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Published on Tuesday, March 8, 2011 by Environment News Service

Chevron Wins Halt to $18 Billion Judgment in Ecuador Pollution Case

NEW YORK - In a New York courtroom yesterday, oil giant Chevron Corp. won a halt to enforcement of an $18 billion judgment for oil pollution of the Ecuadorian Amazon imposed by a court in Ecuador.

Crude oil in an open toxic oil waste pit abandoned by Texaco in the Amazon rainforest near Lago Agrio, Ecuador, April 15, 2010. (Photo by Caroline Bennett courtesy Rainforest Action Network) Granting Chevron's request for a preliminary injunction, U.S. District Judge Lewis Kaplan ruled in Manhattan that Chevron faced "imminent" and "irreparable" harm to its reputation and business relationships.

"There is a significant risk that assets would be seized or attached, thus disrupting Chevron's supply chain, causing it to miss critical deliveries to business partners," Judge Kaplan wrote.

The judge ruled that the judgment won by Ecuadorean indigenous plaintiffs could not be enforced until Chevron's racketeering case against the Ecuadoreans and their lawyers is decided.

On February 1, Chevron sued the Ecuadorian plaintiffs in U.S. District Court in New York, accusing them of fraud, interfering with contracts, trespass, unjust enrichment, and conspiracy. Chevron levied even more serious charges against their main U.S. lawyer Steven Donziger, expert witnesses and affiliated organizations, accusing them of racketeering.

Karen Hinton, a spokesperson for the Ecuadoreans and a defendant named in the racketeering case, said of Judge Kaplan's ruling, "This decision is a slap in the face to the democratic nation of Ecuador and the thousands of Ecuadorian citizens who have courageously fought for 18 years to hold Chevron accountable for committing the world's worst environmental disaster."

"The trampling of due process in the court's refusal to consider key evidence or hold a hearing to determine the facts is an inappropriate exercise of judicial power that will harm the United States' relationship with Latin America and other parts of the world," said Hinton. "It disregards the scholarly and comprehensive 188-page opinion of Ecuadorian Judge Nicolas Zambrano, a well-respected member of Ecuador's judiciary."

"It also ignores key evidence that Chevron has committed a series of frauds in Ecuador to cover up its unlawful misconduct," she said.

Judge Kaplan recognized that the damages from the court in Lago Agrio, Ecuador have more than doubled from original $8.6 billion judgment because Chevron has not made the public apology required by Judge Zambrano's ruling, and 10 percent of the original judgment has been awarded to the Amazon Defense Coalition.

Even so, the Ecuadorean plaintiffs have appealed Judge Zambrano's ruling, arguing that the award is not large enough to clean up the billions of gallons of toxic waste dumped by the oil company.

"We want to emphasize that after appeals in Ecuador the Ecuadorian plaintiffs retain their full right to lawfully enforce the judgment of their own country's courts in any of the dozens of nations around the world where Chevron has assets," Hinton said. "In the meantime, we will appeal the decision on multiple grounds."

Chevron argues that Texaco cleaned up all the contaminated sites before turning the land over to the government of Ecuador.

This legal action began in 1993, when the Ecuadorean plaintiffs filed a class action lawsuit in U.S. District Court in New York against Texaco, since purchased by Chevron.

The class action complaint was filed on behalf of 30,000 inhabitants of the Oriente region of Ecuador seeking compensation for environmental and personal injury from oil contamination in the rainforest from 30 years of oil extraction. The lawsuit accuses Texaco of deliberately and unlawfully discharging more than 18 billion gallons of toxic waste into Amazon waterways, decimating indigenous groups and poisoning an area the size of Rhode Island.

Nine years later, at Chevron's request, that litigation was dismissed and transferred to the courts of Ecuador, where Judge Zambrano issued a judgment against Chevron on February 14, 2011.

Kaplan ordered Chevron to post a $21.8 million bond or deposit that amount with the court to ensure payment of any damages caused by the delay in enforcement of the judgment, if his injunction does not stand.

The Ecuadoreans, acting as defendants in Chevron's racketeering lawsuit, today filed a 42-page sworn affidavit, backed by hundreds of pages of exhibits, outlining in detail Chevron's 18-year effort to undermine the Ecuadorean court in Lago Agrio.

Ecuadorian attorney Juan Pablo Saenz wrote in his affidavit to Judge Kaplan, "After decades of exploiting the country and wielding its influence like a club as it extracted riches from the Napo Concession, Chevron believed it could use that same power to buy or bully its way to a swift dismissal of this case, or, at the very least, to delay the day of reckoning indefinitely."

"It is crystal clear that Chevron wanted this case to be heard in Ecuador because it believed that the Ecuadorian judiciary was too weak to handle these claims," wrote Saenz in his affidavit. "It was only when the Ecuadorian judiciary proved more independent than Chevron expected that the company did an about-face and started to attack Ecuador's courts."

Chevron has removed all assets from Ecuador and has claimed it will not pay the judgment, even though it had promised U.S. courts it would abide by the Ecuador court's decision as a condition of the case being transferred to Ecuador.

Copyright Environment News Service (ENS) 2011
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