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Judge Who Issued $18.2 Billion Ruling Against Chevron Removed From Bench

Stocks in this article: CVX

Chevron Corp. (NYSE: CVX) today renewed its request of authorities in Ecuador to investigate the overwhelming evidence of fraud tainting the Lago Agrio lawsuit after the Associated Press and Ecuador’s El Universo newspaper revealed that Nicolás Zambrano, the judge who issued the $18.2 billion judgment against Chevron, has been dismissed from the bench due to his complicity in an emerging story of court corruption and drug trafficking in Ecuador.

The media outlets reported that the Judicial Council, the body that governs the Ecuadorian judiciary, has determined that Judge Zambrano, and Judge Leonardo Ordóñez, who previously presided over the Lago Agrio lawsuit, should be dismissed from their positions on the Court of Justice of Sucumbíos in Lago Agrio following an investigation into allegations of lenient treatment of drug dealers in cases before them. The investigation and subsequent dismissals followed a complaint filed by Ecuador’s Organized Crime Prevention Unit.

“Chevron has already shown through the plaintiffs’ lawyers’ own documents and film outtakes that Judge Zambrano’s ruling against Chevron was ghostwritten by the plaintiffs’ lawyers. Evidence also shows that the plaintiffs’ representatives paid bribes to at least one court official through a secret bank account. Now it appears the Sucumbíos court was plagued by even broader corruption,” said Hewitt Pate, Chevron vice president and general counsel. “Hopefully now that these judges have been removed from their positions of power, others will come forward with evidence of the wrongdoing that has occurred in the courtrooms.”

Through court-ordered discovery, Chevron has obtained evidence that the Lago Agrio plaintiffs’ lawyers and consultants, at a minimum, provided clandestine assistance to the Lago Agrio court in drafting the judgment against Chevron. Much of the judgment tracks the plaintiffs’ lawyers’ own internal, unfiled documents word-for-word, citing figures from the plaintiffs’ lawyers’ internal database that did not form part of the record, as well as copying errors and idiosyncratic reference citations.

The ghostwriting of judgments in Ecuador is not unique to the Lago Agrio case. As has been widely reported, the El Universo newspaper suffered similar treatment in an equally-politicized trial featuring evidence that the ultimate judgment was written by lawyers working for the plaintiff, in this instance President Rafael Correa. The handling of the El Universo case was, in the words of the Washington Post, “alas, worthy of a banana republic. After four changes of judge, a ‘temporary’ magistrate took over the case, held one hearing, and—33 hours after his appointment—issued the 156-page ruling. A subsequent independent investigation determined that he did not write it, and that the author was probably Mr. Correa’s attorney.”

Other independent organizations have noted the steep decline in the capability of the Ecuadorian judiciary to administer impartial justice. Since Correa’s election, the U.S. State Department has reported on “the susceptibility of the judiciary to bribes for favorable decisions and resolution of legal cases and on judges parceling out cases to outside lawyers, who wrote the judicial sentences and sent them back to the presiding judge for signature.” Other organizations have reached similar conclusions, finding that Ecuador ranks near the bottom of all nations for “rule of law” and similar measures.

Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.



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