U.S. SC staying out of Chevron-Ecuador legal battle

Jessica M. Karmasek Oct. 9, 2012, 11:00am



WASHINGTON (Legal Newsline) - The U.S. Supreme Court has denied a request by Chevron Corp. to review and block an $18 billion judgment against the oil giant for environmental damage in Ecuador.

The nation's high court denied Chevron's petition for writ of certiorari, according to a 19-page order list released Tuesday.

Chevron filed its petition with the Court back in May.

The Court did not give an explanation of its denial, only noting that Justice Samuel Alito "took no part" in the consideration of the company's motion or the decision itself.

Most recently, in May, a federal judge mostly upheld Chevron's complaint in a separate but related lawsuit over the $18 billion judgment.

U.S. District Judge Lewis Kaplan, of the Southern District of New York, allowed the company's racketeering claims to continue, but dismissed other claims that included tortious interference.

More specifically, Kaplan's May 14 order upheld Chevron's complaint for racketeering, fraud, conspiracy and New York Judiciary Law 487, which provides for civil damages against an attorney who engages in deceit or collusion with intent to deceive a court.

"Chevron's extortion allegations are more than sufficient," the judge wrote in his 55-page order.

Hewitt Pate, vice president and general counsel for Chevron, has said the company is "eager" to move forward with its racketeering case against the Ecuadorians, calling the current judgment the result of "fraud" and "misconduct."

In January, an appellate court in Ecuador upheld the $18 billion judgment for Chevron's "intentional contamination" of the country's rainforest.

The adverse ruling was issued by a panel of three temporary judges presiding over the 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 in February 2011.

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

Vowing never to pay the hefty judgment, the company filed its racketeering lawsuit in the New York federal court in response.

The company 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.

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

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

In its full opinion -- which wasn't released until Jan. 26 -- the Second Circuit explained that Chevron could only challenge the judgment "defensively, in response to attempted enforcement," which the Ecuadorians had not yet attempted and might never attempt.

"There is no indication that they will select New York as one of the jurisdictions in which they will undertake enforcement efforts, and if they do, they will have to present their claim to a New York court which will then apply the standards of the Recognition Act before any adverse consequence may befall Chevron," Judge Gerald E. Lynch wrote.

Aaron Marr Page, a lawyer for the Ecuadorians, said in a statement Tuesday that Chevron's latest loss is just another example of the company's "increasingly futile battle" to avoid paying its legal obligations in Ecuador.

"Chevron is running from justice while its toxic dumping continues to create an imminent danger of death to indigenous peoples in Ecuador," he said.

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

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