• Amazon Defense Coalition Says Chevron Should Accept Responsibility for Contamination
• U.S. Federal Appeals Court Rejects Attempt to Shift Liability
A three-judge panel for the U.S. Court of Appeals for the Second Circuit in New York today denied an attempt by Chevron to shift a multi-billion dollar liability to Ecuador's government for a massive environmental contamination in the Amazon rainforest.
The appeals court, in a summary order, found that Chevron's claim was "without merit".
Chevron faces a potential $16.3 billion liability in the long-running case, which was first filed in U.S. federal court in New York in 1993 against Texaco and is currently on trial in the Ecuador town of Lago Agrio. After years of pre-trial motions, the proceeding shifted to Ecuador in 2003 after Chevron argued it would be a more appropriate forum.
Pablo Fajardo, an attorney for the plaintiffs, said, “In the past year, the company has had a motion to dismiss the Ecuador case denied, seen two of its lawyers indicted in Ecuador for fraud and lost a major lobbying battle in Congress over the extension of trade benefits to Ecuador.
“This ruling is yet another blow to Chevron’s strategy to avoid liability in Ecuador and signals that Chevron should take responsibility for the environmental and medical tragedy that resulted from the contamination.”
Chevron bought Texaco in 2001 and will bear any liability in the case, which is expected to be decided in 2009.
In March of this year an independent expert appointed by the Ecuador court found that Chevron was responsible for the dumping of 18 billion gallons of toxic waste into Amazon waterways and the abandonment of more than 900 waste pits. The dumping happened when Texaco was the exclusive operator of an oil consortium in the Amazon from 1964 to 1990.
Local residents have complained for years of severe health problems, including cancers and spontaneous miscarriages. Five indigenous groups say they are struggling for survival and have been displaced from most of their ancestral lands.
The court-appointed expert, Richard Cabrera, assessed damages between $7.2 billion and $16.3 billion.
The appeals court decision stems from an effort by Chevron to force Ecuador's government into a binding arbitration to determine who should be responsible for the liability. Chevron claims it was released by the government from further responsibility for clean-up in 1995 after it performed a limited remediation, but Ecuador claims that the release excluded third-party claims of the type being pressed in the civil lawsuit.
The ruling in New York upheld a federal trial court decision by Judge Leonard Sand that found no legal basis for Chevron's claim that Ecuador was obligated to arbitrate the dispute over the release.
Ecuador was represented by C. MacNeil Mitchel and Eric W. Bloom at Winston & Strawn. Chevron was represented by Thomas F. Cullen and Louis K. Fisher of Jones Day in Washington, D.C.
About the Amazon Defense Coalition
The Amazon Defense Coalition represents dozens of rainforest communities and five indigenous groups that inhabit Ecuador’s Northern Amazon region. The mission of the Coalition is to protect the environment and secure social justice through grass roots organizing, political advocacy, and litigation.
