Republic of Ecuador wants U.S. judge's Chevron settlement injunction dissolved

By Jessica M. Karmasek | Jun 22, 2011


NEW YORK (Legal Newsline) -- Ecuador's government, in a court filing last week, asked a U.S. appeals court to rein in U.S. District Judge Lewis Kaplan for his "belittlement" of their country's court system.

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

Chevron, which has vowed never to pay the judgment, then filed a racketeering lawsuit, 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 Chevron.

Then, at the oil company's request and without an evidentiary hearing, Kaplan issued an injunction blocking worldwide enforcement of the judgment.

Kaplan's ruling is under an expedited appeal before the Second Circuit Court of Appeals in New York, with arguments set for Sept. 12.

Last week, the Republic of Ecuador was one of five entities to file an amicus brief with the Second Circuit, asking that the judge's injunction be dissolved because it "lacks legal authority." An amicus brief from 16 international legal scholars also called the injunction "futile" and a violation of international law.

"The undisguised castigation of, and lack of respect afforded, the Ecuadorian justice system by the District Court runs counter... to long-established jurisprudential norms," lawyers for the government wrote.

Ecuador wrote that its legal system is "predicated on fundamental principles of justice and due process" deeply rooted in the Ecuador Constitution, which, like the U.S. Constitution, guarantees the independence of the judiciary and provides for separation of powers.

Lawyers for the government asserted that Chevron's complaints about Ecuador's courts are "hypocritical" given that the company repeatedly praised the same courts from 1993 to 2002 to convince a U.S. judge to shift the Aguinda lawsuit to the South American nation.

As late as 2006, Ecuador's lawyers said, Chevron was still arguing that Ecuador's courts were fair and transparent as part of its strategy to dismiss a separate case from federal court in San Francisco stemming from the same environmental contamination.

Karen Hinton, spokeswoman for the Ecuadorian plaintiffs who won the judgment, said Ecuador's brief appears to mark the first time a Latin American government has asked a U.S. appeals court to reverse a U.S. trial judge for interfering in its court system.

"This is an extraordinary situation where an American judge has expressed open contempt for the legal system of a U.S. ally and trading partner, has belittled citizens of that country who have fought courageously for justice, and has tried to assert jurisdiction over that country's courts in clear violation of international law," she said in a statement.

The legal scholars, in their own brief, called Kaplan's injunction "breathtaking in its attempts to arrogate a world-wide and exclusive jurisdiction" to a U.S. court over a judgment obtained in a foreign legal system.

The brief, also filed last week, was signed by professors and practitioners from South Africa, Australia, Spain, Italy, Finland and the United States.

Earlier this month, in a separate action, the Ecuadorian plaintiffs asked the Second Circuit to stop Chevron from conducting discovery for an upcoming trial in November and again asked for Kaplan's removal from the case.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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