Bloomberg News

Chevron Wins Retention of Judge in Case Over Ecuador Verdict (1)

September 26, 2013

A group of Ecuadorians lost a bid to remove a U.S. judge set to oversee a trial over Chevron Corp. (CVX:US)’s claims that a $19 billion pollution verdict against it in the South American country was obtained fraudulently.

Chevron, the second-largest U.S. oil company, today won a decision from the U.S. Court of Appeals in Manhattan rejecting the Ecuadorians’ attempt to have a new judge take up the case and to reverse several orders by the current judge. The three-judge appeals panel issued its ruling just hours after hearing arguments over the matter.

Theodore Olson, a lawyer for the San Ramon, California-based company, argued today that U.S. District Judge Lewis A. Kaplan has been “comprehensive” and “thorough,” and that a switch would be a waste of resources.

“That remedy they seek is utterly unwarranted,” he said of the Ecuadorians’ request.

Residents from the country’s Lago Agrio area near the Colombian border have sought damages for about 20 years for pollution in the Amazon rainforest that they allege was caused by Texaco. Chevron, which bought Texaco in 2001, claims the Ecuadorians and their legal adviser, Steven Donziger, improperly influenced a court in that country to issue a $19 billion verdict in 2011.

A trial over the fraud allegations is scheduled for Oct. 15 in Manhattan.

“I can’t tell you how many motions or proceedings there have been” in the case before Kaplan, Olson told the appeals panel, referencing years of litigation and more than 1,400 docket entries. “Our opponents have won a lot of those.”

Inappropriate Findings

James Tyrrell, a lawyer for two of the Ecuadorian claimants, argued that Kaplan issued inappropriate findings in previous orders that conflicted with an earlier decision by the appeals court. Tyrrell also contended that the judge is accommodating the oil company’s effort to encourage courts around the world not to enforce the Ecuador verdict.

Chevron denies there was company wrongdoing in Ecuador and claims that Texaco cleaned up its share of the pollution at its former oil fields, which were taken over by state-owned PetroEcuador. The U.S. company also said that it was released from future liability by an agreement between Texaco and Ecuador.

This month, Chevron said it won’t seek money damages against the two Ecuadorians in the fraud case. The oil company asked that a jury determine liability claims against Donziger and his law firm.

The racketeering case is Chevron v. Donziger, 11-cv-00691, U.S. District Court, Southern District of New York (Manhattan). The appeals court case is In Re Naranjo, 13-00772, U.S. Court of Appeals for the Second Circuit (Manhattan).

To contact the reporters on this story: Christie Smythe in federal court in New York at csmythe1@bloomberg.net; Bob Van Voris in federal court in New York at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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