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‘Radical’ Chevron Order Won’t Go to Washington

WASHINGTON (CN) - The Supreme Court refused on Tuesday to look at a decision that struck down a "radical" injunction blocking Ecuadorean natives from collecting an $18 billion environmental verdict against Chevron anywhere in the world.

The dispute, which spans nearly two decades, began when a group of Ecuadorean aborigines sued Chevron's predecessor Texaco in Manhattan federal court in 1993, for what they call the "Amazon's Chernobyl." The lawsuit charged that Texaco's drilling from 1964 to 1992 decimated rainforest lands, polluted the groundwater and sparked cancer clusters in a region home to 30,000 people.

Texaco attacked the New York venue choice and pushed to dismiss the case in favor of the Amazonian region of Lago Agrio, Ecuador. Chevron acquired Texaco during this rocky period in 2001. After 10 years, on Feb. 14, 2011, the Lago Agrio court slapped the oil giant with an $18.2 billion verdict.

Shortly before the decision, Chevron condemned the Ecuadorean court system as politicized and corrupt, and sued the Ecuadorean plaintiffs in the Southern District of New York for extortion.

That case fell onto the docket of U.S. District Judge Lewis Kaplan, who quickly ordered the Ecuadoreans' attorneys to turn over their case files, granted a temporary worldwide injunction on collection of the award, and fast-tracked a trial to make the injunction permanent.

The 2nd Circuit struck down the injunction and halted the trial on Sept. 19, 2011, but filed its opinion in the case on Jan. 26, 2012.

The 30-page opinion blasts Kaplan for "presuming" his order had such wide jurisdiction.

"It is a particularly weighty matter for a court in one country to declare that another country's legal system is so corrupt or unfair that its judgments are entitled to no respect from the courts of other nations," Judge Gerard Lynch wrote for a three-judge panel. "That inquiry may be necessary, however, when a party seeks to invoke the authority of our courts to enforce a foreign judgment.

"But when a court in one country attempts to preclude the courts of every other nation from ever considering the effect of that foreign judgment, the comity concerns become far graver. In such an instance, the court risks disrespecting the legal system not only of the country in which the judgment was issued, but also those of other countries, who are inherently assumed insufficiently trustworthy to recognize what is asserted to be the extreme incapacity of the legal system from which the judgment emanates. The court presuming to issue such an injunction sets itself up as the definitive international arbiter of the fairness and integrity of the world's legal systems.

"The district court opinion here nowhere addresses the legal rules that would govern the enforceability of an Ecuadorian judgment under the laws of France, Russia, Brazil, Singapore, Saudi Arabia or any of the scores of countries, with widely varying legal systems, in which the plaintiffs might undertake to enforce their judgment. Nor is it clear how a conclusion that the judgment may not be enforced in New York, based on analysis of a New York statute that undertakes to address nothing more than whether New York will recognize the judgment, could authorize a court sitting in New York to address the rules applicable in other countries, or to enjoin the plaintiffs from even presenting the issue to the courts of other countries for adjudication under their own laws. Nothing in the New York statute, or in any precedent interpreting it, authorizes a court to enjoin parties holding a judgment issued in one foreign country from attempting to enforce that judgment in yet another foreign country.

"We need not address here whether and how international comity concerns would affect a hypothetical effort by a state to vest its courts with the authority to issue so radical an injunction. There is no such statutory authorization, for New York has authorized no such relief," the opinion states.

The Supreme Court denied Chevron's petition for a writ of certiorari without comment. It noted only that Justice Samuel Alito took no part in the court's consideration or decision of the case.

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