ECONOMY

US lawyer who battled Chevron in Ecuador sentenced for contempt

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A US lawyer who secured a landmark judgment against Chevron over the damage he said the oil industry had inflicted on indigenous communities in Ecuador has been sentenced to six months in jail, the latest twist in an long-running legal saga.

A judge in New York said human-rights lawyer Steve Donziger deserved the maximum six-month sentence for wilfully and deliberately disobeying court orders. In July she found him guilty of contempt of court for refusing to hand information to Chevron about the case.

“Mr Donziger has spent the last seven-plus years thumbing his nose at the US judicial system,” said US Judge Loretta Preska. “It’s now time to pay the piper.”

Donziger, who was on the verge of tears during the hearing, pointed out he had already served over two years of house arrest, forced to wear an ankle bracelet, had no money, been barred from the legal profession and had his passport confiscated.

“I think by any objective measure I’ve already been punished quite severely,” he said.

The battle between Donziger and Chevron dates back three decades and has been framed by environmentalists as a classic David-versus-Goliath tussle between thousands of poor farmers and indigenous people in the Amazon basin and one of the biggest companies on the planet.

By contrast, Chevron has depicted it as a smear campaign with no basis in fact, led by a manipulative attorney who disregarded the rule of law.

In the 1990s, Donziger launched a class action suit against Texaco on behalf of 30,000 Ecuadorians over the devastation he said the company had caused in the Lago Agrio oilfield.

He said Texaco, which had operated in the area since the 1970s, was responsible for what looked like “an apocalyptic disaster”, resulting in chronic illnesses, congenital diseases and in some cases death due to pollution.

In 2001, Chevron inherited the case when it bought Texaco, although it said it had no liabilities to settle. It said Texaco had cleaned up its operational area before the takeover and that any remaining contamination was the responsibility of Texaco’s partner, Ecuadorean state-owned Petroecuador.

Nine years later, an Ecuadorean court found Chevron liable and ordered it to pay over $18bn in compensation — at the time the biggest award ever against a corporation outside the US.

The figure was later halved, but environmentalists and indigenous activists still hailed Donziger as a hero and said the case would serve as a precedent for other campaigns against Big Oil.

Chevron refused to pay and withdrew from Ecuador. Lawyers for the plaintiffs went after the company in Argentina, Brazil and Canada to try to secure payment, but without success.

The oil company launched a counter-offensive and sued Donziger in the US, saying he used underhand methods to get the verdict he wanted.

In 2014 a US judge agreed, finding that Donziger had effectively ghostwritten the Ecuadorean judgment himself and obtained the decision through “corrupt means”, which the attorney denied.

The case also went to the Permanent Court of Arbitration in The Hague, which issued a damning indictment of Donziger and his legal team. It said people claiming to be genuine plaintiffs “actually were engaged in blackmail and bribery of Ecuadorean judges”. It said the court verdict against Chevron should not be enforced.

After various appeals, Donziger was disbarred in the US and later convicted of contempt of court after he refused a judge’s order to hand over his cell phone and laptop so they could be passed on to Chevron, allowing the company to see information related to the case.

Donziger, who said he is appealing against the conviction, argued that the judge’s request was a violation of attorney-client privilege.

The case still ignites passions nearly 30 years after it began. Environmental activists and other supporters of Donziger staged a rally outside the Manhattan court where he was sentenced on Friday.

“Chevron has used every dirty trick in the book to overturn that [initial] victory and destroy the lives of those who had the guts to stand up to them,” non-governmental organisation Amazon Watch said in a statement.

On the other side on the argument, one defence lawyer has accused Donziger of trying “to bludgeon the company into settling the case for huge sums that have no basis in fact or law”. 

Preska said the case was strictly about Donziger’s refusal to obey court orders and not about the broader allegations. “Even if Chevron is the bad guy in Mr Donziger’s eyes, that doesn’t make Mr Donziger the good guy,” she said.

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