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CSR Press Release

U.S. Courts Hit Chevron Hard Over $19 Billion Ecuador Judgment

Submitted by: Amazon Defense Coalition

Categories: Environment, Corporate Governance

Posted: Oct 02, 2012 – 03:38 PM EST

 

NEW YORK, Oct. 02 /CSRwire/ - Chevron’s courtroom setbacks in the U.S. related to its $19 billion Ecuador liability are piling up as CEO John Watson faces increased shareholder pressure around the world to settle the case, according to an analysis of all legal actions filed by the oil giant in U.S. federal courts.

The new analysis follows reports that Watson’s plan to evade paying the Ecuador judgment is faltering as U.S. courts are showing increasing hostility to Chevron’s claims that it is the victim of fraud in Ecuador, an allegation that the plaintiffs say is a nothing more than a smokescreen for Chevron to hide evidence of its criminal activity in the South American nation.  

Separately, shareholders representing more than $580 billion in assets have called on Watson to settle the case while shareholders and a U.S. Congresswoman have asked the Securities and Exchange Commission to determine if Watson and General Counsel R. Hewitt Pate are lying to company shareholders about the Ecuador risk.

Last year, after an eight-year trial, an Ecuador court found the company liable for dumping billions of gallons of toxic waste into the Amazon and imposed a $19 billion liability.  Evidence showed indigenous groups were decimated by the pollution and that thousands of people have either died or are risk of contracting cancer.

The analysis of Chevron’s court results, prepared after tracking the results of 23 separate legal actions filed by Chevron and its lead outside counsel Gibson Dunn & Crutcher in trial courts around the country, produced the following findings:

**Not a single U.S. court at any level – trial, appellate, or even the U.S. Supreme Court – has accepted Chevron’s fake fraud narrative in any kind of definitive finding, and the vast majority of courts to hear Chevron arguments have flatly rejected them.

**In all, 18 different U.S. federal trial courts and all four federal appellate courts have either rejected Chevron’s claims outright, or refused to adopt them.  The U.S. Supreme Court also denied a Chevron petition to review a decision denying it the right to arbitrate the issue of liability.

**Separately, two courts in Ecuador have flatly rejected Chevron’s fraud claims in the most definitive rulings yet on Chevron’s arguments.  In Ecuador, unlike the U.S., both parties had the opportunity to fully present evidence and brief the issues.

**The Second Circuit Court of Appeals in New York, considered one of the most influential appellate courts in the country, has vacated or stayed three trial court rulings favoring Chevron and also nullified the crown jewel of Chevron’s legal strategy -- an unprecedented and illegal “global injunction” against enforcement of the Ecuador judgment issued by Judge Lewis A. Kaplan.

**A federal appellate court in Philadelphia reversed a discovery order stating “[t]he circumstances supporting [Chevron’s] claim of fraud largely are allegations and allegations are not factual findings.” The appeals court further chastised Chevron’s attacks on the Ecuador courts as “disparaging”.

A number of other U.S. trial and appellate courts have specifically rejected Chevron’s fraud allegations, as follows:

**In the District of Vermont, Judge William Sessions conducted a review of Chevron’s so-called “fraud” evidence as it related to an expert report on damages and concluded “the Court is satisfied that no evidence of fraud, false pretenses or undue influence appears.”

**In the District of Massachusetts, Judge Joseph Tauro rejected Chevron’s claims, finding that the oil giant “has not shown Respondent engaged in or intended any criminal or fraudulent activity.”

**In Ohio, federal Judge Karen Litkovitz threw out “fraud” allegations against one of the plaintiff’s experts, concluding Chevron had “no factual basis” for its claim.

**In Tennessee, federal Judge Joe Brown concluded that Chevron’s allegations were “quickly spiraling out of control” and rejected the attempt to obtain discovery via the “fraud” claims.

**During oral argument before the Fifth Circuit Court of Appeals (based in New Orleans), Federal Judge Fortunato Benavides scolded Chevron for throwing “these words about massive fraud and, uh, all this hyperbole… you're making a mountain out of a molehill”.

In additional to the various legal setbacks, Chevron recently was charged with trying to intimidate people who worked on the legal case by trying to subpoena their private email accounts from Google, Yahoo, and Hotmail. 

A video on the case can be seen here ; a written summary here; and a 60 Minutes segment here

For more information, please contact:

Phone: 703-798-3109
Twitter: @ChevronPit

 

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