punish a defendant's
conduct").
1070 See State Farm, 538 U.S. at 424 (using defendants’ "wrongfully obtained competitive
advantages" or “illicit . . . practices [which] increased profits” to calculate punitive damages "is
unconvincing" as a matter of due process).
1071 Judgment of the Supreme Court of Justice, Fourth Division, Oct. 22, 1991, published in
Judicial Gazette No. 13, Year XCII, Series XV, p. 3933.
1072 Judgment of the Supreme Court of Justice, First Civil and Commercial Division, Sept. 29,
2000, No. 391-2000, published in Official Gazette 205, Nov. 16, 2000.
1073 Id.
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accord, and acknowledge that a claim for unjust enrichment will lie only “when there is
no other action that can reestablish the economic equilibrium that has been destroyed
without lawful justification.” 1074 The plaintiffs’ cited authorities recognize this element,
too, when they state that the “principle of unjust enrichment is a general source of
obligations . . . [that] is possible in unlegislated cases.” 1075
Plaintiffs’ claim for unjust enrichment does not satisfy these basic standards.
First, as discussed above, see supra Chapter VI, the principle of congruency
limits the Court’s jurisdiction to deciding those matters raised in the complaint, and
plaintiffs’ complaint makes no reference to the restitution of money from the defendant
to the plaintiffs, which is the basis of a claim for unjust enrichment.
Second, TexPet’s actions were not “unjustified” or “unlawful,” so any conveyance
was not an “unjust conveyance.” An action is deemed to be just, justified or to have a
just cause when the legal system authorizes the beneficiary to receive and keep the
benefits from it, which may occur when there is an express legal provision or a valid
agreement. 1076 This rule is expressed in article 1483 of the Civil Code, which provides
that all obligations must have a legal and licit cause. As noted, TexPet’s actions as
operator were fully authorized under Ecuadorian law and were approved by the State.
In fact, the same operating practices that TexPet used when it was in charge of the
former Consortium were used in other countries at the time, 1077 and many of those
practices and standards are still authorized in Ecuador and around the world. TexPet’s
remediation, too, complied with the remediation standards established by the
Ecuadorian State in the remediation agreement signed by both parties, which were
even more demanding than those existing in other oil-producing countries at the
time. 1078 Third, there is no “conveyance of assets from one person to another” and no
direct “causal nexus between the [alleged] enrichment and the [alleged]
impoverishment.” 1079 Neither Chevron nor TexPet obtained something that the plaintiffs
1074 ALESSANDRI, Arturo, SOMARRIVA, Manuel and VODANOVIC, Antonio, Treatise on
Obligations, 2nd ed., Editorial Juridica de Chile, Santiago, 2001, p. 61.
1075 Plaintiffs’ Motion, filed Sept. 16, 2010 at 5:15 p.m., at 16, (citing Teran Narvaez vs. Narvaez
Rosero, Judgment of the Supreme Court of Justice, June 28, 2000, No. 273-2000, published in R.O. 134,
August 3, 2000).
1076 DIEZ-PICAZO, Luis and GULLÓN, Antonio, System of Civil Law, Vol. II, 9th ed., Editorial
Tecnos, 2001, p. 525.
1077 Chevron’s Approval of Expert Bianchi’s Judicial Inspection Report on Sacha-13, filed Nov. 29,
2005 at 3:20 p.m., Record at 86002-14, 86011; Chevron’s Objections to Expert Robalino’s Judicial
Inspection Report on Shushufindi-13, filed Apr. 17, 2006 at 2:50 p.m., Record at 103678-104083, 103737.
1078 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m.,
Record at 141082-203, 141134-35.
1079 See Judgment of the Supreme Court of Justice, First Civil and Commercial Division, Sept. 29,
2000, No. 391-2000, published in Official Gazette 205, Nov. 16, 2000.
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(or any other person in Ecuador) concomitantly lost. 1080 An example of the requisite
causal nexus for an unjust enrichment claim is when one party improperly obtains
property or services from another without incurring an enforceable legal obligation to
provide something in return. Plaintiffs’ attempt to label their alleged environmental
damages as unjust enrichment for TexPet fails because, under their own theory, any
enrichment derived from TexPet’s own cost savings, not from plaintiffs.
Fourth, the only losses that Plaintiffs have alleged in their complaint can all be
addressed through “other available lawsuit[s].” Their claim for “environmental damages”
are, according to Plaintiffs, supported by “Article 43 of the Environmental Management
Act.” 1081 Plaintiffs could have also reported alleged violations of the environmental law
to the State, which had the exclusive power and duty to seek remediation and take
other appropriate actions (e.g., fines and sanctions). See supra § 5.3.2.1. Or, they
could have filed a lawsuit against the current operator or owner—here, Petroecuador—
seeking elimination of an imminent threat to indeterminate persons under current Article
2236 of the Civil Code. See supra § 5.3.2.1. The existence of these alternative claims
is fatal to plaintiffs’ claim for unjust enrichment. 1082 Indeed, Plaintiffs’ unjust enrichment
claim is particularly absurd because they ask for both reparation of alleged damages
and payment for unjust enrichment. Even if Plaintiffs’ claims were not entirely
illegitimate, such a double recovery plainly would be impermissible and would be
directly contrary to the limited unjust enrichment doctrine under Ecuadorian law.
1080 This point is fatal to Plaintiffs’ claims for unjust enrichment under both Ecuadorian and U.S.
law. Indeed, a case filed in California based on the same legal theory was summarily dismissed in 2006
because: “The plaintiffs do not state a valid claim for unjust enrichment.” Jane Doe I-V and John Doe I-IV
v. Texaco, Inc., Texaco Petroleum Co. and Chevron Corp., Case No. C 06-02820 WHA in the U.S.
District Court for the Northern District of California, July 21, 2006, attached as Annex 14 to Chevron’s
Motion filed Oct. 29, 2010 at 5:20 p.m., (holding that any “extra profits that defendants gained” by their
allegedly substandard practices “were not conferred upon them by plaintiffs. Plaintiffs do not cite to any
decision addressing—much less upholding—a complaint that stretched a personal-injury tort claim into a
claim of unjust enrichment simply because the alleged tortfeasor got a benefit that was incidental to the
injury.”)
1081 Plaintiffs’ Complaint, filed May 7, 2003 at 11:30 a.m., Record at 73-80v, 78v-80. As shown
above, however, supra § 5.3, this cause of action could not be retroactively applied to sue Chevron for
TexPet’s conduct before the statute was enacted.
1082 This point also renders Plaintiffs’ legal theory non-viable as a matter of U.S. law. A similar
suit filed in U.S. court espousing this same legal theory was summarily dismissed. See Jane Doe I-V and
John Doe I-IV v. Texaco, Inc., Texaco Petroleum Co. and Chevron Corp., Case No. C 06-02820 WHA in
the U.S. District Court for the Northern District of California, July 21, 2006, attached as Annex 14 to
Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m., (holding that “[t]he inability of cash to [remedy the
alleged harm] does not make damages an inadequate remedy. If it did, many people who suffered a
personal injury would be able to seek disgorgement of profits rather than compensatory damages. . . .
