Ecuadorians ask court to stay motion to attach

By Jessica M. Karmasek | Dec 12, 2011


NEW YORK (Legal Newsline) - The Ecuadorians suing Chevron Corp. are asking a federal appeals court to stay the company's latest request to attach all of their assets and to stay all remaining claims against them.

Late last month, Chevron filed a motion for attachment with the U.S. District Court for the Southern District of New York, seeking to prevent the plaintiffs from collecting any monies based on what it describes as a "fraudulent judgment that they have obtained through collusion with a corrupt Ecuadorian court."

"Chevron says its recent maneuver is tolerable because it is consistent with (Chevron's) prior representations to this court that the company would not necessarily wait to lay eyes on this court's forthcoming opinion before setting in motion its plans to end-run that very opinion," the Ecuadorian plaintiffs wrote in their 19-page filing with the U.S. Court of Appeals for the Second Circuit Thursday.

"Notwithstanding these defenses, Chevron's latest effort to draw a United States federal court into a standoff with the courts of Ecuador and others around the world is offensive to everything this court has done thus far."

The company's motion relates to its fraud and RICO claims against the Ecuadorian plaintiffs.

In February, an Ecuadorian court 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. 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 the company.

In March, U.S. District Judge Lewis Kaplan issued an injunction blocking enforcement of the judgment.

In September, the Second Circuit ordered that the injunction be vacated. It also stayed a trial that was scheduled for last month by Kaplan that Chevron sought on the enforceability of the judgment.

Now, the Ecuadorians argue that the TRO and attachment that Chevron seeks would effectively restore the portion of the vacated injunction that the Second Circuit "apparently considered to be most objectionable of all -- barring the Ecuadorian plaintiffs from funding their cause."

"We are presented with yet another escape-plan that relies, just as Chevron's bid for a worldwide preliminary injunction, on a formula of histrionics, half-truths, out-of-context and hacked-apart quotations drawn from the gift of the Ecuadorian plaintiffs' entire privileged case file, and sheer magnitude of paper -- this time around, to the tune of 881 supposedly supporting exhibits totaling 4,500 pages," the Ecuadorians wrote.

"Although the district court itself, many months ago, observed that Chevron's RICO and fraud claims may be 'dramatically narrowed,' or may even 'vanish,' depending upon the disposition of its declaratory relief (Count 9) claims, the district did not accordingly inform Chevron that its motion for a TRO and attachment is premature while this court deliberates.

"Rather, within 24 hours after the filing of Chevron's motion for an order of attachment, the district court entered an order advising Messrs. Camacho and Piaguaje that if they even plan to offer some resistance to Chevron's motion, they ought not to repeat any previous arguments, notwithstanding issue overlap."

Kaplan earlier this month filed a one-page order saying if Chevron's motion for attachment is opposed, the court "anticipates that arguments in opposition will overlap substantially with arguments made previously in motions to dismiss."

Therefore, any filings in opposition to the company's motion "shall avoid repetition of, but may incorporate by reference, arguments already before the court," Kaplan wrote.

Karen Hinton, a spokeswoman for the Ecuadorians, has said the order is part of a "conspiracy" between the company and the judge to prevent enforcement of the $18 billion judgment.

"This futile and baseless legal filing is yet another sign of Chevron's increasing desperation after losing multiple legal battles in both U.S. and Ecuador courts over its destruction of the Amazon rainforest in Ecuador," she said earlier this month.

"Because Chevron can't win in court, it is now turning to its favorite American judge to try to help it block its victims from financing their legal case."

Meanwhile, the company has said it remains committed to its "consistent goal" of obtaining judicial review on the merits of the Ecuadorian plaintiffs' lawyers' fraud before they are allowed to attempt enforcement of the Ecuadorian judgment.

Chevron says it is "confident" that once that full facts are examined, the judgment will be found unenforceable and those who procured it will be "required to answer for their misconduct."

"There is no legitimate evidence supporting any finding of liability against Chevron because Texaco Petroleum Company cleaned up its share of environmental impacts in Ecuador and the remaining impacts are the responsibility of the government of Ecuador and its state-owned oil company, Petroecuador," the company said in a statement in September.

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

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