The U.S. Supreme Court on June 19 handed a victory to Chevron Corp. (NYSE: CVX) by preventing Ecuadorean villagers and their American lawyer from trying to collect on an $8.65 billion pollution judgment issued against the oil company by a court in Ecuador.
The justices turned away an appeal by New York-based lawyer Steven Donziger, who has spent more than to two decades trying to hold Chevron responsible for pollution in the Ecuadorean rain forest, of lower court rulings blocking enforcement in the U.S. of the 2011 judgment.
While not disputing that pollution occurred, San Ramon, Calif.-based Chevron has said it is not liable and that Donziger and his associates orchestrated the writing of a key environmental report and bribed the presiding judge in Ecuador.
U.S. District Judge Lewis Kaplan in Manhattan barred enforcement of the judgment in 2014, citing the corruption used to obtain it. The New York-based 2nd U.S. Circuit Court of Appeals last year upheld Kaplan's decision, citing "a parade of corrupt actions" by Donziger and his associates, including coercion and fraud, culminating in the bribe offer.
The 2nd Circuit found that Chevron's $8.646 billion judgment debt was "clearly traceable" to corrupt conduct by the legal team representing the villagers from the area affected by the pollution.
The lengthy legal battle with Chevron has been waged in several countries and was documented in "Crude," a 2009 documentary film. The plaintiffs have said they plan to continue efforts to enforce the judgment in other countries, regardless of the outcome in the U.S.
The saga was drawn extensive media attention over the years, with a succession of reporters given tours by both sides of the affected sites on the edge of the Amazonian jungle near the town of Lago Agrio. The plaintiffs also touted the backing of several celebrities including actors Mia Farrow and Danny Glover.
Donziger and representatives of residents of the Lago Agrio region have sought to force Chevron to pay for water and soil contamination caused from 1964 to 1992 by Texaco, which Chevron acquired in 2001. Chevron has said a 1998 agreement between Texaco and Ecuador absolved it of further liability.
Donziger's crusade began to unravel when Chevron noticed a deleted scene in the "Crude" documentary, released in 2009, showing Donziger working with supposedly neutral experts in preparing a report for the Ecuadorean court.
Chevron was then able to get access to outtakes and other material related to the documentary via court order. Chevron cited this evidence when it filed its lawsuit in 2011 seeking to block enforcement of the judgment, saying Donziger's actions violated U.S. anti-racketeering law.
Donziger has also tried to enforce the judgment in Canada, Brazil and other countries where Chevron operates.