California Judge Delivers ‘Knockout Punch’ to RICO Case Against Greens

A California judge dismissed the charges from logging giant Resolute and awarded Greenpeace and other defendants their attorneys’ fees. ‘It could not have gone any better,’ says Todd Paglia, executive director of Stand.earth and a defendant in the case

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Story Transcript

D. LASCARIS: This is Dimitri Lascaris for The Real News. Months ago, Montreal-based Resolute Forest Products, Canada’s largest logging company, commenced a highly controversial $300 million lawsuit against two leading environmental organizations, Greenpeace and Stand.earth. The lawsuit was brought under a US federal statute, the Racketeer Influenced and Corrupt Organizations Act or RICO. As its name suggests, RICO was enacted in Congress with the primary purpose of strengthening criminal and civil penalties against those engaged in organized crime. Among other things, RICO entitles a successful plaintiff to awards of treble damages, or three times the amount of damages that the successful plaintiff has actually sustained. Thus, the consequences for defendants found liable under RICO can be devastating.

Precisely because the consequences can be devastating, those who are sued under RICO have no alternative but to expend extensive resources in the defense of a RICO lawsuit. When the plaintiff is a wealthy corporation like Resolute Forest Products and the defendants are not-for-profit environmental organizations, the mere cost of defending the lawsuit can be crippling. But this week, Resolute’s RICO lawsuit against Stand.earth and Greenpeace was felled by a judicial ax when a US federal court dismissed the lawsuit and dealt a severe blow to Resolute’s attempt to silence Greenpeace and Stand.earth.

Now here to discuss this major decision with us is Todd Paglia, Executive Director of Stand.earth. Todd has helped transform the paper policies of multi-billion-dollar Fortune 500 companies. He was chosen as one of Ethisphere Magazine’s 100 Most Influential People in Business Ethics. Before joining Stand.earth, Todd was an attorney for Ralph Nader, focusing on consumer protection issues. I should point out that Todd himself was named as a defendant in Resolute’s RICO lawsuit and I imagine he’s feeling pretty good about this decision as a result.

Thanks again for joining us, Todd.

TODD PAGLIA: Glad to be here, Dimitri. Thanks for having me on.

D. LASCARIS: First of all, congratulations. I’d like you to take a few moments just to summarize for us the judge’s basis for dismissing the complaint by Resolute.

TODD PAGLIA: Absolutely. Be a pleasure. This was beyond what we thought our best case scenario would even be. It’s a knockout punch for Resolute. The judge ruled that all of our motions to dismiss, and this is a very early stage in litigation, so it’s very hard to get a motion to dismiss to succeed — in other words, the lawsuit brought against you needs to be terrible, weak, and not even worth considering — and that’s what the judge ruled in this case, dismissing outright most of Resolute’s claims.

Then, as far as some of the other claims that remained, he actually as a matter of law found this lawsuit to be a SLAPP lawsuit, a strategic lawsuit against public participation under California law, and dismissed the remainder of the lawsuit on that basis and awarded us attorneys’ fees. It could not have gone any better.

D. LASCARIS: Is the quantum of attorneys’ fees something that remains to be determined, or did he specify an amount at this stage?

TODD PAGLIA: We’re talking 18 months of attorneys’ fees for us, for Greenpeace, for Greenpeace Fund, for some of the individual defendants. It’s going to run into the hundreds of thousands of dollars, easily.

D. LASCARIS: For those of our viewers who are not lawyers, as most of them mercifully are not, in the United States, the typical rule is that, and this is different from the legal systems of Canada and the United Kingdom where the loser generally pays, but this is exceptional in United States law, usually the loser does not have to pay the adverse party’s attorneys’ fees. Is that correct?

TODD PAGLIA: That’s right. Most of the time you walk away and you either won or you lost and that’s it. It gives you a sense of just how outrageous the court found Resolute’s lawsuit to be that they judged it to be a SLAPP suit as a matter of law and gave attorneys’ fees. If this was our home-run situation, we didn’t even allow ourselves to think it could happen, and it did.

