On Oct. 9, the US Supreme Court declined to hear Chevron corporation’s bid to block global enforcement of a $19 billion judgment by a court in Ecuador, a victory for 30,000 rainforest dwellers who brought litigation over the pollution of their lands. Chevron had asked the high court to uphold an injunction imposed in March 2010 by US Judge Lewis Kaplan in New York that would have barred worldwide enforcement of Ecuador’s judgment. That injunction was overturned in January by the US Second Circuit Court of Appeals, which ruled that the oil company could challenge the Ecuadoran judgement “only defensively, in response to attempted enforcement,” which the rainforest dwellers had not attempted and might never attempt in New York. The Supreme Court’s rejection of the case lets the Second Circuit decision stand.
The Second Circuit also found that the US courts did not have authority to stop courts in other countries from enforcing the judgment. The plaintiffs, from the rainforest community of Lago Agrio, are currently trying to enforce the judgment in Canada and Brazil. In its appeal to the Supreme Court, Chevron said it was entitled to raise an anticipatory defense in US courts to preempt any enforcement efforts, calling it necessary in light of the “disturbing trend” in which lawyers win big money judgments against US companies in corrupt foreign courts, and then seek to enforce them in countries where the companies operate. “While Chevron is disappointed that the court denied our petition, we will continue to defend against the plaintiffs’ lawyers’ attempts to enforce the fraudulent Ecuadorean judgment, and to further expose their misconduct,” Chevron said in a statement.
Chevron is pursuing a racketeering suit against New York attorney Steven Donziger, a group of Ecuadorans and environmental groups that helped win the judgment, accusing them of intimidation and extortion. It has also challenged the judgment before an international arbitration panel under the trade agreement between the US and Ecuador. The panel is scheduled to begin hearing the dispute in November. (Reuters, Oct. 12; Environmental News Service, Oct. 9)
Chevron was acquitted in a similar US case concerning human rights abuses in Nigeria.
Ecuador court orders seizure of Chevron assets
A court in Ecuador on Oct. 17 ordered frozen all bank accounts owned by Chevron, Texaco, and their subsidiaries in partial payment of the $19 billion pollution damages judgment against Chevron. “This is a huge first step for the rainforest villagers on the road to collecting the entire $19 billion judgment,” said Pablo Fajardo, lead lawyer for the plaintiffs.
Judge Wilfrido Erazo of the Sucumbios Provincial Court signed the order, which immediately affects a $96.3 million debt Ecuador’s government owes Chevron, monies in various bank accounts held in Ecuador by Chevron and its subsidiaries, and licensing fees generated by the use of Chevron trademarks in the country. (ENS, Oct. 17)
Correction on Ecuador “trade agreement”
Contrary to the implication of Reuters, our source, it is technically a Bilateral Investment Treaty, which took effect in 1997. The Ecuador FTA was originally supposed to be part of the Free Trade Area of the Americas (FTAA) pact, and was spun off into a bilateral US-Ecuador deal after the FTAA collapsed in 2005. The bilateral trade deal was scuttled when Rafael Correa took office in 2007.