No More Block to $18 Billion Verdict Against Chevron

MANHATTAN (CN) - The 2nd Circuit unanimously dissolved an injunction blocking an $18.2 billion judgment that an Ecuadorean court entered against Chevron for massive oil contamination in the Amazon.

In a hearing on Friday, a three-judge panel appeared skeptical that U.S. District Judge Lewis Kaplan had standing to try to stop a group of Ecuadorean natives from collecting the award, which they said would be used to remediate the damage to the rainforest, groundwater and public health from decades of drilling.

Chevron refused to pay, calling the award fraudulent and attacking the Ecuadorean judiciary around the world.

Kaplan claimed jurisdiction over the case that Chevron filed in Manhattan and granted nearly all of the oil giant's requests.

Though an Ecuadorean court mulled the case for nearly a decade, Kaplan issued an injunction blocking collection anywhere in the world in a matter of months. He also fast-tracked a trial for November to make the injunction permanent, and he ordered the Ecuadoreans to turn over most of their case file in preparation.

The Ecuadoreans moved repeatedly to have Kaplan recused for alleged bias and asked the appellate court to force him to step down when he refused.

A three-judge panel declined to force Kaplan's recusal, but they overturned his most significant rulings Monday in a brief two-page order.

A subsequent opinion to follow "in due course" could force Kaplan, or any New York judge, off the case, if it finds that the court lacks jurisdiction.

Both sides are appealing the judgment in Ecuador. Chevron wants it to be reversed, and the Ecuadoreans believe the award is too low.

The Ecuadoreans agreed in a court stipulation not to seek collection until the judgment is finalized.

A spokeswoman for the Ecuadoreans hailed the decision.

"This ruling is affirmation of what we have said all along," Karen Hinton said. "Chevron abused the law, and Judge Kaplan rushed to judgment without considering the overwhelming evidence against the oil giant. The Second Circuit panel acted appropriately in halting any further proceedings until the appellate court can fully consider the issues. We call on Chevron to meet its legal, moral, and fiduciary responsibilities and clean up the pollution it left behind in Ecuador's Amazon."

Chevron did not issue a statement by press time.

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