Remarks

How a Corporate Assault on Greenpeace Is Spreading

Trump’s New York law firm brings a second racketeering suit against the environmental group

Greenpeace should be worried. A second large company has accused the prominent environmental group of violating the potent U.S. racketeering law. In a lawsuit filed August 22, Energy Transfer Partners accused Greenpeace of spreading lies and inciting vandalism to raise money and hamper completion of the controversial Dakota Access Pipeline. The legal attack follows a similar suit against Greenpeace brought last year on behalf of the Canadian timber company Resolute Forest Products Inc.

However these cases turn out—and Greenpeace strongly denies liability in both—the litigation could put a serious dent in the group’s coffers and distract its leadership from other priorities. What’s more, additional lawsuits may be on the way.

The New York law firm Kasowitz Benson Torres filed both anti-Greenpeace complaints and engineered the theory that the activist outfit has violated the Racketeer Influenced and Corrupt Organizations (RICO) Act. Marc Kasowitz, the firm’s founder, is President Donald Trump’s longtime personal attorney (though he was marginalized recently in the Russia-influence investigation).

Michael Bowe, the Kasowitz partner handling the RICO cases, says he’s in touch with other companies thinking of filing their own racketeering suits. “When Greenpeace directly attacks a company’s customers, financing, and business, that company has little choice but to legally defend itself,” Bowe asserts. “I know others who are considering having to do so, and would be shocked if there are not many more.”

Greenpeace condemned what it called an attempt to stifle free speech. “This is the second consecutive year Donald Trump’s go-to attorneys at the Kasowitz law firm have filed a meritless lawsuit against Greenpeace,” the group’s general counsel, Tom Wetterer, said in a prepared statement. “They are apparently trying to market themselves as corporate mercenaries willing to abuse the legal system to silence legitimate advocacy work.”

The RICO statute offers corporations a potentially powerful weapon for lashing back at antagonists. Originally enacted in 1970 to facilitate criminal prosecution of mob syndicates, RICO has flexible civil provisions that provide for liability if a defendant commits two or more unlawful acts as part of a racketeering “enterprise.” Money damages under RICO may be tripled.

In recent years, companies ranging from Chevron Corp. to the railroad CSX Transportation Inc. have successfully used RICO to turn the tables on plaintiffs’ lawyers accused of fraud. Business advocacy groups such as the American Tort Reform Association have applauded those cases. Now, the Kasowitz firm is engineering a new variation: the multi-company assault on a common activist group.

The Energy Transfer suit grows out of fierce protests last year against construction of the Dakota Access Pipeline, which runs from North Dakota to Illinois. Clashes between police and Native Americans allied with environmentalists drew international attention to the $3.8 billion oil project. The pipeline was completed earlier this year, after President Trump issued an executive order clearing away obstacles created by the outgoing Obama administration.

In its suit filed in federal court in Bismark, N.D., Energy Transfer alleged that Greenpeace led a corrupt network of environmental groups that fomented protest and negative publicity, which, in turn, caused the Dallas-based company to lose “many hundreds of millions of dollars” and undercut its ability to raise money from capital markets. “Under the ‘Greenpeace Model,’ raising money and the network’s profile is the primary objective, not saving the environment,” the suit claimed. Greenpeace and its allies “manufactured” a crisis late last year by spreading untruths, such as the notion that the pipeline was built on tribal land without permission, the suit added. In truth, according to Energy Transfer, the pipeline runs exclusively on private and federal land without impinging on tribal territory.

Energy Transfer also accused Greenpeace of coordinating with more extreme groups responsible for such violent acts as the burning of construction equipment and use of blow torches to try to cut holes in the pipeline. The company called the alleged acts of physical sabotage by protesters “serious terrorist threats” that endangered lives and could have caused “environmental disaster.” In one incident in August 2016 described in the suit, demonstrators threw rocks and bottles at Dakota Access personnel; in another, two  months later, an activist fired a handgun, narrowly missing a police deputy.

You might ask how Greenpeace could be held liable for violence it did not directly cause. Ordinary criminal laws, after all, apply to the pipeline protesters. The alleged shooter, for example, a woman named Red Fawn Fallis, was charged with attempted murder and is scheduled to stand trial later this year.

RICO has extraordinary reach, however. When trying to implicate the supposed ringleader of a racketeering enterprise, the plaintiff may introduce evidence of far-flung wrongdoing that allegedly took place under the umbrella of that enterprise. 

Greenpeace still has plausible defenses. The main one is that Energy Transfer has filed a defamation claim disguised as a RICO suit. If you accept that, two things follow. First, the RICO apparatus crumbles, and Greenpeace is no longer tainted by other people’s vandalism and violence.  Second, Greenpeace has an opportunity to mount First Amendment arguments to try to defeat the defamation allegation. The group’s general counsel, Wetterer, signaled that this is precisely where Greenpeace’s defense is headed. The RICO suit, he said, is “not designed to seek justice, but to silence free speech through expensive, time-consuming litigation.”

Referring to the racketeering strategy in both the pipeline and timber cases, Wetterer said: “This has now become a pattern of harassment by corporate bullies.” And the pattern, whether it represents bullying or righteous payback, may get worse for Greenpeace if additional companies decide to join the RICO assault.   

 

    Paul Barrett
    Bloomberg Businessweek Columnist
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