Gibson Dunn, Chevron Suffer Another Devastating Setback In $19 Billion Ecuador Case

The U.S. law firm Gibson Dunn & Crutcher is getting hit with a new round of hurt because of its bungling of Chevron’s Ecuador environmental case.

The recent order in Argentine to freeze roughly $2 billion in Chevron assets to help pay for the $19 billion Ecuador judgment is a monumental failure for Gibson Dunn’s defense strategy and a personal setback for its self-described “dream team” of litigators.   These lawyers -- Randy Mastro, Ted Boutrous, Scott Edelman, and Andrea Neuman – prematurely tried (in a stunning display of arrogance) to create an entire practice group off the Ecuador case.

The freeze order in Argentina is a potent setback, not just in one country but throughout Latin America and maybe beyond.  Company officials are ever closer to having to write checks to the very indigenous groups they decimated with their reckless, criminal, and even racist operational practices in the rainforest.

Gibson Dunn probably did not know that International treaties in the region allow for the reciprocal enforcement of foreign judgments.  The Ecuadorians already have seizure actions pending against Chevron in Brazil and are planning to file one soon in Colombia, said Pablo Fajardo, their lead counsel.  Venezuela and Panama are also potential targets.  In Ecuador, Fajardo’s team is in the process of seizing an estimated $200 million in Chevron assets. 

The recovered Ecuador assets can be used to fund even more seizure actions against Chevron around the world, including in Asia, Africa, and Europe.   Chevron thus faces the prospect of a far more constricted reality where its global investment opportunities begin to choke off, little by little.  Countries where Chevron should be considering investments on equal footing with its peers are falling off the map because of the added risk created by Gibson Dunn’s utter failure to contain the Ecuador liability.

In Canada, a key strategic country in the oil industry where the Ecuadorians have an enforcement action pending, Chevron may have as much as $12 billion in assets.  The same goes for Argentina.  In that country, Chevron produces roughly 30,000 barrels of crude daily but has plans to invest another $1.8 billion to drill 120 new wells over the next three years, according to Platt’s Oilgram News.

Ecuador is clearly off the map to Chevron while other international companies vie to buy the drilling rights to numerous oil fields in the Amazon.

This downward Chevron trend line could be a case study in how a top U.S. law firm can lose sight of the big picture while it obsesses over minute details of a satellite (and baseless) “fraud” case in New York. Gibson Dunn keeps billing huge fees to landscape Chevron’s front yard without realizing the house is on fire.

Gibson Dunn has now lost at least 10 major legal actions since entering the case in 2009, including before the U.S. Supreme Court in an appeal headed by none other than Ted Olson, the former Solicitor General of the United States. Olson has probably won more U.S. Supreme Court arguments than any person alive.  But not even he could figure out a way to put lipstick on Chevron’s pig. 

Chevron hired Mastro and the GDC dream team in 2009 to “rescue” it from the impending liability in Ecuador.  Two years later, the Ecuador court – despite eleventh-hour efforts by Chevron to bribe and threaten judges – found the oil giant liable and imposed a $19 billion damages award.  It was based on overwhelming evidence that Chevron deliberately dumped billions of gallons of toxic waste into the environment, poisoning the water supply of indigenous groups and causing an outbreak of cancer and other oil-related health problems.

Courts also found Mastro and his colleagues committed ethical violations on behalf of Chevron, including using lawsuits as weapons of intimidation designed to suppress the First Amendment rights of the company’s critics.

Evidence also emerged that Chevron might be deceiving shareholders about the degree of risk it faces over the Ecuador liability, as documented in great detail in a report by Canadian securities lawyer Graham Erion.  A U.S. Congresswoman and a group of institutional investors have called on the SEC to investigate the company.

This blog by Kevin Koenig of Amazon Watch clearly explains the misrepresentations and hypocrisy radiating out of Chevron’s corporate headquarters in San Ramon.  Even some analysts, most of whom are still in the thrall of the industry, are catching on to the extent of Chevron’s problems in the Ecuador case.  

