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The new culture of corporate impunity

You see it everywhere.  In today’s Times, a story about a wave of NLRB charges against McDonald’s:

The charges said that McDonald’s and its franchisees illegally disciplined employees who had protested, reduced their hours, spied on them and restricted their ability to communicate with union representatives.

Ouch.  You would expect a outraged denial from the company, right?  At least a statement saying that such conduct, even if McDonald’s denies being liable for it, is unacceptable.

Nope.  McDonald’s gave one quote for the article:

McDonald’s said that the general counsel’s action “improperly and dramatically strikes at the heart of the franchise system — a system that creates economic opportunity, jobs and income for thousands of business owners and their employees.

And then it lets its thugs at the U.S. Chamber of Commerce, the International Franchise Association, the National Restaurant Association and the National Retail Federation do the talking, without a word on the merits, simply “warning that [the NLRB action] could result in the loss of hundreds of thousands of jobs by forcing franchising companies to rethink and reduce their number of franchised outlets.”  Blah blah blah.

The idea that McD’s and others would lay off hundreds of thousands of workers and close thousands of restaurants because they have to take some responsibility for franchisee labor conditions, when they already exercise dictator-level control over marketing, promotions, and countless other operational details, is patently self-serving and melodramatic.

But my real point here is how neither McD’s nor any of their linemen even feel the need to address the incredibly serious allegations of rights violations behind the NLRB lawsuits.  It appears to have become perfectly acceptable to stand on your impunity defense with nothing more.  This was always the case in court, but if it’s now the case in the court of public opinion, it makes for a sad statement on where things stand.


Footnote 19 / “I got it from the beginning”

Chevron recently filed its responsive brief in the appeal of its infamous civil RICO case, the retaliatory lawsuit that the oil giant filed against its Ecuadorian victims and their lawyers in U.S. federal court mere days before an Ecuadorian court came down with a massive environmental verdict against the company, in favor of those victims, won by those lawyers.  Facing actions to enforce the Ecuadorian judgment around the globe, in which one of the few available defenses is “fraud,” the RICO lawsuit claimed, surprise surprise, that the entire Ecuadorian environmental case was a “fraud.”  It went further, claiming that the victims’ and the lawyers’ public activism surrounding the case was not free speech but actionable “extortion.”

To support its claims, Chevron paid an impoverished and admittedly corrupt former Ecuadorian judge tens of thousands of dollars in cash and moved him and his extended family to a life of relative luxury in the United States (all despite clear ethical prohibitions on paying fact witnesses), in exchange for the judge’s shifting testimony that he had heard a bribe was paid by the Ecuadorians in the environmental case.  Chevron and its army of over a hundred lawyers introduced testimony by “secret” witnesses that the defendants were not allowed to hear; they managed to exclude all evidence of environmental contamination and the other good faith bases for the environmental case, as well as evidence of Chevron’s own misdeeds in the Ecuador litigation; they seamlessly edited key video footage to take out parts they didn’t like and change its meaning; and most importantly, they abruptly dropped all money damages claims on the eve of trial so that they could avoid having to present the case to a jury of regular U.S. citizens and instead have it decided by one man: the presiding judge, Lewis A. Kaplan.

In March 2014, Kaplan issued a 500+ page opinion that gave Chevron nearly everything it asked for on the law and adopted every aspect of Chevron’s “fraud” narrative, completely ignoring the powerful and at times devastating contrary evidence that the small and admittedly “rag tag” group of lawyers for the defense (I can say this because I was one of them) managed to cobble together during the trial.  That 500-page decision is now on appeal.  Defendant Steven Donziger’s and the Ecuadorians’ briefs were submitted a few months ago, along with several amicus briefs by non-profits, law professors, and the Republic of Ecuador.