[T]he mere fact plaintiffs might prefer the equitable remedy over the legal remedy does not make the legal
remedy inadequate as a matter of law.” Thus, “[t]he plaintiffs do not state a valid claim for unjust
enrichment.”)
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In any event, even if an unjust enrichment claim were both cognizable under
Ecuadorian law and included in the plaintiffs’ complaint, the claim would be wholly
without merit for the following reasons:
First, TexPet’s operations never violated the extant regulatory standards of
Ecuador or international norms. In jurisdictions such as the United States where the
theory of unjust enrichment is recognized, the legitimacy of any accusation of unjust
enrichment related to environmental damage depends on demonstrating that the
responsible party violated applicable environmental norms or regulations. In this case,
the indisputable evidence shows that Consortium management of the three byproducts
from oilfield production—(i) produced water; (ii) oilfield pits; and (iii) natural gas—was
consistent with Ecuadorian and international norms for the corresponding time period.
Produced Water: In the decades of the 1960s, 1970s, and 1980s, management
of produced water by means of treatment in separation pits and subsequent discharge
to the environment was a common practice, not only in Ecuador, but also around the
world. 1083 In Ecuador, relevant regulations were not issued until after TexPet
transferred the operation of the Consortium from TexPet to Petroecuador, 1084 and
surface discharges of produced water persist under Petroecuador’s management due to
operating and maintenance problems. 1085
Oilfield Pits: From the 1970s to today, unlined earthen pits have been commonly
used in oilfields in both Latin America and the United States. 1086 In Ecuador,
Agreement 621, issued in 1992 (two years after termination of operations by TexPet),
established the first regulations addressing the design and construction of oilfield
pits. 1087 Notably, this and subsequent regulations specifically allow for the use of
1083 Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.ii.1, at 130.
1084 Ministerial Agreement No. 621, “Environmental Regulations for Hydrocarbon Activities in
Ecuador,” issued March 6, 1992, established, for the first time in Ecuador, numerical limits for produced
water discharge. These same limits were reconfirmed in Decree No. 2982, published in R.O. 766 on Aug.
24, 1995. CONNOR, John A., Regarding Remediation Activities and Environmental Conditions in the
Former Petroecuador-Texaco Concession, Oriente Region, Ecuador, at 27, attached as Annex 4A to
Chevron’s Motion, filed Sept. 16, 2010, at 4:35 p.m.
1085 SOUTHGATE, Douglas, CONNOR, John A., Response to the Report of Mr. J. S. Shefftz with
Regard to “Analysis of Unjust Enrichment,” issued 13 September 2010, in the Matter of Maria Aguinda et
al. vs. Chevron, at 5, attached as Annex 1 to Chevron’s Motion, filed Oct. 29, 2010 at 5:20 p.m.
1086 Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.ii.2, at 132-134.
1087 CONNOR, John A., Regarding Remediation Activities and Environmental Conditions in the
Former Petroecuador-Texaco Concession, Oriente Region, Ecuador, attached as Annex 4A to Chevron’s
Motion, filed Sept. 16, 2010, at 4:35 p.m., at 22. Specifically, for earthen oilfield pits used to contain
drilling mud, cuttings, or oilfield wastes, the soils on the pit walls and base were to be compacted to
achieve low-permeability conditions (Agreement 621, Article 13). Ecuador Decree 2982, which
superseded Agreement 621 in August 1995, first established the general procedures for closure of oilfield
pits; however, numerical criteria for remediation of soils in oilfield pits (i.e., soil TPH and TCLP limits) were
not established until February 2001, when Ecuador Decree 1215 was issued. Id.
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earthen pits, and Petroecuador continues to construct and use unlined earthen pits in
the former concession today. 1088
Natural gas: The International Association of Oil and Gas Producers (OGP) has
recognized that “the option to release gas to the atmosphere by flaring and venting is an
essential practice in oil and gas production, primarily for safety reasons.” 1089 Not
surprisingly, therefore, significant volumes of gas are still being burned in all of the
principal oil-producing regions of the world. 1090 In Ecuador, gas flaring continues today.
The natural gas in the former concession was the exclusive property of the Ecuadorian
State, which retained exclusive rights over the use and/or disposal of gas for the full
period of TexPet’s operations. In this capacity, the State made a decision that it was
not economically feasible to capture all of the natural gas in the Oriente produced in
connection with crude oil, or in the other oilfields of this country, and therefore, it burned
the gas. Although flaring has subsequently been regulated in Ecuador and
Petroecuador has built at least one gas capture facility in the Oriente, in 2006 nearly
half of all natural gas in Ecuador was still flared. 1091 In fact, no oil company in Ecuador
has ever achieved 100 percent recovery of natural gas from any oilfield. 1092
Since TexPet’s operations fully complied with applicable regulations in Ecuador,
it cannot be possibly said that TexPet gained some “unjust profit.”
1088 See Petroecuador Impacts Report, Attachment I of Appendix A to Chevron’s Rebuttal to the
Barros Report, filed on Jan. 14, 2010 at 5:55 p.m., Record at 164527-33; see also Chevron’s Motion filed
Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.ii.2, at 135; CONNOR, John A., Regarding Remediation Activities
and Environmental Conditions in the Former Petroecuador-Texaco Concession, Oriente Region, Ecuador,
attached as Annex 4A to Chevron’s Motion, filed Sept. 16, 2010, at 4:35 p.m., at 22 (of Spanish), 20 (of
English).
1089 CONNOR, John A., Regarding Remediation Activities and Environmental Conditions in the
Former Petroecuador-Texaco Concession, Oriente Region, Ecuador, attached as Annex 4A to Chevron’s
Motion, filed Sept. 16, 2010, at 4:35 p.m., at 30 (of Spanish) 27 (of English).
1090 CONNOR, John A., Regarding Remediation Activities and Environmental Conditions in the
Former Petroecuador-Texaco Concession, Oriente Region, Ecuador, attached as Annex 4A to Chevron’s
Motion, filed Sept. 16, 2010, at 4:35 p.m., at 29 (of Spanish) 27 (of English).
1091 CONNOR, John & HUTTON, William, Response to the Proposal of Mr. Cabrera Regarding
Improvement of the Infrastructure in the Former Petroecuador-TexPet Concession, attached as Appendix
to Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at
146726-146887, 146738; Chevron’s Motion, filed Sept. 16, 2010, at 4:35 p.m., at 137-38; see also
CONNOR, John A., Regarding Remediation Activities and Environmental Conditions in the Former
Petroecuador-Texaco Concession, Oriente Region, Ecuador, attached as Annex 4A to Chevron’s Motion,
filed Sept. 16, 2010, at 4:35 p.m., at 31.
