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from Stories I’d like to see:

Hagel’s ignorance, Big Oil in the rain forest and a drone story

The Hagel fiasco:

I can’t get Defense Secretary-designate Chuck Hagel’s awful Jan. 31 Senate confirmation testimony out of my head. I went back last week and watched most of it again. It was stunning, by far the worst performance by a high-level appointee I’ve ever seen or heard about. I’m not referring to Hagel’s gaffes, though there were some. I’m talking about pretty much everything he said after he read his opening statement. He seemed – is there a nice way to say this? – stupid.

Yet from what I’ve read, those who know him say he is far from stupid. I spent an hour interviewing him about 10 years ago and he seemed pretty sharp ‑ though it was for a profile of a friend of his, so the questions were hardly challenging.

Why did Hagel stumble so badly? Is he an empty suit who showed his real ability or lack thereof when he faced the senators’ tough grilling? Or was he ill? Does he have a health problem we should know about?

I’m serious. This testimony was more than a bad “performance.” For example, he seemed not to understand even the basics of the Pentagon budget and the effects of the looming sequestration of a portion of its appropriated funding. Go back and watch it.

from Alison Frankel:

Truth and justice are elusive in Chevron Ecuador case

On Monday, Chevron filed a new motion for summary judgment in its fraud and racketeering case against the lawyers and expert witnesses who helped 47 Ecuadoreans from the Lago Agrio region of the rainforest obtain an $18 billion judgment against the oil company from an Ecuadorean court in 2011. The motion discloses what seems to be incredibly powerful evidence that the Ecuadorean judgment was illegitimate: A onetime presiding judge on the Ecuadorean case, Alberto Guerra, submitted a declaration asserting that he acted as the middleman in setting up a $500,000 bribe from plaintiffs' lawyers to the Ecuadorean judge who entered the judgment against Chevron. Guerra claimed that the plaintiffs actually drafted the 2011 judgment and that he, as a behind-the-scenes ghostwriter, worked with plaintiffs' lawyers to make it seem more like a court ruling. According to his declaration, filed before U.S. District Judge Lewis Kaplan of Manhattan, Guerra had previously received regular payments from the plaintiffs in the Chevron case to ghostwrite other rulings subsequently issued by the presiding judge. And, to boot, Guerra asserted that Chevron -- unlike the plaintiffs -- didn't respond to his solicitation of bribes.

Chevron filed additional new evidence to back Guerra's declaration, including draft versions of the 2011 judgment found on the former judge's computer, mail and bank records showing his contacts with the plaintiffs and sworn statements by other witnesses supposedly involved in the bribery scheme. "Guerra's testimony and corroborating evidence confirm what the extensive overlap between the (plaintiffs') internal files and the judgment already prove: that the (plaintiffs) corrupted the Ecuadorean court and wrote the $18 billion judgment against Chevron," wrote the oil company's lawyers at Gibson, Dunn & Crutcher.

from Breakingviews:

Exxon’s fracking gag makes Chesapeake look good

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Exxon Mobil’s reticence to come clean about fracking makes Chesapeake Energy look good. That’s a rare feat - and hardly one to brag about. The troubled gas firm is infamously opaque. But its openness on the risks of fracking puts larger rivals like Exxon Mobil and Chevron to shame. After another large minority vote from investors for more information on this controversial practice, Big Oil should follow its troubled cousin’s lead.

from Alison Frankel:

Morrison and international RICO: Kaplan’s take in Chevron case

It's been relatively easy for district courts to figure out how to apply the U.S. Supreme Court's 2010 ruling in Morrison v. National Australia Bank in securities cases – unless the defendant is a U.S.-listed company, shareholders are pretty much out of luck in U.S. courts. Post-Morrison racketeering litigation has no such conveniently bright lines. The Racketeer Influenced and Corrupt Organizations Act doesn't explicitly mention that it applies to overseas conduct, so under Morrison judges must presume it does not. But they've struggled to define exactly what constitutes overseas racketeering as opposed to domestic racketeering with an international component.

After all, as U.S. District Judge Lewis Kaplan of federal court in Manhattan noted in a ruling last week, RICO was originally intended to combat international organized crime rings. Kaplan is presiding over Chevron's RICO case against the U.S. lawyers and experts who helped Ecuadoreans obtain an $18 billion judgment against the oil company. His ruling cites the Southern District's famous Pizza Connection prosecution, which involved Mafia drug trafficking between Sicily and New York, as a RICO paradigm. "To say that Congress did not intend RICO to apply unless the enterprise in question was purely domestic would be unsupportable," Kaplan wrote.

from Breakingviews:

Review: Exxon’s shareholder fetish, good and bad

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Exxon Mobil shareholders may feel a warm glow when reading Steve Coll’s history of their firm. “Private Empire” reveals the company’s single-minded devotion to investors and shows that it has helped the oil giant earn world-beating returns. But other readers will be struck by the downside of this obsession.

from The Great Debate:

Brazil’s attack on Chevron is a dangerous error

A truly bizarre international incident has gone largely unnoticed, even though it is one of the most shameless shakedowns of an American company by another country in recent memory. What is happening now in Brazil could easily scare off U.S. companies that may be looking to do business overseas.

