What’s Next in the Chevron/Ecuador Legal Saga?

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Sludge Match: Inside Chevron’s $9 Billion Legal Battle With Ecuadorian Villagers,” Alexander Zaitchik’s recent article in Rolling Stone, is a fascinating look at the Chevron/Ecuador legal saga that dives into some of the more scandalous details that haven’t received much mainstream news coverage.  It is a must read for anyone who has followed the more than 20-year-long effort to hold Chevron accountable for environmental devastation caused by the company’s operations in the Ecuadorian Amazon.

By examining both sides in the case’s sordid history, Zaitchik’s presentation stands in stark contrast to the way the business media has consistently simplified and obscured the narrative around the legal case. In particular, he discusses many of the morally, ethically, and legally suspect actions Chevron has been accused of taking over the years. Bribing key witnesses, pressuring co-defendants into settling and testifying on Chevron’s behalf, and tampering with the soil sampling process are just a few examples of the range of tactics Chevron is said to have employed to make the case against it go away.  I can’t help but notice the irony here: the retaliatory RICO lawsuit Chevron filed against attorney Steven Donziger and his Ecuadorian clients accused Donziger of similar wrongdoing, such as bribery and trying to pressure Chevron in to settling the environmental lawsuit.

Earlier this year, Judge Kaplan decided the RICO case in Chevron’s favor, ruling that Donziger and his Ecuadorian clients had obtained the $9.5 billion Ecuadorian court judgment against Chevron by fraud. But Zaitchik’s article serves as an important reminder that Judge Kaplan’s decision is not the end of this extraordinary saga. The article’s summary of the writer’s discussion with ERI’s legal director creatively captures this:

Marco Simons, legal director of EarthRights International, notes a disorienting, mildly hallucinogenic aspect. “We could be looking at an Alice in Wonderland scenario of never-ending litigation,” he says. “It’s hard to see where this ends.”

In the U.S., Donziger and the Ecuadorians have appealed Judge Kaplan’s decision. Amicus curiae (“friend of the court”) briefs on specific legal issues were filed by ERI, civil society groups,  prominent international law scholars, and the Ecuadorian government, among others, in support of Donziger and the Ecuadorians. Together, they have presented a number of convincing grounds for overturning the decision that will demand careful consideration. Chevron will have the chance to respond to these arguments in its appellate brief, due in October, and additional amicus briefs will likely be filed in support of Chevron soon after. It will be many more months before the appeal is decided.

In the meantime, however, courts in other countries may soon weigh in on the enforceability of the Ecuadorian judgment against Chevron.  Judge Kaplan’s decision prevents Donziger and the Ecuadorians from enforcing the $9.5 billion judgment in the U.S., but can’t prevent them from trying to enforce it elsewhere. The Ecuadorians are already pursuing enforcement proceedings in Canada, Brazil and Argentina.

While the cases in Argentina and Brazil have progressed slowly, things started heating up in Canada in December of last year when the Ontario Court of Appeals ruled that the Ecuadorians had the right to pursue enforcement of the Ecuadorian judgment against Chevron’s assets in Canada. “After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard in an appropriate jurisdiction,” said the decision issued by a three-judge panel of the Ontario Court of Appeals. “At this juncture, Ontario is that jurisdiction.” Chevron has appealed that decision, arguing that the Ontario trial court has no jurisdiction to hear the enforcement action, and that the judgment cannot be enforced against Chevron’s wholly-owned Canadian subsidiary. The Supreme Court of Canada is expected to hear arguments in December 2014.

Should the Ecuadorians succeed before the Canadian Supreme Court, the case will go back to the original judge who will then consider whether the judgment should be recognized and enforced. It’s unclear what effect Judge Kaplan’s decision will have. Chevron will go to great lengths to use the decision to argue the judgment should not be enforced in Canada. But the Canadian court, like the courts in Brazil, Argentina, and other countries that may be asked to enforce the judgment, will ultimately have to decide for itself, and it may not give Judge Kaplan’s view of the evidence against Donziger the weight that Chevron hopes for.

A success for the Ecuadorians on Chevron’s jurisdictional defenses in Canada may also result in a wave of new enforcement actions against the company’s assets in other Commonwealth countries with similar legal systems. Thus, despite its initial success before Judge Kaplan, Chevron will no doubt be litigating its liability for destruction in the Amazon in numerous courts around the world for many more years to come.

The conclusion to this saga thus remains just as uncertain and distant as it was 20 years ago. But one thing is clear: Chevron hasn’t won yet.

 

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