NY Trial Begins in Chevron's Bid to Prevent Collection in US of $18B Environmental Judgment

Associated Press
15 October 2013

A judge who once tried to stop collection worldwide of an $18 billion environmental judgment against energy giant Chevron began hearing evidence Tuesday in the oil company's bid to block collection in the U.S.

U.S. District Judge Lewis A. Kaplan listened as Chevron attorney Randy Mastro said a lawyer for a group of indigenous inhabitants of the Amazon rain forest fraudulently won the judgment two years ago in Ecuador. Mastro said that if Chevron loses the case, "it will be open season on U.S. companies in corrupt foreign jurisdictions."

Mastro said Steven Donziger "masterminded and orchestrated" a scheme that involved multiple acts of wire and mail fraud, extortion, bribery, witness tampering and money laundering.

Donziger's attorney, Richard Friedman, portrayed Donziger as a hero to the plaintiffs, who were injured by oil pollution left by Texaco, Chevron's predecessor oil company in Ecuador. Texaco operated an oil consortium from 1972 to 1990 in the Amazon and became a wholly owned subsidiary of Chevron in 2001.

"He was trying to hold a multi-national corporation responsible for the environmental harm to a third-world country," Friedman said. "He's here because he managed to get justice for his clients."

A month after the Ecuadorean judgment was issued, Kaplan blocked it. The 2nd U.S. Circuit Court of Appeals in Manhattan reversed his order, saying he did not have authority "to dictate to the entire world which judgments are entitled to respect and which countries' courts are to be treated as international pariahs."

The appeals court said the judge has authority to block collection if Ecuadorean plaintiffs move against Chevron in New York.

Chevron has long argued that a 1998 agreement Texaco signed with Ecuador after a $40 million cleanup absolves it of liability. It claims Ecuador's state-run oil company is responsible for much of the pollution in the oil patch that Texaco quit more than two decades ago. The Ecuadorean plaintiffs say the cleanup was a sham and didn't exempt third-party claims.