Court refuses to block judgment won by Lago Agrio residents over Amazon pollution by Texaco, now part of Chevron
9 October 2012
The U.S. Supreme Court has denied a bid by Chevron to block an $18.2 billion judgment against the company in a pollution case in Ecuador.
A lower court threw out an injunction blocking enforcement of the judgment. Chevron appealed to the supreme court, which rejected the appeal without explanation. On 26 January, the 2nd US circuit court of appeals in New York said Chevron had been premature to challenge the judgment, which residents of Ecuador's Lago Agrio region won in February 2011 over pollution of the Amazon jungle and resulting damage to their health. In July, damages in the case were increased to $19 billion.
Chevron claimed that the judgment was fraudulent and unenforceable under New York law.
But the 2nd Circuit said the oil company, based in San Ramon, California, could challenge it "only defensively, in response to attempted enforcement," which the Lago Agrio residents had not attempted and might never attempt.
The vicious legal fight dates back to the 1970s and 80s when Texaco, now part of Chevron, discharged billions of gallons of toxic waste into an area affecting over 1,500 square miles of what has become known as the "Amazon Chernobyl".
The plaintiffs assert the pollution triggered a spike in cancer rates, destroyed locals' livelihoods and habitats, and killed flora and fauna.
Chevron claims Texaco cleaned up everything it was responsible for, before turning the sites over to state-owned oil company Petroecuador.
In its appeal, Chevron said the 2nd circuit in January ignored "well-settled" precedents allowing it to raise an anticipatory defence under the federal Declaratory Judgments Act. It also said such defences are necessary in light of the "disturbing trend" in which lawyers win big money judgments against US companies in corrupt foreign courts, and then seek to enforce them in countries where the companies operate.
The judgment included $8.6 billion of environmental damages, which an Ecuador court more than doubled because Chevron failed to make a public apology.