A federal appeals panel in New York threw out a lower-court ruling that blocked enforcement of an Ecuadorean court’s $18 billion environmental damages verdict against Chevron Corp.
“The preliminary injunction issued by the district court on March 7, 2011, is vacated in its entirety,” the U.S. Court of Appeals in New York wrote in an order issued Monday.
In March, U.S. District Judge Lewis Kaplan in Manhattan issued a ruling that barred Ecuadorean residents in the Amazon River Basin from enforcing an $18 billion judgment awarded by a court in their country until Chevron’s case against the villagers and their lawyers is decided.
The company alleged in a U.S. racketeering lawsuit that lawyers for the Ecuadoreans conspired to fabricate evidence. Attorneys for the Latin American plaintiffs said the lawsuit is an unjustified attempt to derail the pollution lawsuit damages.
At a Sept. 16 argument before the appeals court in New York, a lawyer for the Ecuadoreans said his clients agreed not to enforce the judgment in New York until Ecuador’s top court rules on it.
Kent Robertson, a spokesman for San Ramon, California-based Chevron, didn’t immediately return a voice-mail message left at his office seeking comment on the ruling. Karen Hinton, a spokeswoman for the plaintiffs, didn’t have an immediate comment.
In his March order, Kaplan said Chevron faced “imminent” and “irreparable” harm to its business relationships and reputation if the Ecuadorean judgment was enforced.
“There is a significant risk that assets would be seized or attached, thus disrupting Chevron’s supply chain, causing it to miss critical deliveries to business partners,” Kaplan said.
Chevron, the second-largest U.S. oil company, was ordered Feb. 14 to pay as much as $18 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 lawsuit decided by a judge in Lago Agrio, a provincial capital near the Colombian border.
Chevron says it cleaned up its portion of the oil fields and was released from pollution claims against Texaco in an agreement with the government of Ecuador. Chevron acquired Texaco in 2001.
The racketeering case is Chevron v. Donziger, 11-00691, U.S. District Court, District of New York (Manhattan). The case in Ecuador is Maria Aquinda v. Chevron, 002-2003, Superior Court of Nueva Loja, Lago Agrio, Ecuador.
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