Federal appeals court allows damages against Chevron for Ecuador oil spill

[JURIST] The US Court of Appeals for the Second Circuit [official website] on Monday ended an injunction [JURIST report] on damages levied against US oil company Chevron [corporate website; JURIST news archive], making the company potentially liable for $18 billion in damages to Ecuadorian citizens for an oil spill in the 1990s. The award will not be granted immediately, pending appeals in Ecuador [press release] and a decision by the Permanent Court of Arbitration [official website; case materials] in The Hague. The court also issued a stay on a planned hearing in November and rejected the Ecuadorians' motion to recuse Judge Lewis Kaplan for bias. Chevron was unfazed by the ruling, insisting they are the victims of fraud: "There is no legitimate evidence supporting any finding of liability against Chevron because Texaco Petroleum Company cleaned up its share of environmental impacts in Ecuador and the remaining impacts are the responsibility of the government of Ecuador and its state-owned oil company, Petroecuador." Representatives for the Ecuadorians made several statements [El Universo report, in Spanish] praising the decisions, and accusing Chevron of valuing sensationalism over law [San Francisco Chronicle report].

Damages were initially awarded in February [JURIST report] by the Provincial Court of Sucumbios in Ecuador, finding that Texaco, which was acquired by Chevron in 2001, polluted large areas of the country's rain forest. That month, Chevron filed a lawsuit against plaintiffs' lawyers and consultants in the case, claiming that professionals for the plaintiffs were attempting to extort Chevron. The damages were then enjoined in New York in March. In July, the Second Circuit upheld [LAT report] a May ruling [NYT report] by the Southern District of New York ordering filmmaker Joe Berlinger to turn over to Chevron certain outtakes from his 2009 documentary Crude [film website]. Chevron claims the outtakes show plaintiffs' lawyers discussing illegal and unethical tactics, including ghost-writing a court appointed expert's report, intimidating a judge and colluding with government officials. Chevron claims that a 1995 cleanup agreement between Ecuador and Texaco, completed in 1998 at a cost of $40 million, absolves Chevron of all liability.

 

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