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Plaintiffs’ Lawyers Fail in Bid to Extend Their Ecuador Fraud to Brazil

Date: Jun 22, 2018

Brazil’s Superior Court of Justice (STJ) has certified that its November 2017 dismissal of the Ecuadorian plaintiffs’ recognition action against Chevron Corporation is final and no appeal is now possible. The STJ on Friday issued a certificate verifying that its Nov. 28 decision became final after the plaintiffs’ failed to appeal by the Thursday deadline, ending a case that began in 2012. In response, Chevron issued the following statement:

“The plaintiffs’ lawyers’ five-year attempt to extend their Ecuadorian fraud to Brazil is over. It’s the latest setback to their extortion scheme since defeats last month in courts in Canada and Gibraltar. The Superior Court of Justice’s (STJ) ruling last November made clear there is no place in Brazil for the plaintiffs’ corrupt Ecuadorian judgment against Chevron. That decision now stands as the final ruling in this action. By failing to appeal, the plaintiffs’ themselves recognize they have no case in Brazil.”

Background

The Ecuadorian plaintiffs’ lawyers began Brazilian legal proceedings to collect on the $9.5 billion Ecuadorian Judgment against Chevron in June 2012, their second enforcement action after a similar filing in Canada a month earlier. The filing before Brazil’s Superior Court of Justice (STJ) named Chevron Corporation as the sole defendant.

The STJ requested a formal opinion from Brazil’s federal public prosecutor’s office (MPF) on the Ecuadorian plaintiffs’ recognition action.

Meanwhile, in March 2014, a U.S. federal court in New York determined, after a seven-week civil racketeering trial, that the Ecuadorian Judgment against Chevron was obtained through fraud and extortion and, therefore, could not be recognized or enforced in the United States. In a nearly 500-page opinion, the U.S. District Court for the Southern District of New York found lead plaintiffs’ lawyer Steven Donziger and his Ecuadorian co-conspirators fabricated environmental evidence, bribed court experts and judges, and ghostwrote the Ecuadorian Judgment.

In May 2015, Brazilian Deputy Prosecutor General Nicolao Dino issued his opinion, urging the STJ to reject the plaintiffs’ petition, citing extensive evidence that the Ecuadorian judgment “was issued in an irregular manner, especially under deplorable acts of corruption” and, thus, represents “an offense against the international public order and even to good customs.” Dino said:

“[T]he illicit acts that influenced the result of the foreign judgment represent types of conduct that violate international public order, notably by the clear evidence of corruption, which is unfortunately present in public and private spaces, configuring a threat to democracy and to economic growth, in addition to increasing skepticism in relation to the functioning of institutions.”

On November 29, 2017, the STJ unanimously rejected the Ecuadorian plaintiffs’ request for recognition of the judgment based on a lack of Brazilian jurisdiction.  The STJ found that Chevron Corporation is a U.S. corporation with no assets in or points of connection with Brazil. Similarly, the STJ held that the Ecuadorian Judgment may not be enforced against Chevron’s indirect subsidiary in Brazil because the subsidiary is a separate and distinct legal entity, is not the judgment debtor, and was not a party to the Ecuadorian proceedings. Additionally, the STJ ordered the Ecuadorian plaintiffs to pay approximately $31,000 for Chevron’s attorneys’ fees and court costs. The STJ published its written decision denying recognition of the Ecuadorian Judgment on March 15, 2018.

The STJ’s judgment became final on June 15, 2018 after the Ecuadorian plaintiffs failed to appeal.