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Chevron makes its case in trial over $19 billion Ecuadorean judgment

A waste pit filled with crude oil left by Texaco drilling operations years earlier lies in a jungle clearing near the Amazonian town of Sach
A waste pit filled with crude oil left by Texaco drilling operations years earlier lies in a jungle clearing near the Amazonian town of Sach

By Joseph Ax

NEW YORK (Reuters) - Chevron Corp is bringing its enormous resources to bear in a court case in New York in which it has accused a U.S. lawyer of using fraud to win a $19 billion environmental judgment against it.

The judgment was made by an Ecuadorean court to a group of affected villagers in 2011. Chevron has asked the U.S. District Court in Manhattan to prevent the villagers and the U.S. lawyer who helped them, Steven Donziger, from collecting the award.

Donziger has denied using fraud to obtain the judgment.

Chevron, which rested its case on Tuesday, has brought a series of expert witnesses from the fields of linguistics, psychology and computer science to testify in the case over the past four weeks.

The star witness was Alberto Guerra, a former Ecuadorean judge who said he was paid by lawyers for the villagers to ghostwrite rulings for the judge in the case.

Donziger was aware of the arrangement, he said.

"Mr. Donziger thanked me for the work that I was going to do," Guerra said.

Lawyers for Donziger said Guerra's testimony cannot be credited because Chevron paid to relocate his family and has covered his living and housing expenses.

The judge who made the award, Nicolas Zambrano, also appeared as a witness for Chevron.

Zambrano said he authored every word of the 188-page opinion on his own. But Chevron, with a small army of lawyers from top law firm Gibson Dunn & Crutcher, raised several apparent inconsistencies in his testimony.

When asked how he was able to cite both French and English case law in his 188-page decision, despite speaking neither language, Zambrano said an assistant found the citations online for him.

Other witnesses included experts who said that Zambrano's opinion contained material from Donziger's files and that Zambrano could not possibly have reviewed hundreds of thousands of documents in the case in the time frame he claimed.

And a U.S. lawyer who worked on the Ecuador case, Jeffrey Shinder, testified that he pulled out of the case after only a few days when he learned that an expert's report on Chevron's liability was ghostwritten.

Donziger's much smaller defense team began putting on his case on Tuesday.

The first witness, Donald Moncayo, who worked for the plaintiffs, said on Tuesday morning that he saw Chevron lawyers in Ecuador meet in private with judges, in an apparent effort to show that Chevron did not act properly during the Ecuadorean case.

Other scheduled defense witnesses include Zambrano's assistant, Evelyn Calva, who has said she took dictation and observed him coming up with the decision entirely on his own.

Donziger, who was not present in court on Tuesday, is also expected to testify.

The case stems from pollution between 1964 and 1992 at an oil field operated by Texaco, which was acquired by Chevron in 2001. Zambrano awarded $18 billion to residents of Lago Agrio in 2011, and the amount was later increased to $19 billion to cover fees.

Because Chevron no longer has assets in Ecuador, the villagers have tried to seek enforcement of the judgment outside the country, resulting in the action by Chevron.

Defense lawyers have complained that U.S. District Judge Lewis Kaplan, who is presiding over the trial without a jury, is biased against them.

Chevron will call one more witness out of order on Thursday because of scheduling issues. The witness, Joshua Lipton, is the president of Stratus Consulting, which Chevron has accused of ghostwriting the report to which Shinder referred in his testimony.

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

(Editing by Eddie Evans and Douglas Royalty)

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