Gibson Dunn is of course reaping a financial windfall to help Chevron evade responsibility for the destruction it has caused.  Mastro recently trooped into U.S. federal court in New York with 11 lawyers in tow for a minor hearing at which one person spoke.  He has admitted to using more than 60 lawyers from his firm on the Chevron case.   The firm’s profits rose by 20% the year after Chevron hired it.

The Gibson Dunn/Chevron losing streak in Ecuador highlights Chevron’s utter lack of corporate governance. Chevron General Counsel R. Hewitt Pate, for example, was given an obscene 75% raise last year (to $7.8 million) after he lost the Ecuador case. In granting the raise, Chevron’s Board actually praised his handling of the matter.  Taking care of insiders -- that’s how aging dictators act as the winds of change start to sweep over the palace.

Pate and notoriously short-fused Chevron CEO John Watson need independent oversight, but none exists.  The conflicted Watson is both Chairman of the Board and CEO, making him his own boss.  He was also the main Chevron executive who vetted the purchase of Texaco in 2001 and at the time failed to account for the massive Ecuador liability.  By all accounts, he is emotional and unrepentant when talking about the Ecuador case – telltale signs of a man who suffers from an acute conflict of interest.

There will be more international enforcement actions filed against Chevron soon.  The company’s investment map will get smaller.  In the meantime, expect more delusion, denial, and deceit as long as Watson and Pate are leading the company.

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Hell Froze Over As Argentina Embargoes Chevron's $2 Billion In Assets

Yesterday, hell froze over when an Argentine court embargoed or, in effect, froze up to potentially $19 billion in Chevron assets in the South American country.

Now it's time to fight it out on the ice.

Chevron, which now has about $2 billion in assets in Argentina, has sworn it will never pay a dime to cleanup the contamination it left behind in the Ecuadorian rainforest. Said former General Counsel Charles James: "Not till hell freezes over, and then we will fight it out on the ice."

Chevron has defied Ecuador's courts, refusing to pay an enforceable $19 billion judgment and forcing the Ecuadorians to file lawsuits to seize assets in Ecuador, Brazil, Canada and Argentina to obtain the damage award for one of the world's largest oil-related environmental disasters.

The Ecuadorians and their lawyers -- some of the top litigators in these four countries -- have their skates on.

See the press release below and read more details here and here in Kevin Koenig's Amazon Watch blog:

BUENOS AIRES, /CSRwire/ - In a major blow to Chevron’s effort to avoid paying a historic $19 billion environmental judgment in Ecuador, an Argentine judge today signed the first of what is expected to be many orders freezing billions of dollars of assets owned by the U.S. oil company.

The order, signed by Civil Judge Adrian Elcuj Miranda of the Commercial Court of Justice in Buenos Aries, freezes almost all Chevron assets in Argentina pending enforcement of the Ecuador judgment. The embargo applies to 100% of Chevron's capital in Argentina, 100% of dividends, all of Chevron's stake in pipeline operator Oleoductos del Valle SA, 40% of Chevron's oil sales to Argentine refineries, and 40% of the money Chevron has deposited in Argentine banks, said Enrique Bruchou, the lawyer who represents the indigenous and farmer communities in Ecuador who brought the lawsuit.

In 2011, Chevron was found liable in Ecuador for dumping billions of gallons of toxic waste into the Amazon rainforest, decimating indigenous groups and causing an outbreak of cancer and other oil-related health problems. A video on the case can be seen here; a written summary of the evidence can be read here; and a segment from the U.S. news show 60 Minutes on the case can be viewed here.

Since Chevron has refused to pay the Ecuador judgment despite submitting to jurisdiction there, lawyers for the affected rainforest communities filed an action last week to seize the oil giant's assets in Argentina. The affected communities filed asset seizure actions against Chevron in the last few weeks in Canada, Brazil, and Ecuador.

Chevron has at least $2 billion worth of assets in Argentina, said Bruchou.  The freeze order applies to the entire $19 billion amount of the Ecuador judgment, meaning that Chevron will effectively be barred from investing further in Argentina unless it wants to risk seizure of those assets as well.

