U.S. Judge Sides With Chevron In Amazon Pollution Case

He ruled the $9.5 billion verdict against Chevron for oil pollution in the Amazon was obtained illegally and is unenforceable. For more, David Green talks to Paul Barrett of Bloomberg Businessweek.

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LINDA WERTHEIMER, HOST:

It's MORNING EDITION, from NPR News. I'm Linda Wertheimer.

DAVID GREENE, HOST:

And I'm David Greene. Good morning.

The oil company Chevron has been blamed for polluting a swath of rainforest in Ecuador. A judge in Ecuador ruled against the company, saying Chevron owed $9.5 billion to indigenous farmers and others who sued the company.

WERTHEIMER: Now, an American judge has given Chevron a huge victory in federal court. The judge ruled that the verdict against the company in Ecuador is unenforceable because it was a product of fraud and corruption. That's a blow to the farmers in Ecuador, who must now consider other options.

GREENE: And we have Paul Barrett on the line. He's a senior writer at Bloomberg Businessweek who has been covering the story very closely. Paul, welcome to the program.

PAUL BARRETT: Thanks. Glad to be here.

GREENE: So can you remind us how we got to this big legal decision in New York?

BARRETT: Sure. In February 2011, a provincial court in Ecuador entered what was, at the time, the largest environmental judgment ever, concerning contamination that took place in the Amazon in Ecuador, in the '70s and '80s. Chevron, however, refused to pay that judgment, saying that it was the product of fraud, and it countersued the American plaintiffs' lawyer who was behind the case. His name is Steven Donziger.

This most recent ruling is the product of that Chevron countersuit against Donziger. And a federal judge in New York has said that Donziger may have won a big victory in Ecuador, but that it was a product of a corrupt racketeering enterprise and therefore, as far as American law is concerned, he and his clients may not profit from their ill-gotten judgment.

GREENE: OK. So we have this American lawyer who was bringing the case on behalf of indigenous people in these areas of Ecuador. The judge essentially says that this lawyer who brought the case was committing fraud?

BARRETT: The judge said that what may have begun all the way back in 1993 as a legitimate lawsuit evolved into something more like a shakedown. He said that in order to win in Ecuador, this lawyer, Steven Donziger, employed tactics like bribery, coercion, fabricating evidence and ultimately - according to the judge - agreeing with the trial judge in Ecuador to make sure that the trial judge would get a $500,000 kickback, in exchange for allowing the plaintiffs to draft his ruling.

GREENE: Did this judge say anything about the environmental impact of what Chevron did in Ecuador?

BARRETT: No. Judge Kaplan, who's the judge here in New York, granted that there has been contamination in Ecuador. That is really not in dispute by anyone who's gone down there, as I have. There's still oil on the ground, and there has been since the early '70s. This case was about whether the plaintiffs' lawyers - who were representing the farmers, the indigenous tribe members - whether those lawyers used corrupt means to get to what may have been a just end.

And his answer was yes, and that you can't fight injustice with more injustice. Sort of the old thing your mother told you about two wrongs don't make a right.

GREENE: Is Chevron totally off the hook now?

BARRETT: Not necessarily. The plaintiffs, Donziger and his clients, are going to courts in third countries - Canada, Argentina, Brazil - and saying, we've got a legitimate judgment from Ecuador. We want you to enforce it here in your country, and allow us to sell off Chevron assets that exist here. And Chevron does have substantial assets in all of those countries.

But Chevron now has a weapon because any court in any country that might consider imposing a penalty on Chevron - and Chevron's going to be able to stand up and say: whoa, whoa, whoa. Wait a second. This whole thing was the product of fraud. You don't want to dirty your hands with this corrupt judgment.

GREENE: So what does this decision in New York mean for the indigenous people in Ecuador who brought the case?

BARRETT: Yeah, there aren't really any heroes to speak of, but you do have victims. The victims are the thousands of poor people who live very close to these massive industrial operations. Sad to say that if you try to produce oil and then allow - or even, as was the case in Ecuador - encourage people to live right next door, and you don't have government regulation of how the industry operates, you're going to have a problem. And that's what developed over decades, in Ecuador.

And the real tragedy here is that after all this litigation, the oil hasn't been cleaned up. It hasn't been cleaned up by the oil company; it hasn't been cleaned up by the Ecuadorian government. And all these plaintiffs' lawyers really, so far, have achieved absolutely nothing.

GREENE: Paul, thanks very much for talking to us.

BARRETT: Glad to. Anytime.

GREENE: Paul Barrett is a senior writer at Bloomberg Businessweek magazine, and also author of "Law of the Jungle," which tells the story of the Chevron oil pollution case in Ecuador. That book comes out this fall.

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