Chevron Reaches Settlements With DeLeon

Chevron Corporation has reached a settlement agreement with James Russell DeLeon, the principal funder of the fraudulent lawsuit against Chevron in Ecuador. Chevron brought claims against DeLeon in Gibraltar, where DeLeon maintains a residence, for his role in funding and advancing the fraudulent lawsuit. In the settlement, DeLeon has resolved those claims by withdrawing financial support from the Ecuador litigation and assigning his interests in the litigation to Chevron. Chevron, in turn, has agreed to release all claims against DeLeon. In filings with the Gibraltar court, DeLeon previously disclosed having invested approximately $23 million in the case in exchange for an approximate 7 percent stake in the $9.5 billion Ecuadorian judgment against Chevron. DeLeon’s funding entity, Torvia Limited, and his associate, Julian Jarvis, are also parties to the settlement.

“We are pleased that yet another long-time supporter has ended his association with this scheme,” said R. Hewitt Pate, Chevron’s vice president and general counsel. “Chevron will continue to hold accountable those who associate themselves with this fraudulent litigation.”

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, the lead lawyer behind the lawsuit, liable for RICO violations. The judgment also discussed DeLeon’s involvement, which included providing the main source of funding for the propaganda film Crude, contributing approximately 60 percent of the film’s total funding. As part of the settlement, DeLeon has agreed to assign to Chevron all of his financial interests in Crude.

In a public statement released today, DeLeon stated:

“Commencing in March 2007, I provided funding to support the litigation in Ecuador against Chevron Corporation (CVX), in the good faith belief that I was supporting a worthy cause.

However, I have since reviewed the March 4, 2014 opinion by Judge Kaplan of the United States District Court for the Southern District of New York setting out the Court’s findings and I have also considered the evidence presented during the trial. As a result, I have concluded that representatives of the Lago Agrio plaintiffs, including Steven Donziger, misled me about important facts. If I had known these facts, I would not have funded the litigation.

I no longer seek or wish to receive any financial benefit from this matter and I have therefore decided to relinquish my entire interest in the litigation to Chevron.”

In settling this matter, DeLeon is the latest party, among many others, to disassociate himself from Donziger and the Lago Agrio Plaintiffs. During the seven-week federal racketeering trial against Donziger, more than a dozen former insiders and allies testified against him, including his former co-counsel, environmental consultants, funders, employees and his Ecuadorian collaborators.

Chevron still has cases pending in Gibraltar against U.K.-based Woodsford Litigation Funding Ltd. for its role in funding the lawsuit; Amazonia Recovery Ltd., a Gibraltar-based company set up by Donziger and his associates to receive and distribute funds resulting from the Ecuadorian judgment against Chevron; and Pablo Fajardo, Luis Yanza and Ermel Chavez, who are all directors of Amazonia Recovery Ltd.