“We are now on the fast track to collection in our two-decade struggle to force Chevron to clean up its awful environmental disaster,” said Luis Yanza, the Ecuadorian community organizer and driving force behind the lawsuit since it was filed in 1993.

“We are committed to holding Chevron fully accountable for the crimes it has committed against our indigenous peoples,” he added.

The move by the Argentine judge is the first time the plaintiffs have been successful in freezing assets outside their home territory of Ecuador.  The assets will remain frozen until the court rules whether it will enforce the Ecuador judgment, which is expected to be relatively smooth given that the nation has signed a reciprocal enforcement treaty in the region that includes Ecuador.

The legal action in Argentina derives its authority in part from an international treaty in Latin America called the Inter-American Convention on the Execution of Preventive Measures. The treaty, which dates from the late 1970s, allows for the automatic freezing of assets of a defendant that fails to abide by the law and refuses to pay a final foreign judgment.

The Preventive Measures treaty has been ratified by Argentina, Ecuador, Colombia, Peru, Paraguay, Guatemala, and Uruguay. Venezuela and Chile have signed the treaty but not ratified it.

In all, the amount of Chevron assets in the four countries where enforcement actions are pending are worth at least $10 billion based on the latest estimates, said Pablo Fajardo, the lead Ecuadorian lawyer.  Seizure actions will continue to be filed against Chevron assets in more countries to make sure the full amount of the judgment is collected, he added.

Bruchou, a native of Buenos Aries, founded his firm in 1990 after working for several years at the U.S. law firm Shearman & Sterling.  International Financial Law Review named his firm, Bruchou Fernandez Madero & Lombardi, the best in Argentina for five consecutive years. Bruchou himself was named “Law Firm Leader of the Year” in 2011 by the prestigious Latin Lawyer magazine.

In a press conference last week in Buenos Aires, Bruchou said that enforcement of the Ecuador judgment in Argentina and other Latin American countries will signal to foreign investors that they should apply the same environmental standards they use at home to areas where vulnerable indigenous and farmer communities are located.  “We ask for no more than that and no less than that,” he said.  “We call it responsible foreign investment.”

Just recently, a court in Ecuador ordered the seizure of an estimated $200 million in Chevron’s assets in that country, which include bank accounts and a $96.3 million debt owed the oil giant by Ecuador’s government.

The area of Ecuadorian rainforest affected by Chevron’s toxic dumping was once one of the most bio-diverse ecosystems on the planet.  It is home to hundreds of plant and animal species but has been pockmarked with more than 900 open-air toxic waste pits left by Chevron, which operated in Ecuador under the Texaco brand.

Soil tests of Chevron wells sites during the Ecuador trial indicated the oil giant left massive quantities of cancer-causing hydrocarbons, sometimes at levels hundreds of times higher than permissible norms.  Approximately 9,000 people are expected to contract cancer as a result if there is no immediate clean-up, according to a study by Dr. Daniel Rourke, former of the Rand Corporation.  See here.

"We have fought now for almost two decades to correct the injustice created by Chevron in Ecuador,” said Fajardo, who grew up in Ecuador’s oil fields and is the recipient of a CNN Hero Award.

"While Chevron might think it can ignore court orders in Ecuador, it will be impossible for Chevron to ignore court orders in countries where it maintains substantial assets,” he added.  "The decision of the Argentine judge proves that the sentence in Ecuador is legitimate and will be enforced in any country that observes the rule of law."

The action in Argentina comes just weeks after the U.S. Supreme Court denied Chevron’s attempt to block enforcement of the judgment and the oil giant itself suffered a devastating series of courtroom setbacks. In May, Chevron CEO John Watson suffered a stunning reprimand when investors holding 38% of the company’s shares voted for a resolution that found he mishandled the Ecuador case.

Watson’s former lawyer, Charles James, has said Chevron will fight the Ecuador judgment “until hell freezes over, and then skate it out on the ice.”  However, Chevron Comptroller Rex Mitchell recently testified in New York fedeal court that the seizure actions filed by the Ecuadorians would cause “irreparable harm” to company operations.

