H5 Settles With Chevron Over Ecuadorian Lawsuit
Chevron Corporation (NYSE:CVX) has reached a settlement agreement with H5, a California-based e-discovery and litigation services firm. In the settlement, H5 has withdrawn its support from the litigation against Chevron in Ecuador and has assigned its 1.25 percent interest in the $9.5 billion Ecuadorian judgment to Chevron. In 2014, Chevron obtained court-ordered discovery from H5 for the company’s role in supporting and advancing the lawsuit led by Steven Donziger, which a federal judge found to be tainted by fraud.
“Chevron is pleased that H5 has ended its association with this scheme,” said R. Hewitt Pate, Chevron’s vice president and general counsel. “Chevron is also pleased that H5 has taken the further action of disclaiming any interest in the Ecuadorian judgment and relinquishing its interest to Chevron. It remains Chevron’s intent to hold accountable those responsible for what a federal judge found to be a fraud.”
H5 became involved in the case in 2009, supporting a variety of activities. It helped enlist funding from Burford Capital Limited, a U.K.-based litigation funder, and James Russell DeLeon, a Gibraltar-based businessman. It also played an integral role in bringing the Patton Boggs law firm into the case to provide legal support. Burford, DeLeon and Patton Boggs have all since withdrawn their support from the fraudulent lawsuit and settled with Chevron. H5 also assisted Donziger’s team in responding to Chevron’s discovery related to the Cabrera Report, an Ecuadorian court-ordered damages report that a U.S. federal court later found was secretly authored by Donziger and Stratus Consulting, a Colorado-based environmental consulting firm. Stratus has also subsequently settled with Chevron.
On March 4, 2014, Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York ruled that the $9.5 billion judgment against Chevron in Ecuador was the product of fraud and racketeering activity, finding it unenforceable in the United States and holding Steven Donziger liable for RICO violations.
In a public statement released today H5 stated:
“Today’s agreement with Chevron resolves all outstanding issues relating to H5 in the Lago Agrio matter. Beginning in 2009, H5 proceeded in good faith to provide a variety of electronic discovery and advisory services in relation to the Lago Agrio case in Ecuador. In this as in other matters, H5 was called on because of our expertise in complex litigation and investigations globally. Last year, Chevron obtained a ruling in its favor from U.S. District Judge Lewis A. Kaplan in New York. Although H5 was not a party to that lawsuit, H5 has reviewed Judge Kaplan’s extensive findings. In view of those findings, among other reasons, H5 has decided it does not want to profit from the Ecuadorian Judgment and is therefore relinquishing any interest in the judgment.”
In settling this matter, H5 is the latest party to disassociate from Donziger and the Lago Agrio Plaintiffs. In addition to the withdrawal of Woodsford, Burford and DeLeon, who all repudiated the unethical tactics of Donziger and abandoned their financial interest in the fraudulent lawsuit, more than a dozen former insiders and allies testified against Donziger, including his former co-counsel, environmental consultants, funders, employees and Ecuadorian collaborators.
Chevron still has claims pending in Gibraltar against Amazonia Recovery Ltd., a Gibraltar-based company set up to receive and distribute funds resulting from the Ecuadorian judgment, and Pablo Fajardo, Luis Yanza and Ermel Chavez, who are directors of the company. Chevron has alleged that Amazonia is merely a vehicle to perpetuate the ongoing fraud.