1092 SOUTHGATE, Douglas, CONNOR, John A., Response to the Report of Mr. J. S. Shefftz with
Regard to “Analysis of Unjust Enrichment,” issued 13 September 2010, in the Matter of Maria Aguinda et
al. vs. Chevron, at 6, attached as Annex 1 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
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Second, since TexPet already undertook remediation, any compensation to the
plaintiffs for unjust enrichment would be to ask the company to pay twice for the same
alleged environmental damage. 1093
Third, the unjust enrichment damages requested by both the plaintiffs in their
September 16, 2010 submission at 5:15 p.m. and through Mr. Cabrera suffer from the
same fatal mistakes. Both are based on data gathered in the Cabrera Report, which is
tainted by fraud and fundamentally flawed. Willfully ignoring Ecuadorian law, the
Cabrera Report recommends that Chevron pay US$8.31 billion for unjust enrichment
because TexPet allegedly obtained profits “by not having invested sufficient money in
appropriate environmental controls during its operation of the Concession.” 1094 While
the Cabrera Report does not provide enough information to replicate its calculations of
supposed unjust enrichment, 1095 it is clear that the calculations are exaggerated,
erroneous, or both. Serious errors in the Cabrera Report, and the plaintiffs’ submission
of September 16, 2010 at 5:15 p.m. that was based on its data, include, but are not
limited to:
• Neither the Cabrera Report nor the report of Jonathan Shefftz, submitted
by the plaintiffs with their September 16, 2010 filing at 5:15 p.m.,
recognizes two factors that should have been taken into account in the
calculation of the supposed unjust enrichment: (1) the minority status of
TexPet in the Consortium, and (2) income tax paid by the Consortium.
Taking into account these factors, TexPet would be liable for only 2.1
percent of any unjust enrichment claim. 1096 All told, TexPet received
1093
See Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.iii, at 138; SOUTHGATE,
Douglas, CONNOR, John & MACNAIR, Douglas, Response to the Allegations of Mr. Cabrera Regarding
Supposed Unjust Enrichment of Texpet, attached as an appendix to Chevron’s Objections to Expert
Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146342-370, 146349. See also
LEAMER, Edward, Ph.D., Evaluation of Economic Analysis Contained in Summary Report of Expert
Examination and Answers to the Plaintiffs’ Questions About the Expert Report in the Case of Maria
Aguinda et al. v. Chevron Corporation, No. 002-2003, dated Sept. 8, 2010, attached as Annex 11 to
Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., at 49.
1094
SOUTHGATE, Douglas, CONNOR, John & MACNAIR, Douglas, Response to the Allegations
of Mr. Cabrera Regarding Supposed Unjust Enrichment of Texpet, attached as an appendix to Chevron’s
Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146342-370,
146345 (citing Expert Cabrera’s Global Report, filed Apr. 1, 2008, at 8:30 a.m., at 55, Record at 134228-
134289, 134284).
1095 Mr. Cabrera failed to record dates and sources of information that are indispensable for
reproducing his calculations. See Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15,
2008, at 2:14 p.m., Record at 141082-203, 141176; see also Chevron’s Motion filed Sept. 16, 2010, at
4:35 p.m., § II.B.4.b.iv.5, at 146.
1096 See SOUTHGATE, Douglas, CONNOR, John A., Response to the Report of Mr. J. S. Shefftz
with Regard to “Analysis of Unjust Enrichment,” issued 13 September 2010, in the Matter of Maria
Aguinda et al. vs. Chevron, at 10, attached as Annex 1 to Chevron’s Motion filed Oct. 29, 2010 at 5:20
p.m.; Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.iv.2, at 142-43.
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approximately US$500 million, a sum that is very far from those proposed
by the plaintiffs. 1097
• The Cabrera Report claims to calculate alleged past savings in nominal
dollars and that these savings equaled US$879 million. However, all the
values in the spreadsheet included in that expert report are expressed in
2007 dollars. These calculations exaggerate the values from past years
due to the inflation that occurred between those years and 2007. 1098
Although the Cabrera Report states that all of the calculations have been
adjusted for inflation and exchange rate, the methodology used to perform
these adjustments is not explained. 1099 While Mr. Shefftz’s report
recognizes this error, his attempts to “deflate[]” the Cabrera Report’s cost
estimates to 1990 values are inadequate, and he uses too high a discount
rate to establish present day values. 1100
• Both Mr. Shefftz’s and the Cabrera Report’s calculations are based on
exaggerated measurements of the costs of appropriate environmental
management. 1101 For example, Mr. Shefftz overestimates the “avoided
cost” of produced water management by a factor of seven due to serious
errors in the Cabrera Report. 1102 Additionally, the Cabrera Report
assumes that all costs are variable, which is incorrect. The Report should
have distinguished between investment costs and annual costs. 1103 The
Cabrera Report also vastly overstates remediation costs because he
erroneously inflates both the number of pits and their surface area. 1104
Since Mr. Shefftz’s report is based on the Cabrera Report’s data, both
their reports suffer from the same errors.
1097 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 at 2:14 p.m.,
Record at 141082-203, 141176.
1098 Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.iv.5, at 146.
1099 Id.
1100 See SOUTHGATE, Douglas, CONNOR, John A., Response to the Report of Mr. J. S. Shefftz
with Regard to “Analysis of Unjust Enrichment,” issued 13 September 2010, in the Matter of Maria
Aguinda et al. vs. Chevron, at 10, attached as Annex 1 to Chevron’s Motion filed Oct. 29, 2010 at 5:20
p.m.; SHEFFTZ, Jonathan S., Analysis of Unjust Enrichment in Maria Aguinda et al. v. Chevron
Corporation, attached as Annex B to Plaintiffs’ Motion, filed Sept. 16, 2010, at 5:15 p.m., at 7, 12.
1101 See Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.iv.4, at 144.
1102 SOUTHGATE, Douglas, CONNOR, John A., Response to the Report of Mr. J. S. Shefftz with
Regard to “Analysis of Unjust Enrichment,” issued 13 September 2010, in the Matter of Maria Aguinda et
al. vs. Chevron, at 6-8, attached as Annex 1 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1103 See Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.iv.5, at 147.
1104 See Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.iv.4, at 145.
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• With regard to pit remediation, 1105 both the Cabrera Report and the report
of Mr. Shefftz ignore that the Ecuadorian Government accepted
responsibility for remediation with the PEPDA program, and 156 pits have
already been remediated through this process at the cost of US$85,000
per pit. 1106
• As previously discussed, natural gas should never have been included in
the Cabrera Report’s estimates because it was and is the property of the
Ecuadorian State. However, even if it is included, the Cabrera Report’s
analysis failed to subtract the income on the sale of gas from the costs of
capture. 1107 Furthermore, it overestimated the volume of gas by 3,400%
due to the fact that it did not correctly convert the gas volumes from cubic
feet to cubic meters. 1108 Again, since Mr. Shefftz relies upon the data,
including the associated unit costs, presented in the Cabrera Report, his
report does nothing to correct these errors. 1109
Mr. Shefftz’s report merely repackages the Cabrera Report without any new
evidence. Relying exclusively on data in the Cabrera Report, Mr. Shefftz apparently
performed no investigation of the associated facts or the significant deficiencies in the
Cabrera Report, despite those deficiencies having been identified by Chevron on
multiple occasions. 1110 In fact, Mr. Shefftz not only fails to correct the Cabrera Report’s
most serious errors, but he also compounds them by multiplying his calculations by four,
purportedly to account for an arbitrarily chosen twenty-five percent chance that TexPet’s
activities would be detected. 1111 This damage multiplication is foreign to Ecuadorian law,
1105
SOUTHGATE, Douglas, CONNOR, John & MACNAIR, Douglas, Response to the Allegations
of Mr. Cabrera Regarding Supposed Unjust Enrichment of Texpet, attached as an appendix to Chevron’s
Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 146342-370,
146358 (citing HINCHEE, R., Rebuttal of the Method Used by Mr. Cabrera to Determine the Supposed
Necessity and Cost of Remediation, 2008).
