MANHATTAN (CN) - Chevron can try to freeze the assets of a group of Ecuadoreans who the company claims used fraud and extortion to win a $18.2 billion judgment against it for environmental damage in the Amazon, the 2nd Circuit ruled.
U.S. District Judge Lewis Kaplan has not yet ruled on Chevron's Nov. 29 motion, which says the Ecuadoreans are hiding their money in offshore bank accounts and should surrender their assets to the custody of U.S. Marshals.
Until Kaplan decides, the matter means is not ripe for appeal, according to the appellate judges' two-page summary order.
Lawyers for the Ecuadoreans have condemned Chevron's motion as a "sideshow," designed to scare off their clients' advocates and funders.
Though a provincial court in Lago Agrio, Ecuador, says that Chevron is liable for oil-drilling damage to the Amazon allegedly caused by its predecessor, Texaco, Chevron has condemned those proceedings as fraudulent.
The oil giant sued its Ecuadorean adversaries in New York, months before the Lago Agrio court delivered the $18.2 billion verdict that said Texaco had decimated rainforest lands and groundwater in a region home to 30,000 people.
Rebuking that court, Judge Kaplan granted Chevron's requests to expose the Ecuadoreans' case file, block collection of the judgment and fast-track a trial to make the injunction permanent.
Though the 2nd Circuit ultimately dissolved Kaplan's injunction and stayed his trial, it stopped short of forcing the judge's recusal.
At the last hearing, the three-judge panel warned Chevron that it may find that no Southern District of New York judge has standing to second-guess the Lago Agrio court. The court has not yet published this ruling.
Undeterred, Chevron filed its 36-page brief, with 4,500 pages of exhibits, demanding an order to seize the Ecuadoreans' assets.
James Tyrrell, a Patton Boggs attorney for the Ecuadorans, appealed the motion to the 2nd Circuit on Friday, ridiculing Chevron's "sheer magnitude of paper" as an attempt to bully the Ecuadoreans' legal supporters.
"The Ecuadorean plaintiffs are in the Ecuadorean Amazon - does Chevron really expect to confiscate their current or future assets? This is about scaring away funders and lawyers," Tyrrell wrote. "Just like the preliminary injunction, the end-game is to deprive the Ecuadorian plaintiffs of resources and of counsel, killing off their case."
Like their conspiracy allegations, Chevron's accusations that the Ecuadoreans are hiding assets "plunge back down the rabbit hole," the 19-page brief states.
"The reality - and it is an obvious one - is that it is hard to fund a case that has dragged on for eighteen years against a leviathan that has very publicly vowed, as though this human rights litigation were a professional wrestling match, to fight 'until hell freezes over' and then 'fight it out on the ice,'" Tyrell wrote.
Chevron's motion had slammed the Ecuadoreans for allegedly trying to sidestep Kaplan's jurisdiction and "honest judicial scrutiny," but Tyrrell called that argument "offensive and absurd."
"Apparently, none of the judicial systems in any of the dozens of countries in which Chevron operates throughout the world can be trusted, in Chevron's estimation, to exercise 'honest judicial scrutiny' as well as the district court," the Ecuadoreans' brief states.
Tyrrell said Chevron is the one dodging justice.
"As observed by Professor Robert Percival from the University of Maryland's Francis King Carey School of Law in a recent news account, Chevron's motion for an order of attachment is an unmasked 'effort to do an end run around the 2nd Circuit's dissolution of the trial judge's global injunction,'" the brief states.
The Greenwire story containing that quotation appears as an exhibit in the Ecuadoreans' 117-page filing.
Before the appellate court ruled on Tuesday, Chevron predicted that the appeal would not pass muster on factual or procedural grounds.
"There is no basis, factually or procedurally, for any appellate stay here of claims and issues that aren't even on appeal," Chevron spokesman Justin Higgs said. "This move reflects the LAPs' desperation to do anything to try to avoid the consequences of their misconduct."
The three-judge panel did not make any factual findings on the appeal, which they said the Ecuadoreans can renew after Kaplan rules on Chevron's motion.
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