Judge in Chevron Case Declines to Reject Award

By BLOOMBERG NEWS

Published: July 31, 2012

The Chevron Corporation failed on Tuesday to persuade a federal judge in New York to find an $18.2 billion judgment by an Ecuadorean court unenforceable, but the judge left an injunction against the award in place pending further litigation.

The judge, Lewis A. Kaplan of United States District Court in Manhattan, declined to rule on Chevron’s request, saying it remained to be seen whether the judgment was based on fraudulent evidence.

The oil company is suing lawyers for Ecuadorean plaintiffs who claim Chevron is responsible for pollution in the Amazon rain forest, contending that they fabricated evidence in the case in violation of racketeering laws.

Judge Kaplan said the questions still to be resolved included whether the judgment was enforceable under New York law.

As part of his ruling, Judge Kaplan found an expert report recommending billions in damages against Chevron was potentially fraudulent.

In March 2011, Chevron won an extension of a temporary order barring enforcement of the judgment while the racketeering case was litigated. “This ruling clears the way for Chevron to challenge the enforceability of the judgment in the Southern District of New York,” Justin Higgs, a spokesman for Chevron, said in an e-mailed statement.

Karen Hinton, a spokeswoman for the Ecuadorean plaintiffs, called Judge Kaplan’s decision a setback for Chevron.

“Judge Kaplan’s refusal to rule that the Ecuador judgment is unenforceable due to Chevron’s fabricated fraud charges is consistent with the unanimous rulings of appellate courts in the United States and Ecuador that Kaplan has no legal authority to block enforcement of the Ecuador judgment,” Ms. Hinton said in an e-mailed statement.

Stock in Chevron, which is based in San Ramon, Calif., fell 24 cents, to $109.58 a share.