Chevron Case Adds An Additional Venue, Canada; Plaintiffs Seek To Enforce Judgment There

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A brief recap of where the parties are in this continuing saga.  After obtaining a judgment against Chevron Corp. (which bought assets directly or indirectly from Texaco, Inc. in 2001 and was treated as the successor in interest for environmental liabilities) of $8.646 billion, Ecuadorian plaintiffs (indigenous peoples in the Amazonian rain forest) sought enforcement of a  judgment in the U.S.  The Southern District of New York, in Chevron Corp. v. Donziger, et al., 11 Civ. 0691 (S.D.N.Y. Feb. 2011), issued a 127-page decision on a motion for preliminary injunction.  The decision preliminarily enjoined enforcement, anywhere in the world, of the Ecuadorian judgment.  The District Court (discussed here) did not hold Chevron to earlier statements it affirmatively made in earlier court proceedings in federal court in New York (which was laudatory about the Ecuadorian system of justice), preliminarily concluding that the Ecuadorian judicial system had changed in the years since those statements and that it “does not provide impartial tribunals and due process”.

On appeal, the Second Circuit vacated the Order (discussed here).   The Court of Appeals found that “[c]onsiderations of international comity provide additional reasons to conclude that the Recognition Act cannot support the broad injunctive remedy granted by the district court”.   In passing the uniform statute and making it a part of New York law, “New York undertook to act as a responsible participant in an international system of justice — not to set up its courts as a transnational arbiter to dictate to the entire world which judgments are entitled to respect and which countries’ courts are to be treated as international pariahs”.   Indeed, the Court of Appeals explained that “when a court in one country attempts to preclude the courts of every other country from ever considering the effect of that foreign judgment, the comity concerns become much graver”.  Making the point that concerned us when we considered the District Court’s injunction, the Court of Appeals stated that, in entering such a broad injunction, “the court risks disrespecting the legal system not only of the country in which the judgment was issued, but also those of other countries, who are inherently assumed insufficiently trustworthy to recognize what is asserted to be the extreme incapacity of the legal system from which the judgment emanates

The Third Circuit similarly articulated its misgivings in indicting or condemning the Ecuadorian judicial system (discussed here). Said that Court:

[T]he Chevron applicants are asking that American courts make a finding that the attorneys in a civil case in Ecuador can control the Ecuadorian criminal justice system. Though it is obvious that the Ecuadorian judicial system is different from that in the United States, those differences provide no basis for disregarding or disparaging that system. American courts, though justifiably proud of our system, should understand that other countries may organize their judicial systems as they see fit.

Back in the District Court, the Court rejected some but on the pleadings permitted some racketeering claims to proceed against lawyers for the plaintiffs (discussed here).

Despite emanations to the contrary from an international arbitration tribunal, the Appellate Court in Ecuador (discussed here) was unwilling to enforce an arbitral award that would call into question the ability of Ecuadorian courts to dispense justice. 

Now the Ecuadorian plaintiffs have commenced additional enforcement proceedings in Canada.

 

Published In: Civil Procedure Updates, Civil Remedies Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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