Canada Catches Latest in $18B Chevron Case

(CN) - Nearly 20-year-old claims concerning oil contamination in the Amazon took another turn Wednesday night as lawyers for indigenous Ecuadoreans filed a lawsuit in Canada to enforce $18.2 billion judgment against Chevron.

Pablo Fajardo, the lead attorney for the Ecuadoreans, said his clients are tired of waiting for relief.

"The time for delay is over," Fajardo said in a statement. "For decades Chevron refused to address the contamination that has devastated our ancestral lands. While Chevron might think it can ignore court orders in Ecuador, it will be impossible to ignore a court order in Canada where a court may seize the company's assets if necessary to secure payment."

In 1993, residents of the rainforest region of Lago Agrio initiated a federal lawsuit in Manhattan against Chevron's predecessor, Texaco, over an environmental disaster that they said destroyed their homes and health.

Texaco blamed the nationalized Petroecuador for the contamination, and meanwhile fought to bring the case to Ecuador's courts.

In 2001, Chevron acquired Texaco and its alleged liabilities in Ecuador. Ten years later, a Lago Agrio, Ecuador, judge ordered Chevron to pay $8.6 billion, and then doubled that sum with other penalties when the oil giant refused to apologize.

Months before the verdict, Chevron returned to the Southern District of New York with a federal complaint that characterized the Lago Agrio case as extortionate.

The matter fell before U.S. District Judge Lewis Kaplan, who gave Chevron access to the Ecuadoreans' 18-year case file and outtakes from filmmaker Joseph Berlinger's documentary about the case, "Crude."

Claiming that this evidence supported the fraud theory, Chevron accused the Ecuadoreans, their attorneys and their consultants of violating federal anti-racketeering law. In addition to the federal RICO complaint in Manhattan, the oil giant appealed the Lago Agrio verdict and started international arbitration.

Chevron's aggressive legal strategy faltered recently, as an Ecuadorean appeals court affirmed the $18 billion verdict, and the Manhattan federal appeals court threw out the "core" of the RICO case. Meanwhile the Ecuadoreans have vowed to ignore the arbitration proceedings.

Late Wednesday, the Ecuadoreans announced a collections action in Canada, saying that they chose the country because of its respected judiciary and Chevron's high-profile projects there.

"Canada is a country with a respected judiciary that gives appropriate deference to the judgments of foreign courts," the Ecuadoreans' spokeswoman Karen Hinton said in an email.

The comment appeared to be a veiled swipe at Judge Kaplan, whom the 2nd Circuit chastised for issuing an injunction that flew in the face of Ecuador's judicial sovereignty.

Hinton added: "Chevron has substantial assets in the country that would be subject to seizure should Canada recognize the Ecuadorian judgment," citing the Athabasca oil sands project, Hibernia project and Ells River exploration.

Meanwhile, Chevron appears to not to have budged from an earlier promise to "fight this until hell freezes over," and then "fight it on the ice."

"The Ecuador judgment is a product of bribery, fraud, and it is illegitimate," Chevron spokesman Kent Robertson said in a statement. "The company does not believe that the Ecuador judgment is enforceable in any court that observes the rule of law."

In contrast to the 2001 strategy, Chevron now hails U.S. courts as the only proper venue to sort out the claims.

"If the plaintiffs' lawyers believed in the integrity of their judgment, they would be seeking enforcement in the United States - where Chevron Corporation resides," Robertson added. "In the U.S., however, the plaintiffs' lawyers would be confronted by the fact that seven federal courts have already made findings under the crime/fraud doctrine about this scheme."

Crime-fraud findings entitle a plaintiff to seek evidence of wrongdoing, but they do not establish that a fraud has been committed. While several courts have green-lit Chevron discovery under the crime-fraud exception, they have not actually ruled that the fraud occurred.

Robertson added that "Chevron will vigorously defend against any enforcement action" and "will also continue to pursue relief against Ecuador in our pending arbitration and against the plaintiffs' representatives in our RICO action pending in New York."

The Ecuadoreans, who reject the allegations behind the New York case, plan to file additional collections actions in the coming weeks.

In the early days of Chevron's conspiracy allegations, the company quaked over their opponents' so-called "Invictus memo," which outlined a legal strategy to file lawsuits around the world and use political connections to pressure a settlement.

Fajardo indicated that this prophecy is taking shape.

"We plan to exercise our legal right to collect every penny of the legitimate judgment from Ecuador, even if we have to drag Chevron kicking and screaming into courts around the world," Fajardo said in a statement.

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