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Members leave CBA over Chevron case

|Written By Yamri Taddese

Some members of the Canadian Bar Association are considering giving up their memberships after the organization decided to act as a neutral intervenor in Chevron Corp.’s upcoming legal battle against the indigenous Mayan people of Ecuador at the Supreme Court of Canada.

David McRobert is unhappy with the CBA’s decision to intervene and says he disagrees with the corporate law principles it

E-mails obtained by Law Times show the CBA is moving ahead with the intervention despite a recommendation from the aboriginal law section that it refrain from doing so. The e-mails suggest some executive members of the section have resigned as a result of the organization’s decision.

The thrust of the case against Chevron is that the company caused extensive pollution in the Lago Agrio region of Ecuador. The indigenous villagers had obtained judgment for $9.51 billion in a local court against Chevron and they’re now seeking to enforce it against the company’s assets in Ontario.

A lower court had tossed out the case against Chevron on grounds that there was no jurisdiction in Ontario to enforce the judgment, but the Ontario Court of Appeal reversed that decision.

The CBA denies it’s backing Chevron and says its position will simply clarify corporate principles, including the corporate veil and the enforceability of foreign judgments in Canada. This includes the notion of “enterprise liability”, or one corporation being liable for the actions of another. This argument is unrecognized in Canada, the U.S. or elsewhere.

The second question focuses on jurisdiction – the enforceability of foreign judgments in Canada. In this case, the Ontario court granted jurisdiction even though Chevron Canada is not headquartered in Ontario and is not engaged in any activities at issue in that jurisdiction. The CBA will be arguing that this jurisdiction shopping would set a harmful precedent for the administration of justice in Canada.

But some members, such as aboriginal section executive member David McRobert, say they fundamentally disagree with those principles.

“We think corporations have too much power in society, and there are issues around accountability,” says McRobert.

McRobert says he’s so unhappy with the CBA’s decision to intervene that he’s struggling with whether or not to terminate his membership.

The concern for some members of the CBA is that the organization has retained Blake Cassels & Graydon LLP for its intervention given that the firm acts for Chevron in other matters.

McRobert says the decision to intervene in the case is inconsistent with the CBA’s approach to previous situations. Unlike the current case, he says the CBA often dives into matters when they relate to the role of lawyers, such as issues of solicitor-client privilege, he says.

The decision to advance corporate principles in this matter gives the public an impression that lawyers are against the rights of aboriginal people, according to McRobert, who notes Chevron is a well-represented party in this matter and that entities other than the CBA could intervene without causing a controversy.

“As a precedent for the CBA, I worry about what it signals,” he says.

Another member of the aboriginal law section, Judith Rae, says several people from her firm, Olthuis Kleer Townshend LLP, have resigned their membership and notes she’s “definitely considering it.”

“I have two concerns. The first is that I don’t think this is a good case for CBA intervening and if they were intervening, I don’t think it’s the right position to be taking,” she says.

The CBA should properly consult members when it decides to intervene in a controversial matter, according to Rae. She says even the legislation and law reform committee of the CBA, which is responsible for reviewing appropriate matters for intervention, is against the decision to intervene in this case.

In its application to intervene, the CBA wrote that it has “a direct and significant interest in the issues raised in this appeal” as 4,500 of its members are in-house lawyers, some of whom have corporations as clients.

In a statement to Law Times, the CBA admitted the issues around the case are “arguably deplorable” but still defended its decision to intervene.

“The CBA appreciates fully that the circumstances surrounding this case are controversial, arguably deplorable. The decision to intervene does not mean that the CBA supports Chevron or their actions in Ecuador in any way, shape or form,” the CBA said.

[em]Correction: Indigenous people of Ecuador are not Mayan as originally stated.

Update Oct. 7: To clarify CBA as neutral intervenor.[/em]

  • Sam C.
    This just in from Amazon Watch: "The U.S. federal judge [Lewis A. Kaplan] who ruled in favor of Chevron in the company's campaign to block collection of its $9.5 billion environmental liability in Ecuador held investments in the oil company at the time of his decision, documents reveal."
  • Patricia L
    I think its shocking that the CBA even considered intervening and very relieved that "we" withdrew.
  • Tom S.
    I'm surprised that the CBA was even given leave to intervene with such a thin excuse that the article mentions. The CBA's representation of in-house lawyers, and in-house lawyers themselves, should not be bundled together with the interests of the corporations the lawyers represent. The SCC needs unique perspectives to help actually advance or clarify the law on a principled basis. Whatever the SCC decides, in-house lawyers will be able to understand it, apply it, and offer advice. It just doesn't make any sense, on the CBA's rationale, to support one side or the other.
  • Shibil Siddiqi
    Chevron has also sued the American lawyers who opposed it in Ecuador, forcing a reputable firm to withdraw, and asking for up to $32 million in costs against one of their lawyers. One would think that the CBA's mandate to further access to justice would make it sympathetic to the indigenous plaintiffs, and that its responsibility to the legal profession would make it sensitive to Chevron's intimidation of lawyers who worked on this case. Why should a single aspect of the case, namely a novel argument in favour of increased protection for multinational corporations, take precedence over the indigenous, environmental and professional concerns this case raises?
  • Paul M.
    The RICO trial, which Chevron won, included evidence by the environmental consultants hired by the plaintiff's counsel (the accused in the RICO case), who now disavow their work and claim there is no scientific basis for the ecuadorian judgment; the financial backers of the ecuadorian lawsuit, who filed evidence that the accused in the RICO case committed fraud and misconduct in securing funding; and most importantly, the ecuadorian judge, who testified he was given a half million dollar bribe in exchange for the judgment.