1106 See Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.4.b.iv.5 and § IV.A, at 148,
216-17.
1107 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m.,
Record at 141082-203, 141176.
1108 Id.
1109 See SHEFFTZ, Jonathan S., Analysis of Unjust Enrichment in Maria Aguinda et al. v.
Chevron Corporation, attached as Annex B to Plaintiffs’ Motion, filed Sept. 16, 2010, at 5:15 p.m., at 5-6,
(Shefftz explains “Exhibits 1, 2, and 3 are my versions of the Cabrera report’s Tables 1, 2, and 3.”).
1110 See SOUTHGATE, Douglas, CONNOR, John A., Response to the Report of Mr. J. S. Shefftz
with Regard to “Analysis of Unjust Enrichment,” issued 13 September 2010, in the Matter of Maria
Aguinda et al. vs. Chevron, at 12-13, attached as Annex 1 to Chevron’s Motion filed Oct. 29, 2010 at 5:20
p.m.
1111 See SHEFFTZ, Jonathan S., Analysis of Unjust Enrichment in Maria Aguinda et al. v.
Chevron Corporation, at 7-8, attached as Annex B to Plaintiffs’ Motion, filed Sept. 16, 2010, at 5:15 p.m.;
see also SOUTHGATE, Douglas, CONNOR, John A., Response to the Report of Mr. J. S. Shefftz with
Regard to “Analysis of Unjust Enrichment,” issued 13 September 2010, in the Matter of Maria Aguinda et
al. vs. Chevron, at 4, attached as Annex 1 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.; see
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and was evaluated by the United States Environmental Protection Agency but
rejected. 1112 Further, the multiplier concept would only theoretically apply as a part of a
disincentive to future violations of regulations, not as a punitive measure. 1113 As noted
by Professor Clifford Russell, who was part of the advisory panel evaluating this
concept for the United States Environmental Protection Agency, “[i]n the context of a
post-detection damages action claiming to seek to recoup avoided costs, there is no
basis for a detection/prosecution probability adjustment.” 1114 Application of this
multiplier concept here is inappropriate since detection of the supposed violation has
already occurred. 1115 Therefore, Mr. Shefftz’s analysis compounds the error-ridden
report putatively authored by Mr. Cabrera by inappropriately applying an arbitrary
damages multiplier. 1116
Furthermore, documents produced by Mr. Donziger suggest that the unjust
enrichment figures were massively inflated due to pressure from the plaintiffs’ lawyers.
On November 17, 2007, plaintiffs’ consultant Douglas Beltman advised that Stratus had
put together an analysis of the unjust enrichment from avoided costs, which came to a
total of $530 million. Mr. Donziger was unhappy with this sum: “sounds awfully low.”
He warned the team to “make sure you don’t say or even suggest anything that backs
(continued…)
generally RUSSELL, Clifford S., Evaluation of Jonathan Shefftz’s Analysis of Damages to be Claimed
from Chevron in Connection with Oil Field Operations in Ecuador and his use of the Report of the US
EPA Science Advisory Board’s Advisory Panel on “Illegal Competitive Advantage,” attached as Annex 7
to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1112 SOUTHGATE, Douglas, CONNOR, John A., Response to the Report of Mr. J. S. Shefftz with
Regard to “Analysis of Unjust Enrichment,” issued 13 September 2010, in the Matter of Maria Aguinda et
al. vs. Chevron, at 10-11, attached as Annex 1 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1113 See RUSSELL, Clifford S., Evaluation of Jonathan Shefftz’s Analysis of Damages to be
Claimed from Chevron in Connection with Oil Field Operations in Ecuador and his use of the Report of
the US EPA Science Advisory Board’s Advisory Panel on “Illegal Competitive Advantage”, at 1, attached
as Annex 7 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1114 RUSSELL, Clifford S., Evaluation of Jonathan Shefftz’s Analysis of Damages to be Claimed
from Chevron in Connection with Oil Field Operations in Ecuador and his use of the Report of the US
EPA Science Advisory Board’s Advisory Panel on “Illegal Competitive Advantage”, at 3, attached as
Annex 7 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1115 See RUSSELL, Clifford S., Evaluation of Jonathan Shefftz’s Analysis of Damages to be
Claimed from Chevron in Connection with Oil Field Operations in Ecuador 1115 and his use of the Report of
the US EPA Science Advisory Board’s Advisory Panel on “Illegal Competitive Advantage,” at 1, attached
as Annex 7 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
1116 See SOUTHGATE, Douglas, CONNOR, John A., Response to the Report of Mr. J. S. Shefftz
with Regard to “Analysis of Unjust Enrichment,” issued 13 September 2010, in the Matter of Maria
Aguinda et al. vs. Chevron, at 11, attached as Annex 1 to Chevron’s Motion filed Oct. 29, 2010 at 5:20
p.m.; see also RUSSELL, Clifford S., Evaluation of Jonathan Shefftz’s Analysis of Damages to be
Claimed from Chevron in Connection with Oil Field Operations in Ecuador and his use of the Report of
the US EPA Science Advisory Board’s Advisory Panel on “Illegal Competitive Advantage,” at 1, attached
as Annex 7 to Chevron’s Motion filed Oct. 29, 2010 at 5:20 p.m.
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away from the figures” in the plaintiffs’ “submission,” which said “that the unjust
enrichment would be on the order of billions of dollars.” 1117 Given this history, this Court
should attribute no credibility to the plaintiffs’ estimates, which are indeed in the billions
of dollars as Mr. Donziger demanded.
Fourth, even if TexPet did derive unfair profits during Consortium operations,
Chevron is not the successor of TexPet in any way whatsoever, see supra Chapter I,
and it cannot be held liable for TexPet’s actions.
7.5 The Plaintiffs Have Not Even Attempted to Link the Alleged Harms or
Threats of Harm to the Consortium’s Operations
The plaintiffs have offered no evidence to link their alleged (but unproven) harms
to the Consortium’s operations, which is fatal to their claims given the numerous other
potential sources for the alleged harms.
