Chevron Takes Offensive Again After Appellate Defeat | Courthouse News Service
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Chevron Takes Offensive Again After Appellate Defeat

MANHATTAN (CN) - Dusting off a recent 2nd Circuit defeat, Chevron has asked a federal judge to seize assets from a group of indigenous Ecuadoreans, their lawyers and their financiers, who are trying to recoup $18.2 billion from the oil giant to clean up what they call the "Amazon's Chernobyl."

Chevron says a trial will probably find that the Ecuadoreans violated federal anti-racketeering law, even though the federal appeals court recently stayed the oil company's previous case and warned that insufficient standing may torpedo other claims.

The Ecuadoreans' spokeswoman, Karen Hinton, scoffed at Chevron's "baseless" maneuver, which she described as a mix of "desperation," foul play and legal-fee padding.

"More than anything, this baseless legal filing is further proof that the Gibson Dunn law firm never misses a chance to take advantage of a billable opportunity when it comes to Chevron," Hinton said in a statement, referring to Chevron's legal team.

A provincial court in Lago Agrio, Ecuador, slapped Chevron with an $18.2 billion penalty in February to remediate decades of damage to the Amazon caused by oil drilling. Chevron's predecessor, Texaco, had drilled there from 1964 to 1992, and the court found it had decimated the rainforest and groundwater by dumping billions of gallons of oil in a region home to 30,000 people.

Chevron was pulled into a decade-old lawsuit over the spill when it acquired Texaco in 2001.

Hoping to turn the tables on the Lago Agrio suit as it wound down, the Delaware-based oil giant went to the Southern District of New York, where the Ecuadoreans' class action against Texaco had originated, and decried the Lago Agrio proceedings as an extortionate fraud.

The Ecuadoreans said that Chevron found its "greatest ally" in U.S. District Judge Lewis Kaplan, who granted nearly all of the oil company's requests. Kaplan made the Ecuadoreans release nearly their entire case file to Chevron, granted a preliminary injunction to block the Lago Agrio verdict, and ordered an early trial to make that injunction permanent.

The 2nd Circuit rebuked two of those decisions in September when it dissolved the injunction and stayed a trial to make it permanent. The appellate panel stopped short of granting the Ecuadoreans' repeated demands to force Kaplan's recusal, but noted that Kaplan, and every other New York judge, may lack standing to second-guess the Lago Agrio court's determination.

Chevron rebounded from this falter Tuesday with a 36-page brief that accuses the Ecuadoreans of hiding their money in offshore bank accounts and tells them to put their assets in the custody of U.S. Marshals.

"If defendants had a legitimate judgment they believed could withstand honest judicial scrutiny, they would have welcomed the opportunity to litigate recognition and enforcement in this court, in the sole country where Chevron Corporation is present and has assets to satisfy a judgment," the brief states. "But since they fear further exposure and adjudication of their corrupt practices, they are scheming to enforce the fraudulent Ecuadorian judgment in foreign jurisdictions where they, their counsel and their other conspirators have influence - against separate Chevron affiliates with no connection to the Ecuadorian claims at issue - and to convert alleged future interests in the fraudulent judgment into present cash while keeping any proceeds out of this court's reach."

Kaplan warned the Ecuadoreans not to repeat any arguments in their reply brief.

"In the event that [Chevron's prejudgment attachment] motion is opposed, the court anticipates that arguments in opposition will overlap substantially with arguments made previously in motions to dismiss filed by defendant Donziger and the Stratus defendants," Kaplan wrote, referring to attorney Steven Donziger and Stratus Consulting, two key players in the Lago Agrio trial. "Any papers in opposition to this motion shall avoid repetition of, but may incorporate by reference, arguments already before the court on the Donziger and Stratus motions."

If Kaplan grants the motion, it will mark a reversal from his earlier position.

"The core of this case is the issue of the enforceability of the Judgment outside of Ecuador," Kaplan wrote on April 15. "Once that issue is decided, one way or the other, it is likely that the rest of the case will vanish or at least pale in significance."

Hinton, meanwhile, does not believe that Kaplan will allow the case to vanish, and accused the judge of colluding with Chevron to drain the Ecuadoreans' war chest.

"The real conspiracy is between Chevron and Judge Kaplan who are working in concert to prevent the Ecuadorians from enforcing a legitimate judgment," Hinton said. "Because Chevron can't win in court, it is now turning to its favorite American judge to try to help it block its victims from financing their legal case. Chevron's request is clearly a back-door attempt to circumvent legal precedent that protects the right of the Ecuadorian rainforest residents to raise the funds necessary to press their legal claims and hold Chevron accountable for the environmental crimes committed on their ancestral lands."

In 2009, then-company spokesman Donald Campbell outlined the oil giant's legal strategy: "We're going to fight this until hell freezes over. And then we'll fight it out on the ice."

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