Litigation
Lawyers for the indigenous residents of the Lago Agrio field sued Texaco in New York in 1993. The 30,000 member class-action lawsuit accused TexPet of discharging produced water into open pits, contaminating the water that was used by the locals for fishing, bathing, and drinking. The case was dismissed for improper venue in 2001, and another case was filed in 2003 in Ecuador.
Chevron claims that the company is being unfairly targeted as a deep pocket. It maintains that responsibility for damage and cleanup now lies with Petroecuador and the government, and contends that much of the present damage comes from Petroecuador's activities since 1990, including spills from a pipeline system built by the consortium that Petroecuador has not maintained.
In 2008, a court-appointed expert issued a report accusing Texaco employees of not only widespread pollution, but deforestation and cultural destruction as well. The report estimated the damages by TexPet between $8 billion and $16 billion dollars, which the expert later increased by $11 billion.
Cristóbal Bonifaz, the lawyer who had filed the initial action in New York in 1993, was dismissed from the litigation in 2006. He went on to file a case against Chevron in 2007 on behalf of new clients who claimed that pollution had given them cancer. The court found that three of the plaintiffs did not have cancer. After dismissing their claims (leaving two claims active), the court imposed a $45,000 fine against Bonifaz for making frivolous claims.
Attorney Pablo Fajardo, who represents the plaintiffs, and activist Luis Yanza received the Goldman Environmental Prize in 2008 for their work in this case. The prize is considered the most prestigious award for environmental protection in the world.
In August 2009 a video surfaced showing an alleged member of Ecuador's ruling party, Alianza PAIS, bribing Judge Juan Núñez, who is the presiding judge in the case. In the video, the judge agreed to rule against Chevron, to deny Chevron's appeals, and also discusses the allocation of the $3 million bribe between himself, the president, and the plaintiffs. The video also shows discussion regarding the awarding of remediation contracts that would result from a ruling against Chevron. The judge was forced to resign. Chevron claims it had no involvement in the videotaping, however in April 2010 it was found that one of the men involved in the filming was a long-time Chevron contractor, who in turn was later caught on hidden camera saying he "has enough evidence to ensure a victory by the Amazon communities if Chevron failed to pay him what he was promised". This man was later relocated to the United States with his family at Chevron's expense, where he is also receiving an undisclosed amount of living expenses. The other man involved in filming the video is a convicted drug smuggler.
In order to finance the litigation, New York lawyer Steven R. Donziger, who acted as a spokesman and lobbyist for the plaintiffs, had sold a percentage of the final settlement to a hedge fund.
Chevron had acquired outtakes of the 2009 documentary Crude which covers part of the case. The outtakes suggest that Donziger considered the Ecuadorian system of justice to be corrupt and had urged Ecuadorian President Rafael Correa to issue criminal indictments against two Chevron lawyers involved in the settlement negotiations of the late 1990s. The two lawyers were subsequently indicted. When Donziger was ordered to testify about this in the U.S. federal case, he claimed attorney–client privilege but was rebuked by the judge. Donzinger subsequently was forced to hand over all his case files, his computers, his tax returns and bank account information to Chevron and he was deposed under oath. Donzinger's diary, which had been stored on one of his computers, became a matter of public record. The deposition revealed that the above-mentioned report by a court-appointed expert had largely been written by an environmental consultancy company hired by the plaintiffs.
In February 2011, Chevron filed suit in New York against Donziger and several other people involved in the plaintiff's case, invoking the RICO Act and alleging extortion and fraud in that they made up evidence and tried to manipulate the legal system of Ecuador.
Plaintiffs in the Ecuadorian court case had initially demanded compensation payments of $27 billion. When the court ordered Chevron to pay $18 billion in February 2011, the company vowed to appeal, calling the ruling "illegitimate" and "unenforceable in any court that observes the rule of law", and said that "the United States and international tribunals had already taken steps to bar enforcement of the ruling." Plaintiffs were also planning to appeal, as a recent report put the damages at $113 billion.
Chevron had obtained an injunction by a U.S. federal judge, preventing the plaintiffs from collecting on the Ecuadorean judgement anywhere in the world. This injunction was overturned by the Second Circuit Court of Appeals in September 2011.
Read more about this topic: Lago Agrio Oil Field