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Not Chump Change: $2 Billion In Chevron Assets Likely Frozen In Argentina Soon

The Ecuadorians, who recently won a $19 billion judgment against Chevron for oil contamination in the Amazon rainforest, have filed a lawsuit in Argentina, asking a court to freeze $2 billion in Chevron's Argentina assets as partial payment for the judgment. Chevron has refused to pay, even though the Ecuadorian courts have ordered the company to do so, and U.S. courts have said the judgment can be enforced. Chevron has few assets in Ecuador.

The chances of the Ecuadorians' collecting are good because Argentina and Ecuador have an agreement that they treat each other's court decisions as their own. Chevron's shareholders should be concerned because $2 billion ain't chump change.

Read more here:

Ecuador Villagers Seek $2 Billion of Chevron Assets In Argentina

Buenos Aires, Argentina – Indigenous groups and villagers from Ecuador are filing suit today to freeze an estimated $2 billion of Chevron assets in Argentina to help pay for a remediation of the extensive toxic pollution left by the oil giant on their ancestral lands in the Amazon rainforest, representatives of the communities announced.

The move is the fourth legal action filed to enforce a $19 billion judgment in Ecuador against Chevron for creating what experts believe is the world's worst oil-related contamination, dubbed the "Rainforest Chernobyl" by local communities. Earlier legal actions were filed this year against Chevron assets in Canada, Brazil, and Ecuador.

Brought by the prominent lawyer Enrique Bruchou, the action in Argentina differs from the earlier seizure actions in that it derives its authority in part from an international treaty in Latin America called the Inter-American Convention on the Execution of Preventive Measures. The treaty, which dates from the late 1970s, allows for the automatic freezing of assets of a defendant that fails to abide by the law and refuses to pay a final foreign judgment.

The Preventive Measures treaty has been ratified by Argentina, Ecuador, Colombia, Peru, Paraguay, Guatemala, and Uruguay. Venezuela and Chile have signed the treaty, but have not ratified it.

Chevron maintains oil operations and bank accounts in Argentina worth about $2 billion, said Bruchou and Pablo Fajardo, the lawyer representing dozens of indigenous and farmer communities in Ecuador. Chevron's operations in Argentina produce about 26,000 barrels of crude and 4 million cubic feet of natural gas daily.

In all, the amount of Chevron assets in the four countries are worth at least an estimated $8 billion, said Fajardo. Because the judgment in Ecuador against Chevron is for $19.04 billion, seizure actions will continue to be filed against Chevron assets in more countries to make sure the full amount of the judgment is collected, he added.

Bruchou, a native of Buenos Aries, founded his firm in 1990 after working for several years at the U.S. law firm Shearman & Sterling. International Financial Law Review named his law firm, Bruchou Fernandez Madero & Lombardi the best in Argentina for five consecutive years. Bruchou himself was named "Law Firm Leader of the Year" in 2011 by the prestigious Latin Lawyer magazine.

In a press conference in Buenos Aires on Wednesday, Bruchou said that enforcement of the Ecuador judgment in Argentina and other Latin American countries will signal to foreign investors that they should apply the same environmental standards they use at home to areas where vulnerable indigenous and farmer communities are located. "We ask for no more than that and no less than that," he said. "We call it responsible foreign investment."

Just recently, a court in Ecuador ordered the seizure of an estimated $200 million in Chevron's assets in that country, which include bank accounts and a $96.3 million debt owed the oil giant by Ecuador's government. Any further investments that Chevron tries to make in the four countries would be subject to seizure and auction, said Fajardo.

The case originally was filed in the U.S. in 1993, but shifted to Ecuador in 2002 at Chevron's request after the oil company praised the courts there as fair and transparent.

After an eight-year trial, the court in Ecuador found in 2011 that Chevron admitted to deliberately dumping billions of gallons of toxic waste into Amazon waterways, decimating indigenous groups and creating an epidemic of cancer that has killed or threatens to kill thousands of people. A video on the case can be seen here; a written summary of the evidence can be read here; and a segment from the U.S. news show 60 Minutes on the case can be viewed here.

