In 2014, a federal court found that an American lawyer fabricated evidence, bribed court officials and intimidated judges as part of a lawsuit in Ecuador against a U.S. oil company. In its 500-page opinion the court declared that "Justice is not served by inflicting injustice. The ends do not justify the means." In other words, one cannot commit a series of knowingly fraudulent and illegal acts, even if purportedly done in the name of a noble cause.
There is a growing trend of these types of cases being filed against corporations, claiming to be in defense of the environment or human rights, which are ultimately exposed as fraudulent and fabricated. Often, corporations settle these types of cases to avoid reputational damage or costly litigation. As a result, allegations and rhetoric can trump evidence by those supporting and promoting these lawsuits, and threats alone can result in a payout.
Increasingly, however, corporations are challenging these baseless actions, and the organizations behind the frivolous lawsuits are not happy about it.
Last week, Katie Redford, the co-founder and director of EarthRights International, published a column to this site lamenting the fact that corporations are standing up for themselves. She even goes so far as to blame my law firm for leading this charge, citing cases we have handled for Dole and Chevron as examples of what she labels "retaliatory litigation" in an effort to silence environmentalists.
By highlighting these two cases, Ms. Redford demonstrates exactly why it is not only important, but vital, that American corporations fight fraudulent lawsuits if they have facts on their side.
The Dole litigation involved false allegations that the company had caused sterility of tens of thousands of banana workers in Nicaragua by exposing them to pesticides in the late 1970s. In 2007, a Los Angeles jury returned a multimillion dollar verdict in the first of potentially thousands of trials against Dole. But then Dole exposed the fraud. California courts found the litigation to be a "heinous conspiracy" and a "massive scheme of fraud" orchestrated by plaintiffs' lawyers in the U.S. and Nicaragua. These lawyers, the court ruled, recruited fake plaintiffs, coached them to lie, forged documents, falsified lab results, and threatened, intimidated, and tampered with witnesses. Subsequently, a federal judge in Florida refused to recognize a $97 million Nicaraguan judgment that resulted from this same misconduct--finding that the judgment purported to "establish facts that do not, and cannot, exist in reality."
Had Dole not challenged the false charges against them, and simply settled with the plaintiffs, none of these facts would have come to light.
The Chevron case had a remarkably similar outcome. Steven Donziger, the lawyer behind the case, along with activist groups, including Amazon Watch, alleged Chevron was responsible for wide-spread pollution in Ecuador's Amazon. Despite a lack of evidence, an Ecuadorian court issued a $19 billion judgment against the oil company. Through court-ordered discovery in the U.S., however, it was revealed that Donziger and his team engaged in a pattern of racketeering, including fabricating evidence, bribing Ecuadorian judges and court officials, and even ghostwriting the final judgment against Chevron. This evidence, along with witness testimony - including from members of Donziger's own team - and outtakes from a documentary commissioned by Donziger was presented to a U.S. federal court in 2013. The court found after a full trial that Donziger violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by committing extortion, money laundering, wire fraud, Foreign Corrupt Practices Act violations, witness tampering, and obstruction of justice in obtaining the Ecuadorian judgment and in trying to cover up his and his associates' crimes.
The schemes against Chevron and Dole shared several common elements. Both relied on a false--but superficially compelling--narrative of a multinational company invading an unsophisticated third-world country many years ago, harming the environment, and disrupting indigenous communities. Both schemes sought to escalate settlement pressure by fomenting political, media and social unrest in these foreign countries. And both sets of U.S. plaintiffs' lawyers manufactured evidence, pressured witnesses, and employed other unscrupulous tactics in order to secure a huge judgment.
Accountability is a two way street. To be sure, not every lawsuit is fraudulent; legitimate legal actions can provoke change for the common good and have a positive societal impact. And companies that violate the law should be held accountable. But so, too, should the lawyers and organizations who seek to hold them to account. Giving lawyers and activists a free pass to commit crimes and fraud in the name of a noble cause harms the very interests they claim to represent and perverts our judicial system. As the judge overseeing Chevron's lawsuit against Donziger put it: "There is no 'Robin Hood' defense to illegal and wrongful conduct."
A group of highly respected international human rights experts, including past presidents of the Inter-American Court of Human Rights and the Inter-American Commission on Human Rights filed a brief with the U.S. Court of Appeals for the Second Circuit denouncing the tactics used by Donziger and his team. Their brief stated, "Advocates for human rights do not advance human rights by violating them, and the corrupt pattern of fraud, extortion, and bribery described by the District Court, if accurate, denies the fundamental human rights to due process of law and a fair trial."
Simply put: The ends do not justify the means.