It is public knowledge that the pits, wells, and production stations located in the
former concession area have been under the sole control and responsibility of
Petroecuador since 1992, when the Consortium ended. 1118 And several courtappointed
experts found that Petroecuador was responsible for contamination and spills
in the region. 1119 Indeed, even one of the experts nominated by plaintiffs admitted that
Petroecuador’s operations caused contamination. 1120 Yet neither plaintiffs in their
September 16, 2010 filing at 5:15 p.m., nor the Cabrera Report make any effort to
specify and trace chronologically whether the alleged damages were due to Consortium
activities or post-Consortium activities. Though Mr. Cabrera had been ordered to make
this distinction, instead, the Cabrera Report presented the preposterous legal theory
that Chevron is responsible for the volitional acts of Petroecuador, a State entity, over
the past eighteen years. 1121 In addition to being fed to him by plaintiffs’ counsel, this
suggestion is a reflection of Mr. Cabrera’s undisclosed conflict of interest, since an
award absolving Petroecuador of any liability would put Mr. Cabrera and the
environmental remediation company in which he has an interest in the good graces of
Petroecuador. See supra § 3.4.2. And this is no small matter given Petroecuador’s
1117 E-mail from Steven Donziger to Doug Beltman, et al., dated Nov. 16, 2007 at 5:51 p.m., at 1,
3, attached as Annex 1 to Chevron’s Third Supplemental Motion for Terminating Sanctions, filed Dec. 20,
2010 at 4:30 p.m. (DONZ0025512).
1118 Acta de Entrega Recepcion de las Operaciones del Consorcio Petroecuador-Texaco, dated
Nov. 25, 1992, filed Apr. 27, 2004, Record at 7227-56v, 7234.
1119 See, e.g., Expert Report of Adriana Enriquez on Palanda Production Station, filed June 24,
2007, at 8:15 a.m., Record at 130605-39, 130616, 130627; Expert Report of Adriana Enriquez on
Shushufindi Refinery, filed Sept. 24, 2007, at 5:00 p.m., Record at 132684-791, 132717.
1120 Expert Report of Luis Alberto Villacreces Carvajal on Lago Agrio Central, filed Sept. 6, 2006,
at 4:40 p.m., Record at 119320-503, 119327.
1121 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m.,
Record at 141082-203, 141164; see Expert Cabrera’s Global Report at 27, filed Apr. 1, 2008, at 8:30 a.m.,
Record at 134228-89, 134256.
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history. 1122 Even one of the plaintiffs’ Ecuadorian attorneys recognized, in a
conversation captured on video, that it is “inconceivable to me that we can blame
Texaco for everything that Petroecuador has been doing to this date.” Another of
plaintiffs’ attorneys responds: “Oh, I agree.” 1123
The truth is that Petroecuador has aggressively developed its oil exploitation
activities in the former concession area during the nearly twenty years since TexPet
ceased to be a member of the Consortium. It has more than doubled the number of oil
wells in the former concession, drilling more than 414 new wells since 1990 at a cost of
more than US$1.2 billion. 1124 To support expanded drilling activity in the past three
years, Petroecuador has constructed more than 277 pits in the former concession
area. 1125 Nearly ninety percent of these new pits have been constructed at the
platforms of former Consortium operated wells rather than at the platforms of newly
drilled wells. 1126 Petroecuador has used these pits to bury large volumes of drilling
muds and other oilfield wastes produced by its activities, mainly in the Guanta,
Shushufindi, and Sacha fields. 1127 In addition to building new wells and facilities,
Petroecuador has actively exploited the existing fields and facilities of the former
concession area. In 2009 alone, Petroecuador repaired or reconditioned approximately
250 wells. In total, Petroecuador spent an estimated US$46 million to increase oil
production by 87,000 barrels per day. 1128
Despite its investment in new infrastructure, Petroecuador has made little
investment in improved environmental practices or in the basic maintenance of their
oilfield equipment, resulting in frequent spills of crude oil from outdated, badly
1122 See Ecuador’s Pathetic Tactics, Latin American Bus. Chron. (Sept. 15, 2008), (noting that
Petroecuador caused 1,000 oil spills between 2002 and 2007, including 168 in 2007, accounting for 90%
of all oil spills in Ecuador).
1123 Transcript of Crude Outtakes, attached as Exhibit 1 to Chevron’s Motion filed Sept. 16, 2010
at 4:35 p.m., (CRS 040-27-04).
1124 Annex B of Environmental Impacts Associated with the Deficient Operational Practices of
Petroecuador at 3, filed as part of Appendix A to Chevron’s Rebuttal to the Barros Report, filed on Jan. 14,
2010, at 5:55 p.m., Record at 164471-73, 164473.
1125 Petroecuador Impacts Report, Attachment I, attached as part of Appendix A to Chevron’s
Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at 164528-33, 164532-33.
1126 Petroecuador Impacts Report, Attachment I, attached as part of Appendix A to Chevron’s
Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at 164528-33, 164529; see
also id., Attachment G, Record at 164502-19, 164510 (photos of Petroecuador discharging drilling wastes
into unlined pits at former consortium sites).
1127 See Petroecuador Impacts Report, Attachment I, attached as part of Appendix A to Chevron’s
Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at 164528-33, 164529-33.
1128 Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at
164528-164533, 164445, see Summary of Petroecuador Data Regarding Workovers in the Eastern
Region of Ecuador, attached as Attachment E to Appendix A of Chevron’s Rebuttal to the Barros Report,
filed on Jan. 14, 2010, at 5:55 p.m., Record at 164495-97, 164497.
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maintained, and corroded pipelines. 1129 Some of the highest ranking executives of the
state-run company have confirmed that, after 1992, when the concession passed to the
sole ownership of Petroecuador, the Government assumed control of the budget and
ceased to allocate sufficient funds to maintenance of the oilfield infrastructure. 1130 In
fact, between 1993 and 2003, Petroecuador spent less than one percent of its budget
on environmental, health, and safety issues. 1131 That early figure has persisted in more
recent budgets. 1132
From 1992 to 2009, independent media reports from around the country
identified approximately 4.6 million gallons of crude oil spills attributable to
Petroecuador, 1133 which have impacted rivers and streams throughout the region.
Indeed, on March 15, 2010, Petroecuador took out an ad in several mainstream
newspapers showing that between 2005–2008, the company was responsible for over
175 spills. Its own records show that of the 1,415 significant oil spills Petroecuador
recorded from 2000 to 2008 alone, 565 (forty percent) were caused by corrosion, 128
(nine percent) by operator error, and an additional 240 (seventeen percent) by
equipment failure, meaning that approximately sixty-six percent of these spills could
have been prevented by improved equipment maintenance and personnel training. 1134
Similarly, during the period from 1990 to 2007, over 394 million barrels of formation
water generated as a result of the exclusive operations of Petroecuador have been
discharged to rivers and streams, including discharge of over 300 million barrels after
those discharges were first regulated under Ecuadorian law in 1993. 1135 Nearly eighty-
1129 See Petroecuador Impacts Report, Attachment H, attached as part of Appendix A to
Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at 164521-26,
164522-26 (register of spills in the former Concession area from 1992 to 2009).
