Chevron Expects to Fight Ecuador Lawsuit in U.S. ($27B fine for rainforest damage)

[Robbien]

Source: WSJ

Chevron Corp., which expects to be on the losing end of a long-running environmental lawsuit in Ecuador, is turning its attention to fighting the expected multibillion-dollar verdict in the U.S.

The plaintiffs in the case, residents of Ecuador's oil-producing Amazonian rainforest, are seeking to hold Chevron responsible for environmental contamination they say was caused by Texaco, which operated in Ecuador from 1964 to 1990 and was bought by Chevron in 2001. An expert appointed by the Ecuadorian court has recommended the judge award the plaintiffs $27 billion in damages from Chevron

Read more: http://online.wsj.com/article/SB124804873580263085.html?mg=com-wsj

---

Financial blog site article:

Chevron Getting Hit With $27 Billion Fine For Destroying Ecuador's Rain Forest
http://www.businessinsider.com/chevron-may-lose-27-billion-lawsuit-expects-to-pay-nothing-2009-7

Chevron is expected to be slapped with a $27 billion judgment by a court in Ecuador for environmental damage done to the rain forest between 1964 and 1990.

It will be the largest environmental judgment ever. Chevron has no plans to pay it.

Chevron intends to fight enforcement by claiming the trial was unfair, in part because Ecuador's president has publicly supported the plaintiffs.

According to The Wall Street Journal, Chevron is less worried about the payment than the hit to its "green" reputation. It's possible that's true, but the payment represents a tenth of total revenue for Chevron.

Texaco operated in the area from 1964 to 1990, pulled out of the country in 1992 and was bought by Chevron in 2001. Because Chevron has never operated in Ecuador, the plaintiffs cannot capture any assets in their home country and will be forced to collect in the United States.

[imdjh]

1. Why would Chevron give a shit what a court in Ecuador says?

[AngryAmish]

3. Because both Ecuador and the US belong to the WTO

Being part of the WTO means judgments in one country are enforceable in another country. And you generally don't get a second bite at the apple on the evidence or damages. Must prove either 1) you were not served with the suit or 2) there was fraud in obtaining the judgment.

[imdjh]

4. But there has to be some agreement on the laws themselves for that to work, I would think.

In the US, you can't go back in history and punish a company for something it did prior to whatever it did being illegal. For example, you can't sue (you can but you won't proceed) JP Stevens or its heirs for dumping bleach and dyes into Backwoods Creek and the Podunk river system prior to it being illegal to dump industrial waste into those waterways. The Supreme Court has ruled that we can't sue major corporations for the environmental impact of the industrial revolution or even stuff they did during WWII if there were no laws against it at the time, even if they knew at the time it wasn't a nice thing to do or that it would cause harm downstream or lasting damage.

Without knowing what laws, and the history of those laws, under which Chevron was found liable, it's really hard to take a position on this. We cannot simply assume that Chevron got a fair trial by US standards or that it doesn't matter because they agreed to be sued in Ecuador rather than in the US. Some people, as we know, are unconcerned about a US Constitutional standard of justice when it comes to the environment or major corporations, they just want the evil corporation punished and robbed.

[AngryAmish]

5. I think in the US we can go back and enforce remediation

The Cercla/Superfund laws mean if you dirtied it up. you clean it up. I think. I'm not an enviromental lawyer.

Anyway, IIRC, part of the original agreement between Edcuador and Chevron was for enviromental clean-up when they finished pumping oil.

As to if they got a fair trial, the standard is Ecuadorian, not US. I think they have more of a Roman system (Spanish colony and all that whatnot). The WTO does provide for full faith and credit (I think).

[McCamy Taylor]

8. If you buy a company, you buy their legal debt, too, as Dick Cheney learned.

Otherwise, every negligent company would avoid suits by "selling" to one of its competitors in what would really amount to a merger.

[imdjh]

16. This isn't a debt. Details from Chevron's website

Texaco Petroleum, Ecuador and the Lawsuit against Chevron

Executive Summary

The environmental case pending against Chevron in Ecuador has devolved into a runaway judicial farce,
orchestrated by a community of interest made up of U.S.-based contingency-fee lawyers seeking a
financial bonanza and the government of Ecuadorian President Rafael Correa, which seeks both a
financial and political windfall. Four facts about the case cannot be disputed:

1. At the conclusion of the oil production concession between Texaco Petroleum (“Texpet,” a
subsidiary of Texaco, which merged with a Chevron subsidiary in 2001) and the government of
Ecuador in 1992, the parties conducted a full environmental audit, and Texpet performed a multi-
year, $40 million remediation program proportionate to its minority ownership share of the
Consortium. That program was approved by the government of Ecuador, which then granted
Texpet and all related entities a full and complete release from any remaining environmental
liability associated with the consortium’s operations.

2. When the same U.S. contingency-fee lawyers initially filed the Aguinda case —the precursor to
today’s Lago Agrio lawsuit—in U.S. federal court in 1993, the then government of Ecuador
formally intervened in the case and advised the court that the government, not private plaintiffs,
had the exclusive right to assert claims for environmental impacts to the government-owned lands
upon which the oil operations had been conducted, and that the government had resolved those
claims through the negotiated remediation program and the related Settlement and Release.

