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The Ecuador Lawsuit.

Updates On “Big Oil” Liability: Justice Is Prevailing! – Forbes

Date: Jun 26, 2018

By Michael I. Krauss

Several past columns have dealt extensively with two types of lawsuits against “Big Oil.” On the one hand, California and New York cities are suing Big Oil for creating the “nuisance” of, essentially, causing the Earth’s temperature to rise. On the other hand, Ecuadorean plaintiffs are suing Chevron for, essentially, poisoning indigenous people. Both sets of suits are nonsense, as my past columns have pointed out. The cities’ suits don’t meet any intelligible definition of nuisance. Chevron did not despoil the Ecuadorean jungle and was found liable only by a kangaroo court in that country.

Today I’m happy to report that the good news keeps coming in on both these fronts.

  • U.S. District Court Judge William Alsup dismissed San Francisco’s and Oakland’s lawsuits Monday night.  Demonstrating an understanding of the limits of litigation and of the judicial function, Judge Alsup observed that, “The problem [of global warming] deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case.”
  • Brazil’s Superior Court of Justice (STJ)  has just certified that its November 2017 dismissal of the Ecuadorian plaintiffs’ attempt to enforce its Ecuadorean judgment against Chevron Corporation in Brazil is final, and that no appeal is possible. The STJ on Friday issued a certificate verifying that its Nov. 28 decision became final after the plaintiffs’ failed to appeal by the deadline on June 15, ending a case that began in 2012.  In May 2015, Brazilian Deputy Prosecutor General Nicolao Dino had urged the STJ to reject the 2012 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 wrote:“[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 28, 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. The STJ also 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.
  • Argentina’s federal prosecutor’s office has just recommended that an appeals court reject an attempt by plaintiffs’ lawyers to enforce the Ecuadorian judgment against Chevron Corporation in that country.  In an opinion requested by the court, Assistant Court Prosecutor Ricardo Ruben Peyrano determined that the appellate court should affirm the trial court’s dismissal of the case based on a lack of jurisdiction and the principle of “corporate separateness.” Peyrano said Chevron Corp., the company sued in Ecuador, has no directly held assets or legal presence in Argentina and Chevron Argentina SRL and other indirect local subsidiaries are separate legal entities with no connection to the Ecuadorian case.  “There is no reasonable point of connection with the local forum that would allow the Argentine justice system to consider the exequatur promoted by the plaintiffs,” Peyrano said in his 22-page opinion. An “exequatur” in Argentine jurisprudence is a foreign judgment recognition and enforcement action.

The bad news just keeps coming in for the Ecuadorean plaintiffs, who were most likely in fact injured by the actions of an Ecuadorean state petroleum company.  As this column has already noted,  in May the Ontario Court of Appeal affirmed a lower court’s decision to dismiss  plaintiffs’ enforcement against Chevron Canada Ltd.. Also in May, the Supreme Court of Gibraltar issued a judgment against plaintiffs’ lead Ecuadorian lawyer and representatives for their role in procuring and attempting to enforce the fraudulent Ecuadorian judgment, ordering them to pay Chevron $38 million in damages.  We do not know whether New York State Bar authorities are investigating the behavior of attorney Stephen Donziger, who was found by United States District Judge Kaplan to have possibly committed RICO violations.  As always, this column will keep you apprised of developments as we get them.

Michael Krauss is Professor of Law at the Antonin Scalia Law School of George Mason University, and is a nationally known scholar of Tort Law and Legal Ethics. His home page is here.