2nd Circuit Court rules in favor of Chevron in next round of shakedown suit

The long saga of the attempted Chevron Shakedown by corrupt agencies in Ecuador and their environmentalist allies in the United States hit another milestone today. You may recall that more than two years ago a judge ruled against the groups attempting to pick Chevron’s pockets to the tune of nine billion dollars, finding that they had engaged in outright fraud during a RICO case brought against them by the energy giant. The court further determined that they could not collect on the massive judgement they obtained in Ecuador. (Not surprising given the mountain of evidence presented in court which showed that the judge in the that country was basically on the payroll of the plaintiffs.) The would-be billionaires, led by Manhattan attorney Steven Donziger, appealed the finding and this week, after a long and winding legal road, the 2nd U.S. Circuit Court of Appeals found that the RICO ruling stands, the original case was based on fraud and the plaintiffs can go whistle for their supper. (ABC News)

Ecuadorean plaintiffs cannot collect a $9 billion judgment in the U.S. against energy company Chevron for rainforest damage, a federal appeals court ruled Monday, upholding a judge’s finding that the judgment was obtained through bribery, coercion and fraud.

The 2nd U.S. Circuit Court of Appeals in New York said U.S. District Judge Lewis A. Kaplan had the authority after a trial to rule in March 2014 as he did. It noted, however, that Kaplan’s decision doesn’t invalidate the Ecuadorean judgment and doesn’t stop the enforcement of the judgment outside the U.S.

A U.S. spokeswoman for the Ecuadoreans, Karen Hinton, said they were shocked and called it a “sad day for the U.S. justice system.”

“As disappointed as we are, this ruling will not deter the Ecuadoreans, their lawyers and their supporters from aggressively seeking justice in Canada and in other countries where litigation is underway to seize Chevron assets,” she said.

You can read the full ruling via the Wall Street Journal. If you haven’t been keeping up with this, feel free to catch up with our coverage of this case dating back several years. Unfortunately, this won’t be the end of the road for this tale of racketeering. As indicated in the ABC News article, the plaintiffs have already seen the writing on the wall and are attempting to move their suit to a more friendly climate which might not pay as much attention to the fraud aspect of it. As we previously reported, Canada’s courts have been under fire for considering taking up the fraudulent case, but given the power of environmental groups in that nation there’s no telling how it will shake out in the end.

All of this should serve as a lesson to other major corporations. It’s common practice for these types of indignant groups to threaten a massive lawsuit against large corporations in the hopes that they will simply write them a big check to avoid the long term hassle and potential bad publicity of a messy lawsuit. Sadly, that strategy works all too often and it’s become something of a cottage industry among environmentalists. But for the past few years Chevron has declared that they were fed up with it and fought back. Since the RICO finding, most of the “investors” who bankrolled Donziger’s efforts in exchange for a promise of a cut of the shakedown profits have bailed out and surrendered their shares to Chevron.

But for now, the drama will continue to play out. Not, however, in the United States.