Chevron Brief
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Case 1:11-cv-00691-LAK-JCF Document 1847 Filed 12/23/13 Page 1 of 391 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x : CHEVRON CORPORATION, : : Plaintiff, : -against- : : Case No. 11 Civ. 0691 (LAK) : STEVEN R. DONZIGER, et al., : : Defendants. : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x CHEVRON CORPORATION’S POST-TRIAL MEMORANDUM OF LAW GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, New York 10166-0193 Telephone: 212.351.4000 Facsimile: 212.351.4035 Attorneys for Plaintiff Chevron Corporation Case 1:11-cv-00691-LAK-JCF Document 1847 Filed 12/23/13 Page 2 of 391 TABLE OF CONTENTS Page TABLE OF AUTHORITIES ........................................................................................................ xii TABLE OF DEFINED TERMS AND ABBREVIATIONS .................................................... xxxv PRELIMINARY STATEMENT .................................................................................................... 1 FACTUAL BACKGROUND ....................................................................................................... 13 A. TexPet, Remediation, and Release.............................................................................. 13 B. The Aguinda Litigation ............................................................................................... 16 C. The Chevron-Texaco Transaction ............................................................................... 17 D. The Lago Agrio Litigation .......................................................................................... 17 E. Donziger Exploited Corruption in Ecuador to Fuel His Extortion of Chevron in the United States ..................................................................................................... 18 F. Donziger Executed a Pressure Campaign Against Chevron in the United States ........................................................................................................................... 19 G. The Cabrera Fraud ...................................................................................................... 20 H. Obstruction and Cover-Up .......................................................................................... 22 I. Judgment Fraud ........................................................................................................... 23 J. Proceedings in This Action ......................................................................................... 24 ARGUMENT ................................................................................................................................ 25 I. Donziger Has Violated RICO ........................................................................................... 27 A. RICO Provides a Cause of Action for Those Injured by Racketeering ...................... 27 B. Donziger Operates and Manages an Enterprise That Pursues an Extortionate Scheme Against Chevron ............................................................................................ 29 1. Donziger’s Enterprise Is a Multi-Faceted Organization ....................................... 30 a. U.S. Lawyers ................................................................................................... 31 b. Funders ............................................................................................................ 32 c. Public Relations and Lobbying ....................................................................... 33 d. U.S. Consultants.............................................................................................. 34 e. Defendants’ Ecuadorian Agents ..................................................................... 35 2. Donziger is the Undisputed “Cabeza” of the Enterprise ....................................... 38 C. Donziger Has Committed Dozens of RICO Predicate Crimes ................................... 44 1. Donziger’s Attempt to Obtain Money From Chevron Through Fear of Economic Harm Constitutes Extortion ................................................................. 44 i Case 1:11-cv-00691-LAK-JCF Document 1847 Filed 12/23/13 Page 3 of 391 TABLE OF CONTENTS (continued) Page a. Extortion Encompasses Attempting and Conspiring to Make Wrongful Use of Fear of Economic Harm to Induce Another to Pay Money ...................................................................................................... 45 b. Donziger Exploited Judicial Weakness and General Corruption in Ecuador to Manufacture “Leverage” Over Chevron ...................................... 46 c. Donziger’s Initial Scheme Was to Corruptly Influence the Court Process Through Party-Nominated and Court-Appointed Experts ................. 48 i. Donziger Submitted Forged Reports to the Ecuadorian Court Under the Signature of the LAP-Nominated Expert, Dr. Charles Calmbacher .................................................................................. 48 ii. Donziger Set Up a Fraudulent “Monitorship” Program With Fernando Reyes to Influence the Neutral Settling Experts ....................... 51 iii. These Schemes Failed to Obtain the Results Donziger Desired ............... 52 d. Unable to Generate Sufficient Leverage Over Chevron in the Judicial Inspection Process, Donziger Implemented a Bolder Scheme to Install and Control Richard Cabrera as the Definitive “Global Expert” .............................................................................................. 53 i. Donziger Recruited and Placed Cabrera as an “Independent” Expert ........................................................................................................ 54 ii. Donziger Hired the LAP Team’s U.S. Consultants to Ghostwrite the Cabrera Reports ................................................................ 56 iii. While the U.S. Consultants Wrote Cabrera’s Report, Donziger and His Co-Conspirators Also Controlled the Fake Cabrera Inspection Process ..................................................................................... 60 iv. Despite Drafting the Report and Controlling Cabrera, Defendants—and Cabrera—Repeatedly Denied the LAP Team’s Role .............................................................................................. 62 v. Defendants Can Neither Explain Nor Defend Their Ghostwriting ............................................................................................. 64 (1) Defendants’ Assertion That Cabrera “Adopted” the Report They Wrote Is False and No Defense Anyway ................................... 65 (2) The LAP Team’s Relationship with Cabrera Was Illegal Under Ecuadorian Law ....................................................................... 67 (3) Donziger’s Attempts to Conceal the Ghostwriting Demonstrate That He Knew it Was Wrongful .................................... 70 (4) Defendants’ Contention That the Cabrera Fraud Is Immaterial Fails .................................................................................. 76 ii Case 1:11-cv-00691-LAK-JCF Document 1847 Filed 12/23/13 Page 4 of 391 TABLE OF CONTENTS (continued) Page e. With the Cabrera Report in Hand, Donziger Launched a Full-Scale Pressure Offensive .......................................................................................... 79 i. In the U.S., Defendants Falsely Promoted the Cabrera Report as Independent .......................................................................................... 80 ii. Donziger Took the Cabrera Report to U.S. Federal and State Officials..................................................................................................... 84 f. Donziger Falsely Presented the Fraudulent Judgment as Legitimate and Enforceable .............................................................................................. 86 i. Defendants’ Fingerprints Are all Over the Judgment, in the Form of Their Own Unfiled, Confidential Work Product ........................ 86 ii. Guerra’s Eyewitness Testimony Explains These Anomalies and Confirms the LAP Team’s Ghostwriting of the Judgment ....................... 92 (1) Guerra Approached Chevron With Evidence of the LAP Team’s Fraud ...................................................................................... 93 (2) For Years, Guerra Worked as Zambrano’s Illegal Ghostwriter, and Took Bribes for Favorable Orders During That Time From the LAP Team .......................................................... 95 (3) Zambrano’s Return to the Case Gave Donziger the Opportunity to Seize the Ultimate Prize: Ghostwriting the Judgment Itself .................................................................................... 98 iii. Defendants’ Gamble to Bring Judge Zambrano to Testify Backfired ................................................................................................. 100 (1) Guerra’s Ghostwriting of Orders in Zambrano’s Cases in Exchange for Payments from Zambrano .......................................... 100 (2) Zambrano’s Claims that he Drafted and Dictated the Lago Agrio Judgment ................................................................................. 102 (3) Documents Left Outside Zambrano’s Office Door .......................... 105 (4) Zambrano’s New Employment ......................................................... 106 (5) Defendants’ Failed Attempts to Rehabilitate Zambrano’s Testimony ......................................................................................... 107 (6) Zambrano and