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U.S. Supreme Court Backs Chevron In $9B Ecuador Pollution Case

Chevron

The U.S. Supreme Court on Monday denied to hear an appeal by an American lawyer to try to collect US$8.65 billion in pollution damages from Chevron, handing a victory to the U.S. oil supermajor over a pollution judgment issued in Ecuador, which lower U.S. courts had earlier agreed had been obtained via corruption.

In August 2016, a U.S. appeals court blocked the enforcement of a US$9.5-billion judgment against Chevron, upholding a lower court ruling that had found that a pollution judgment against the U.S. oil major in Ecuador was the product of fraud and racketeering, and therefore, unenforceable in the U.S.

In March 2014, U.S. District Judge Lewis Kaplan ruled that the case against Chevron in an Ecuadorean court was the product of fraud and racketeering orchestrated by a New York lawyer, concluding that the judgment should not be enforced. Judge Kaplan said the case had been corrupted by American lawyer Steven Donziger and Ecuadorean lawyers, who allegedly submitted fraudulent evidence and coerced and bribed an Ecuadorean judge to rule in their favor in 2011.

The 2014 court ruling found Donziger to have violated the federal Racketeer Influence and Corrupt Organizations Act (RICO) in the lawsuit in Ecuador, committing money laundering, extortion, wire fraud, witness tampering, and obstruction of justice.

Although Chevron has never operated in Ecuador, it bought in 2001 Texaco Petroleum (TexPet), which was a minority shareholder, together with Ecuador’s state-owned Petroecuador, in an oil-production consortium in Lago Agrio between 1964 and 1992. After returning its share to Petroecuador in 1992, Texaco remedied the areas and was fully released from further environmental liability, Chevron has said.

The court saga started in 1993 when American lawyers sued over the pollution, which they claimed affected around 30,000 indigenous villagers in Ecuador’s Lago Agrio region. A court in Ecuador initially ordered Chevron in 2011 to pay US$19 billion, but later halved the judgment. Chevron refused to pay and sued Donziger to challenge the award.

By Tsvetana Paraskova for Oilprice.com

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