The area affected by Chevron's toxic dumping was once one of the most bio-diverse ecosystems on the planet.

Luis Yanza, a representative of the dozens of rainforest communities that brought the lawsuit, praised the filing of the action in Argentina. "The time has come to use the force of law to obligate Chevron to correct its atrocious behavior in our country," Yanza said.

"We have fought now for almost two decades to correct the injustice created by Chevron in Ecuador," said Fajardo, who grew up in Ecuador's oil fields and is the recipient of a CNN Hero Award. "While Chevron might think it can ignore court orders in Ecuador, it will be impossible for Chevron to ignore court orders in countries where it maintains substantial assets," he added.

The action in Argentina comes just weeks after the U.S. Supreme Court denied Chevron's attempt to block enforcement of the judgment, while numerous other U.S. courts have flatly rejected the oil giant's claim that the judgment was the product of "fraud". In May, Chevron CEO John Watson suffered a stunning reprimand when investors holding 38% of the company's shares voted for a resolution that found he mishandled the Ecuador case.

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Chevron Facing Wall Street Criticism Over $19 Billion Ecuador Liability

Wall Street analysts rarely take controversial positions on publicly traded companies whose stock is doing well. But Chevron’s mishandling of its $19 billion liability in Ecuador for dumping toxins into the Amazon is beginning to look like the exception, at least to the analysts at Seeking Alpha and a commentator at the influential proxy advisor Glass Lewis.

One thing is indisputable: cracks are beginning to appear in Chevron’s determined effort to keep Wall Street in line with the idea that the Ecuador judgment represents no short-term threat to the company’s financial position.  One analyst even predicted the lawsuit eventually could lop as much as 20% off the company’s share price. Even worse, the U.S. Supreme Court just dinged Chevron’s final attempt to block enforcement around the world.

Some of these analysts are beginning to get that the judgment in Ecuador – from the very court where Chevron wanted the issues resolved– is based on overwhelming scientific evidence that proves Chevron committed what is probably the largest oil-related environmental disaster in world history. See here and here.

The fact that the plaintiffs now have launched seizure lawsuits targeting billions of dollars of Chevron assets in Brazil and Canada certainly takes the idea of litigation risk for Chevron to new and unchartered territory, leading one analyst to advise shareholders to dump the stock for now. Further, numerous U.S. courts, including the Supreme Court, recently denied Chevron’s increasingly desperate attempts to derail the litigation while several institutional shareholders and a U.S. Congresswoman have asked the SEC to investigate the company for lying about its Ecuador risk.

Consider the various analyses from Seeking Alpha, an award-winning website for stock research that has more than 800,000 followers.  Kiplinger’s recently named Seeking Alpha the Most Informative Website; it also received a “Best of the Web” award from Forbes.

Seeking Alpha recently dismissed Chevron’s fake fraud narrative and wrote in reference to the pending seizure action in Canada:

“Canada has a reputation for fair legal proceedings. This will make it incredibly difficult for Chevron to continue claiming that the lawsuit is based on fraud. I think it is highly unlikely, furthermore, that fraud is the reason for the charges against the company. In fact, I think that these recent developments may be the start of a downward trend for the company that it will struggle to recover from.” 

Another Seeking Alpha analyst, David White, said just this week that Chevron shareholders should sell. In a blog, entitled Chevron Can't Seem To Turn The Bad News Faucet Off, White devoted his entire analysis to all of Chevron’s many legal problems in Ecuador, Brazil and the company’s own home state, California.  Federal and state criminal prosecutions and hefty fines are a possibility due to safety problems at a refinery in Richmond, a small city just across the Bay from San Francisco. White wrote:

“…with all of these unexpected costs that CVX is facing, I think it is time to unload this historically strong, steady dividend payer….If you own CVX, it is time to sell it.”

