Ecuadorian SC halves damages against Chevron

QUITO, Ecuador (Legal Newsline) -- Ecuador's Supreme Court on Tuesday upheld a $9.5 billion damage claim against Chevron Corp., but dismissed the $9 billion punitive damage award against the oil giant.

The opinion is the final ruling in the hotly contested lawsuit between the villagers of Ecuador and Chevron.

In 2011, a lower Ecuadorian court found Chevron liable for dumping billions of gallons of toxic waste into the Amazon, causing an outbreak of disease and decimating indigenous groups, and ordered the company to pay $19 billion.

Chevron has vowed never to pay the judgment.

It alleges that the Ecuador suit has been used to threaten the oil company, mislead U.S. government officials, and harass and intimidate its employees -- all to extort a financial settlement from the company.

And soon after the 2011 ruling, the company filed a racketeering lawsuit in a New York federal court in an effort to prevent New York attorney Steven Donziger and the Ecuadorians from pursuing enforcement of the award.

Judge Lewis Kaplan, for the U.S. District Court for the Southern District of New York, continues to hear testimony in the case. The trial began last month.

In an email to Yahoo! News, Chevron spokesman James Craig called the Ecuadorian Supreme Court's ruling "as illegitimate and unenforceable today as it was when it was issued."

A spokesman for the legal team representing the Ecuadorian villagers countered, calling the court's 220-page decision "reasonable, fair and a clear victory for environmental justice."

"Ecuador's Supreme Court has given careful consideration to each of Chevron's conspiratorial claims, and has rejected them one-by-one," spokesman Han Shan said in a statement Wednesday. "While the company's complaints have found a sympathetic ear in Judge Kaplan's courtroom in New York, the fact remains that Chevron has been found liable by the court it fought to have the case heard by, and that decision has now been upheld at the highest level.

"We hope that Chevron, who has now had multiple days in court complies with the law and the clean up of the Amazon can finally begin."

Chris Gowen, of Washington, D.C.-based The Gowen Group Law Office PLLC and a spokesman for Donziger, said Wednesday the ruling makes the "charade" in the New York federal court a "completely meaningless trial."

"As much as Judge Kaplan would like to be chief justice of the world, he is not," said Gowen, also an adjunct law professor.

"The ruling by the Ecuadorian Supreme Court is the final level of appeal in this case and Chevron's appellate remedies are now completely exhausted."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.