2nd Circuit Won’t Derail Upcoming Chevron Trial

MANHATTAN (CN) - The federal judge presiding over Chevron's claims that the $19 billion judgment it faces in Ecuador amounts to extortion can oversee the October trial, the 2nd Circuit ruled.

Chevron wants U.S. District Judge Lewis Kaplan to invalidate the multibillion-dollar penalty that an Ecuadorean court slapped against it in 2011 to redress massive oil contamination in the Amazonian rainforest. The oil company claims that U.S.-based lawyers who spearheaded the trial in Ecuador - particularly Steven Donziger - corrupted the case by bribing a judge and fixing the scientific studies.

Judge Kaplan has been receptive to those claims from the start, earning him a reputation among advocates for the Ecuadoreans as "Chevron's greatest ally."

Before the Ecuadorean court even issued the ruling, Kaplan entered a worldwide injunction purporting to block any court in the world from honoring the judgment, and setting a date for a trial to make that injunction permanent.

The 2nd Circuit ruled last year that Kaplan didn't have the jurisdiction to issue such an order, and it stopped the injunction trial in its tracks. The Ecuadoreans quickly went about trying to enforce the $19 billion verdict against Chevron in countries where it holds assets: Argentina, Canada and Brazil.

Meanwhile, Kaplan pushed forward a new trial on the enforceability of the judgment through the counts that the appellate panel had left untouched.

Lawyers for the Ecuadoreans argued in a writ of mandamus that Kaplan defied the "spirit," if not the letter, of the circuit's instructions. They said the new rulings must be vacated and the case reassigned.

The 2nd Circuit rejected the writ on Thursday in an unsigned, one-page order denying both motions.

Press representatives for Chevron and the Ecuadoreans did not immediately provide a comment.

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