The Latest Twist In The Ecuadorian Rainforest Pollution Litigation – Chevron Is Victorious In $9.5 Billion Oil Pollution Appeal

Reportedly, a three-judge panel of the Second Circuit, “unanimously affirmed a trial court’s determination that, in 2011, the lead attorney for some 30,000 Ecuadorians had won a $9.5 billion judgment against Chevron by means of bribery, coercion, and fraud.” For those who need background on the underlying case, Steven Dozinger, the lawyer at issue, obtained a $19 billion verdict in Ecuador in 2011 that “was supposed to compensate residents of the Amazon rainforest in eastern Ecuador for contamination allegedly left behind by Texaco, which drilled for oil in the region from 1964 to 1992. (Chevron acquired Texaco in 2001.).” The Ecuadorian judgment was then reduced in 2013 from $19 billion by the Ecuadorian Supreme Court. Apparently, Chevron owns no property in Ecuador, so there was no mechanism by which the judgment could be enforced in Ecuador, so the Plaintiffs attempted to enforce the judgment in Canada, and in September of 2015, “the highest court in Canada . . . ruled that villagers can move forward with an effort to seize assets tied to the oil company.”

Meanwhile, Chevron filed suit in federal court in New York, and Judge Lewis Kaplan concluded that “Donziger had won the judgment against Chevron in Lago Agrio, Ecuador, Kaplan . . . , by engaging in extortion, wire fraud, obstruction of justice, witness tampering, money laundering, bribery, and Foreign Corrupt Practices Act violations in a pattern of conduct that also amounted to a violation of the Racketeer Influenced and Corrupt Organizations Act (RICO).”  Interestingly, the decision did not address the merits of the underlying pollution case; it simply said that the methods by which Dozinger acquired the judgment were improper and that no one could enforce the judgment in the U.S. or profit from it in the United States. The recent Second Circuit opinion affirmed Judge Kaplan.

This is an interesting development in a lengthy saga that has involved PR campaigns by both Chevron and Dozinger. Chevron also filed suit in Gibraltar against Amazonia Recovery Ltd, the company set up by Plaintiffs’ attorneys to collect the Ecuadorian judgment and obtained a $28 million verdict. According to Dozinger, “the villagers have filed standard collection actions against Chevron in jurisdictions where the company maintains substantial assets (thus far, Canada, Brazil, and Argentina).” This is an interesting, monstrous piece of litigation that has cost everyone involved an extraordinary amount of money. Judging by the appearances listing on the U.S. District Court opinion, this case has kept plenty of lawyers on both sides busy for a long time. It will be interesting to see what happens next.

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