Chevron's New Offensive in Ecuador Trial

[Judi Lynn]

Chevron's New Offensive in Ecuador Trial
By David Lee Smith
September 20, 2010

Move over, BP (NYSE: BP), Transocean (NYSE: RIG), and Halliburton (NYSE: HAL). Since April, when the companies were involved in a massive Gulf of Mexico tragedy, the trio has sucked up most of our attention to Big Oil. But it now looks like Chevron (NYSE: CVX) might assume center stage, at least for a while.

You're likely aware that the second-largest U.S. oil company is involved in a 17-year-old lawsuit originally filed on behalf of indigenous tribes in Ecuador. The suit maintains that the Ecuadorians suffered severe health problems and other difficulties when Texaco -- which Chevron bought in 2001 -- failed to remediate an environmental mess that occurred when it operated a consortium in the country between 1965 and 1990.

Plaintiffs' weapons
Key to the arsenal of the plaintiffs' team during the past two years has been a detailed report ostensibly written by engineer Richard Cabrera, an "independent expert" appointed by the Ecuadorian court, along with a 2009 documentary film called Crude. Cabrera's final report estimates the damages for which Chevron should be liable at $27 billion. But, as both Fortune and Forbes have described in their most recent issues, Gibson, Dunn & Crutcher, Chevron's outside law firm, has filed 11 Section 1782 actions. Through these filings, those involved in overseas litigation can subpoena testimony and documents from U.S. witnesses.

The firm pulls out its files
Of Gibson Dunn's total filings, at least part of all 11 have been granted by the judges involved, a good average in any sport. The filings were targeted at cities where the plaintiffs' team members or consultants worked, including San Diego, Denver, Houston, Atlanta, Newark, N.J., New York City, Washington, D.C., and Asheville, N.C. The search ultimately was intended to elicit proof that Cabrera's report had actually been written by the plaintiffs' attorneys. According to Fortune, at least one of the judges who have looked at the 1782's findings thus far has noted the appearance of "fraud."

A couple of specifics: An expert used earlier by the plaintiffs testified that two reports that he had supposedly written claiming contamination at the sites of four former Texaco wells were not his work and didn't contain his conclusions. And Fortune maintains that a Chevron-hired forensic linguist has written a report concluding that Cabrera's report was largely written in English and subsequently translated into Spanish. Cabrera does not speak English.

More:
http://www.fool.com/investing/general/2010/09/20/chevrons-new-offensive-in-ecuador-trial.aspx

[Judi Lynn]

1. Ecuador Judge Says Trial Period Finished In Chevron Case

SEPTEMBER 20, 2010, 11:18 A.M. ET.
Ecuador Judge Says Trial Period Finished In Chevron Case
By Mercedes Alvaro
Of DOW JONES NEWSWIRES

QUITO (Dow Jones)--Ecuadorian judge Leonardo Ordonez has said the trial period has ended in a multibillion lawsuit Chevron Corp. (CVX) faces in Ecuador.

The judge, who is president of the provincial court of Sucumbios in the jungle city of Lago Agrio, communicated the decision in a letter sent Friday to both sides in the case.

The letter was reviewed Monday by Dow Jones Newswires.

Ordonez now will have to analyze about 190,000 pages of relevant documents before giving a ruling.

A verdict is expected by March next year. Both parties can then avail turn to several levels of appeal, which could add a couple years or more before a final ruling is reached.

Chevron inherited the lawsuit when it bought Texaco in 2001.

More:
http://online.wsj.com/article/BT-CO-20100920-707796.html