U.S. Judge Finds a $9.5B Ecuadorean Ruling Against Chevron Corrupt


Chevron (NYSE:CVX) has won a U.S. ruling which claimed that a multi-billion dollar judgement against Chevron issued in Ecuador was procured by fraud, Bloomberg and Reuters report.

A U.S. District Judge, Lewis Kaplan, has said he found “clear and convincing evidence” that an American lawyer, Steven Donziger, as well as his legal team bribed an Ecuadorean judge into issuing an $18 billion judgement against the oil company in 2011, per Reuters. Donziger’s legal team also ghostwrote court documents, Kaplan found.

Kaplan’s decision make it much less likely that the villagers of the Lago Agrio region would collect any of the $9.5 billion award. ”The decision in the Lago Agrio case was obtained by corrupt means,” Kaplan said. “The defendants here may not be allowed to benefit from that in any way.”

The Ecuadorean villagers, as well as activists supporting their cause, claimed that Chevron should be held financially responsible for the pollution of the Amazon rain forest in northeastern Ecuador by Texaco between 1964 and 1992. Chevron bought Texaco in 2001, and claims that the company has already paid $40 million to clean up the mess that resulted from a drilling contamination.

The decision, made Tuesday in Manhattan, also bars Donziger and the villagers from attempting to enforce the Ecuadorean ruling in the United States; the decision could also help Chevron in other countries where plaintiffs are seeking to go after Chevron’s assets, by providing legal ammunition, Reuters says.

“This ruling will be very helpful if the plaintiffs continue to try to seek enforcement of a corrupt verdict that was obtained in Ecuador,” said John Watson, Chevron’s chair and chief executive officer. “Having a judgement like this from a reputable court in the United States will certainly be helpful in preventing enforcement actions elsewhere. We will continue to defend ourselves in any enforcement actions around the world.”

Donziger has called the verdict “appalling,” according to Reuters, and said in a statement that, “Through this decision, we now have the spectacle of a Manhattan trial judge purporting to overrule Ecuador’s Supreme Court on questions of Ecuadorean law.” He has vowed to appeal the decision.

Kaplan has called the case “extraordinary,” saying that the tactics used by Donziger and the Ecuadorean plaintiffs are the kinds of things that, “Normally come out of Hollywood — coded e-mails among Donziger and his colleagues describing their private interactions with and machinations directed at judges and a court-appointed expert.”

Kaplan added that while Chevron “justice is not served by inflicting injustice. The ends do not justify the means. There is no ‘Robin Hood’ defense to illegal and wrongful conduct,” per Bloomberg.

Chevron’s chief executive has called the verdict a “resounding victory.” In a statement, the company has added that, “Any court that respects the law will find the Lago Agrio judgement to be illegitimate and unenforceable.” Meanwhile, Donziger has said he will pursue an “immediate and expedited appeal.”