Ecuador Plaintiffs Appeal U.S. Court Decision on Arbitration
Rainforest Residents Seek to Enforce Chevron's Promises to U.S. Courts That the Company Would Litigate Case in Ecuador
Amazon Defense Coalition
18 March 2010 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
New York – Lawyers for the Ecuadorian plaintiffs suing Chevron for dumping billions of gallons of toxic waste into Ecuador's Amazon filed a notice of appeal today in U.S. federal court seeking to prevent the oil giant from taking its claims to an international arbitration where the rainforest communities cannot appear.
The appeal is of a March 11th decision by U.S. Judge Leonard B. Sand that allowed Chevron to take claims in the environmental case (Aguinda v. ChevronTexaco) to a private arbitration in violation of its earlier promises to the U.S. federal court that it would abide by any judgment in Ecuador subject only to an enforcement action under New York state law, according to the plaintiffs.
"We believe this case presents important issues regarding Chevron's forum shopping that are appropriate for review by the appellate court," said Jonathon Abady, who represents the rainforest residents suing Chevron for environmental clean-up.
The rainforest communities argue that Chevron, to induce transfer of the case from the U.S. federal court to Ecuador, made several promises to the U.S. court that it is now violating because the scientific evidence at the trial suggests it will lose. These include a promise by Chevron to abide by jurisdiction in Ecuador and pay any judgment subject to certain enforcement provisions that do not include an international arbitration, said Abady.
The Aguinda case was filed in U.S. federal court in 1993 and transferred to Ecuador in 2002, following Chevron's promises to accept jurisdiction there. The oil giant at the time had submitted 14 sworn affidavits praising Ecuador's courts.
The rainforest communities and Ecuador's government had requested that Judge Sand enjoin Chevron from participating in the arbitration on the grounds the company had waived its right to do so years earlier when it induced transfer of the case to Ecuador. The communities accused Chevron of forum shopping and trying to make good on its promises to create a "lifetime of litigation" for the plaintiffs as a way of punishing them for asserting their legal rights.
"Chevron's plan to try to resolve the legal claims of thousands of rainforest residents in a secret arbitration is a massive denial of due process," said Abady, of the law firm Emery, Celli, Brinckerhoff & Abady in New York City. "After more than 17 years of litigation fraught with delay caused largely by Chevron itself, these individuals deserve to have their claims resolved in the forum that Chevron chose after relying for years on those promises.
"Chevron, because it faces an adverse judgment, is now looking for yet another forum to drag out this process and make good on its promise of a lifetime of litigation for the communities," added Abady.
The plaintiffs have argued that Chevron is trying to use the arbitration to undermine the rule of law. The company is asking the arbitration panel for an order that extinguishes the Aguinda case on the grounds Chevron has been treated unfairly in the trial even though Chevron has yet to actually lose, and that such an order would violate Ecuador's Constitution.
Chevron is trying to abandon the Ecuador trial even though the parties have produced more than 64,000 chemical sampling results, conducted 103 court-supervised inspections of former Chevron well sites scattered throughout the rainforest, and created a trial record than runs to more than 200,000 pages. A court-appointed expert has estimated damages at up to $27.3 billion.
Ultimately, a judge in Ecuador will decide questions of liability and damages. If Chevron succeeds in obtaining the arbitration and winning, it is unclear what effect if any such a ruling in a parallel proceeding would have on the Ecuador court.
The Aguinda lawsuit charges that Texaco (which Chevron bought in 2001) created a system of oil extraction in the Amazon rainforest that deliberately discharged billions of gallons of toxic wastewater into streams and rivers and abandoned more than 900 unlined waste pits filled with toxic sludge. Texaco was the exclusive operator of the oil fields, which cover an area roughly the size of Rhode Island, from 1964 to 1990.