While Chevron likes to pretend that Kaplan’s decision is a juggernaut, it is increasingly apparent that it is really a Hindenburg, likely facing a spectacular implosion on appeal.  It is too controversial on too many fronts: too many sweeping jurisdictional assertions and novel legal conclusions; too little concern for core constitutional rights; too easy an embrace of deeply disturbing evidence, like the paid fact witness testimony; and ultimately, so much raw hostility directed at the defendants, on every page for 500 pages, that it starts to feel unseemly, no matter what your view of the facts.  As a result, Chevron and its allies, including the small cadre of corporate legal reporters who have adoringly covered the RICO case over the last few years, have subtly started backing away from the decision—to an extent.  One of those reporters, Paul Barrett of Businessweek, who went so far as to publish a book celebrating Chevron’s RICO case and counter-attack strategy, published an item on Chevron’s appeal brief yesterday.  Here is the quote that Chevron’s lead lawyer, Randy Mastro, gave Barrett for the story:

Judge Kaplan’s extensive factual findings, detailed in a 485-page post-trial decision, stand virtually unchallenged on this appeal. So whatever else now happens, those compelling findings will remain the definitive word on the travesty to which Chevron has been subjected in Ecuador.

No one ever accused Randy Mastro of being subtle.  The fact that Chevron is so aggressively trying to cover its rear before the appeal has even been heard — before it has even been fully briefed — speaks volumes.

One is initially attempted to call this a “Plan B” type strategy, resorted to now that Chevron is finally being forced to confront the deep problems underlying its RICO case.  But in fact, it’s Plan A.  Chevron and its lawyers, after all, composed the RICO score from which Judge Kaplan sang his 500 pages.  They know the fatal flaws of the RICO case better than anyone.  An no one challenges their shrewdness, so it can’t seriously be argued they did not see this coming.  Indeed, the strategy of relying on Judge Kaplan’s “factual findings” even if Kaplan is reversed on appeal has been floated by Chevron for years, and was even practiced by Chevron back in 2011 when an earlier appealed decision by Kaplan was “vacated in its entirety” by the appellate court, yet Chevron continued to assert the vitality of Kaplan’s factual findings in various collateral litigation.  The plan here — Plan A — is to keep flogging Kaplan’s “factual findings” in enforcement courts around the world even if he is reversed on appeal.

That’s why Footnote 19 of Chevron’s recent appellate brief is is really the only thing noteworthy in its 185 pages.  At the end of the day, assuming the appellate court will not be able to stomach Kaplan’s countless legal and jurisdictional overreaches, what Chevron really wants from the appellate court is sort of a leg up in the largely rhetorical battle to come about what significance Kaplan’s “findings” have in the event the legal and jurisdictional foundations that purportedly allowed him to make those findings are swept away.  Chevron’s hope:

Even if this Court were to find that private plaintiffs may not obtain equitable relief under RICO and vacate the injunction, it should exercise its remedial power to uphold the district court’s detailed factual findings regarding Donziger’s RICO liability. “[F]ederal courts have the power to award any appropriate relief in a cognizable cause of action brought pursuant to a federal statute.” Franklin, 503 U.S. at 70–71. . . . In this case, where the centerpiece of Donziger’s ongoing racketeering is and has been a series of falsehoods that culminate in a fraudulent judgment, a freestanding determination of the true facts is more than “appropriate” — it is critical.

There is no shortage of jurisdictional, constitutional, international comity, and other legal problems with this argument, of course.  But, if the reality is that what Chevron wants from the RICO case is not an injunction but a “freestanding determination of the true facts,” how fundamentally wrong is that?  Isn’t it entitled to the truth?

Even setting aside the fact that truth cannot possibly arise from a process as tainted as the RICO proceeding, for the reasons indicated above and many more, it is apparent that the “truth” in Kaplan’s judgment is Chevron’s truth: a carefully crafted blend of truth, untruth, and a-truth, that coheres into a deeply self-interested and, I believe, fundamentally false narrative designed to help Chevron fight the Ecuadorian environmental liability for decades to come.  For Chevron, the prospect of getting that “truth” robed in the garb of U.S. judicial authority has always been Plan A, and was conceived well before the RICO case even began, as Judge Kaplan worked his way through a series of pre-cursor discovery cases Chevron brought against Donziger and others.  At the very first hearing in Donziger’s discovery case, Judge Kaplan expounded from the bench as to what he thought of Mr. Donziger and the historic environmental litigation in Ecuador that Mr. Donziger had worked on for nearly 20 years:

The imagination of American lawyers is just without parallel in the world. It is our one absolutely overwhelming comparative advantage against the rest of the world, apart from medicine. You know, we used to do a lot of other things. Now we cure people and we kill them with interrogatories. It’s a sad pass. But that’s where we are. And Mr. Donziger is trying to become the next big thing in fixing the balance of payments deficit. I got it from the beginning.

