Surprise! Ecuador Rules Chevron Owes Ecuador Tons of Money

posted at 5:00 pm on February 14, 2011 by Jazz Shaw

As Hot Air reported back in January, an extremely questionable court case was brought by an Ecuadorian “environmental group” against Texaco (now owned by Chevron) which had raised far more questions about the ethics of the case than the supposed damages being claimed. (Running into the billions of dollars.) On Monday that case came to a rather predictable conclusion in a court in Lago Agrio, Ecuador.

SAN RAMON, Calif. – Feb. 14, 2011 – Chevron Corporation (NYSE: CVX) today announced there has been an adverse judgment from the Provincial Court of Justice of Sucumbíos in Lago Agrio, Ecuador in an environmental lawsuit involving Texaco Petroleum Company.

In response to the ruling, Chevron issued the following statement:

“The Ecuadorian court’s judgment is illegitimate and unenforceable. It is the product of fraud and is contrary to the legitimate scientific evidence. Chevron will appeal this decision in Ecuador and intends to see that justice prevails.

The exact figures being awarded are still in flux. However, other courts have been busy weighing in on the matter over the past week barring the plaintiffs from picking anything from Chevron’s pockets just yet. The first was from The Hague.

Permanent Court of Arbitration Bars Enforcement of Judgment Against Chevron in Ecuador Lawsuit

On February 9, 2011, an international panel of arbitrators presiding in the Permanent Court of Arbitration in The Hague ordered the Republic of Ecuador to “take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment” against Chevron in the Lago Agrio case pending further order or award from the international tribunal.

The second came out of the Big Apple.

New York Judge Issues Restraining Order Against RICO Defendants

On February 8, 2011, Judge Lewis Kaplan of the Southern District of New York issued a temporary restraining order against the RICO defendants. The temporary restraining order blocks RICO defendants “from receiving benefit from, directly or indirectly, any action, or proceeding for recognition or enforcement of any judgment entered against Chevron in Ecuador.” The order also precludes “prejudgment seizure or attachment of assets based on any such judgment.”

Initial estimates as reported by the Wall Street Journal, however, make it look like the awarded damages could be as much as $8 billion, far in excess of what was originally requested. Why? A Chevron representative contacted Hot Air, reminding us of a few choice quotes discovered from the previously reported outtakes from the movie Crude, made by plaintiffs’ lead U.S. attorney Steven Donziger:

“If we have a legitimate fifty billion dollar damages claim, and they end up—the judge says, well, I can’t give them less than five billion . . . . And, say, Tex had a huge victory. They knocked out ninety percent of the damages claim.”

But as a concept, I ask, do we ask for much more than we really want as a strategy? Do we ask for eight and expect three, so that [the judge] says, ‘Look, Texaco, I cut down the largest part.’”

With the restraining orders in place, we should see a fair amount of breathing room for the rest of the shenanigans taking place in Ecuador to come to light before the American company has to pony up any cash. More details are expected in the next 48 hours and we’ll keep you updated on it.


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Not much different than what little Bammie did to BP in the Gulf, only he didn’t disguise it through a court process.

slickwillie2001 on February 14, 2011 at 5:06 PM

Just wait till Ecuador goes after Good Humor and Eskimo Pie for underpaying for all that chocolate back in the 1930′s/40′s/50′s.

coldwarrior on February 14, 2011 at 5:07 PM

California hardest hit. Chevron is California’s largest company. That’s funny as hell.

Apologetic California on February 14, 2011 at 5:07 PM

Question: ¿If Evo Morales is the poor man’s Hugo Chávez, what does that make Rafael Correa?

steebo77 on February 14, 2011 at 5:08 PM

The lesson? Don’t do business in Ecuador. That’s plain enough.

beatcanvas on February 14, 2011 at 5:09 PM

While this isnt the Middle East the Unrest around the world is spreading even to South America

http://www.bbc.co.uk/news/world-latin-america-12427057

Bolivian President Evo Morales flees food price protest

But he and his team left the city to avoid a violent demonstration by miners throwing dynamite

William Amos on February 14, 2011 at 5:13 PM

before the American company has to pony up any cash

I bet my family and I could live happily for some time on a single digit percentage of what they’ve already paid in legal fees.

TexasDan on February 14, 2011 at 5:13 PM

This is the same scenario as Bhopal where Union Carbide held a minority of the company while the Indian government held the majority and dictated operations and maintenance.

BOHICA is becoming more of a certainty when a U.S. company partners with a foreign government owned entity.

Kermit on February 14, 2011 at 5:20 PM

Question: ¿If Evo Morales is the poor man’s Hugo Chávez, what does that make Rafael Correa?

steebo77 on February 14, 2011 at 5:08 PM

A Hugo Chávez’s Hugo Chávez.

teke184 on February 14, 2011 at 5:21 PM

I remember Texaco paying large 9 figures over simply repeating the diversity training metaphor of “black jelly beans” to refer to black employees. And now this. Poor Texaco is getting screwed for the second time.

