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Federal judge blocks damages in Chevron Ecuador pollution case

By Daniel Makosky

[JURIST] A judge for the US District Court for the Southern District of New York [official website] on Monday issued a preliminary injunction barring the enforcement of a recent Ecuadorian court judgment against US oil company Chevron [corporate website; JURIST news archive]. The injunction blocks [Reuters report] plaintiffs from attempting to secure $8.6 billion in damages from the company, which were awarded [JURIST report] last month by the Provincial Court of Sucumbios after finding that Texaco, which was acquired by Chevron in 2001, polluted large areas of Ecuador's rain forest. As Chevron does not hold assets in Ecuador, the ruling eliminates the possibility that the plaintiffs will seek enforcement in other countries where the company operates and reserves the final decision on enforcement for the US judicial system. The ruling effectively extends a temporary restraining order [text, PDF] issued last month.

Following last month's verdict, Chevron vowed to appeal [press release] and called the ruling "illegitimate and unenforceable" and "the product of fraud," while the plaintiffs' lawyer also announced his intention to appeal [NYT report] after the court awarded far less than the $113 billion originally sought. Also in February, Chevron filed a lawsuit [press release] against plaintiffs' lawyers and consultants in the case, claiming that professionals for the plaintiffs were attempting to extort Chevron. In July, the US Court of Appeals for the Second Circuit upheld [LAT report] a May ruling [NYT report] by the Southern District of New York ordering filmmaker Joe Berlinger to turn over to Chevron certain outtakes from his 2009 documentary Crude [film website]. Chevron claims the outtakes show plaintiffs' lawyers discussing illegal and unethical tactics, including ghost-writing a court appointed expert's report, intimidating a judge and colluding with government officials. The suit was re-filed in Ecuador [AP report] in 2003 after being dismissed by the Southern District of New York in 1996. Chevron claims that a 1995 cleanup agreement between Ecuador and Texaco, completed in 1998 at a cost of $40 million, absolves Chevron of all liability. Plaintiffs originally filed suit against Texaco, which operated the oil fields from the 1960's until the early 1990's.

Full post as published by JURIST - The Paper Chase on March 08, 2011 (boomark / email).