Court rules against Chevron in $18 billion Amazon pollution case

  • Published on September 21st, 2011

chevron's dirty oilWell, it was worth a try. After losing an 18-year long legal battle over the horrific pollution oil operations left in the Amazon rainforest of Ecuador, Chevron convinced a friendly New York judge to rule that it didn’t have to pay. (Background here) But yesterday the Federal Appeals Court overturned that decision. So Chevron is back on the hook for upwards of $18 billion in damages.

Chevron’s friendly judge, Lewis Kaplan,  had done something novel: attempted to use New York law to overturn a decision of a court handed down in Ecuador. Not only that, but he had tried to prevent the native plaintiffs from collecting on Chevron assets anywhere in the world.

Unusual, and very, very wrong.

As the appeals court judges noted, this would throw international law into chaos. “How do you think the New York courts would react if a Venezuelan court attempted to enjoin a holder of a judgment from Russia?” Judge Lynch asked during the hearing on Friday. “Do you think there’s any chance that the New York courts would respect such a judgment? Or should respect such a judgment?”

The three-judge panel said that, since the case is still currently under appeal in Ecuador, there is no possible reason for a New York court to get involved. This leaves the door open for a possible later intervention, but squashes Chevron’s current legal strategy, which many suspected was simply meant to intimidate the tribes, their lawyers and the Ecuadorean government.

“Chevron abused the law, and Judge Kaplan rushed to judgment without considering the overwhelming evidence against the oil giant,” noted Karen Hinton, spokeswoman for the plaintiffs.

And Pablo Fajardo, lead lawyer for the plaintiffs, told the Associated Press, “We can now at least dream there will be justice and compensation for the damage, the environmental crime, committed by Chevron in Ecuador.”

“We are very excited that the court has reached this decision,” said Jim Tyrrell, another member of the Ecuadorans legal team. “It represents a triumph of the rule of law over the sensationalism created by Chevron’s PR department.”

Chevron had been arguing that because the Ecuadorean court system is corrupt, they should get a free pass.

In a novel legal theory, they say:

“…No amount of allegedly ‘unclean hands’ can possibly justify a judgment rendered under conditions denying due process or impartial tribunals,” the company wrote.

Is that clear? “Our company can be as corrupt as can be, but if there is any hint of impropriety in the court system, we should be able to get away with it.”

This is spectacularly disingenuous compared to Chevron’s own track record in the case. DeSmog Blog got a look at some company memos that were part of the legal record, and they paint a picture of a company that wanted to get the case transferred to Ecuador because it KNEW the system was corrupt… and they thought they had the inside track.

Chevron did get one win – the Ecuadoreans had also asked that the appeals court to remove Kaplan from the case, since he seemed pretty biased in favor of Chevron, but they didn’t get that.

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About the Author

Jeremy Bloom is the Editor of RedGreenAndBlue. He lives in New York, where he combines his passion for the environment with his passion for film, and is working on making the world a better place.
  • Obviously, Chevron will not take this opportunity to settle. As I understand it, they still have two more levels of appeals in Ecuador, so we can expect this case to drag out for a lot longer.