Paul-Cincy on February 14, 2011 at 5:23 PM

It seems that stupid is in charge of much of the world right now. What business would want (risk) to work with Ecuador after this? Jeez

Keemo on February 14, 2011 at 5:24 PM

William Amos on February 14, 2011 at 5:13 PM

Wow.

The protesters say the agency – known as Emapa – is inefficient and discourages private commerce.

A pro-gun vote in Europe, and a pro-free enterprise protest in South America.

Meanwhile Obamanoids are cheering a military coup in Egypt and are helping to prop up a theocracy in Iran.

pedestrian on February 14, 2011 at 5:27 PM

What happens to lawyers invovled in fraud cases like this? They’re just free to go on their merry way looking for other companies to rape?

Lawyers involved in crap like this should have their licenses revoked.

darwin on February 14, 2011 at 5:29 PM

Sell em crank flashlights and blankets and they can pursue green utopia while dying from exposure

Sonosam on February 14, 2011 at 5:30 PM

Henry The Sixth, Part 2 Act 4, scene 2, 71–78.

Do it for the children.

Mason on February 14, 2011 at 5:30 PM

“Poor Texaco is getting screwed for the second time.”

Lol, poor Texaco???? Don’t worry about them, they will pass the cost along to us. The money won’t come out of the board members or stockholders pockets, it will come out of yours and mine!

Africanus on February 14, 2011 at 5:34 PM

Taking notes from Obama, they were.

Midas on February 14, 2011 at 5:46 PM

William Amos on February 14, 2011 at 5:13 PM

protesters blocked the road to the airport to demand the government scrap an agency set up to promote food production.

The protesters say the agency – known as Emapa – is inefficient and discourages private commerce.

Bolivian Tea Party?

beancounter on February 14, 2011 at 5:46 PM

What happens to lawyers invovled in fraud cases like this? They’re just free to go on their merry way looking for other companies to rape?

Lawyers involved in crap like this should have their licenses testicles revoked.

darwin on February 14, 2011 at 5:29 PM

… although ‘revoked’ possibly isn’t the verb I’m looking for…

Midas on February 14, 2011 at 5:47 PM

Alternate headline:

Ecuador ends all foreign capital investment in Ecuador.

(well, except for maybe Hugo and his cohorts)

hillbillyjim on February 14, 2011 at 5:49 PM

Bolivian Texas Tea Party

beancounter on February 14, 2011 at 5:46 PM

Fixed

teke184 on February 14, 2011 at 5:52 PM

Part 4,623 of the continuing story…

Why (insert backwards @$$ s**thole here) is a Backwards A$$ S**thole.

A country is only the sum of it’s residents.

MNHawk on February 14, 2011 at 6:24 PM

Shut the operations down and leave removing all key equipment and tell the thieves to take a flying leap.

JIMV on February 14, 2011 at 6:30 PM

Shut the operations down and leave removing all key equipment and tell the thieves to take a flying leap. – JIMV on February 14, 2011 at 6:30 PM

Agreed. Chavez should be told to shove it!!

SC.Charlie on February 14, 2011 at 6:36 PM

Africanus on February 14, 2011 at 5:34 PM

I see we have a Big Oil hater. Anyone that cries about the
unfairness of possible cost shifting to the consumers:

1.) Ought to be decrying an apparently fraudulent lawsuit against an American company that employs people, buys equipment, and pays dividends (which generates tax revenue) and taxes in large sums.

Where’s your call for justice in that respect?

2.) Is probably an Obama supporter that doesn’t realize his proposed tax increases will be passed on to consumers – you included. I supsect you’ll moan about this is in another thread?

3.) Doesn’t realize that if shareholders have to suffer for the bogus suit, it will likely be less dividends paid thereby lowering the amount paid in income tax and possibly less cap gains from sales of any shares.

Nice to see the Obama regime & some of its supporters are so concerned about true justice for an American company. Oh wait, they don’t know justice for capitalism. I suppose it’s no surprise from a party that has sold its soul to thugs, socialists, mind-numbed idiots, and trial lawyers amongst others. Yeah, no real justice could ever be Hoped for from this gang. We need positive Change in ’12. God help us and protect us from the packs of jackals in donkey skins.

Lest you forget, liberalism is the only self-inflicted mental illness.

PalmettoPatriot on February 14, 2011 at 7:36 PM

As an addendum to the above:

4.) Should tell the envirowhacks & an this administration to get out of the way and let American companies drill for American resources. This will be a big bonus to the American economy in hiring and equipment purchases as well provide increased tax revenue and royalties. Prices could also likely come down as oil prices are currently based on the dollar. Also, it would open up competition against American dislikers whom we have made ourselves almost dependent.

If CA wants to be admirable and help itself financially, they ought to tell the flakes & nuts to STFU and push the feds to let drilling occur off its coast. Oh, but not this bunch of liberal putzes who are in bed with the “enviromentalists.” Read as socialist, control freaks.

Also better to have drilling occur here under stricter federal safety and enviromental regulations than elsewhere.