1130 Petroecuador is Experiencing Its Second Crisis, Hoy, Feb. 6, 2007, submitted as Annex 7 to
Attachment I of Appendix A, to Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55
p.m., Record at 164795-96, 164796 (reporting declarations by former vice presidents of Petroecuador
and Petroproducción); see also Affidavit of Ricardo Reis Veiga, dated Dec. 23, 1998 at 10, submitted as
Annex A to Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at
164828-32, 164831.
1131 Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at
164426-59, 164446 (citing reports by Petroecuador (2007) and the Comptroller General’s Office (2005)).
1132 Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at
164426-59, 164446 (citing reports by Petroecuador (2007) and the Comptroller General’s Office (2005)).
1133 See Petroecuador Impacts Report, Attachment H, attached as part of Appendix A to
Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at 164521-26,
164526 (register of spills in the former Concession area from 1992 to 2009).
1134 See Petroecuador evaluates environmental damages caused by crude, El Universo, Feb. 28,
2009, submitted as Annex 8 of Attachment I of Appendix A; Chevron’s Rebuttal to the Barros Report, filed
on Jan. 14, 2010, at 5:55 p.m., Record at 164797-98, 164798.
1135 See Petroecuador Impacts Report Attachment D, attached as part of Appendix A to
Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at 164479-94,
164480-81 (Temporal Analysis of Production Water Management in the Former CEPE-TexPet
Concession).
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four million barrels of produced water were discharged into the environment from June
2000 to June 2004 alone, due to inadequate construction and maintenance of reinjection
facilities. 1136
Even the plaintiff’s attempt through the Cabrera Report to foist responsibility for
Petroecuador’s conduct upon Chevron has been publicly rejected by the plaintiffs’ lead
attorney. In a radio interview, Mr. Fajardo stated that “[t]he latest damages caused by
Petroecuador during the last 15 or 16 years, for example, are not included in this lawsuit
because they are different things.” 1137 Mr. Fajardo then asserted that it is “false” that
the plaintiffs “ask Chevron to pay for or repair all the damage caused, even the one
caused by Petroecuador.” 1138
The existence of PEPDA and Petroecuador’s implicit acknowledgment of
responsibility conflict with the Cabrera Report’s absurd recommendation that this Court
should hold Chevron responsible for Petroecuador’s unilateral conduct since the
Consortium ended. The costs of the PEPDA program also prove that the Cabrera
Report’s estimates are baseless and grossly inflated. For example, the Cabrera
Report’s US$2.7 billion figure was over twenty-five times higher than the US$96.74
million budget for the PEPDA remedial program set in June 2009, which the State and
Petroecuador believe sufficient to fully remediate the entirety of the former concession
area and more. 1139 The Cabrera Report’s sweeping conclusions bear no resemblance
to the actual remedial work that would be implemented to address the alleged harms to
the environment.
The failure to prove a causal link is not only fatal to plaintiffs’ environmental
claims, but it undercuts their claims regarding public health as well. The plaintiffs simply
assume that living in one of the towns located within or near the former concession area
establishes—a priori and without need of proof—harm or poses a “risk” to health. But
there is no proof that the Consortium even operated in five of the communities where
the forty-eight named plaintiffs live: Ávila, Unión Milagreña, Tarapoa, San Roque, and
Aguas Negras. Four of the allegedly “affected communities”—El Dorado de Cascales,
Palma Roja, Villa Secoya and San Pablo— are clearly outside the boundary of the
former concession. The plaintiffs also assume, without foundation, that the alleged
health effects were caused by exposure to potentially toxic components of petroleum in
such a dosage and with such frequency that this exposure is capable of affecting
health. 1140 Moreover, plaintiffs fail to account for potential alternative causes of many of
1136 Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at
164426-59, 164446-47 (citing report by the Comptroller General’s Office).
1137 The Power of Words, Ecuador Inmediato Radio, Mar. 15, 2010.
1138 The Power of Words, Ecuador Inmediato Radio, Mar. 15, 2010.
1139 See State Assumes Environmental Remediation, El Universo, June 21, 2009, attached as
Annex E to Chevron’s Rebuttal to the Barros Report, filed on Jan. 14, 2010, at 5:55 p.m., Record at
165383-84, 165384; Cabrera's Supplemental Report, filed Nov. 17, 2008, at 8:25 a.m., Record at 152950-
153000, 152966-967.
1140 See, e.g., Plaintiffs’ Motion, filed Aug. 31, 2005, at 5:20 p.m., Record at 79274-366, 79274.
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the claimed health effects they allege, such as the documented presence of fecal matter
in the water, malnutrition, lack of pre-natal care, and Petroecuador’s exclusive
operations in the former concession area since 1990. 1141
7.6 Although Chevron Bears No Duty to Offer Evidence, It Has Proven That
the Plaintiffs’ Case Is Devoid of Merit
Although Chevron bears no burden of proof in this case, the evidence it has
presented makes clear that the plaintiffs’ claims are devoid of merit and that the
plaintiffs cannot meet their burden of proof. In fact, the only competent scientific
evidence in the record is that submitted by Chevron, which was prepared by recognized
experts following rigorous protocols and working with accredited laboratories.
My client’s evidence is more fully detailed in the prior portions of this Chapter, but
among other things, Chevron’s nominated experts concluded that ninety-eight percent
of the pits remediated by TexPet met the RAP standards. 1142 They also established that
there is no significant risk to human health at the remediated sites. 1143 This was
confirmed by the independent settling experts in the case of Sacha-53, who found that
TexPet met its remediation requirements under its contracts with the Government of
Ecuador and that chemical substances were present in quantities “below the
permissible limits” for hydrocarbon activities. 1144 In addition, ninety-eight percent of the
pits remediated by TexPet still comply with the standards set by the Government of
Ecuador in the Settlement Agreement and the Final Acta, 1145 and a comprehensive risk
evaluation performed by Chevron’s nominated experts indicates that groundwater in the
former concession area does not pose any petroleum-related health risks to local
residents or workers. 1146 In the face of this evidence, plaintiffs have been forced to
1141 See KELSH, Michael A., McHugh, Thomas E., and Tomasi Theodore D., Rebuttal to Mr.
Cabrera’s Excess Cancer Death and Other Health Effects Claims, and His Proposal for a New Health
Infrastructure, attached as Appendix to Chevron’s Objections to Expert Cabrera’s Global Report, filed
Sept. 15, 2008, at 02:14 p.m., Record at 146371-146649, 146410-13, 146529-46; CONNOR, John and
LANDAZURI, Roberto, Response to Statements by Mr. Cabrera Regarding Alleged Impacts to Water
Resources in the Petroecuador-Texaco Concession Area, attached as Appendix to Chevron’s Objections
to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m., Record at 148352-478, 148365,
148364-65, 148428-37; SANTACRUZ, Silvia, The other L.A., Forbes (Nov. 20, 2009) (Between 2000 and
2008, Petroecuador caused 1415 oil spills—which equates to an accident every two days).
1142 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m.,
Record at 141082-203, 141090.
