Although trial lawyers frequently have the upper hand in litigation built around environmental charges, they are taking a beating at the hands of Chevron Corp., which has been on a roll in U.S. federal courts. Through its U.S. discovery efforts, the company has acquired documents that belong to the lawyers for plaintiffs in Lago Agrio, Ecuador that includes evidence of potentially unlawful collusion.
Consequently, Chevron has filed an amended RICO (Racketeer Influenced and Corrupt Organizations Act) complaint that reinforces the case against attorneys and consultants who have orchestrated the anti-corporate campaign.
Chevron is defending itself against allegations that it is responsible for alleged environmental damage in the Amazon region of Ecuador. The litigation began in New York back in 1993, but the case was moved to Ecuador a decade later. Although Chevron has never operated in Ecuador, it purchased Texaco Petroleum in 2001, which was the subject of the initial suit. Plaintiffs accused Texaco of dumping oil-drilling waste in unlined pits they claim later contaminated the forest and caused illness to the local population. In response, Chevron pointed out that Texaco remediated environmental impacts that resulted from its operations. Moreover, this remediation was certified by government agencies in Ecuador.
“All legitimate scientific evidence submitted during the litigation in Ecuador proves that TexPet’s remediation was effective and that the sites it remediated pose no unreasonable risks for human health or the environment,” Chevron officials have pointed out. Moreover, Ecuador’s state-owned company, Petroecuador, was actually the majority owner of the consortium that included Texaco and bears responsibility, with the government of Ecuador, for any environmental damage that has occurred in the region, Chevron has argued.
Nevertheless, in February, an Ecuadorian court in Lago Agrio issued an $18 billion judgment against Chevron. Since then the company has fought back vigorously. It claims the ruling is illegitimate and unenforceable because of documented evidence of fraud on the part of the plaintiffs, the Ecuadorian government and that country’s judiciary. Judge Lewis Kaplan of the Southern District of New York concurred after hearing the evidence and issued a preliminary injunction that barred any attempt to enforce Ecuadorian judgment outside of that country.
In late March, in a related matter, an international arbitration panel at The Hague ruled in favor of Chevron in a separate, $700 million Ecuadorean claim involving previous Texaco work. The Permanent Court of Arbitration ruled that the Ecuador’s courts violated international law.
The amended RICO from Chevron strongly suggests that the plaintiffs’ lawyers and consultants provided “clandestine assistance” to the Ecuadorian court in drafting the judgment against Chevron.
“There is no apparent explanation as to how the judgment would have incorporated these errors and irregularities without cooperation between the Ecuadorian court and the plaintiffs’ representatives,” stated R. Hewitt Pate, Chevron vice president and general counsel. “This is another instance of the fraud and corruption that have permeated the Ecuadorian judicial proceedings.”
By Kevin Mooney