After more than half a decade and countless court appearances in countries around the world, the saga of what’s come to be known as the Chevron Shakedown finally seems to be staggering to a close. If you’ve missed our coverage of this story over the years you can catch up with all of it here. A corrupt court in Ecuador provided a ruling in favor of local interests, ordering Chevron to pay billions of dollars for the cleanup of drilling sites in that country which were, in all likelihood, contaminated by Ecuador’s state-run oil company. The plaintiffs, with the help of various environmental groups and their lead American attorney Steven Donziger, apparently assumed that Chevron would simply pay up rather than go through the hassle of a lengthy legal battle.
This has turned out to be one of the worst assumptions in legal history. Chevron fought back in every court where cases were opened, proving repeatedly that the original case was a product of fraud, corruption and racketeering. The case in the United States ended particularly badly for the plaintiffs, with Donziger being exposed for engineering a massive effort at fraud. But they were still fighting on, attempting to get the courts in a couple of other countries to entertain a judgment on their behalf.
Now, as Michael Krauss reports at Forbes, those final efforts seem to be headed for a similarly spectacular failure.
The plaintiffs’ (and their American attorney Steve Donziger’s) efforts to enforce their corruptly obtained Ecuadorean judgment against the assets of Chevron Canada Limited, a company distinct from Chevron Corp. is drawing to a close. The Court of Appeal for the province of Ontario (which, like most jurisdictions outside the US, has a “loser-pays” rule requiring unsuccessful litigants to pay reasonable lawyers’ fees of their victorious opponents) has ordered the Ecuadorian plaintiffs to deposit nearly C$1 million as security for costs of their appeal of adverse decisions against it, which appeals the provincial high court predicted are unlikely to succeed.
“In my view, the Ecuadorian plaintiffs have not demonstrated that their appeal has a good chance of success,” Justice Gloria J. Epstein wrote in her 31-page decision. The court had discretion to waive the bond requirement for impecunious litigants, but Justice Epstein noted that the plaintiffs have “received a significant amount of funding for this litigation in the past” and that they refuse to provide information about their current sources of financing.
There had been some concern that the plaintiffs might actually prevail in Canada, as their system skews quite a bit further in the lefty, tree-hugging direction and some of their judges have been sympathetic to similar causes before. But with the court ordering the plaintiffs to put up a massive bond to cover legal fees before moving forward, the prospects for success look dim. It’s also interesting that the court is questioning the source of all the financing that Donziger and company have been receiving thus far.
That wasn’t the only bit of bad news for the would-be billionaires who brought the suit. In Brazil they had a separate, similar effort going, hoping to have the judgement enforced there. But Krauss reports that Brazilian Justice Luis Felipe Salomão has issued an order saying that enforcing the ruling would be, “contrary to public order because the judgment was based on fraud.” That doesn’t sound like the sort of ruling one bothers appealing any further.
Krauss further informs us that back in Donziger’s home town, several judges have filed complaints with the state bar, asking that he be disbarred in New York. Had he succeeded in this scheme, it likely would have been a once-in-a-lifetime score for Donziger, assuring him a life of wealth and luxury. But as things stand now, he may have brought about his own professional demise. As we covered here earlier, questions have already been raised as to whether or not he should wind up being prosecuted for his participation in this scheme. Going after lawyers who bring cases to court hasn’t been a particularly popular or successful activity in the past, but this might be an exception to the rule.
So is this the end of the road at long last? Not exactly. There are still plenty of final details to be ironed out and you can never be sure what any given court will do. But from the looks of it, the end is at least in sight and it doesn’t look good for the Ecuadorian tricksters and their associates. Chevron has spent a tremendous amount of time and money fighting this rather than simply rolling over and paying up. Perhaps other corporations will use this as a blueprint for the future when someone else tries to pick their pockets.