1143 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008, at 2:14 p.m.,
Record at 141082-203, 141090.
1144 Settling Expert’s Report on Sacha-53, filed Feb. 1, 2006, at 5:00 p.m., Record at 92492-587,
92522.
1145 Chevron’s Objections to Expert Cabrera’s Global Report, filed Sept. 15, 2008 ,at 2:14 p.m.,
Record at 141082-203, 141090.
1146 For additional details, see Chevron’s Motion filed Sept. 16, 2010, at 4:35 p.m., § II.B.3.c.v, at
104-106.
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esort to flawed methods and fraudulent evidence in an unlawful attempt to meet their
evidentiary burden.
7.7 Application of New Constitutional Provisions Is Improper and Would Deny
Chevron Due Process
Having failed to offer competent evidence of injury, negligence, or causation, at
the tail-end of this case the plaintiffs, their amici, and Judge Núñez have sought to shift
the burden of proof to Chevron under provisions from the new 2008 Constitution.
Articles 396 and 397 of the current Constitution contain a series of new provisions
related to environmental claims that (i) shift the burden of proof in environmental
actions, 1147 (ii) exempt such claims from any statute of limitations, 1148 and (iii) provide
strict liability against plaintiffs [sic]. 1149
These fundamental alterations took effect in October 2008, more than eighteen
years after TexPet transferred operation of the former Consortium to Petroecuador and
more than five years after the initiation of this trial, and there is no indication in the new
Constitution that these provisions are to apply retroactively. As discussed above, supra
§ 5.3, the principle of non-retroactivity bars the application of these new provisions to
alleged acts or omissions by TexPet. Strict liability in this particular case imposes a
higher standard of conduct on a defendant than the standard duty of care in force during
the Consortium operations. As a consequence, its imposition constitutes a substantive,
rather than a mere procedural, change in the law. The retroactive elimination of the
statute of limitations for environmental lawsuits also constitutes a substantive change
where, as here, it purports to revive a cause of action that has previously been
vindicated or has been extinguished due to the passage of time. Similarly, reversing the
burden of proof is a substantive change because it imposes liability in circumstances
where, under the law that existed at the time of the alleged acts, liability could not have
been imposed. In sum, the 2008 Constitution wrought a sea change in Ecuadorian civil
liability standards. Any judgment in this trial based on the new provisions of the 2008
Constitution would therefore violate Chevron’s due process rights.
Additionally, even if any of these changes were somehow deemed procedural,
they could not be applied where—as here—the proceeding began prior to their adoption.
1147 Article 397(1) provides: “The burden of proof about the inexistence of a potential or real
damage shall fall on the executor of the activity or on the defendant . . . .”
1148 Article 396 provides: “Legal actions to prosecute and penalize environmental damage shall
not be subject to any statute of limitations.”
1149 Article 396 provides: “There is strict liability for damage to the environment . . .”
Article 397 provides: “In cases of environmental damage, the State shall act immediately and
secondarily to guarantee the health and restoration of the ecosystems. In addition to the corresponding
sanctions, the State shall bring an action against the operator of the activity that caused the damage to
force such operator to assume obligations related to total remediation, on the terms and in accordance
with the procedures set forth in the law. Civil servants responsible for oversight of the environment shall
also be held liable.”
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Article 7(20) of the Civil Code provides: “Laws related to the proceedings and rituals of
trials prevail over the previous ones from the moment they enter into force. But terms
that have already started, and procedural steps that have already been initiated, shall
be governed by the law which was valid at that moment.”
For example, shifting the burden of proof violates the fundamental principle of the
“unity” of evidence. This principle forbids a court from hearing one part of the evidence
on the basis of one rule while hearing another part of the evidence on the basis of a
different, contrary rule. If this Court allows the burden to shift at this late date, that is
exactly what will have occurred in this case: this Court will have heard the first part of
the evidence based on Article 114 of the Code of Civil Procedure, which provides that
each party is required to prove the facts that it alleges, and the second part of the
evidence based on Article 397 of the current Constitution, which provides that the
burden of proving that damages did not exist shall be borne by the defendant. To do
this would be contrary to Ecuadorian law and would violate Chevron’s right to due
process.
The legal commentary echoes these principles, explaining that
[p]rocedure, by rule, must subject itself to the law in effect at
the time it is applied, except for the exception established by
our Code, and which is justified by the fact that a time period,
an act, a proceeding constitute a unit, an individuality that
cannot and must not be divided so that the prior law applies
to one part of it and the new law applies to another part of
it. 1150
The Constitutional Court has recognized these principles in applying the current
Constitution. Indeed, the Court explained on November 13, 2008, in the Rules of
Procedure for the Exercise of Jurisdiction by the Constitutional Court for the Transition
Period that “[c]ases that are waiting to be heard in actions and appeals provided for by
the Constitution of 1998 and the Law of Constitutional Review shall continue being
heard and shall conclude in accordance with the rules in effect when they began being
heard.” 1151
These rules are in force to prevent the deprivation of vested rights and to protect
the right of legal certainty, which,- as acknowledged in Article 82 of the current
Constitution, is based in respect for previous legal provisions. Once the proceeding had
1150 LOVATO, Juan Issac, Analytical Program of Ecuadorian Civil Procedural Rights, Vol. I, 2d ed.,
p. 150 (cited in Mario Villegas vs. Mario Novoa Merino, Judgment of the Supreme Court of Justice, First
Civil and Commercial Division, June 12, 1998, Case 430-98, published in Official Gazette 84, Dec. 9,
1998.
1151 Rules of Procedure for the Exercise of Jurisdiction of the Constitutional Court for the
Transition Period, Second Temporary Regulation, published in Official Gazette 466 Supplement, dated
Nov. 13, 2008, at 13.
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started, my client presented evidence to this Court pursuant to the provisions at that
time on burden of proof, standard for liability, and prescription. Thus, before the current
Constitution went into effect, my client acquired rights in the application of the extant
legal provisions. Also on the basis of that same rule, the parties put together their
respective procedural strategies, and they also asked for and contributed evidence.
Neither the evidence ordered nor the evidence in part taken before the current
Constitution became effective constitutes a mere expectancy, but rather a vested right.
Because of their possible effect on these rights, “[l]aws normally have no retroactive
effect because if they did so, they would no longer be a rational rule that must be
previously known.” 1152
Fundamentally changing the rules at the end of the trial’s evidentiary phase
would cause this case to be governed by two different principles in two different periods.
Not only would it be impermissibly retroactive, but it would also violate the guarantee of
due process by depriving Chevron of its basic right to defend itself against the plaintiffs’
claims. Therefore, as I noted in my filing of September 2, 2009, at 5:30 p.m., if this
Court alters the rules at this late stage, this trial will be null and void. 1153
PRAYER FOR RELIEF
1. Your Honor, based on the foregoing I ask that you declare the nullity of the
proceedings due to the many defects that fully invalidate it and that have been
argued throughout the entire case, starting with the improper filing of the
complaint itself and those other unlawful procedures such as the forging of
evidence, the failure to comply with essential and specific formalities that are
described throughout this pleading and specifically in Chapter IV. These
procedural defects require that Your Honor declare nullity and moreover order
criminal prosecutions in accordance with Article 292 of the Criminal Code and
Article 129 of the Organic Code of the Judiciary.
