Some countries derive their legal system from the Magna Carta or the Napoleonic code, which clamped restrictions on royal fiats. Others rely on the Koran. And in Ecuador, the governing authority looks to Alice in Wonderland for legal standing.
In the trial there of a $27 billion pollution lawsuit against Chevron, the courtroom echoes with the cry of the Queen of Hearts: "Sentence first — verdict later."
The trial is still going on, evidence is still being submitted. But in a YouTube video (youtube.com/texacoecuador), you can can see presiding judge Juan Nuñez breezily declaring that he's already decided against Chevron and will stick the company with a fine in January.
"Chevron is the guilty party?'" asks a visitor. "Yes, sir," the judge assures him.
It's hardly surprising that the wheels of justice are running on flat tires in Ecuador, where President Rafael Correa fires congress at breakfast, repudiates a few billion dollars in debt at lunch and then relaxes over dinner by sheltering Marxist narcoguerrillas. Ecuador's main export may be oil, but Correa runs his country like a banana republic.
The Chevron trial has become a morass of corruption that threatens to suck in the U.S. judiciary, too. It's the ugliest example yet of a new, international form of jackpot justice in which buccaneer American trial lawyers hitch their wagons to class-action suits in anti-American countries, hoping for a big score that will be enforced by U.S. courts.
The good news is that U.S. judges have, so far, refused to play along. This summer, a California judge ruled that a trial lawyer had faked evidence in Nicaragua lawsuits in which plantation workers supposedly poisoned by pesticides won $3.2 million from Dole Food Company. "It is now clear that those plaintiffs and the evidence presented were all a product of the fraudulent enterprise," declared Judge Victoria Chaney in a ruling that casts major doubt on more than $2 billion in Nicaraguan judgments against Dole, Dow Chemical and others.
The Chevron case in Ecuador will be the sternest test yet of the American judicial system's ability to resist politically correct but legally suspect awards from Latin America. Steven Donziger, the lead attorney representing the Ecuadoreans, is Barack Obama's law-school pal who raised more than $40,000 for the campaign and likes to brag about his political clout.
Certainly the case has more to do with politics than the law. It started with Texaco's discovery of oil in the Ecuadorean Amazon in 1967. (Chevron inherited the case when it bought Texaco in 2001.) Far from regarding the American company as a rapacious interloper, the Ecuadorean government welcomed Texaco as the key to a bright economic future.
Over the next quarter century, Texaco worked with the state-owned company Petroecuador in an enterprise that brought Ecuador billions of dollars of royalties and turned the country into the second-largest oil exporter in Latin America.
In 1992, when Ecuador decided it could pump the oil by itself, Petroecuador bought out Texaco's stake. Texaco spent $40 million cleaning up its drilling sites; the Ecuadorean government released the company from further liability.
But that was no deterrent to American trial lawyers who, as Ecuador's politics moved left, saw a cash cow just waiting to be milked. The entire case against Chevron has been bankrolled not by damaged Ecuadorean parties but Philadelphia trial lawyer Joe Kohn. While the state-owned Petroecuador never cleaned up its share of sites and has amassed one of the world's worst environmental records — an estimated 1,400 oil spills this decade — it mysteriously is not a target of the lawsuit.
The conduct of the Chevron case has been an outrage from the beginning, with faked cancer cases, backdated documents, findings of pollution at nonexistent wells and grotesquely inflated cost estimates. (One court-appointed "expert" recommended billing Chevron $2.2 million for cleaning up each well pit, even though Petroecuador cleans up its own pits for $85,000 apiece.)
But last week's video of Judge Nuñez's "facts?-we-don't-need-no-stinkin'-facts" advance verdict takes the case to a new level of legal malfeasance. The video was shot with concealed cameras by two businessmen who were negotiating with the government for a piece of any cleanup project resulting from the verdict. Correa's political cronies arranged for them to meet with the judge (who, on Friday, removed himself from the case) to assure them that there's plenty of money in the pipeline.
As attorney Donziger admitted in the documentary film Crude, discussing political pressure his team has applied to Ecuadorean courts, "Ecuador, you know, this is how the game is played, it's dirty." American courts would do much better to stay on this side of Alice's looking glass.
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