Ecuador Lawsuit

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Chevron is defending itself against false allegations that it is responsible for alleged environmental and social harms in the Amazon region of Ecuador. In February 2011, an $18 billion judgment—later reduced to $9.5 billion—was rendered against Chevron by a court in Lago Agrio, Ecuador, for alleged contamination resulting from crude oil production in the region.

On March 4, 2014, the U.S. District Court for the Southern District of New York ruled that the $9.5 billion Ecuadorian judgment was the product of fraud and racketeering activity, finding it unenforceable.

The nearly 500-page ruling finds that Steven Donziger, the lead American lawyer behind the Ecuadorian lawsuit against the company, violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO), committing extortion, money laundering, wire fraud, Foreign Corrupt Practices Act violations, witness tampering and obstruction of justice in obtaining the Ecuadorian judgment and in trying to cover up his and his associates’ crimes.

The ruling prohibits Donziger and his associates from seeking to enforce the Ecuadorian judgment in the United States and further prohibits them from profiting from their illegal acts.

Exposed: The Fraudulent Ecuadorian Judgment Against Chevron

The U.S. federal court found the judgment against Chevron in Ecuador to be the product of fraud and unenforceable in the United States.

Fraud by the Numbers

Bribes
Courts
Bribes and Hush Money
600 Hours of Evidence
$1,000 Monthly Bribe
17 Insiders Testified

Bribes

Courts

Bribes and Hush Money

>Bribes and Hush Money

600 Hours of Evidence

$1,000 Monthly Bribe

17 Insiders Testified

Several facts detail the fraudulent actions by plaintiffs' lawyer Steven Donziger and his associates.

Chevron has never operated in Ecuador. Texaco Petroleum (TexPet), which became a subsidiary of Chevron in 2001, was a minority partner in an oil-production consortium in Ecuador along with the state-owned oil company, Petroecuador, from 1964 to 1992. After TexPet turned its remaining share of the oil operations over to Petroecuador in 1992, pursuant to an agreement with Ecuador, TexPet conducted a remediation of selected production sites while Petroecuador committed to perform any remaining cleanup. The government of Ecuador oversaw and certified the successful completion of TexPet’s remediation and fully released TexPet from further environmental liability. Petroecuador, however, failed to conduct the cleanup it promised and has continued to operate and expand oil operations in the former concession over the past 20 years.

Chevron is seeking to hold the Republic of Ecuador accountable for their role in denying Chevron justice through an international arbitration tribunal in The Hague, which is convened under the authority of the U.S.-Ecuador Bilateral Investment Treaty and administered by the Permanent Court of Arbitration at The Hague.

The tribunal has already ruled that the Republic of Ecuador released TexPet – and therefore Chevron – from liability for all public interest or collective environmental claims through agreements signed in the 1990s. The Lago Agrio plaintiffs’ lawyers have repeatedly admitted, and the relief in the Lago Agrio judgment makes clear, that their claims are exclusively collective and not individual.

Following are the most recent updates about the major components in the case:

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Chevron RICO Lawsuit Against Plaintiffs' Lawyers and Consultants

Chevron brought a civil lawsuit in U.S. federal court under the Racketeer Influenced and Corrupt Organizations Act (RICO) against Steven Donziger, the American lawyer behind the Ecuador lawsuit, and his associates to prove that the judgment was the product of fraud.

The RICO complaint was filed in February 2011 to hold the plaintiffs' representatives accountable for fraud, extortion and other misconduct associated with the Lago Agrio litigation.

The case went to trial in October 2013. During the trial, Chevron called 24 witnesses, offered deposition testimony from 21 others, and submitted more than 3,000 exhibits into evidence.

Testimony was also included from those formerly aligned with the plaintiffs, who provided firsthand account of corruption:

Environmental Consultants: The plaintiffs' key environmental consultants, from Stratus Consulting, provided sworn testimony disavowing their work for the plaintiffs' lawyers and affirming that there is no scientific merit to the plaintiffs' claims against Chevron.
Funders: One of the largest financial backers of the plaintiffs, Burford Capital, provided sworn testimony documenting fraud and other misconduct on the part of the plaintiffs' lawyers to secure funding.
Former Judge: A former Ecuadorian judge who once presided over the case testified that the judge who issued the ruling was promised a half-million dollar bribe from the plaintiffs' lawyers in exchange for ghostwriting the judgment in their favor.

Read the most recent RICO news on The Amazon Post.

International Arbitration Tribunal: Chevron Not Liable for Environmental Claims in Ecuador

On September 18, 2013, an international arbitration tribunal, convened under the authority of the U.S.-Ecuador Bilateral Investment Treaty (BIT), issued a Partial Award in favor of Chevron and its subsidiary, Texaco Petroleum Company (TexPet). The Tribunal found that the Settlement and Release Agreements that the government of Ecuador entered into with TexPet released TexPet and its affiliates of any liability for all public interest or collective environmental claims.

