Chevron Defends Its RICO Victory in the Epic Ecuadorian Oil Pollution Case

Business Week

In March, Chevron (CVX) won an unusual racketeering verdict in federal court in New York that thrilled many members of the corporate defense bar. The company obtained a ruling that discredited an earlier multibillion-dollar pollution judgment against Chevron in Ecuador. Corporate advocates praised the New York ruling as a model of how to combat allegedly fraudulent class actions. Late on Oct. 1, Chevron made a lengthy appellate filing seeking to preserve its victory.

The most surprising thing about Chevron’s 185-page brief is that the San Ramon (Calif.)-based oil company concedes (on page 65) that its antagonists raise at least one “legitimate” issue on appeal. Not that the company surrenders on the point—it most certainly does not—but in a legal war of uncommon bitterness that has persisted for 21 years, an admission that the other side has raised even a single question worth consideration seems shocking.

Before getting to the particulars, a brief recap: In 2011, Steven Donziger, a New York plaintiffs’ attorney, engineered a record $19 billion verdict against Chevron for ecological and human harm linked to oil production in eastern Ecuador in the 1970s and 1980s. Ecuadorian appellate courts upheld Chevron’s liability but halved the damages to a still-substantial $9.5 billion. Contending that it had been unfairly blamed, Chevron refused to pay and fought back. The company sued Donziger in federal court in New York under the Racketeer Influenced and Corrupt Organizations (RICO) Act. After a six-week trial in late 2013, U.S. District Judge Lewis Kaplan ruled in March of this year that Donziger’s legal-and-media campaign against Chevron had indeed evolved into a shakedown featuring fabricated scientific evidence, forged documents, coercion, and bribery.

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