Disastrous day for the Lago Agrio plaintiffs in Chevron trialNovember 6, 2013: 9:04 AM ET
In Manhattan federal court, the former Ecuadorian judge who signed a $19 billion environmental judgment against Chevron seemed startlingly unfamiliar with the opinion he claims to have authored.
FORTUNE -- In remarkable testimony Tuesday in federal court in Manhattan, the former Ecuadorian judge who signed a $19 billion environmental judgment against Chevron in 2011 seemed startlingly unfamiliar with the contents of the opinion he claims to have authored. He was unable to account for key data, reasoning, case citations, and terms he used in it.
The strikingly poor performance of the judge, Nicolás Zambrano Lozada, appeared to bolster Chevron's contention that the $19 billion judgment in the environmental case, commenced in Lago Agrio, Ecuador in 2003, was not written by Zambrano at all, but rather by the plaintiffs lawyers themselves, who, Chevron maintains, won that opportunity by agreeing to pay Zambrano $500,000 from out of any eventual recovery. Zambrano maintains that he wrote the ruling without any assistance from anyone.
Zambrano's testimony came in a civil case Chevron (CVX) filed in Manhattan in February 2011 against U.S. lawyer Steven Donziger and other leaders of the Ecuadorian litigation. In that suit, brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), Chevron accuses the Lago Agrio plaintiffs team of having won the huge Ecuadorian judgment through bribery, extortion, fraud, witness tampering, obstruction of justice, and money laundering. The Lago Agrio case sought damages for contamination allegedly left behind by Texaco after it drilled for oil in the Ecuadorian Amazon from 1964 to 1990. Texaco was acquired by Chevron in 2001.
Attorneys for Donziger and the other defendants in Chevron's RICO case will have an opportunity to try to rehabilitate Zambrano today. Donziger spokesperson Chris Gowen issued a statement Tuesday evening that attacked the impartiality of U.S. District Judge Lewis Kaplan and claimed that Chevron's lead lawyer Randy Mastro, of Gibson, Dunn & Crutcher, "repeatedly conducted improper impeachments of the witness relying on poor translation and semantics and never once allowing the witness the opportunity to explain his testimony -- a basic component of proper impeachment."
Early in his examination Mastro sprang upon Zambrano a pop quiz on the ruling he claims to have written -- a daring gambit that seemed to pay off. Mastro asked Zambrano, for instance, to name what the author of the ruling had described as "the most powerful carcinogenic agent considered in this decision."
"I don't recall exactly," Zambrano responded. "But if you give me the names, perhaps I can remember."
Mastro then asked Zambrano to identify what the author of the opinion had called "the statistical data of the highest importance to delivering this ruling."
Zambrano hazarded a guess, but was mistaken.
"What theory of causation," Mastro asked next, "does the author of the ruling say he agrees with?"
"I don't recall," Zambrano said.
Mastro may have been emboldened to subject Zambrano to this test by the fact that -- as he revealed next -- Zambrano had been, during his deposition last Friday and Saturday, unable even to identify exactly what the initials "TPH" stood for in the ruling. "It pertains to hydrocarbons," Zambrano had answered, "but I don't remember exactly." As, it seemed, almost everyone in the courtroom except Zambrano knew, the initials stood for "total petroleum hydrocarbons," the main measure of contamination referred to throughout the 188-page, single-spaced ruling.
Worse was yet to come. After establishing that Zambrano claimed to have done all his own research, Mastro asked the former judge, who acknowledged speaking no English or French, how he came to cite as precedents in it English- and French-language rulings from U.S., English, Australian, and French court decisions. Zambrano said that the 18-year-old woman who typed his dictations into the official court-supplied computer had also looked up "topics" for him on the Internet, and had then used Internet translation engines to convert the materials she found into Spanish. Zambrano also said that all the research he collected in this fashion, as well as all the notes he ever took on the Lago Agrio case itself, he had later destroyed, so that there was no surviving documentary corroboration for his having authored the ruling.
