A federal judge ruled in favor of Chevron Corp. on Tuesday in a civil racketeering case, saying a record $9.5 billion environmental judgment in Ecuador against the oil giant was “obtained by corrupt means.”
U.S. District Judge Lewis Kaplan found that New York lawyer Steven Donziger and his litigation team engaged in coercion, bribery, money laundering and other criminal conduct in pursuit of the 2011 verdict.
The decision barred Mr. Donziger and his two Ecuadorean co-defendants from profiting from the verdict.
The decision could hamper efforts to enforce the 2011 judgment by pursuing Chevron’s assets in Canada and elsewhere.
In a statement, Mr. Donziger said he intends to appeal the ruling, which he called: “an appalling decision resulting from a deeply flawed proceeding that overturns a unanimous ruling by Ecuador’s Supreme Court. We believe Judge Kaplan is wrong on the law and wrong on the facts and that he repeatedly let his implacable hostility toward me, my Ecuadorian clients, and their country infect his view of the case… We are confident we will be fully vindicated in the U.S., as we have been in Ecuador.
He added: “Nothing in Judge Kaplan’s ruling will prevent my clients from pursuing the judgment’s enforcement in other countries. The villagers deserve justice, and I am confident they will get it despite Chevron’s effort to flout the rule of law.”
Chevron called the ruling a “resounding victory” for Chevron and its stockholders. “It confirms that the Ecuadorean judgment against Chevron is a fraud and the product of a criminal enterprise,” the company said. “Steven Donziger and his associates can now be held accountable and will not be allowed to profit from their illegal acts.”
Han Shan, U.S. spokesperson for the Lago Agrio Plaintiffs in Ecuador, said after the ruling: “While the Ecuadoreans respect the rule of law in all countries, they do not accept this court’s jurisdiction nor this ruling. The affected communities long ago gave up hope that a U.S. court would provide them relief from Chevron’s contamination, which has taken their loved ones, poisoned their lands, and imperiled their cultures.
“Their focus now is on enforcing their judgment in countries where they can receive a fair hearing about Chevron’s pollution of the rain forest and the company’s refusal to abide by a legitimate ruling from the courts in Ecuador, where Chevron demanded the case be heard. It is time for Chevron to end its abusive efforts at evading justice, and restore the indigenous people and villagers who suffer from the company’s terrible legacy.”
The ruling follows a six-week trial in Manhattan where Mr. Donziger faced an array of accusations leveled against him by Chevron. Both sides have spent millions battling in legal forums from Quito to The Hague.
Judge Kaplan said the defendants may not be allowed to benefit “in any way” from the contested judgment in Ecuador, and described the ultimate result as having “perverted” the course of justice.
“The wrongful actions of Donziger and his Ecuadorean legal team would be offensive to the laws of any nation that aspires to the rule of law, including Ecuador—and they knew it,” the judge wrote in a 485-page opinion issued Tuesday morning.
The case in New York stems from a 2003 lawsuit filed by a group of Ecuadorean villagers from the Lago Agrio region over decades-old pollution from oil exploration in the Amazon rain forest by Texaco Inc., which Chevron acquired in 2001.
Chevron has denied liability for any environmental damage, and accused Mr. Donziger and others who represented the plaintiffs of numerous misdeeds in Ecuador and the U.S. in order to extort billions from the oil giant.