    All this over a claim for pollution based on a predecessor company (texaco, which Chevron subsequently acquired), who was a minor party in an oil and gas development (Petroecuador was the majority partner), who remediated sites to the requirements set out by the ecuadorian government and obtained releases from both Petroecuador and the Ecuadorian government.
  • Erin W.
    Dear Sir - the "pollution" to which you refer is unequivocally the most disastrous environmental carnage I have ever witnessed. Oil pools are rampant across the Country - contaminating its water supply. Their people and their animals suffer immensely and die from carcinogens at alaraming rates, and with terrible side-effects that I would never wish upon anyone. Texaco stormed its way into Ecuador, and only for 'optics' did they partner with Petroecuador. The fact that you are relying on a "Release" as some sort of finality to the carnage entirely ignores the oppressive circumstances upon which they were obtained.
  • Daniel H.
    The judge in the RICO trial in NY showed extraordinary bias in favor of Chevron, and evidence excluded from that trial reveals that Chevron committed extensive fraud and used extrajudicial pressure tactics in Ecuador. The judge who testified about the $500k bribe is hardly a credible witness for various reasons, and in any case he had nothing to do with the final judgment from the Ecuadorian court. Judge Kaplan's RICO ruling is deeply flawed and may well be overturned on appeal.

    Texaco was the minority *financial* partner with Petroecuador, but Texaco was sole operator and made all decisions about handling waste + spills. The 1990s "requirements set out by the Ecuadorian government" for remediation were lax, and yet were still not met. That sham "remediation" was grossly inadequate to deal with the massive scope of the pollution (documented in external audits commissioned by Texaco itself). The resulting releases only pertain to government, not private, claims.
  • Sam C.
    Well, it seems that you've read Chevron's press releases. Or, are you part of its legal team? Perhaps you might want to look into other aspects of the case, such as (i) in obtaining a stay from NY in the early 1990s, Chevron praised Ecuador's court, attorned to it and agreed to abide by its judgment, (ii) NY Judge Lewis Kaplan has been roundly criticized for overt bias in favour of Chevron and bad decisions, not least by 36 esteemed international jurists in a legal appellate brief filed, (iii) Chevron's star witness as to bribery (a former Ecuadorian judge removed from the bench who has himself admitted to taking bribes) was prepped by Chevron's lawyers for 50 days and has admitted, under oath, that his original testimony to Chevron was "not true" about the alleged bribe of the Ecuador trial judge, (iv) the plaintiffs allege that Chevron improperly used its wealth, power and influence to discredit their environmental consultants and, in some cases, to recant, etc., etc..
  • Paul M.
    You all should really look into the underlying case a little more. The "judgment" in Ecuador was obtained by fraud. The action was financed by americans, it was obtained by the plaintiff's american counsel bribing the local judge, and having a third party write his judgment. Chevron sued the US counsel under the RICO statute for 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.
  • Simon Potter
    Not every intervention,no matter how helpful to the court on narrow issues, will please every segment of the CBA. We should take pride that, when the CBA speaks, it is to assist the courts to see the issue for what it is, not necessarily the way any particular litigant will see it. Our CBA interventions are welcomed for that reason and we should be proud of that rather than deciding whether we like the intervention or not depending who the litigant is.
  • Lorraine L
    I agree that not all the CBA members will agree with every CBA intervention. But the CBA's own process usually allows for a fulsome internal discussion and input from relevant sections before decisions are made, and grounds for when an intervention is appropriate. These were flouted in this case - many of the CBA's own sections have strongly opposed the intervention, and have raised questions about the ethics of the decision-making process (using Blakes as counsel when Blakes also works for Chevron; applying a 'new policy' without having passed that new policy first, etc.) As a CBA member (now resigning) I'm appalled at both the CBA's process and the limited and one-sided focus of the intervention.
  • Sam C.
    I disagree. It's a huge stretch to say, in the Chevron case, that the CBA will be assisting the court. The litigants are already represented by top-flight legal talent, so all the important issues will be fully addressed and ably argued by the litigants' own counsel. The CBA's intervention is being seen for what it is -- bias in favour of the corporate class. That is not something to be proud of.
  • Martha Montour
    The CBA should have made a visit to the polluted site in Eucuador before making their decision to intervene on the side of Chevron. How would they like their families living in such conditions that the Mayan people must now contend with. Shame on them. I hope there are more resignations of CBA members. CBA is now a corporate defender and should change their name to Corporations Bar Association.
  • Muray Teitel
    Does anyone know if Blakes is being paid for their work on this intervention? If so who is paying? Or are they doing it pro bono (or pro malo as the case may be)?
  • Garth Wallbridge
