Monday, January 30, 2012

Chevron’s Deceit Exposed In “Legal Misapprehension” Ruling

Less than 24 hours after the U.S. Second Circuit Court of Appeals threw out Chevron's case against a group of Ecuadorian indigenous peoples, the oil giant's CEO John Watson accused them of fraud in an analyst call, while trying to explain his $18 billion problem in Ecuador and his $11 billion one in Brazil.

Yet, a close read of the court's opinion reveals Watson’s lawsuit itself was the actual fraud that not only cost the indigenous groups greatly -- both emotionally and financially -- but also delayed a cleanup of the oil company's toxic mess in the Amazon rainforest that is costing lives.

Last week the three-judge panel dismissed in its entirety a lower court ruling that sought to block enforcement of the $18 billion Ecuador judgment against Chevron for the deliberate and massive contamination of the Amazon rainforest.

Judge Gerard Lynch wrote that lower court’s "endorsement" of Chevron's "theory of relief" was a "legal misapprehension."

We don't use the word "misapprehension" a lot. Here are a few synonyms, according to
absurdity, blunder, boo-boo, delusion, fallacy, falsehood, goof, howler, screamer, screw-up, sin, transgression, trespass, untruth, wrongdoing
Chevron’s “theory of relief” revolved around twisting a New York state statute used to enforce foreign judgments to make it an affirmative weapon to block the enforcement of foreign judgments anywhere in the world. 
The theory was opposed by almost every legal academic the world over, many of whom filed amicus briefs explaining how absurd it was for a U.S. trial court judge to think he could dictate to judges around the world how they should rule on the enforceability of a foreign country's judgment. See here and here.

Chevron sold off its holdings in Ecuador in anticipation of an adverse judgment in that country, forcing the rainforest communities to consider standard collection actions against company assets around the world. 
The panel wrote that the Recognition Act "nowhere authorizes a court to declare a foreign judgment unenforceable on the preemptive suit of a putative judgment-debtor (Chevron) .... (the act) and the common law principles it encapsulates are motivated by an interest to provide for the enforcement of foreign judgments, not to prevent them." (Emphasis added.)
So, Chevron was allowed to drag the Ecuadorians, their country, and their courts threw the mud for almost a year due to a legal "boo-boo" and a "goof".
The appellate panel also wrote that concerns about jurisdictional mutual respect among countries become "far graver" when "a court in one country attempts to preclude the courts of every other nation from ever considering the effect of that foreign judgment .....
"In such an instance the court risks disrespecting the legal system not only of the court in which the judgment was issued, but also of those other countries, who are inherently assumed insufficiently trustworthy to recognize what is asserted to be the extreme incapacity of the legal system from which the judgment emanates."
The lower court, the panel wrote, did not address the legal rules that would "govern enforceability of an Ecuadorian judgment under the laws of France, Russia, Brazil, Singapore, Saudi Arabia or any of the scores of countries, with widely varying legal systems, in which the plaintiffs might undertake to enforce their judgment."

That's some humbling stuff for Chevron and its theory of relief.

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