An $18 billion judgment against Chevron Corp. in Ecuador over remediation for environmental damage was the result of fraud and is unenforceable in the U.S., according to a ruling released Tuesday by the U.S. District Court in New York.
The Ecuadorean legal action became the focus of a shareholder campaign against Chevron led by Thomas P. DiNapoli, New York state comptroller and sole trustee of the $173.2 billion New York State Common Retirement Fund, Albany. “We are reviewing the court's decision,” said Matthew Sweeney, press secretary to Mr. DiNapoli, in an e-mail.
Mr. DiNapoli led a coalition of institutional investors calling for Chevron to prevent further harm to shareholder value by settling its long-running legal battle with indigenous populations in the Amazon rainforest. In addition, Mr. DiNapoli co-filed a shareholder proposal at Chevron in 2012 “in an effort to improve Chevron's environmental policies.”
Chevron filed the case in 2011 that led to the U.S. District Court ruling, contending the 2011 Ecuadorean judgment — which plaintiffs have sought to enforce around the world — “was procured by fraud,” according to the decision.
Writing the U.S. District Court's 497-page decision, Judge Lewis A. Kaplan barred enforcement of the judgment in the U.S., although not elsewhere in the world outside U.S. jurisdiction.
“The decision in the Lago Agrio (Ecuadorean) case was obtained by corrupt means,” Mr. Kaplan wrote. “The defendants here may not be allowed to benefit from that in any way.”
Chevron in a statement Tuesday said, “This ruling is a resounding victory for Chevron and our stockholders. It confirms that the Ecuadorean judgment against Chevron is a fraud and the product of a criminal enterprise.”