    The CBA has clear policies on when they might seek leave to intervene. Most importantly they will consider doing so when they see an important principle in law that might not otherwise be argued. In this case the CBA position, as set out in the application seeking status and in the supporting affidavit of the then CBA president, could have been written by Chevron's legal team. This does not bode well for their ability as lawyers as they seemingly can't follow their own rules.
  • Ian Wilson
    Regardless of the merits, why doesn't the CBA limit itself to intervening in matters where one side has little or no hope of obtaining adequate legal representation? How does one argue with Sam C in these circumstances that CBA really = Corporate Bar Association?
  • Laurent Debrun
    Fort hose wishing to take position, I suggest reading the Court of Appeal decision and the Parties' briefs filed with the SCC (hearing scheduled for December 2014). I entirely agree that it is not the role of the CBA to intervene in such a case. in fact, should the SCC side with the Plaintiffs, it would actually serve the benefits of Canadian judgment creditors trying to execute decisions on reluctant foreign debtors having assets in Canada, directly or indirectly held. In any event, CBA was granted intervener status but not the American Government. As for the choice of counsel, hmmmm
  • Jeff G.
    The legal issues notwithstanding, Big Business simply doesn't need the CBA's intervention to help it make its case. For that matter, neither does the Supreme Court, which will undoubtedly receive thouroughly researched legal briefs from the main parties. So why do some senior decision-makers at the CBA feel the need to get involved? The CBA tells the Court that 4500 of its members are in-house lawyers; but that hardly seems a valid excuse, since the employment status of (a segment of) its membership should not make the CBA a mouthpiece for Corporate Canada. As one of those in-house lawyers, I am quite content to let Chevron tend to its own veils.
  • Lisa A.
    I am a corporate/commercial lawyer (external firm) and I fully agree with this comment. There is no necessity for the CBA to make submissions in this matter or to attempt to pre-judge; the parties are fully capable and well represented and the SCC will have full information on which to decide this very important matter. CBA intervention in favour of corporations creates a public perception issue and unecessarily divides the membership base. The justification that it is necessitated by in-house counsel members is a real stretch; it is a serous oversimplification to suggest they require a finding in favour of the status quo corporate law. I question my membership fees being used this way.
  • Victoria Lehman
    For the first time, as I understand, we have a CBA President from the In-House Corporate sector, having been understandably concerned these last years that they have not had sufficient representation. But now, with this situation, the "optics" of the CBA being in support of a corporation, or any group outside the issue of Human Rights and the process of Law, is poor to say the least. Consider that this case appears to have UN Human Rights violation allegations as well, we appear to collectively have been placed in a very dubious position indeed. In future, and in fact right now, the General Membership should be consulted if there are any issues other than legal process, Human Rights support, our profession, or citizens (and I don't mean "corporate-entities-as-persons/citizens") or the Constitution. it is well to consider "The decision to advance corporate principles in this matter gives the public an impression that lawyers are against the rights of aboriginal people,"
  • Jan Christiansen
    The issue is whether Canadian courts will facilitate forum shopping. It should make no difference whether the Plaintiff is an impoverished indigenous people or a Russian oligarch. I think the trial judge was right in feeling that the Canadian courts should not allow themselves to be dragged into this fight.
  • Stephen Scott
    I congratulate and thank the CBA for this intervention. Distinct corporations have distinct assets and liabilties and shareholders and creditors, and should not be conflated because it may seem in someone's interest to do so on some rough assessment of approximate economic identity. The terminology of "corporate veil" is itself prejudicial and misleading, because it suggests that the distinct legal identities are a sham which can and should be exposed and stripped away as concealing some underlying truth or reality, Laws as to joint and several liability for a common tort, or common liability for joint ventures, are adequate to achieve justice where various corporations, directors, or others perpetrate wrongs together.
  • Sam C.
    I consider the CBA's action as just another example of the legal establishment's de facto support of the corporate class and their goal of effecting a corporate coup d'etat of power in Canada. It's already happened in the USA.
  • John Legge
    Chevron needs the CBA's help? Really? How could the CBA know? Anatole France wasn't taught in Commercial Law 101 or 202.

    "The Law In its majestic equality, law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread." Nor was "Those whom the Gods would destroy, they first make mad." DOH!
  • Murray Teitel
    The lower court did not decide it had not jurisdiction s your reporter says.
    Brown J. decided he did have jurisdiction and, accordingly, refused to set aside service ex juris.
    However, untroubled by the fact that he was not the trial judge, he, nevertheless, decided the piercing the corporate veil issue (as it seemed to him at the time constituted) against the Ecuadorians and stayed the action

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