Another Seeking Alpha analyst wrote that Chevron is “losing support from all corners” in its bid to evade the Ecuador judgment.  He also highlighted the growing number of courtroom setbacks suffered by Chevron’s legal team at Gibson Dunn & Crutcher, which was brought in two years ago to “rescue” the oil giant from its impending liability.

The analyst also reported concerns about the lawsuit from both shareholders and Members of Congress, writing that many of Chevron’s institutional investors have “made it clear … that a settlement is the preferred course of action, as it appears increasingly unlikely that Chevron will be able to avoid paying out a significant portion of its available cash over this lawsuit.”

“Although I believe it is in Chevron's best interests to settle the suit, this may represent a huge hit for the company, which I think could force its price per share as low as $80, a level not seen since 2010,” the analyst concluded.

Another Seeking Alpha analyst wrote that the $19 billion liability in Ecuador and a separate $20 billion potential liability in Brazil resulting from an oil spill there in 2011 is “cast(ing) a long shadow” on Chevron’s stock, which “could tumble” as a result.

He wrote:

“Chevron is continuing to build its cash balance, which now stands at $21.1 billion compared to $15.8 billion at the close of 2011. I think that fears over suits brought against it in Brazil and Ecuador, despite a Chevron show of bravado in casting these litigations as fraud, are contributing to Chevron's rapid accumulation of cash.” 

Noting that other oil majors give dividend increases, buy something and/or pay down debt when they have that much cash, the analyst projected that “it’s unlikely that its cash balance will be substantially drawn down until both of these super-suits are settled or dismissed, which could be a matter of years.” That was written in early September.  Chevron has yet to do anything with its huge surplus.

The analyst wrote that the liabilities in Ecuador and Brazil together “could wipe out Chevron's healthy cash balance as well as a significant portion of its equity. This in turn would lower Chevron's outlook across the board. Chevron is a comfortable hold, but a risky buy in the current environment.”

Glass Lewis, a leading proxy advisory firm, just this week urged shareholders to “remain vigilant” in holding Chevron accountable relative to its disclosure obligations. Courteney Keatinge, an analyst at Glass Lewis, wrote:

“As these legal battles consume considerable company resources and leave the company exposed to significant risk, shareholders should continue to remain vigilant in ensuring that Chevron is managing and disclosing these issues properly and sufficiently.” 

Another analyst, Fadel Gheit at Oppenheimer & Co., following a meeting with Chevron's CEO John Watson in 2011, wrote that "a $2-3B settlement [in the Ecuador lawsuit]... could remove uncertainty and reflect positively on the stock.”  Later, in May of this year, after the Ecuador trial judgment was upheld on appeal, Gheit doubled-down on his belief that "a reasonable settlement with the plaintiffs impacted by the oil contamination in Ecuador...could boost the stock.”

Gheit is generally pro-Chevron and he has written about the case in ways that suggest he does not fully understand how the legal process works. His recognition that Chevron now faces real liability is yet another example of the how company is beginning to lose some of its allies on Wall Street.

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U.S. Supreme Court Squelches Chevron Appeal On Ecuador Case

The U.S. Supreme Court today rejected Chevron’s latest attempt to block global enforcement of a historic $19 billion environmental judgment from Ecuador’s courts, removing another hurdle for rainforest indigenous groups as they continue their efforts to seize billions of dollars of Chevron assets around the world.

Chevron's losing petition was prepared and signed by Ted Olson, one of the top Supreme Court litigators in the country and the former Solicitor General of the United States under the last Bush Administration.  Olson works at Gibson Dunn & Crutcher, Chevron's lead outside law firm on the Ecuador matter and itself the subject of judicial rulings that it has committed ethical violations on behalf of the oil giant.

Jim Tyrrell of Patton Boggs and John Keker of Keker & Van Nest signed papers for the Ecuadorian rainforest communities and their counsel.

The Supreme Court decision represents the latest of numerous courtroom setbacks for Chevron as the company tries to evade paying the Ecuador judgment, which was issued in early 2011 after an eight-year trial found that the oil giant deliberately dumped more than 16 billion gallons of toxic waste into the Amazon.  A three-judge appellate panel in Ecuador later affirmed the decision, criticizing Chevron harshly for threatening judges and filing frivolous motions to delay the proceedings.

