U.S. Court Shields Chevron from Paying $9 Billion Judgment for Ecuador Rain Forest Destruction

From AllGov:

By Kevin Lessmiller and Adam Klasfeld, Courthouse News Service

(CN) — The Second Circuit ruled Monday 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.”

In 1993, indigenous and farmer residents of the Ecuadorean rainforest sued Chevron’s predecessor Texaco in New York, alleging that the company left behind an environmental and public health disaster for the 30,000 residents of Amazon. Chevron’s first step after acquiring Texaco was convincing the New York courts to relocate the lawsuit to the Ecuadorean city of Lago Agrio, where the drilling occurred.

An Ecuadorian judge awarded the plaintiffs $18 billion in February 2011 for environmental damage caused by Texaco during its operation of an oil consortium in the rainforest from 1972 to 1990.

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.

U.S. District Judge Lewis Kaplan agreed and ruled in March 2014 that Ecuador‘s judgment had been “procured by corrupt means,” such as bribery.

Kaplan devoted two separate subsections of a 500-page decision to Ecuadorean President Rafael Correa’s election and “influence” on the Lago Agrio litigation. Those sections described how Correa pushed for the prosecution of Chevron lawyers, offered to call a …

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