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REFILE-Lawyer 'wanted no part' of case against Chevron in Ecuador

Nate Raymond
Thursday, 31 Oct 2013 | 6:32 PM ET

NEW YORK, Oct 31 (Reuters) - A New York lawyer testified on Thursday that he quit a team that was suing Chevron Corp over environmental pollution in Ecuador in 2010 for "ethical" reasons.

The testimony appeared to bolster Chevron's effort to prevent the lawyer who headed the litigation, Steven Donziger, from pursuing enforcement of a $19 billion award against Chevron.

Jeffrey Shinder, a partner at the law firm Constantine Cannon, said Donziger had approached him starting in late 2009 about helping enforce any award the Ecuadorean court issued.

Shinder said he quit after just eight days into his formal retention after learning that a report by an expert appointed by the Ecuadorean court had actually been written by a consulting firm working for the plaintiffs.

"I wanted no part of it," Shinder said in federal court in New York.

The testimony came in the third week of the non-jury trial before U.S. District Judge Lewis Kaplan in which Chevron claims that Donziger and others engaged in fraud and bribery to obtain the award.

In 2011, a judge in Ecuador awarded $18 billion to people from the village of Lago Agrio, who had for years been pursuing litigation over environmental contamination from 1964 and 1992 at an oil field operated by Texaco, which Chevron bought in 2001.

The award was later increased to $19 billion to cover fees. But as Chevron no longer has assets in Ecuador, the Ecuadoreans have been forced to look overseas and have pursued enforcement actions in Canada, Argentina and Brazil.

Chevron, the second-largest U.S. oil company, has refused to pay. It filed the New York lawsuit in 2011 claiming the award was the product of fraud.

At trial Thursday, Shinder, whom Chevron subpoenaed to testify, said Donziger approached him about joining the case in October 2009 as Donziger began preparing to fight to enforce an anticipated judgment.

While no award had been issued, a court-appointed expert had in April 2008 issued a report recommending the judge hold Chevron liable for up to $16.3 billion in damages.

The expert, Richard Stalin Cabrera Vega, revised his recommendation in November 2008 to $27 billion.

STRATUS CONSULTING

Chevron has long contended that Cabrera's report was ghostwritten by a consulting firm, Stratus Consulting Inc, working for the plaintiffs. Shinder said Donziger had sought to assure him Chevron's claims were "trumped up" and inaccurate.

"He denied the allegations, but did say to me that, 'You have to understand, they do things differently in Ecuador,"' Shinder said.

In March 2010, Shinder's firm agreed to represent the plaintiffs in cases Chevron had filed in the United States seeking evidence in aid of the Ecuador litigation.

Soon after, Shinder said he flew out to Colorado at Donziger's expense to meet employees at Stratus, including co-founder Douglas Beltman.

Near the end of his two-hour conversation with Beltman, Shinder said the "truth came out" as he admitted Stratus had written portions of Cabrera's report.

After discussing the matter with other lawyers at his firm, Shinder said he told Donziger he would be withdrawing, primarily for "ethical reasons."

"It bothered me and still bothers me that we'll never know if there was a case against Chevron," Shinder said.

Stratus Consulting, once a co-defendant in the New York case, settled with Chevron in April. It has also disavowed any and all findings and conclusions of reports it issued in the Ecuador litigation.

The case is Chevron Corp v. Steven Donziger et al, U.S. District Court for the Southern District of New York, No. 11-0691.

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