Several pro-business groups who are funded in part by Chevron, including the U.S. Chamber of Commerce and National Association of Manufacturers, had weighed in on the oil giant’s behalf before the Supreme Court.

When Chevron refused to pay the Ecuador judgment, lawyers for the 30,000 affected villagers this summer hired prominent law firms to file seizure actions targeting billions of dollars of Chevron assets in Canada and Brazil.  They have promised to file more seizure actions soon in other countries, potentially creating significant operational problems for the oil giant, according to Chevron’s own court filings. See here. 

Chevron’s use of substandard operational practices in Ecuador – it operated there from 1964 to 1992 under the Texaco brand -- decimated indigenous groups and caused an outbreak of cancer that has killed or threatens to kill thousands of people, according to findings of the court.  A summary of the evidence against Chevron can be found here, a video about the case can be seen here, while a summary of the cancer deaths can be found here.

Independent journalists, such as 60 Minutes and a prominent Australian news show, also have confirmed Chevron’s extensive pollution in Ecuador.

Chevron had asked the Supreme Court to salvage an unprecedented injunction imposed in March 2011 by New York federal judge Lewis A. Kaplan purporting to bar worldwide enforcement of the Ecuador judgment.  That injunction provoked outrage in much of the legal community and was overturned unanimously in September 2011 by the Second Circuit Court of Appeals, the ruling the Supreme Court declined to review.

Over the last two years, federal courts at every level in the United States – trial courts, intermediate appellate courts, and now the Supreme Court – have now rejected Chevron’s attempts to block or undermine the Ecuador judgment.  The oil giant claims the judgment was procured by fraud, a charge the villagers and their lawyers say is a smokescreen invented by Chevron to cover-up its own criminal behavior in Ecuador as found by various courts.

“Chevron's latest loss before the Supreme Court is an example of the company's increasingly futile battle to avoid paying its legal obligations in Ecuador," said Aaron Marr Page, a lawyer for the Ecuadorians.

"Chevron is running from justice while its toxic dumping continues to create an imminent danger of death to indigenous peoples in Ecuador,” said Page.

Chevron’s losses in U.S. courts on the Ecuador case are mounting fast.

In the last two years, 18 U.S. trial courts and four appellate courts have either rejected or declined to consider Chevron’s campaign to paint the Ecuador judgment as a product of “fraud”, according to an analysis of court data by representatives of the rainforest communities.  That analysis can be read here.


Even Judge Kaplan, who has been subject to withering criticism for his biases against the Ecuadorians, further gutted Chevron’s strategy when he dismissed or stayed three of Chevron’s fraud claims and its unjust enrichment claim against the rainforest communities in a racketeering case pending against them in New York.

In its public relations materials, Chevron continually tried to claim U.S. courts have found “fraud” in the Ecuador proceedings.  In reality, three different Ecuadorian courts have heard Chevron’s allegations and rejected them, while no U.S. court has found fraud on the merits after an evidentiary hearing or trial.

In the handful of courts where judges made such a preliminary finding, it was done in the context of simple discovery proceedings and later was overturned by federal appellate courts.

A panel of federal appellate judges in Philadelphia, for example, blasted Chevron for attacking Ecuador’s courts – calling its comments “disparaging”.  Another federal judge in New Orleans accused the oil giant of using “hyperbole” and trying to make “a mountain out of a molehill.” See here.

This was the second time in the long history of the Ecuador lawsuit that the Supreme Court declined to hear a Chevron petition for review.  In 2009, the court declined to review a decision that denied Chevron’s attempt to force Ecuador’s government into a private arbitration over who should pay for the clean-up in Ecuador.

For that petition, Chevron used high-profile lawyer Paul Clement, another former U.S. Solicitor General.  Clement argued the losing side in the famous case last year over the Obama Administration’s health care law.

Just last week, the Gibson Dunn law firm was criticized for overbilling Chevron by sending 11 lawyers to a relatively minor court hearing.

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