PalmettoPatriot on February 14, 2011 at 7:49 PM

The suit against Chevron reads like a soap opera banana republic style, the state corruption is top to bottom and the original complaint wasn’t even against Chevron.

Ecuador Lawsuit
Facts About Chevron and Texaco in Ecuador

Chevron Files RICO Lawsuit Against Trial Lawyers and Consultants

On February 1, 2011, Chevron Corporation filed a civil lawsuit under the Racketeer Influenced and Corrupt Organizations Act (RICO) as well as other federal and state laws against the trial lawyers and consultants leading a fraudulent litigation and public relations campaign against the company. Through the lawsuit, Chevron seeks a court declaration that any judgment against Chevron in the Ecuador lawsuit is the result of fraud and therefore unenforceable. Chevron is also seeking damages associated with the cost of defending the Ecuador litigation. Read More

Speakup on February 14, 2011 at 8:19 PM

The lesson? Don’t do business in Ecuador. That’s plain enough.

beatcanvas on February 14, 2011 at 5:09 PM

Used to be… when companies did business overseas..they did so at their risk and peril…. The political stability and legal system of America was a huge plus…..

I say … American Companies wanna make crap outta the country…. when that country F*ucks ya over…. TOO BAD…don’t come cry’n to me.

roflmao

donabernathy on February 14, 2011 at 8:48 PM

PalmettoPatriot on February 14, 2011 at 7:36 PM

I’ve done business in shit hole countries and have taken into account the risks associated with same… therefor I made damn sure the rewards were worth it…. Ya see…. Being…. a lil guy… Uncle Sam ain’t gonna come to my rescue. And I was never foolish enough to think he would.

donabernathy on February 14, 2011 at 9:00 PM

It’s a high stakes poker game. Forbes reported:

One diagram the plaintiffs shared with investors shows the oil company at the center of a ring of “pressure” points including pension funds, state attorneys general, and the Obama administration’s former climate czar, Carol Browner.
According to confidential e-mails and other documents filed with the court, attorney Steven Donziger recruited J. Russell DeLeon, a founder of online-poker firm PartyGaming and a fellow Harvard Law School graduate, to invest at least $1.6 million in the case in exchange for as much as 6% of the anticipated fee, which would be 25%-30% of any settlement.
Also investing, those documents suggest, is Burford Group, a London firm that specializes in financing corporate litigation.

Hopefully Donzinger and his scamster associates will rot in jail side by side with Mafia Dons. He’s nothing but a Harvard educated thug.

Buy Danish on February 15, 2011 at 8:16 AM

PalmettoPatriot on February 14, 2011 at 7:36 PM

This is also the same type of person that will then complain about the price of gas and blame it on greedy fat cat oil men.

John Deaux on February 15, 2011 at 8:23 AM

Correction: Donzinger isn’t the Harvard educated thug, his hire, J. Russell DeLeon is.

Buy Danish on February 15, 2011 at 9:23 AM

I’ve been to Manta, Ecuador, a fairly large coastal city to the southwest near where the real Panama hats are made (no, the real ones aren’t made in Panama). To say that the city was a cesspool is an understatement. There were dead dogs laying in the gutters of the streets, literally, and no one even seemed to notice or care. The place was disgustingly filthy and these people have the nerve to say that anyone has damaged their country environmentally? You should see the sewage being pumped directly into the bay. We were not allowed to use the beaches because of the diseases present. What a joke that they are claiming someone else has damaged their environment. Puh-leeeze!!

Big John on February 15, 2011 at 10:50 AM

Shut the operations down and leave removing all key equipment and tell the thieves to take a flying leap.

JIMV on February 14, 2011 at 6:30 PM

Don’t forget to boobytrap the facilities and unmovable equipment top to bottom, as much as time permits. Leave behind nothing but empty shells of buildings and useless junk that’s lethal to even get near.

I say … American Companies wanna make crap outta the country…. when that country F*ucks ya over…. TOO BAD…don’t come cry’n to me.

roflmao

donabernathy on February 14, 2011 at 8:48 PM

+1. And they won’t be the last, either.

Think it’s too expensive to do business here? Just wait until the ‘law’ the cr@psack country you’re in nationalizes your stuff…or worse, kicks down your door with the gang of overdressed baboons they call an ‘army’.

Dark-Star on February 15, 2011 at 10:59 AM

If The United States would allow for drilling here & in such territory as we have, the American companies wouldn’t have as much need to go elsewhere for the stuff. That said, they are capitalists so they will seek product from which to profit and will pay subsequent taxes thereon.

For all those that think Chevron should pay the sum and they got what they deserve, let’s not forget this was a joint venture with Petroecuador who has been assigned no apparent responsibility. Let someone file a trumped up case with fraudulent evidence against you and see if you retain that mindset.

Leftists in the world; leftists in America? Very lil difference. They are all anti-freedom, anti-business, corrupt thugs. The main difference is the leftists here haven’t yet gotten the military to use against the citizenry. God-willing they won’t ever.

PalmettoPatriot on February 15, 2011 at 2:03 PM