In a conference call with reporters Wednesday, Pablo
Fajardo, an Ecuadorean lawyer for the Lago Agrio plaintiffs
whose $18 billion judgment against Chevron was upheld by an Ecuadorean appellate panel this week, said he is poised to
launch international litigation to enforce the judgment as soon
as it's legally feasible. "We're going to start the necessary
actions for the ruling to be enforced in several continents and
countries where Chevron has assets," Fajardo said. "We'll go to
many courts in the world to demand that Chevron pays for the
crime it committed in the Amazon."
The Ecuadorean plaintiffs can act to collect their $18
billion thanks to the U.S. Court of Appeals for the Second
Circuit, which (as you'll doubtless recall) lifted a
preliminary injunction barring enforcement in a stunning order in September.
The U.S. appeals court still hasn't issued an opinion
explaining its decision to reverse the worldwide enforcement
ban imposed by U.S. District Judge Lewis Kaplan of Manhattan
federal court and to stay an imminent declaratory judgment
trial before Kaplan on Chevron's assertion that the Ecuadorean
judgment was the result of fraud. But it's clear from the
transcript of the Sept. 17 oral argument that the 2nd Circuit
panel was fundamentally uncomfortable with a U.S. judge
summarily concluding that the courts of another country are
corrupt. "Don't we have some sense of comity to the legitimacy
of the process?" said appeals judge Richard Wesley. "Are we
just to say to the people of Ecuador, 'You're all corrupt and
your process doesn't matter to the United States?'"
The posture of the case is slightly different now that the
Ecuadorean appeals court has upheld the initial judgment, but
it's not likely that the 2nd Circuit will endorse any revised
attempt bu Chevron to bar enforcement around the world through
a U.S. injunction. The U.S. appellate judges would be offering
more of a snub than ever to international comity if they did,
given the vehemence of the Ecuadorean appeals court's ruling
against Chevron. Chevron and its lawyers at Gibson, Dunn &
Crutcher have a pending injunction count in their still-alive
racketeering suit against the Lago Agrio plaintiffs and many of
their lawyers and experts. I don't think it's going to fly.
But the always-crafty Gibson Dunn has already come up with
a Plan B that could have the same effect as an injunction
barring enforcement. On Nov. 29, as if anticipating the
Ecuadorean appeals court's ruling, Chevron filed a motion for a pre-trial order of attachment in its racketeering suit against
the Lago Agrio plaintiffs, which is still before Kaplan. (The
Ecuadoreans had asked the 2nd Circuit for a writ of mandamus
against Kaplan, who has consistently sided with Chevron, but it
was denied.) Noting the judge's own finding of "ample evidence"
that the Ecuadoreans and their lawyers engaged in fraud,
Chevron asked Kaplan to attach their assets, "particularly
their alleged interests in the fraudulent Ecuadorean judgment
against Chevron." Without an attachment order, Chevron claimed,
the Ecuadoreans would divert anything they recovered from
Chevron to the offshore accounts of their litigation
financiers, out of Chevron's reach if it won a judgment in the
RICO suit. In essence, Chevron asked Kaplan to attach Chevron's
own assets.
"It's bizarre," said Craig Smyser of Smyser Kaplan &
Veselka, who represents the Ecuadorean plaintiffs in the RICO
suit before Kaplan. Smyser cautioned that the Ecuadoreans can't
begin enforcement actions on the $18 billion judgment for at
least 30 days, which is Chevron's deadline to seek a hearing at
Ecuador's highest court. (That appeal would require the oil
company to post a bond, Smyser said, though not for the entire
$18 billion.) Smyser said, however, that Chevron's attachment
motion is a naked attempt to accomplish in the RICO suit what
the 2nd Circuit said it could not. "It's the same relief in
different form," he told me.
Smyser and other counsel for the RICO defendants (who,
confusingly, include Ecuadorean plaintiffs in the suit against
Chevron) also argued in their Dec. 13 brief in opposition to the attachment motion that the attachment order request
contravenes two previous 2nd Circuit rulings, the September
order lifting the worldwide injunction and a May order that set
limits on the Kaplan injunction.
Winning a preliminary attachment order is anything but a
sure thing for Chevron. For one thing, Kaplan stayed the RICO
suit this summer, when it seemed that a trial of Chevron's
declaratory judgment suit would take place in November. After
the 2nd Circuit's Sept. 20 order stayed that trial, Chevron
asked Kaplan to lift the stay in the RICO suit, but he hasn't
yet done so.
I asked Smyser if he thought the judge would permit the
RICO suit to start up again, now that the Ecuadorean appeals
court has ruled. He said he had "no way of handicapping what
Judge Kaplan will do," but noted that the 2nd Circuit's
"healthy skepticism" may influence the judge to wait and see
what the appeals court says in its opinion. On the other hand,
Smyser said, "Judge Kaplan is indicated a clear receptiveness
to Chevron's arguments."
Chevron counsel, Randy Mastro of Gibson Dunn, declined to
comment.
(Reporting by Alison Frankel)
Follow Alison on Twitter: @AlisonFrankel
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