What happened was that a small amount of oil seeped from cracks in the ocean floor near an oil well that was operated by Chevron off Brazil’s coast. This oil seep occurred some 200 miles offshore, was successfully stopped in four days, has been fully contained, and caused no harm to the environment, wildlife or human health. The amount of oil that leaked from the cracks in the ocean floor was less than 0.1 percent the size of the BP spill in the Gulf of Mexico.

from Alison Frankel:

Chevron tries, tries again to attach Ecuadoreans’ $18 bln award

It's been all of three weeks since U.S. District Judge Lewis Kaplan of Manhattan federal court lifted a stay on Chevron's fraud and racketeering suit, which was filed in 2010 against the Ecuadoreans who accuse the oil company of contaminating the Lago Agrio region of the rainforest as well as the Ecuadoreans' lawyers and advisers. But the two sides in this corollary to the endless litigation that produced an $18.2 billion judgment against Chevron in the Ecuadorean courts have picked up as though they never left off. This week Chevron filed a motion for partial summary judgment and renewed its motion for an attachment order that would effectively block the Ecuadoreans from enforcing their award. Lawyers for the RICO defendants, predictably, have responded with accusations of dirty tricks against Chevron and its counsel at Gibson, Dunn & Crutcher.

Chevron's summary judgment motion, which asks Kaplan to reject collateral estoppel defenses based on findings in the Ecuadorean courts, is mostly a reformulation of arguments that have become all too familiar to anyone who follows the litigation. So I'll focus on the new attachment motion, which includes some information we haven't seen before. In January, you may recall, Kaplan denied Chevron's request for a highly unusual pretrial order that would essentially have frozen the assets of the RICO defendants in anticipation of a Chevron victory and damages award in the New York case. The judge said that Chevron hadn't sufficiently specified its alleged damages, aside from citing the $18.2 billion Ecuadorean judgment. "In these circumstances, Chevron has not demonstrated a likelihood of recovering any specific amount of damages," Kaplan wrote. But he invited Chevron to come back when it had firmer evidence of its potential damages.

from The Great Debate:

Suing corporations should be a last resort

On Feb. 28, the U.S. Supreme Court will hear arguments in Kiobel v. Royal Dutch Petroleum. The case is about Shell’s alleged complicity in torture and extrajudicial killings committed by the Nigerian military in the mid-1990s, and is expected to determine whether corporations can be sued in the U.S. for their involvement in human rights abuses abroad.

Corporate lawyers and plaintiffs’ attorneys alike are eagerly awaiting the outcome. If the Supreme Court upholds corporate liability, as federal courts have in the past and the Obama administration is encouraging the High Court to do, other lawsuits will surely follow -- against Apple for labor abuses in its Chinese manufacturing base, for example.

from Alison Frankel:

Ecuadoreans call for U.S. help in Chevron arbitration

In last week's rejection of Chevron's attempt to use U.S. courts to block enforcement of the Lago Agrio plaintiffs' $18 billion Ecuadorean judgment, the U.S. Court of Appeals for the Second Circuit was clearly uneasy at the idea of American judges interfering with foreign jurisprudence. So far, the arbitration panel overseeing Chevron's case against the Republic of Ecuador has had no such qualms. But with Chevron now relying heavily on the arbitration process to protect it from plaintiffs' attempts to claim oil company assets, the panel's power over foreign courts is going to become a key issue -- and the Ecuadorean plaintiffs are now calling for the U.S. government to support Ecuador's sovereignty. Chevron, meanwhile, argues that if anyone has caused harm to Ecuador's constitution, it's the Republic and the Lago Agrio plaintiffs, not Chevron and the arbitration panel.

The three-person arbitration panel, appointed under the terms of a bilateral investment treaty between the United States and Ecuador, is presiding over Chevron's claim that the Republic of Ecuador is liable for any judgment in the Lago Agrio litigation. (The argument is two-fold: Chevron asserts that it has been denied due process, in violation of the investment treaty, and that the Republic signed an indemnification agreement years ago with its predecessor, Texaco.) The arbitrators don't have jurisdiction over the individual Ecuadoreans suing Chevron, but they do have power over the Republic. Last spring, following U.S. District Judge Lewis Kaplan's imposition of a worldwide injunction barring enforcement of the Ecuadorean trial court's judgment against Chevron, the arbitration panel issued an interim order instructing the Republic to "take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment against in the Lago Agrio case."

from Alison Frankel:

Chevron opinion doesn’t go its way

If Chevron was still hoping for a ruling from New York's federal courts that would make it impossible for Ecuadorean plaintiffs to collect their $18 billion judgment against the oil company, Thursday's long-awaited opinion by the U.S. Court of Appeals for the Second Circuit puts an end to that strategy. The appellate panel's 30-page opinion -- which explains the court's Sept. 2011 order lifting the worldwide injunction barring enforcement of the Ecuadorean judgment -- gives Chevron the chance to argue once again that the Ecuadoreans can't collect in New York, under the state's Uniform Foreign Country Money-Judgments Recognition Act. But in no uncertain terms, the Second Circuit advised that even if Chevron eventually persuades a New York judge that the Ecuadoreans procured their judgment through fraud, that judge cannot bar enforcement of the judgment outside of the United States.

"Nothing in the New York statute, or in any precedent interpreting it, authorizes a court to enjoin parties holding a judgment issued in one foreign country from attempting to enforce that judgment in yet another foreign country," wrote Second Circuit Judge Gerald Lynch, for a panel that included Judges Rosemary Pooler and Richard Wesley. "The court presuming to issue such an injunction sets itself up as the definitive international arbiter of the fairness and integrity of the world's legal systems."