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Chevron Rebuffed by Top U.S. Court on Ecuador Award

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Chevron Rebuffed by U.S. Court on $19 Billion Ecuador Award
Chevron Corp. says the judgment is the product of fabricated evidence and is the largest awarded by a foreign court against a U.S. company. Photographer: David Paul Morris/Bloomberg

Oct. 9 (Bloomberg) -- Chevron Corp. lost a U.S. Supreme Court bid to block a $19 billion judgment by an Ecuadorean court in an almost two-decade legal battle over pollution in the Amazon rain forest.

The highest U.S. court, without comment, today let stand a federal appeals court ruling against Chevron. The appellate court said a federal trial judge in New York couldn’t bar a group of Ecuadoreans from seeking to collect the award anywhere in the world.

Chevron says the judgment is the product of fabricated evidence and is the largest awarded by a foreign court against a U.S. company. The Ecuadoreans blame Texaco Inc., which Chevron acquired in 2001, for destroying the environment in the Lago Agrio region of the rain forest.

The high court rebuff eliminates one legal avenue for Chevron in litigation that has produced dozens of U.S. court decisions. The company, based in San Ramon, California, is pressing separate legal theories before a federal trial judge in New York.

“While Chevron is disappointed that the court denied our petition, we will continue to defend against the plaintiffs’ lawyers’ attempts to enforce the fraudulent Ecuadorean judgment and to further expose their misconduct,” Chevron said in an e-mailed statement.

The appeal centered on the power of federal courts to issue so-called declaratory judgments. In ruling against Chevron, the U.S. Court of Appeals in New York said the company couldn’t seek an order blocking the award until the Ecuadoreans sought to enforce the judgment.

“Chevron’s latest loss before the Supreme Court is an example of the company’s increasingly futile battle to avoid paying its legal obligations in Ecuador,” Aaron Marr Page, a lawyer for the Ecuadoreans, said in an e-mail. “Chevron is running from justice while its toxic dumping continues to create an imminent danger of death to indigenous peoples in Ecuador.”

Justice Samuel Alito didn’t take part in today’s action. As is the court’s custom, he gave no reasons.

The Supreme Court case is Chevron v. Naranjo, 11-1428.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Steven Komarow at skomarow1@bloomberg.net

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