The Chevron Shakedown has now failed in Canada as well

It’s now been more than a year since the Chevron Shakedown came to a rather ignominious end in a New York federal court for attorney Steven Donziger and his Ecuadorean co-conspirators. (If this is the first you’re hearing of this story, you can browse our years-long coverage of it here.) Having ghostwritten a bogus judgment in Ecuador against the energy company for a $19B payday, Donziger not only came out on the losing end of a RICO trial but was ordered to pay nearly a million dollars in court costs. That didn’t mean that the aspiring fraudsters were giving up entirely, though.

Having been thoroughly defeated in the court battles in the United States, Donziger and company took their fight to Canada. They hoped to be able to convince a Canadian court to enforce the fraudulent Ecuadorean judgment against Chevron’s subsidiary in the Great White North, despite the fact that Chevron Canada Limited has no ties to the original project in Ecuador. After losing in the first round up there as well, the Ontario Court of Appeal rejected the claim this week, refusing to enable the ongoing fraud. (Globe and Mail)

The Ontario Court of Appeal has upheld a lower Canadian court’s determination that an Ecuadorian judgment against Chevron Corporation, already found by U.S. courts to have been obtained through fraud and corruption, cannot be enforced against Chevron Canada Limited, an indirect subsidiary. The Court of Appeal affirmed the judgment dismissing all claims against Chevron Canada Limited holding that it is a separate entity from Chevron Corporation and its assets are protected from seizure by those seeking to enforce the corrupt Ecuadorian judgment. The court rejected the Ecuadorian plaintiffs’ arguments as contrary to fundamental principles of Canadian corporate law.

The Court of Appeal stated: “What is really driving the appellants’ appearance in our courts is their inability to enforce their judgment in the United States,” where it is has already been found to be the product of “a massive fraud” that involved both corruption and coercion of judges. The Court of Appeal continued: “What we are really being invited to do is to assist the appellants in doing an end-run around the United States court order by breaking with well-established jurisprudence and creating an exception to the principle of corporate separateness.”

“The Canadian court’s decision follows rulings by courts in the United States, Brazil, and Argentina that confirm the fraudulent Ecuadorian judgment should be unenforceable in any court that respects the rule of law,” said R. Hewitt Pate, vice president and general counsel, Chevron Corporation. “We are pleased that the Ontario Court of Appeal has affirmed the trial court’s clear application of legal principles that show that Chevron Canada Limited is a separate legal entity that cannot be dragged into this fraudulent litigation.”

The court’s decision was particularly brutal. On the surface, the court noted that Chevron and Chevron Canada Limited are separate entities for the purpose of this suit and the Canadian subsidiary couldn’t be held accountable for the parent company’s obligations to begin with. But they went further, quoting previous courts in describing Donziger’s suit as, “the product of fraud and racketeering activity including extortion, money laundering, wire fraud, witness tampering and obstruction of justice. ”

Ouch. Are we talking about an environmental lawsuit here or a scene from The Sopranos?

By all rights, this should be the end of it, but that’s not a sure thing since Donziger apparently never learns and can’t take no for an answer. There have been other court actions considered in even more countries previously and he might continue this quixotic quest in one of those locations. But every loss he racks up adds additional precedent for Chevron to cite down the line.