Federal judge denies Chevron's motion to attach

Jessica M. Karmasek Jan. 9, 2012, 12:44pm


NEW YORK (Legal Newsline) - A federal judge has denied Chevron Corp.'s motion to attach the assets of the Ecuadorian plaintiffs suing the oil giant.

U.S. District Judge Lewis Kaplan filed his six-page opinion Friday.

"Chevron has put in no proof of any damages in support of its motion for an order of attachment except the fact and the amount of the judgment. But it has not established that it has paid any part of the judgment. The amount of the judgment therefore is not a measure of any damages that it has suffered to date," Kaplan wrote.

"In these circumstances, Chevron has not demonstrated a likelihood of recovering any specific amount of damages."

Kaplan's ruling comes days after an Ecuadorian appellate court upheld the $18 billion judgment against Chevron for its "intentional contamination" of the country's rainforest.

The "adverse ruling" was issued by a panel of three temporary judges presiding over appellate proceedings in the Provincial Court of Justice of Sucumbios in Lago Agrio.

The ruling, which stems from an environmental lawsuit involving Texaco Petroleum Company, confirmed a lower court's ruling last February.

The lower court had found the oil giant liable for dumping billions of gallons of toxic waste into the Amazon, causing an outbreak of disease and decimating indigenous groups.

Chevron, which has vowed never to pay the $18 billion judgment, subsequently filed a racketeering lawsuit in the Southern District of New York, alleging 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.

In March, Kaplan had issued an injunction blocking enforcement of the judgment.

In September, the U.S. Court of Appeals for the Second Circuit ordered that the injunction be vacated.

Chevron then filed a motion for attachment last month, seeking to prevent the Ecuadorian plaintiffs from collecting any monies based on the "fraudulent" judgment.

In his opinion last week, Kaplan said it is not to say that the company is unlikely to prevail on its claim that the judgment was procured by fraud or is unenforceable for other reasons.

"It is not to say that Chevron's ability to enforce any damages judgment it may secure in this case would not be frustrated by transfers of the sort that it here seeks effectively to prevent. Nor is it to say that Chevron could not make out a sufficient case for some order of attachment, now or in the future," the judge wrote.

"It is to say only that an order of attachment is not available on the present showing because Chevron has not established a likelihood of recovery in any specific amount."

In his opinion, Kaplan also denied a request by the company for a temporary restraining order preventing the Ecuadorians and their lawyers "from assigning, alienating, transferring, encumbering or otherwise dispersing their interest in the fraudulent Ecuadorian judgment, or otherwise collecting proceeds."

The Ecuadorians had argued that Chevron's motion was nothing more than an attempt to "dry up support" for their case, thereby denying them legal counsel and the ability to enforce the Ecuadorian judgment.

"This decision is another rebuke for Chevron and it comes on the heels of a devastating defeat in the appellate court of Ecuador," Karen Hinton, spokeswoman for the Ecuadorians, said in a statement Friday.

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

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