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New York judge supports Chevron in Ecuador pollution case

05 March 2014

On March 4, US District Judge Lewis Kaplan in New York said he found "clear and convincing evidence" that attorney Steven Donziger's Ecuador-supported legal team used bribery, fraud and extortion in pursuit of an $18 billion judgement against Chevron Corp in Ecuador issued in 2011. This is a setback for Ecuadorean villagers hoping to collect on the original award.

Bioremediation pond for soil contaminated with crude in the Ecuadorian Amazon.
Bioremediation pond for soil contaminated with crude in the Ecuadorian Amazon.

The villagers had said Texaco, later acquired by Chevron, contaminated an oil field in northeastern Ecuador between 1964 and 1992. Ecuador's high court cut the judgment to $9.5 billion last year.

But regardless of whether there is pollution at the site, Kaplan said, Donziger cannot use a "Robin Hood" defense to justify illegal behavior.

Kaplan's decision bars Donziger and the villagers from enforcing the Ecuadorean ruling in the United States. It may also give Chevron legal ammunition in other countries where the plaintiffs could try to go after Chevron's assets.

At a six-week trial last year, Chevron accused Donziger of fraud and racketeering and said Texaco cleaned up the site, known as Lago Agrio, before handing it over to a state-controlled entity.

Donziger, who has repeatedly levelled accusations of bias against Kaplan and who predicted he would lose the case, called the decision "appalling" and blamed Kaplan's "implacable hostility" toward him and his Ecuadorean clients.

"Through this decision, we now have the spectacle of a Manhattan trial judge purporting to overrule Ecuador's Supreme Court on questions of Ecuadorean law," he said in a written statement. He vowed to appeal and said the ruling would not stop his clients from seeking to enforce the judgment in other countries.

Chevron no longer has significant assets in Ecuador, and the villagers have tried to enforce the ruling in Canada, Argentina and Brazil.

Chevron Chief Executive John Watson said the ruling was "a resounding victory."

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