SAN RAMON, Calf.--(BUSINESS WIRE)--The United States Supreme Court has denied a certiorari petition seeking review of a decision by the U.S. Court of Appeals for the Second Circuit affirming extensive district court findings that a $9.5 billion Ecuadorian judgment against Chevron Corporation was the product of fraud and racketeering activity, and unenforceable in the United States.
In 2014, Steven Donziger, an American lawyer behind a fraudulent lawsuit against Chevron Corporation in Ecuador, was found by the U.S. District Court for the Southern District of New York to have 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 the criminal conduct by him and his associates. The court detailed its findings of fact in a nearly 500-page decision. The U.S. Court of Appeals for the Second Circuit unanimously affirmed the lower court’s decision in August 2016.
“The facts of the Ecuadorian judicial extortion scheme and the illegality of the plaintiffs’ lawyer misconduct have been finally and conclusively affirmed by the legal system of the United States,” said R. Hewitt Pate, Chevron vice president and general counsel. “Today’s decision is an important step toward bringing this illegal scheme to a final conclusion.”
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 agreed to conduct a remediation of selected production sites while Petroecuador remained responsible 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.
Since the extent of the fraud was revealed, more than a dozen former insiders and allies have abandoned Donziger and his scheme, including his former co-counsel, environmental consultants, funders, investors, employees and Ecuadorian collaborators.
Donziger’s attempts to enforce the fraudulent judgment in other jurisdictions have also been met with resistance. In January 2017, a Canadian court rejected an attempt to enforce the Ecuadorian judgment against Chevron’s subsidiary, Chevron Canada Limited. The court found that Chevron Canada Limited is a separate entity from Chevron Corporation, not a party to the Ecuadorian lawsuit and not a debtor to the judgment.
Public prosecutors in Argentina and Brazil issued opinions in April 2016 and May 2015, respectively, to their courts recommending against the recognition of the Ecuadorian judgment. Brazil’s Deputy Prosecutor General stated it was “issued in an irregular manner, especially under deplorable acts of corruption.”
In December 2015, the Supreme Court of Gibraltar issued a judgment against Amazonia Recovery Ltd., a Gibraltar-based company set up by Donziger and his associates to receive and distribute funds resulting from the fraudulent Ecuadorian judgment. The court awarded Chevron $28 million in damages and issued a permanent injunction against Amazonia, preventing the company from assisting or supporting the case against Chevron in any way.
Chevron Corporation is one of the world’s leading integrated energy companies. Through its subsidiaries that conduct business worldwide, the company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemicals and additives; generates power; and develops and deploys technologies that enhance business value in every aspect of the company’s operations. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.