Chevron Won’t Seek Money From Ecuadorians in U.S. Lawsuit

Chevron Corp. said it won’t seek money damages against two Ecuadorians it sued in a New York racketeering case claiming the pair committed fraud to win a $19 billion verdict in a pollution case in their country.

The oil company also asked that the trial, set to begin next month in federal court in Manhattan, be held in two parts, one before a jury and a second before a judge.

Chevron, the second-largest U.S. oil company, was ordered to pay as much as $19 billion in compensatory and punitive damages for Texaco Inc.’s alleged dumping of toxic drilling wastes in the Ecuadorean jungle from 1964 to about 1992. The ruling came in an 18-year-old case decided by a judge in Lago Agrio, a provincial capital near the Colombian border.

The company sued in federal court in New York in 2011 accusing Ecuadorians who were named plaintiffs in the case and their lead legal adviser, Steven Donziger, of improperly influencing a court expert in the case in Lago Agrio and committing fraud to win the judgment. U.S. District Judge Lewis Kaplan in New York, who is presiding over the case, scheduled an Oct. 15 trial.

The San Ramon, California-based oil company said it won’t seek money damages against the two Ecuadorians, and that a jury should determine liability claims against Donziger and his law firm.

‘Extensive Evidence’

“Chevron has uncovered extensive evidence that the 2011 Ecuadorian judgment was fraudulently obtained by the Lago Agrio plaintiffs,” Morgan Crinklaw, a company representative, said in an e-mail. “However, their international campaign to enforcement that judgment has not gained much traction to date. The equitable relief Chevron continues to seek against the Lago Agrio plaintiffs will enable us to protect our assets, and those of our subsidiaries, from being seized by the Lago Agrio plaintiffs or in their name.”

Kaplan today rejected a request by Donziger and two of the individual plaintiffs in the Ecuadorean suit to delay the trial pending a decision by the Manhattan-based U.S. Court of Appeals.

Oral arguments are to be heard Sept. 26 on Donziger and the Ecuadorians’ request that the court remove Kaplan from the case and cancel several orders he issued.

Kaplan said that Donziger had failed to request a delay pending the appeals court’s decision soon enough.

“The motion to delay the trial is without merit, represents a radical change in defendants’ nominal position (though it is entirely consistent with a years-old strategy of delay wherever possible), and comes far too late,” he said. “Notwithstanding their attempts to portray themselves as Davids, each alone facing Goliath, the reality is quite different.”

Chevron asked that a jury determine what, if any, compensatory and punitive monetary damages should be paid by Donziger and asked Kaplan to determine what other remedies should be imposed.

Phase Two

The company asked the judge to decide in a second phase of the trial whether the Ecuadorians and Donziger should be barred from further harming Chevron and to issue an order that protects its assets.

The company also requested that the Lago Agrio plaintiffs be prohibited from making what it called prejudicial statements about “alleged environmental issues in Ecuador.”

Chevron denies there was company wrongdoing in the Lago Agrio lawsuit, saying Texaco cleaned up its share of the pollution at its former oil fields, which were taken over by PetroEcuador, Ecuador’s state-owned oil company. Chevron said it was released from any future liability by an agreement between Texaco and Ecuador. Chevron acquired Texaco in 2001.

The racketeering case is Chevron v. Donziger, 11-00691, U.S. District Court, Southern District of New York (Manhattan). The case in Ecuador is Aquinda v. Chevron, 002-2003, Superior Court of Nueva Loja, Lago Agrio, Ecuador.