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US court rules in favour of Chevron & denies $9.5 billion judgement to Amazonian residents for environmental damage

The United States Court of Appeals for the Second Circuit has ruled in favour of Chevron Corp. in the latest appeal in the case brought by Ecuadorian residents of the Amazon for Texaco's environmental damage of the forest. The decision upheld the previous finding that the $9.5 billion judgment against Chevron for oil pollution in the rainforest was a result of bribery and fraud. The decision comes 23 years after the environmental disaster. In February 2011, an Ecuadorian judge awarded the plaintiffs $18 billion for environmental damage caused by Texaco during its operation of an oil consortium in the Amazon from 1972 to 1990. This was later reduced to $9.5 billion. The US Court found that the case record reveals corruption, coercion, fraud, and bribery. The Ecuadorians' attorneys will examine appeal options. 

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24 August 2016

Commentary: US court denial of Ecuadorian judgment could be persuasive in Canadian lawsuit

Author: Michael D. Goldhaber, Law.com

“Chevron in Ecuador: Is the End in Sight?”, 22 Aug 2016 [Subscription required]

…Now that the U.S. Court of Appeals for the Second Circuit has fully embraced Chevron Corp.’s view—that the Ecuadorean judgment against it was rotten with fraud— is there any chance that either side will give up the ghost of their case?...Pinning their hopes on Canada, the plaintiffs have stated that a “trial” will begin in September. What’s actually on deck is their motion to strike Chevron’s defenses to enforcement, and Chevron’s motion to dismiss for suing the wrong corporate entity. If those motions fail, then Chevron can argue that the Second Circuit ruling is binding or persuasive…[or] resubmit its undeniable evidence of fraud before another rational court…[T]he Union of Persons Affected by Texaco (led by counsel Pablo Fajardo) splintered from the Amazon Defense Front (allied with counsel Steven Donziger)…Ecuador owed about $100 million to Chevron from an old, unrelated arbitration. Plaintiffs had put a lien on that award…But Ecuador’s president needed to pay Chevron before he could issue $1 billion in sovereign bonds last month. The president got Fajardo to quietly release the plaintiffs’ lien so that Ecuador could pay the old debt to Chevron. When the Frente de Defense de la Amazonia got wind of what had happened, it denounced the Union de Afectados pour la Petrolera Texaco, and threatened to sue Fajardo…

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Company response
22 August 2016

Chevron response

Author: Chevron

...[T]he government of Ecuador [is]...using the indigenous people of the Amazon to mislead the public and extort money from Chevron Corporation...Texaco Petroleum (TexPet)...was a minority partner in an oil-production consortium in Ecuador...[I]n 1992, pursuant to an agreement with Ecuador, TexPet agreed to conduct a remediation of selected production sites while Petroecuador remained responsible to perform any remaining cleanup. The government of Ecuador oversaw and certified the successful completion of TexPet’s remediation and fully released TexPet from further environmental liability. Petroecuador, however, failed to conduct the cleanup it promised and has continued to operate and expand oil operations in the former concession over the past 20 years. In an amicus brief a group of international human rights and anti-corruption experts...stated, “Advocates for human rights do not advance human rights by violating them, and the corrupt pattern of fraud, extortion, and bribery described by the District Court, if accurate, denies the fundamental human rights to due process of law and a fair trial.”In 2014, a U.S. federal court found the Ecuadorian judgment against Chevron to be the product of “egregious fraud”. The nearly 500-page ruling, found that Steven Donziger, the lead American lawyer behind the Ecuadorian lawsuit against the company, violated the federal Racketeer Influenced and Corrupt Organizations Act...

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9 August 2016

2nd Circuit Shields Chevron From $9.5B Verdict

Author: Kevin Lessmiller and Adam Klasfeld, Courthouse News Service (USA)

The Second Circuit ruled...that Ecuadoreans cannot collect a $9.5 billion judgment against Chevron for rainforest damage, finding that the judgment was the result of bribery and fraud. The ruling is another setback for rainforest residents who have struggled for 23 years for compensation for what they called an "Amazon Chernobyl"...Ecuador's highest court upheld the verdict three years later, but reduced the judgment to about $9.5 billion. Chevron promised to abide by the Ecuadorean judgment to win the transfer of the case, but it later insisted that this obligation was void because of fraud. Returning to New York, Chevron accused lawyers for the Ecuadoreans — particularly, a human-rights lawyer named Steven Donziger — of attempting to "shake-down" the company for billions by pressuring them to pay an illegitimate judgment...The Second Circuit heard arguments in the case last year...[T]he New York City-based appeals court unanimously upheld Kaplan's ruling. "There is no authority suggesting that a party ignorant of its attorney's fraudulent actions may enforce a fraudulently procured judgment," Judge Amalya Kearse wrote for a three-judge panel..."The Ecuadorians' attorneys are reviewing it carefully and will be exploring all options for further appeal...[T]his ruling will not deter the Ecuadorians, their lawyers and their supporters from aggressively seeking justice in Canada and in other countries where litigation is underway to seize Chevron assets,"...