3. By its own admission, the government of Ecuador for years neglected to perform its share of the
environmental remediation. Indeed, in sharp contrast, it has systematically starved its wholly-
owned oil operations of the funds necessary for reasonable maintenance and responsible oil field
operations, preferring instead to divert its billions of dollars in oil proceeds to other purposes.

4. Since the government of Ecuador assumed full ownership of the operation nearly 20 years ago,
Petroecuador has compiled a deplorable record of environmental irresponsibility, tallying more
than 1,400 oil spills since 2000 alone.


PS- I don't often find myself defending oil companies in debates, but I have a keen sense of smell when it comes to rats. A fine that equals some 28% of the GDP of Ecuador doesn't sound like justice in motion, it sounds like a shakedown.

[Peace Patriot]

18. It's not a matter of laws. It's a civil suit for damages, by the people who were

damaged--high cancer rates, many deaths, horrendous destruction of the rivers and streams--from Chevron/Texaco's goddamn horrendous mess in the Ecuadoran rainforest (which environmental groups have termed the "Rainforest Chernoybl"--it is so bad). These are very, very poor people, suing for a cleanup and health care. Texaco did a cosmetic cleanup (capped huge pollution sites with dirt) and walked away; then Chevron bought Texaco, in a typical corporate shuffle to evade responsibility. The case has gone on for about ten years, fought by ONE POOR GUY attorney, all alone--against batteries of Chevron attorneys--a local resident who took on-line courses and went to night school, to become an attorney--on behalf of the poor indigenous people, including his own family members, who grew up with toxic sludge all around them--drank toxic water, took toxic showers, and saw their local fishing for sustenance disappear. The toxic stream--and death of the fisheries--goes all the way to Peru. He has suffered death threats. His best friend, who helped him with the lawsuit, was killed in suspicious circumstances. He is a very courageous man and a great environmental hero.

When one corporation buys out another, it acquires both assets and liabilities. That is what Chevron is trying to evade--Chevron/Texaco's liability for this horror. Texaco LIED ABOUT the cleanup. It was fraudulent. (I've seen the pictures.) They violated existing law at the time, by lying (aided by the corrupt rightwing government of that era--which has been replaced by a good government, that of the new president, Rafael Correa)--so in that sense, it is a matter of law. Chevron-Texaco maintains that they cleaned it up. That is untrue. But the suit is about damages. (Example: Somebody who kills your wife or husband might get off scot free in a criminal trial--due to the "beyond a reasonable doubt" rules at a criminal trial; but he still might be liable for civil damages, where the burden of proof is less stringent. In fact, this occurred in the case of OJ Simpson; his wife's family sued him for civil damages, after he was acquitted, and, as I recall, they won. Civil damages are different from law violations. Another example: A corporate manufacturer of a dangerous product might follow all laws to the letter, and still be liable if their product causes great harm to someone. You don't have to prove that they are criminals, to get damages--although it of course helps if you can.)

[FreakinDJ]

6. Chevron got "The Goods" on the Ecuadorian Gov.

Has video tape of the Ecuadorian Government run Oil Company dumping sludge into a river in the Rain Forest (saw the tape myself)

[AngryAmish]

2. They sued Chevron first in the US

Chevron begged to get the case back to Ecuador. They got their wish.

Careful about those wishes...

[EFerrari]

7. When did we start taking the side of international polluters?

Go, Rafa, kick their corporate @sses.

[bluesmail]

9. I wonder if the WTO, as powerful it is and ubiquitous

is like the Federal Reserve, created to protect the interests of Big Banks(ters). Just asking, because if I was ChevronExxonMobileWTO I wouldn't be too worried about paying the $B's. Bad PR, but since when do they care. Reminds me of a bumper sticker from early 70's that had the logo for IT&T with We Don't Care/ We Don't Have To. hA! updated message to include Chevron!

[fascisthunter]

10. Chevron Execs... dig a big hole, and jump inside

we have plenty of muscle to cover you all... afterall... we work for a living.

[AnnaKay]

11. Environmental criminals!

Chevron has been playing dirty from the beginning and it won’t stop. Not only does it not want to take responsibility this mess, but it says it won’t pay up if found guilty?! Unbelievable!

To find out more about the contamination, see this blog: www.thechevronpit.blogspot.com

[AlecBGreen]

13. hi AnnaKay!

welcome to DU! :hi: :toast: :party:

[KMhiele]

12. Chewrong!

Chevron won’t be bullied? That’s rich. Here’s a company that has done nothing to offer any kind of relief to local residents. It uses a potent cocktail of manipulation, spin and deceit while flexing its corporate muscle to avoid taking responsibility for this environmental disaster. Given that Chevron fought for the trial to be held in Ecuador and agreed to be bound by its verdict, it’s time the oil giant stood up and accepted its fate with whatever grace and dignity it might have left.

[AlecBGreen]

14. hi KMhiele!

welcome to DU! :hi: :toast: :party:

[Vidar]

15. Welcome to DU. Well said.

[Blue_Tires]

17. big oil didn't get to be where they are by playing within the rules...