On February 7, 2013, an international arbitration tribunal ruled that the Republic of Ecuador has violated the tribunal's prior interim awards by not preventing the attempted enforcement of an $18 billion judgment against Chevron.

In prior rulings, the tribunal put the Republic on notice that if Chevron's arbitration ultimately prevails, "any loss arising from the enforcement of (the Lago Agrio judgment) may be losses for which the (Republic) would be responsible to (Chevron) under international law."

In February 2012, the tribunal had issued a Second Interim Award ordering the Republic—and all of its branches, including the judiciary—to take all necessary actions to prevent enforcement and recognition of the Lago Agrio judgment, both inside and outside of Ecuador. That award expanded upon an earlier award requiring Ecuador to "take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment."

Chevron filed its request for arbitration in 2009, claiming that the Republic violated its obligations under the BIT and international law.

Fourth Interim Award (672 KB)

PCA Decision on Jurisdiction (1.2 MB)

Second Interim Award (1.2 MB)

Ecuadorean Environmental Claims Disavowed Under Oath by Plaintiffs' Own Experts

On April 12, 2013, Chevron settled pending fraud and extortion claims against Boulder, Colo.-based Stratus Consulting, the lead environmental consultants to the plaintiffs' lawyers in the Ecuador trial.

Stratus scientists provided sworn declarations outlining the firm's knowledge of the plaintiffs' lawyers' misconduct in the ongoing litigation as well as testifying that there is no scientific merit to the plaintiffs' damages claims against Chevron and Texaco Petroleum.

In the sworn declarations, Stratus details the role the firm and the plaintiffs' lawyers played in drafting the supposedly independent damages report of Richard Cabrera, which serves as an evidentiary basis of the 2011 judgment against Chevron in Ecuador. Testimony also provides a direct account of lead plaintiffs' lawyer Steven Donziger's control of Cabrera's report and the pressure Donziger applied to contrive damages attributed to Chevron.

Fourth Interim Award (672 KB)

PCA Decision on Jurisdiction (1.2 MB)

Second Interim Award (1.2 MB)

News Coverage

17 June 2014
PR Firm's Undisclosed Work for Ecuadorian Government Raises Legal Questions - The Washington Free Beacon

7 May 2014
Patton Boggs Pays Chevron $15 Million To Rid Itself Of Donziger – Forbes

7 May 2014
Patton Boggs pays Chevron $15 million to settle fraud charges – Fortune

7 May 2014
Patton Boggs Surrenders in Battle With Chevron, Agrees to Pay $15 Million – Bloomberg Businessweek

5 March 2014
Federal Court: Plaintiffs' Lawyers Can Be Prosecuted Using Racketeering Laws Originally Intended For Mobsters - Forbes Opinion

4 March 2014
Chevron Wins U.S. Ruling Calling Ecuador Judgment Fraud - Bloomberg News

4 March 2014
Ecuador $9.5 Billion Ruling Against Chevron Was Corrupt: U.S. Judge - Reuters

26 November 2013
Chevron Alleges Still Another Fraud by Ecuadorians - CNNMoney

6 November 2013
Disastrous Day for the Lago Agrio Plaintiffs in Chevron Trial - CNNMoney

31 October 2013
Chevron Witness Describes 'Shocking' Levels of Corruption in $19 Billion Pollution Case - Bloomberg Businessweek

31 October 2013
Lawyer 'Wanted No Part' of Case Against Chevron in Ecuador - Reuters

17 October 2013
A SWAG Surprise in the $19 Billion Chevron Case - Bloomberg Businessweek

17 October 2013
Witness Claims U.S. Lawyer Used Inflated Estimate in Chevron Case - Reuters

Press Releases

4 May 2015
Another Key Funder of Fraudulent Ecuador Litigation Against Chevron Withdraws Support

16 February 2015
Financial Backer of Fraudulent Ecuador Litigation Withdraws Support, Settles

4 March 2014
U.S. Court Declares Ecuador Judgment Against Chevron Corporation Fraudulent, Unenforceable

17 December 2013
Chevron Corp. Statement on Canadian Court of Appeal Decision in Ecuador Enforcement Proceeding

13 November 2013
Ecuador's High Court Ignores Fraud, Upholds Judgment Against Chevron

18 September 2013
International Arbitration Tribunal Finds Chevron Not Liable For Environmental Claims in Ecuador

More Press Releases

Legal Filings

04 March 2014
Judge Kaplan’s Ruling (1.5 MB)

21 January 2014
Chevron's RICO Post-trial Reply (700 KB)

20 January 2012
Chevron Cassation Appeal (2.3 MB)

20 December 2011
Letter to Ecuador's Prosecutor General (5.1 MB)

View the latest legal documents in the Ecuador lawsuit.

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