A month later, Kaplan ordered Donziger to hand over to Chevron his entire Ecuador case file: 17 years worth of attorney-client communications and confidential files.  Donziger ultimately had to hand over his whole hard drive, containing everything, including his personal diary, which Chevron later used against him in court.  A few months after this discovery order, Chevron’s lawyers filed the RICO case.  Judge Kaplan assigned the case to himself.  Various lawyers entered the case for Donziger and the Ecuadorians, but all were forced to withdraw for lack of funds (when Chevron effectively froze the defendants’ ability to raise money) and out of disgust with the way Judge Kaplan was managing the proceedings.  Nationally renowned defense attorney John Keker, a former marine and as august a member of the bar as can be found, withdrew by way of a letter to the judge calling the proceedings a “Dickensian farce.”  As Marissa Vahlsing, an attorney at Earthrights International who took a leave of absence from her job to volunteer as a defense attorney throughout the trial in New York last fall, wrote in a powerful blog earlier this year, the truth of the Ecuadorian victims of Chevron’s contamination, and of Steven Donziger, never stood a chance in Kaplan’s court.

Chevron knew perfectly the “truth” it would get out of Kaplan.  It got that “truth” memorialized in “factual findings,” no matter how flawed and one-sided those findings are.  The battle in the Ecuador case in years to come will be about pitching, in enforcement courts, the authority of the “truth” from one U.S. judge (no matter what the appellate court does) against the truth of eight years of environmental litigation, 20 years of struggle by communities affected by contamination, and a final judgment of Ecuador’s highest court.

The idea that U.S. judicial authority can be deployed so neatly in service of a single private interest, even (or especially) one of the country’s most powerful corporations, is a bit hard to swallow, at least for me.  Others, it seems, got it from the beginning.

 


Finally, indeed

Reprinted from The Huffington Post:

Finally! A Candid Exposé of Chevron’s Dirty Tricks

It’s not easy to try to explain the saga of the decades long battle to hold Chevron to account for deliberately poisoning people and planet in the Ecuadorian Amazon.Rolling Stone does a very good job of it, however, in yesterday’s article Sludge Match: Inside Chevron’s $9 Billion Legal Battle With Ecuadorean Villagers by Alexander Zaitchik.

The article skillfully explains how Chevron turned a straightforward case into a neverending legal battle – because winning based on the merits was never an option for the oil giant. From blaming the victim to threatening and pressuring their allies,Chevron’s tactics are as dirty as the crude they dumped in the rainforest. The oil giant has launched the greatest assault on corporate accountability to date, yet until now, mainstream coverage of that attack has been frustratingly scarce.

In fact, considering Chevron’s history of going after anyone critical of their actions in EcuadorRolling Stone should be applauded for aggressively investigating a story that few others have been brave enough to take on. Zaitchik confronts the sordid details of the false narrative concocted by Chevron to fuel its retaliatory RICO suit against Steven Donziger and the Ecuadorians, but unlike others reporters, he doesn’t let fear of Chevron’s army of lawyers or Judge Kaplan’s outrageously biased decision dilute his reporting or outweigh the facts.

Most importantly, Zaitchik reminds readers that, “it’s the farmers and the Indians, not the lawyers, who continue to struggle daily with the 50-year legacy of oil production in the region.” For their sake, it’s about time the media told the full story.

Read the full article here.


Chevron: Release The Secret Evidence That Proves Your Guilt In Ecuador

Reprinted from The Huffington Post:

In the wake of a controversial U.S. court ruling that a $9.5 billion Ecuador judgment against Chevron is fraudulent, the oil giant has been touting loudly its innocence of any environmental crimes in the South American country.

Chevron’s lawyers even successfully pressured some CBS News corporate suits to yank a damning 60 Minutes piece from the network’s website about the deliberate contamination of the Ecuador rainforest from 1964 to 1992 by Texaco, which Chevron later bought.

(See the dead link here. You can see the segment on my company’s web site. So sue me, CBS.)

Instead of succumbing to Chevron’s pressure tactics, CBS’ lawyers should grow a backbone and demand to see contamination “playbook” documents that Chevron has been forced to produce in an international arbitration proceeding.

They are explosive and prove 60 Minutes got it right, and the U.S. judge got it wrong.

More here…