A sturdy man with a shaved head, Zambrano appeared to be unaccustomed to the powerful North American air conditioning at the federal courthouse. He kept his overcoat on throughout his testimony, and even bundled up with a scarf during the afternoon session. After an early warning from Judge Kaplan not to provide long-winded, discursive answers to yes-or-no questions, Zambrano followed that instruction religiously, though his terse responses were often delivered after long pauses or requests for repetition. Not infrequently, Mastro showed, these answers were seemingly inconsistent with those delivered at his deposition less than a week earlier.
Zambrano seemed puzzlingly unprepared for the most foreseeable questions he was being called upon to field. Within weeks after Zambrano ostensibly issued the $19 billion judgment on February 14, 2011, for instance, Chevron began publicly highlighting alleged "irregularities" contained within it, of which the most problematic were its seemingly plagiaristic incorporation of long passages from certain internal memos known to have been authored by the Lago Agrio lawyers themselves, but never introduced into the official record -- the only place Zambrano could have legitimately gained access to them. (At least one of these internal memos came to light when Judge Kaplan permitted Chevron to mirror the hard drives of Donziger's computers in New York in early 2011.)
Similarly, more than two years ago Chevron began citing as evidence of the plaintiffs' allegedly clandestine and corrupt involvement in the writing of the judgment the ruling's incorporation of data throughout that contains errors and other anomalies that match perfectly the characteristics of data contained in the plaintiffs team's internal database, but which were absent from the data introduced into the official record.
Yet in his testimony Tuesday Zambrano seemed totally unprepared to explain either phenomenon. With respect to one of the allegedly plagiarized passages, for instance, he not only couldn't account for how it got into his ruling, but he also couldn't explain the presence of an English word within the passage -- "workover," a term referring to an oil-well drilling procedure -- whose meaning he admitted not knowing.
At times Zambrano seemed to dig the RICO defendants into a deeper hole than they already found themselves. In a declaration Zambrano submitted last March, for instance, he had seemed to suggest one conceivable -- if unlikely -- explanation for the irregularities, by claiming that people sometimes anonymously left documents outside the door of his office when he was writing the judgment, and suggesting that he might have incorporated some of these documents into his ruling without verifying whether they had ever been properly introduced in the record.
But at both his deposition last weekend and in his testimony Tuesday he seemed to foreclose the possibility that this sort of a baby-in-a-basket scenario could explain the anomalies. At his deposition he testified that when something was dropped outside his door he would "match" it to materials already in the record, and if it was "different I would discard it, because it wasn't useful to me."
Similarly, on Tuesday Zambrano seemed to preclude the possibility that the plaintiffs' internal databases could have been provided to him in this fashion, because he testified that he hadn't received any computer disks or Excel spreadsheets outside his door. In fact, he acknowledged, he didn't know what an Excel program was and, thus, he seemed to have no clue as to how a great many calculations that appear in the ruling were performed, since the calculations hinged, Mastro suggested, upon such spreadsheet manipulation and hadn't been drawn from any expert's report.
By the morning break Chevron counsel Mastro seemed positively giddy at how well he felt his cross-examination was going, and at an afternoon break Chevron's vice president and general counsel, R. Hewitt Pate -- who has attended almost every day of the first three weeks of testimony -- embraced Mastro in triumph in the hallway.
In an otherwise somber day for the defense, Donziger received a visit in the afternoon from one of his celebrity supporters, Trudie Styler, the wife of Sting and a cofounder of the Rainforest Foundation Fund. He leaned across the bar to kiss her.
Because Mastro called Zambrano as an "adverse witness," Zambrano has essentially endured nothing but cross-examination so far. The RICO defendants' lawyers will finally get a chance to lead him through friendlier "direct" testimony today, probably beginning around mid-morning, after Mastro completes his cross-examination.