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U.S. Judge Delays Decision In Chevron-Ecuador Case

Date: 21-Feb-11
Country: USA
Author: Grant McCool and Basil Katz

A U.S. judge asked lawyers in the long-running Chevron Corp pollution dispute in Ecuador's Amazon rain forest to do more work on Ecuadorean law before he decides whether any judgment against the oil company can be enforced.

At a hearing in U.S. District Court in New York on Friday, Judge Lewis Kaplan did not convert his February 8 temporary restraining order halting the enforcement of any damages award against Chevron into an injunction. Kaplan's order lasts until March 8.

The issue is part of a hard-fought 18 year-long legal battle in which rain forest residents have sought as much as $27 billion in damages over accusations that the second-largest U.S. oil company is responsible for oil dumped on their land in the 1970s and 1980s that causes death and illness.

The litigation is considered a test case widely watched by international oil companies wary of damages claims.

Chevron has called the charges false. As part of its broad attack on the allegations, Chevron filed a civil racketeering lawsuit in New York on February 1 against some Ecuadoreans, their Amazon Defense Fund supporters, and their main American lawyer, Steven Donziger.

Oil company lawyer Randy Mastro said in court that the plaintiffs wanted to "wreak havoc" on Chevron, including "seizing boats, seizing ships, seizing tankers and disrupting the distribution stream around the world."

He said Chevron was facing a "nightmare" of "irreparable harm."

But an attorney for the Ecuadorean plaintiffs, Steven Hyman, asked: "How are the Ecuadorian plaintiffs who live in the bush ... going to seize up a 164 billion dollar company?"

Chevron, which had anticipated a judgment in the South American country in favor of Ecuadorean farmers, had asked Kaplan to step in. On February 14, a court in Ecuador announced an $8.6 billion award, but the farmers appealed, claiming more money was needed for cleanup efforts.

Kaplan told the parties to submit expert affidavits by February 24 on issues of Ecuadorean law and the appeals process there.

The question that surrounds enforcement of the ruling is that Chevron has no assets in Ecuador and worries that the plaintiffs will try to collect on the judgment in other countries.

"Chevron is not a widow or an orphan that can't take care of its business," John Keker, who represents Donziger, said at Friday's hearing in Manhattan federal court.

"If there is any evidence ... that anyone will seek to enforce this judgment in the next 6 months, the answer is no," Keker told the judge.

Kaplan interrupted, declaring: "Chevron says the sky could fall tomorrow ... You say no, the sky could not begin to fall for six months."

Ecuadoreans began their litigation in 1993 against Texaco, which was bought by Chevron in 2001. They have accused the company of dumping oil-drilling waste in unlined pits, contaminating the forest and causing illnesses and deaths.

Chevron says it cleaned up all waste pits for which it was responsible before turning the sites over to Ecuador's state-owned oil firm, Petroecuador, which still operates in the area.

The company has pilloried lawyer Donziger for his comments on corruption in the Ecuadorian judicial system and his purported efforts to intimidate officials. The remarks came to light in a publicly released documentary, "Crude" and its outtakes, which were subpoenaed in the litigation.

The case is Chevron Corp v. Steven Donziger et al, U.S. District Court for the Southern District of New York, No. 11-0691.

(Editing by Lisa Von Ahn and Gerald E. McCormick)

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