D. LASCARIS: I noticed that a lawyer on behalf of Resolute in an email statement to Canada’s state broadcaster, the CBC, said that this is not a significant setback because the company has been granted leave to amend and file a modified complaint within 21 days. As a lawyer myself who’s litigated in US district courts, I was quite impressed by the claim that this is not a significant setback. It’s true that sometimes civil actions are revived after a dismissed complaint is amended, but when a judge dismisses a complaint at this preliminary stage, usually it’s a pretty bad sign and the case cannot be salvaged. What’s your take on all of this?

TODD PAGLIA: I agree with Resolute’s lawyer. They should spend as much money as possible in the next three weeks trying to revive this lawsuit. There’s zero chance, almost, of it coming back, but I hope they waste a lot more money doing so because the judge, if you actually read the opinion, it’s an extensive opinion issued a mere six days after oral argument in federal district court in San Francisco, and the opinion and the ruling of the judge is just absolutely devastating to this claim of action that Resolute brought. It leaves almost no room to maneuver. It goes through in excruciating detail the many, many ways in which Resolute failed to even come close to stating a cause of action that can survive in federal district court. Good luck, Resolute.

D. LASCARIS: Regrettably, this is not the only effort of a large Canadian extractive corporation to silence Stand.earth. I understand that today some sheriffs showed up at the Vancouver office of Stand.earth with a court order to seize all of the assets of the organization. Could you tell us what that’s all about?

TODD PAGLIA: It was actually yesterday morning. I just happen to be, we have offices in San Francisco; Bellingham, Washington; and Vancouver, British Columbia. I just happened to be on one of my regular trips to the Vancouver office, and I arrived just after the sheriffs arrived to take all of our computers, office furniture, microwave. As one of the reporters covering this in British Columbia tweeted later in the afternoon yesterday, this was over $14,000 in legal fees that the Enbridge pipeline corporation claimed we owed. There’s a really strange interlocking of corporate power and governmental power in what happened yesterday. It was frankly very bizarre.

D. LASCARIS: These were incurred in the context of Stand.earth’s submissions to the Canadian Energy Board, is that correct? Having to do with the proposed pipeline by Enbridge, is that right?

TODD PAGLIA: That’s right. This is the Line 6 pipeline, which we fought. This is under the former Prime Minister, Stephen Harper, where to participate in the hearing, to offer testimony in any way, you had to fill out a 12-page form to be considered as somebody who could participate as a citizen in this process. In other words, you had to fill out more paperwork than it requires to become a Canadian citizen to make comments on whether the pipeline should be built or not.

We lost that case. But in just the last couple of years with the Trudeau government, they have acknowledged that that was a mistaken policy, that the public should be able to participate without filling out a 12-page form, and they reversed that policy. Along the way, because we lost, Enbridge got a judgment to recover $14,000 worth of attorneys’ fees, and we refused to pay it. We were fighting for the public interest. The government changed its policy to acknowledging that that decision was wrong, and we refused as a matter of principle to pay Enbridge’s lawyers for their time.

Meanwhile, they have been sneaking along through the courtroom getting an order to seize and sell all of our office equipment, which wouldn’t have added up to more than a couple thousand dollars, let alone the $14,000 that they claim we owe them. This is for a company that made $4.6 billion last year. It’s not about the money. It’s just like the lawsuit. It’s about trying to intimidate citizen activists to stay away from the issues that they’re working on, and it failed miserably and it’s never going to work. It’s certainly not going to intimidate us to back down on anything having to do with pipelines, climate, logging, or anything else.

D. LASCARIS: Just remarkable. Thank you very much, Todd. This has been Dimitri Lascaris speaking to Todd Paglia, the Executive Director of Stand.earth, about a major court victory against Canadian forest company Resolute Forest Products. Thanks again for joining us, Todd.

TODD PAGLIA: Thanks, Dimitri.

D. LASCARIS: This is Dimitri Lascaris for The Real News.