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9 August 2016

Chevron Corp. v. Donziger, United States Court of Appeals for the Second Circuit

Author: United States Court of Appeals for the Second Circuit

...Appellants challenge the district court's judgment principally on grounds of Article III standing, international comity, judicial estoppel, lack of legal authority for the granting of equitable relief, and/or lack of personal jurisdiction over defendants other than Donziger and his firm. Noting, inter alia, that appellants do not challenge the sufficiency of the evidence to support the district court's factual findings, that the Ecuadorian appellate courts declined to hear and resolve the above charges of corruption and expressly preserved the parties' rights to litigate those charges in United States courts, and that the district court's judgment has imposed in personam restrictions on the appellants without disturbing the Ecuadorian judgment, we find no basis for overturning the judgment of the district court...[T]he district court's unchallenged findings of fact as to the fraud, coercion, and bribery engaged in by the LAPs' team..., we see no abuse of discretion in the equitable in personam relief granted by the district court...

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9 August 2016

Chevron Ruling Blocks $8.6 Billion Order in Ecuador Fight

Author: Patricia Hurtado & Erik Larson, Bloomberg Markets (USA)

Chevron Corp. won a victory in its long-running battle over toxic waste in Ecuador after an appeals court found the American lawyer representing indigenous villagers committed fraud and barred him from enforcing an $8.6 billion award. "Even innocent clients may not benefit from the fraud of their attorney," the appeals court...said..., referring to claims that the Ecuadorians’ lawyer had faked evidence and offered bribes. The appeals court upheld a lower-court ruling. The defeat of lawyer...could influence the outcome of the storied legal dispute...Ecuadorians are seeking to seize Chevron assets because the company has refused to pay on a judgment awarded in 2011 by an Ecuadorian court. It is unlikely to be the last twist in the saga, which began in 1993 when American lawyers sued over pollution which they say affects 30,000 indigenous villagers in the oil-rich Lago Agrio region...

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9 August 2016

Chevron’s Pollution Victory Opens Door for Companies to Shirk Foreign Verdicts

Author: Paul Barrett, Bloomberg Businessweek (USA)

Chevron wasn’t the only winner in Monday’s ruling...in which the court affirmed that a lawyer for victims engaged in wrongdoing to secure a $9.5 billion verdict in the South American country. [It] may benefit other corporations seeking to avoid enforcement of foreign judgments they contend are based on corrupt proceedings...Ruling said that an American corporation hit with a big-ticket judgment abroad can come home to the U.S. and use the Racketeer Influenced and Corrupt Organizations Act (RICO) as a weapon to go after the lawyers on the other side of the aisle...Interpreting RICO as authorizing a company to seek an injunction in this manner “is consistent with Congress’s intent to encourage civil litigation to supplement government efforts to deter and penalize” illegal activity prohibited by RICO, Kearse wrote...The injunction that the federal appeals court upheld said that Donziger and his clients couldn’t enforce their tainted judgment in the U.S., and couldn’t profit from it anywhere in the world. It seems entirely likely that other corporations that find themselves in similar straits will emulate Chevron and its RICO defense...

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8 August 2016

Amazon Watch Response to Decision to Uphold Flawed Chevron Retaliatory Lawsuit

Author: Amazon Watch (USA)

Amazon Watch is extremely disappointed by the decision of the 2nd Circuit Appeals court to uphold Chevron's RICO SLAPP suit filed in retaliation for the unprecedented victory of contaminated Ecuadorian communities over Chevron in Ecuador. Since the $9.5 billion verdict...Chevron has reneged on its responsibility and sought every opportunity to escape justice...We are shocked that the Appeals Court is completely unconcerned that the factual findings of the lower court rely on the hearsay testimony of a corrupted witness who admits receiving payment in exchange for his testimony. It is a complete miscarriage of justice. By upholding Judge Kaplan's severely flawed and biased decision, the justices of the Second Circuit Court of Appeals impugnes the entire Ecuadorian judiciary based on the often contradictory testimony of a single compromised witness...It is well established that Chevron...deliberately dumped 18 billion gallons of toxic wastewater into the Amazon rainforest, resulting in an environmental disaster and a severe health crisis for tens of thousands of people...It is extremely disturbing that...the U.S. judicial system has...played a role in aiding a U.S. company found liable for one of the worst environmental disasters in history based on overwhelming evidence.

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