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Chevron, Ecuadoreans Spar Over Halted Damage Award

Date: 11-May-11
Country: USA
Author: Basil Katz

Lawyers for Ecuadorean villagers who sued Chevron Corp over pollution in the Amazon rain forest asked an appeals panel on Tuesday to modify a court order that halted enforcement of an $8.6 billion award against the oil company.

The lawyers told the Court of Appeals for the 2nd Circuit in New York that under the terms of the order, they were unable to meet with their clients or raise funds to fight Chevron in court.

The order, issued in March by U.S. District Judge Lewis Kaplan in New York, was just one development in a 17-year legal battle in which rain forest residents say Texaco, bought by Chevron in 2001, is responsible for hazardous oil-drilling waste dumped on their land in the 1970s and 1980s.

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

Plaintiff lawyer James Tyrrell asked the panel to narrow the order to allow "legal advice and funding" pending a separate hearing on the merits of the order itself.

A lawyer for Chevron asked the judges not to modify the order, which prevents the plaintiffs from trying to collect on the judgment outside Ecuador, arguing that the plaintiffs' lawyers were planning to violate it by seeking enforcement in countries hostile to Chevron.

"We know what their goal is; the strategy is to take that Ecuadorean judgment and use it," attorney Randy Mastro said.

At the hearing, the appeals court judges said they would likely issue a ruling later on Tuesday, but it had not been posted by then end of the court's work day.

An Ecuadorean court in February ruled against Chevron, but enforcement of the damage claim was stopped by Kaplan, who issued a preliminary injunction preventing the plaintiffs from trying to collect on the judgment outside Ecuador.

In his March 7 ruling, Kaplan noted that the damages had more than doubled from $8.6 billion originally to about $18 billion because Chevron failed to make a public apology and when a payment to the Amazon Defense Front is included.

Questions surround the enforcement of the Ecuadorean court ruling because Chevron has no assets in the country, but the second-largest U.S. oil company worries that the plaintiffs will try to collect on the judgment in other countries.

So in anticipation of a judgment in Ecuador in favor of the Ecuadorean farmers, Chevron asked Kaplan to step in.

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 Gerald E. McCormick and Steve Orlofsky)

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