Supreme Court Backs Away Slowly From Chevron/Ecuador Dispute

Photo by Lita V. Some rights reserved.

In February of 2011, American gas giant Chevron (you know, the one with the cute cartoon cars) was ordered to pay $8.6 billion in pollution damages to by a provincial court the relatively small city of Lago Agrio, Ecuador, which claimed that Chevron (the 2nd largest oil company in the U.S.) had done irreparable damage to the area between 1964 and 1992 under the Texaco banner, another oil company that Chevron now owns. The lawsuit was launched in 1993, and the area affected by the damages has since come to be known as “the Amazon Chernobyl.” Chevron at the time responded by calling the ruling “illegitimate and unenforceable,” countering by suing the plaintiffs (the indigenous villagers of Lago Agrio) for racketeering, and requesting a stay of judgment from an international tribunal in the Hague. A federal judge in New York issued an injunction on the dispute in March 2011, blocking any enforcement on the judgment, which was later overturned by the 2nd U.S. Circuit Court of Appeals on January 26th, 2012.

Fast forward to yesterday, October 9th, 2012. The U.S. Supreme Court heard Chevron’s appeal, and ultimately ruled that it would not intervene and block the collection of legal penalties and damage fees, which now total $18.2 billion, as the original $8.6 billion figure was doubled by the Ecuadorian court when Chevron failed to make a public apology. The Supreme Court ruling came despite the fact that Chevron was backed by the National Association of Manufacturers and the U.S. Chamber of Commerce. The fight over environmental reparations will now continue in district courts in New York, Brazil, and Canada, and may end up back at the Supreme Court before a final verdict is reached. If Chevron is strong-armed into paying the $19 billion in damages, it will be the largest judgment of its kind in history.

Read our previous coverage of this case here.

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