It is difficult to comprehend how the relatively straightforward attempt by Ecuadorian plaintiffs to extract damages from oil companies for pollution caused in the course of their work became the perfect definition of a clusterf**k. Everybody got screwed.
Barrett goes through the history of the decades-long lawsuit on behalf of Ecuadorian peasants and tribespeople against Texaco, now part of Chevron, and highlights the bad judgment, culpable wrongdoing, bribery, fraud, and coercion committed by and on behalf of the plaintiffs and the defense.
Petroecuador, the national oil company of Ecuador, should have been named as co-defendant in the case to clean up pollution from seeping pits of oil byproduct left by the oil extractors because they partly owned the oil wells and pits and derived revenue from it but also because they already received some compensation from Texaco toward alleviating the environmental damage. They were not named as co-defendants, however, and did nothing to ameliorate the damage or the plaintiffs’ suffering. The plaintiffs were represented in Ecuadorian court by American lawyer Steven R. Donziger, who began as part of a legal team in 1993 and emerged as lead counsel in 2003.
In February of 2011 the Ecuadorian court ruled against Chevron, ordering them to pay damages for clean-up of USD$18.1 billion. The award was later reduced to USD9.5 billion. Chevron filed countersuit in New York District Court, alleging misconduct by the lead lawyer for the plaintiffs, Donziger, and after several iterations of decisions, managed to obtain an injunction against collection of the damages anywhere in the United States. It is not over yet. Chevron may be named in a lawsuit in another South American country which may seek to recover that big payoff from Chevron.
What struck me about this fiasco is that everyone played to their worst selves. In wanting so badly to avoid being victimized, each group managed to create an environment of social toxicity to go with the demonstrated environmental toxicity. The Ecuadorian state did nothing to demand and enforce clean-up from its own state enterprise which was shoveling profits to them, and once the peasants were offered incentives to claim damages, some appeared to develop illnesses attributed to the illegal oil runoff. Everyone was implicated, everyone was venal, everyone failed.
The plaintiffs' lawyer, Donziger, spent so much time and money on the case he had to bring in a series of investors to keep the case going. Donziger promised percentages of the take to investors once the case was settled (read: won)—so much in fact that had investors all been paid back for their capital infusions, nothing would be left for clean-up!
Donziger, just out of Harvard Law School when he entered the case for the plaintiffs, stated early in the proceedings that he wanted this case to be a “business” model for future attempts to secure damages from large corporations operating without sufficient environmental controls overseas. Even a blatant cynic might blanch at the thought of such stupendous arrogance and this surely went some way to alienating and hardening the positions of Chevron executives, who could have easily fixed the environmental damages with some arm-twisting of Petroecuador, because they came to the case knowing Texaco’s legacy in the country.
But one might say the Americans were the dupes in this fight. They were stupid and arrogant and stubborn, but it was the corruption in Ecuador that really brought both sides to their knees and exposed their idiocy. In a state where the legal system is so little developed that politicians, judges, and lawyers are free to line their pockets at the expense of the people they are sworn to protect, all attempt to recoup losses by legal means are chimerical.
The author, Paul Barrett, is also a Harvard Law grad, and now works as an investigating journalist for Bloomberg BusinessWeek. He has written several other nonfiction books, one of which is called Glock. He manages to bring the mass of information produced by this case into manageable form so that we can understand the progress of the case quite well. He does not appear to take sides, though it is clear he found Donziger’s behavior an affront to his profession.
I came away thinking that this should be read by every law student dreaming of working in international or corporate law for the lessons and warnings it contains. A corporation cannot carry on in this manner and escape unscathed. Needless to say, one would want no law student to imagine they could emulate the hubris of Donziger; failure, in this world or the next, must surely be their fate. This history is positively Dante-esque in the venality of the actors.
I listened to the audio presentation of this book, published by Random House Audio and read by Joe Ochman. Ochman does a good job, threading the legal morass and making it comprehensible. The writing, and therefore the reading, was not completely dispassionate: there was some level of editorial disdain for the parties (who could help it?). There were times I wished I had the hard copy while I was listening, so if you have the opportunity to buy or borrow one or the other, you might like to get both. The hard copy is published by Crown.
You can buy this book here: