U.S. Federal Courts Sideline Cases|Between Chevron and Ecuadoreans

     (CN) – Two recent D.C. Circuit decisions signal the decreasing role U.S. courts will have on the multibillion oil-contamination saga Chevron faces in Ecuador.



     The dispute has been brewing since a group of Ecuadorean natives sued Chevron’s predecessor, Texaco, in Manhattan. Texaco blamed the nationalized Petroecuador for the contamination, and meanwhile fought to bring the case to Ecuador’s courts.
     After Chevron acquired Texaco in 2001, it became the target of a new case filed in Lago Agrio, Ecuador. That case resulted in an $18.2 billion judgment against Chevron in 2011, but it is still far from over.
     In the last several years, Chevron has tried to discredit the Lago Agrio case on three continents, with appeal in Ecuador, federal actions in the United States and international arbitration.
     It accused the Ecuadoreans, their attorneys and their consultants of manipulating the Ecuadorean case to extort a big payout.
     Though Chevron’s racketeering claims had some early traction, the 2nd Circuit dealt a blow by striking down an injunction that prevented collection of the award. There is also a stay blocking trial on the case’s central charge.
     A federal judge later threw out some of the oil giant’s remaining fraud charges.
     The appellate ruling also weakened Chevron’s claims in other jurisdictions.
     On June 12, the D.C. Circuit quashed a subpoena that would have let Chevron conduct discovery on the Weinberg Group, one of the consultants hired by indigenous Ecuadoreans for the Lago Agrio case.
     “Given that the D.C. district court relied on the decision of the New York district court and that the New York district court’s decision was subsequently reversed by the Second Circuit, we must vacate the D.C. district court’s decision and remand,” Judge Brett Kavanaugh wrote for the three-judge panel.
     Ten days later, a different D.C. Circuit panel rejected allegations from the Ecuadoreans’ attorneys at Patton Boggs that Chevron used intimidation tactics in Lago Agrio.
     Last year, a federal judge criticized Patton Boggs for its unusual strategy. The D.C. Circuit echoed those concerns Friday.
     “We agree with the District Court that the allegation is nothing but ‘an unadorned, the-defendant- unlawfully-harmed-me accusation,'” Judge Thomas Griffith wrote for the court.
     Several smaller lawsuits between Chevron and the Ecuadoreans are still nevertheless snaking through other U.S. courts.
     In the Southern District of Florida, a federal judge recently ordered the Banco Miami to turn over financial records allegedly connected to the case, over objections from the bank and Ecuador.
     “It is somewhat disingenuous for Banco Miami to argue that the responsive documents are located in Ecuador and are inaccessible from Miami, while at the same time, representing to the public, on its website, that Banco Miami and Banco Ecuador share information,” according to the order and recommendation signed by U.S. Magistrate William Turnoff. “Specifically, evidence submitted by Chevron shows that the bank’s website represents that Banco Miami and Banco Ecuador share information ‘[F]or [their] affiliates’ everyday business purposes.'”
     Both parties have filed, and fought, similar discovery action in multiple U.S. federal courts, including in Northern District of California where the Ecuadoreans hope to fuel their own fraud counterclaims against Chevron.
     These bids could play a secondary role in the Ecuadoreans’ effort to collect the $18.2 billion judgment in Canada, filed in late May.

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