By Mica Rosenberg
NEW YORK, March 7 Ecuadorean villagers who are
trying to get billions of dollars from Chevron Corp for
pollution in the Amazon jungle are ready to refocus their fight
on pending suits in other countries after a setback in the
A scathing judgment issued by a U.S. judge this week against
their lawyer will cast a long shadow over cases filed in Canada,
Brazil and Argentina, where the plaintiffs are seeking Chevron
assets as payment because the oil giant no longer has a presence
U.S. District Judge Lewis Kaplan handed down a 500-page
decision that found American lawyer Stephen Donziger used
"corrupt means" to help villagers from the Lago Agrio region win
the historic $18 billion judgment against Chevron in Ecuador in
2011. The damage award was later revised down to $9.5 billion.
While Kaplan's decision bars Donziger and the villagers from
enforcing the Ecuadorean ruling in the United States, it is not
binding in pending cases elsewhere.
Of the three cases, the Canadian one seems to have
progressed the farthest, with an appeals court there ruling in
December that the province of Ontario was a proper jurisdiction
for the plaintiffs to press the company to pay up. Chevron has
asked for an appeal of that ruling to be heard by Canada's
Vaughan Black, a professor at the Schulich School of Law in
Halifax, Nova Scotia, thinks Kaplan's ruling will resonate if
the Canadian case ends up being considered on its merits.
"Basically an Ontario court would have to look at all the
evidence again and start at the beginning," Black said. "I
suppose there is always the possibility that they could take a
different view of which witnesses were credible, but the New
York court didn't even think it was a close call. So it doesn't
look very promising for the Ecuadorean plaintiffs."
The sprawling environmental case stretches back to the
1990s, when the villagers first tried to seek compensation for
contamination in northeastern Ecuador by Texaco starting in
1964. Chevron acquired Texaco and for 20 years has been fighting
the case as well as Donziger, who has spent most of his career
representing the Ecuadorean plaintiffs.
The foreign courts will ultimately have to decide how to
weigh the evidence presented against Donziger, which Kaplan said
proved the judgment in Ecuador was tainted by fraud, against the
underlying claims of the villagers who say they were sickened by
decades of pollution.
The cases in Argentina and Brazil are moving slowly. But the
Ontario appeals court in December reversed a lower court
decision and found Canada should be a forum to hear Ecuadoreans'
Chevron has resisted the Ecuador plaintiffs at every turn.
"We're going to fight this until hell freezes over. And then
we'll fight it out in the ice," a company spokesman once said.
"Chevron's wish is granted," the Dec. 17 Ontario Court of
Appeal decision said, referring to the spokesman's quote. "After
all these years, the Ecuadorean plaintiffs deserve to have the
recognition and enforcement of the Ecuadorean judgment heard on
the merits in an appropriate jurisdiction. At this juncture,
Ontario is that jurisdiction."
CAST A SHADOW
Canada's Supreme Court could decide whether to grant a
hearing of the appellate decision in May, according to Canadian
legal experts. If it takes up the case, the Supreme Court will
likely only consider the narrow question of Canadian
Should the Supreme Court agree with the appellate decision,
the entire case will go back to the original court, said
That's when Chevron could bring to bear reams of documents
it introduced in the New York case, including Donziger's
personal notebook, purporting to show he ultimately corrupted
the case by submitting fraudulent evidence, bribing a judge,
ghost-writing the judgment and covering up his wrongdoing.
In the Canadian case, Donziger is not representing the 47
Ecuadorean plaintiffs who are standing in for the larger
community of 30,000 affected residents.
"The U.S. court can't annul the Ecuador judgment," said Sara
Seck on the Faculty of Law at Western University in London,
Ontario. "It casts a shadow on it, but it's going to be up to
Canadian courts to decide what to do."
Chevron believes Judge Kaplan's ruling in the Southern
District of New York will be a game changer for the cases being
fought in foreign courts.
"No judge in any country that respects the rule of law will
entertain the enforcement of the corruption judgment," Chevron's
General Counsel R. Hewitt Pate said on a call with reporters. "I
think the opinion will carry great weight. ... We will share the
contents of the opinion with the other judges in Argentina,
Brazil and Canada."
But Donziger's camp says making the ruling available will
not be enough to sway the other proceedings.
BRAZIL, ARGENTINA TO COME
In 2011, Kaplan issued a decision blocking the plaintiffs
from trying to enforce the Ecuadorean judgment anywhere in the
world, but the 2nd U.S. Circuit Court of Appeals in New York
overturned that ruling.
In his opinion on Tuesday, Kaplan carefully said his order
against Donziger "does not 'disrespect the legal system ... of
the country in which the judgment was issued' or those of 'other
countries' in which the (Lago Agrio plaintiffs) now, or later
may, seek to enforce the judgment."
Donziger's lawyer Deepak Gupta said he would appeal Kaplan's
decision and the villagers would continue to battle it out
In Brazil, the villagers' case is waiting to be heard by a
court, said Chevron spokesman Morgan Crinklaw.
In Argentina, the Supreme Court reversed a freezing of
Chevron's Argentine assets last year, but the enforcement case
is still pending, he said. Chevron brought the case to the
International Court in the Hague in 2009, claiming it was denied
justice in Ecuador. That arbitration is ongoing.
In a confidential memo produced as part of the New York
trial, Patton Boggs - the law firm that became involved in 2010
to help Donziger enforce the Ecuador judgment - suggests 24
countries where the plaintiffs could potentially study options
to enforce the Ecuador judgment.
"We don't have a system where one single trial judge,
whether they are in New York or anywhere else can appoint
themselves a worldwide fact-finding commission and essentially
preclude or persuade other courts not to enforce a judgment,"
Gupta said. He said he could not comment on the memo or on what
future efforts there might be to try to enforce the judgment in
Alan Lenczner, the lawyer representing the Ecuadorean
plaintiffs in Canada, said Kaplan's ruling has "zero" impact on
the ongoing proceedings in Canada.
The case still faces two jurisdictional questions before it
is even heard on the merits. One is whether Canada can enforce a
foreign judgment, and the other is whether a Chevron subsidiary
in the country can be held responsible for the parent's action.
If the plaintiffs can win the court battle, they hope to
recover in Canada as much of the Ecuadorean judgment as
Ultimately, all the international legal wrangling has left
the real victims of the legacy of environmental damage out in
the cold, said Judith Kimerling, an environmental law professor
at The City University of New York, Queens College. Kimerling
represents a group of indigenous Ecuadoreans suing Donziger in
New York state court for unjust enrichment and seeking to
recover resources to clean up the polluted area.
"There are real people with real injuries and legitimate
claims behind all this," Kimerling said. "It is a very sad day
for the victims and for the environment because it makes it more
difficult for them to get remedies."