Specifically relative to criminal prosecution, it is important to take into account the
fraud by the plaintiffs from the time they filed the complaint, the forging of
evidence, the willful misrepresentation (distorted presentation) of such evidence,
as well as the intimidation of the judges, Clerks of Court, and other assistants of
the court, such as experts, and even my client's attorneys, and we must further
emphasize the creation of false expectations in the general public.
2. In addition to the criminal nature, the temerity and malice of the plaintiffs and
their attorneys must be taken into account with all of their effects, among other
things so as to order the plaintiffs to pay the court costs.
1152 Judgment of the Supreme Court of Justice, Third Civil and Commercial Division, Division of
Permanent Judges, Sept. 25, 2003, published in Judicial Gazette, year CIV. Series XVII, No. 12, p. 3838.
1153 See Chevron’s Brief on Retroactive Application of the Law and Burden of Proof, filed Sept. 2,
2009, at 5:30 p.m., Record at 158142-48, 158147.
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3. As Your Honor is aware since it is public and common knowledge, my client
continues to uncover new evidence in U.S. courts of the plaintiffs' fraud, which
affects the validity of this trial; therefore, in the exercise of my right of selfdefense,
I will file this new evidence in the future, which I will summarize in one
or more provisions of this brief, and I also expressly reserve the right to present
such evidence; wherefore in view of the foregoing, I respectfully ask that you not
hand down a judgment until such new evidence is received, added to the record,
investigated and considered by you, Your Honor.
4. In the unlikely event that the Court denies the motion for nullity (there is one
motion but several grounds), which would be unlawful and improper, the
defenses asserted in the answer to the complaint must be considered, and in
particular, the following:
4.1 The lack of jurisdiction over Chevron Corporation, which is a company that
has never been domiciled in Ecuador, much less has it operated here.
Chevron is not the appropriate respondent in this case. You only have
authority to administer justice on the facts of the case that have occurred
in Ecuador and regarding the persons involved in such facts, and not
regarding third parties uninvolved in the operation of the former
Petroecuador – Texaco Consortium, as in the case of my client.
4.2 The plaintiffs do not have the right to sue Chevron, not only because it is
not a party to the legal relationship that is the subject of the facts claimed
in the complaint, but also because at the time when the facts occurred,
there was no cause of action for claiming them.
4.3 Even if a right had existed, it was extinguished along with the action to
claim it, since it was exercised by the municipalities of the various cantons
of the area of the former concession, as well as by the Ecuadorian State,
which acted on behalf of the residents of the country, including the
plaintiffs themselves, in the settlement between Texpet, Petroecuador and
the Ecuadorian State, in order to terminate all environmental obligations
stemming from the Concession agreement. This release and the courtapproved
settlement in the final judgment with the municipalities,
determine the existence of res judicata, and therefore, preclude the filing
of new actions for the same cause.
4.4 It has been demonstrated that the action filed by the plaintiffs constitutes a
bold and malicious attempt to have Your Honor apply in an illegal,
improper and retroactive manner, provisions that were not valid at the time
when the facts underlying the complaint occurred, which renders the
claims made in the complaint inadmissible.
4.5 In particular, I have demonstrated that it is improper to apply the
Environmental Management Act, as it did not take effect until 1999.
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4.6 The fraud committed in these proceedings by the plaintiffs and the expert
appointed by former Judge Dr. German Yánez to conduct the global
expert assessment is obvious. The evidence presented using this fraud is
null and lacks any probative value, which requires that the complaint be
rejected in its entirety for lack of legitimate evidence. It also means that
Your Honor must forward the record of the acts of the experts and the
previous judges who have heard this case, so that the Public Prosecutor
may investigate the possible crimes committed.
4.7 Your Honor must correct the violation of due process in this case and in
relation to my client, which occurred, inter alias, due to the following
reasons:
a) The legal and constitutional provisions were not complied with, nor
were the judicial decisions handed down within the present case,
including the approval of the procedural agreement (procedural
contract), for the judicial inspections and for performance of the
work of the experts. Final judicial rulings were violated, thus
violating the statute of limitations and the effects thereof;
b) The procedure adopted by the Court at the plaintiffs' request has
left unresolved the conflicts (contradictions and discrepancies)
between the different expert reports on the judicial inspections
conducted in these proceedings, which not only means that such
reports lack probative value, but also that the record itself is
incomplete;
c) In the same way, my clients' motions to investigate and correct the
essential errors were not ruled upon, thus further violating the
procedure provided for by law;
d) Moreover, not one but several rulings expressly allowed the
plaintiffs' unlawful waiver of the judicial inspections, thereby
violating the principles of the "unity" and "community" of the
evidence, and consequently producing an unjustified release from
the burden of proof and a gap in the record (incomplete record);
e) Blatant partiality by the judges who heard this case and by the
experts nominated by the plaintiffs and/or appointed by the Court.
Such bias is also evident in the unsubstantiated rejection of
requests made by my client, in explicit violation of constitutional and
legal rules, which has obstructed my client's exercise of its right to
defend itself;
f) As a consequence of the foregoing, my client’s right to legal
certainty was violated;
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g) Total lack of effective and timely protection by the Court of
Chevron’s rights as one of the parties to the suit, which resulted in
clear violation of its right to exercise its self-defense and to a fair
and impartial trial;
h) Repeated and sustained violations of several explicit provisions of
the Constitution, the Organic Code of the Judicial Branch and the
Code of Civil Procedure by various judicial authorities.
4.8 Moreover, even if there were any action that could have been filed by the
plaintiffs, the action filed was statute barred in accordance with the
foregoing.
4.9 Violation of the principle of procedural congruency by allowing the
investigations, expert report, clarifications and supplements thereto filed
by Mr. Cabrera to go beyond both the specific claims of the complaint and
the objective of the global expert assessment, as well as the express
instructions that the judge gave for such purpose.
4.10 Violation of the principle of the publicity of the evidence by allowing the
clandestine work of the experts (including Cabrera) and by not notifying
the parties that the others' work was starting (Barros and biologist
Bermeo), which further caused violation of the principle of being able to
challenge the evidence and the exercise of the right to self-defense.
4.11 Furthermore, based on the foregoing, it is evident that the plaintiffs have
not proven any of the statements made in their complaint.
In view of the foregoing, I request that Your Honor declare the nullity of all proceedings
in this case, and alternatively, in the event that Your Honor fails to do so, I request that
you reject the complaint in full, by accepting one or more of the defenses made, and
which I have legally and properly proven.
For the petitioner, duly authorized and as its Attorney of Record.
DR. IVAN ALBERTO RACINES E.
ATTORNEY
REGISTRATION NO. 6459 – PICHINCHA BAR ASSOCIATION
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