Appeal of injunction against Ecuador verdict expedited

Jessica M. Karmasek May 13, 2011, 10:47am

Judge Lewis Kaplan

NEW YORK (Legal Newsline) - The U.S. Court of Appeals for the Second Circuit granted a group of Ecuadorians, who previously won an $18 billion judgment against Chevron Corp., an expedited appeal of a preliminary injunction in an order filed this week.

The two-page order, the Ecuadorians say, also means they can meet with their American lawyers and raise money to enforce the judgment at a later date.

On Thursday, judges Barrington D. Parker, Rosemary S. Pooler and Ralph K. Winter denied without prejudice "to renew before the merits panel" the Ecuadorians' request to stay the district court proceedings.

The court also ordered that the motion for a partial stay, pending resolution of the appeal of the preliminary injunction, is granted "insofar as the preliminary injunction restrains activities other than commencing, prosecuting, or receiving benefit from recognition, enforcement, or pre-judgment seizure or attachment proceedings."

Karen Hinton, a spokeswoman for the Ecuadorians, said it is their understanding that this order allows them and their lawyers to do legal research, communicate with clients about, and raise money in support of potential enforcement actions.

In its order, the court also granted the Ecuadorians' motion to expedite the appeal.

Hinton said this will allow a full appeal on the merits of the preliminary injunction and the other issues appeal to be heard on an expedited basis. More than likely this will happen by the end of August or early September, she said.

"We believe that Chevron has turned the law on its head and we are gratified that the Second Circuit has decided to allow a full airing of the legal issues on an expedited basis," she said in a statement following the order.

The court also granted the Ecuadorians' motion to file oversized briefs.

The Ecuadorians' opening briefs and appendices, the court wrote, shall be filed within 21 days of its order. Chevron's brief shall be filed within 21 days of the appellants' last brief. The Ecuadorians' reply briefs shall be filed within 10 days of Chevron's response.

No extensions will be granted, the court said.

In February, after an eight-year trial, an Ecuadorian court found Chevron liable for dumping billions of gallons of toxic waste into the Amazon, causing an outbreak of cancer and decimating indigenous groups. Damages were found to be up to $18 billion.

The oil giant then filed a racketeering lawsuit, alleging that the Ecuador lawsuit 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 Chevron.

In March, the Second Circuit ruled that Chevron could proceed with its international arbitration dispute with Ecuador, but found against the company on several factual issues.

First, it found that Chevron is the same company as Texaco and therefore is responsible for any misconduct committed in Ecuador by Texaco.

The panel also found that the Lago Agrio litigation in Ecuador is the same as the original lawsuit filed in New York federal court in 1993, thereby nullifying Chevron's argument that it is not bound by the Ecuador judgment because the cases are different.

The court also determined that the company's promises several years ago to a U.S. federal court that it would submit to Ecuadorian jurisdiction and pay damages are enforceable against Chevron.

It also confirmed that the environmental claims of the Ecuadorians cannot be resolved via international arbitration where they are not a party.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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