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Chevron wins big time in court in Ecuador case

Staff Writer |
The United States Court of Appeals for the Second Circuit has unanimously affirmed a lower court decision in Chevron-Ecuador case.

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The decision found that the $9.5 billion judgment against Chevron Corporation in Ecuador was the product of fraud and racketeering activity, and unenforceable in the United States.

The appeals court stated that there was “no basis for dismissal or reversal” of the district court’s judgment, noting that “[t]he record in the present case reveals a parade of corrupt actions by the LAPs’ legal team, including coercion, fraud, and bribery, culminating in the promise to Judge Zambrano of $500,000 from a judgment in favor of the LAPs.”

In 2014, Steven Donziger, the American lawyer behind a fraudulent lawsuit against Chevron in Ecuador, was found by the U.S. District Court for the Southern District of New York to have violated the federal Racketeer Influence and Corrupt Organizations Act (RICO in obtaining the Ecuadorian judgment and in trying to cover up the crimes committed by him and his associates.

During the seven-week RICO and fraud trial, Chevron presented evidence detailing the acts by Donziger.

Chevron has never operated in Ecuador. Texaco Petroleum (TexPet), which became a subsidiary of Chevron in 2001, was a minority partner in an oil-production consortium in Ecuador along with the state-owned oil company, Petroecuador, from 1964 to 1992.

After TexPet turned its remaining share of the oil operations over to Petroecuador in 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.

Since the extent of the fraud scheme was revealed, more than a dozen former insiders and allies have abandoned Donziger and his scheme, including his former co-counsel, environmental consultants, funders, investors, employees and Ecuadorian collaborators.

In May 2015, Brazil’s Deputy Prosecutor General recommended to the country’s Superior Court of Justice that the fraudulent Ecuadorian judgment not be recognized for enforcement, upholding both international and Brazilian law.

In December 2015, the Supreme Court of Gibraltar issued a judgment against Amazonia Recovery, a Gibraltar-based company set up by Donziger and his associates to receive and distribute funds resulting from the fraudulent Ecuadorian judgment.

The court awarded Chevron $28 million in damages and issued a permanent injunction against Amazonia, preventing the company from assisting or supporting the case against Chevron in any way.

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