Chevron Suffers Major 8-0 Defeat in Ecuador’s Constitutional Court Over Landmark Pollution Judgment

Twenty-nine Appellate Judges Have Now Ruled Against Oil Giant As Enforcement Action Proceeds In Canada

QUITO, Ecuador - In a resounding defeat for Chevron in a landmark pollution case, Ecuador’s Constitutional Court in a unanimous 8-0 decision rejected the oil major’s final appeal of a $9.5 billion pollution judgment that found the company deliberately dumped billions of gallons of toxic oil waste onto Indigenous lands in the Amazon rainforest.

The decision, issued in a 151-page decision published Tuesday, was a total victory for the Indigenous groups that brought the case and a stunning rejection of all of Chevron’s claims.The Court rejected Chevron’s allegations that it was victimized by fraud and the court threw out the company’s claim that Ecuadorian courts had no jurisdiction over the matter.

The decision also raises the total number of appellate judges in Ecuador and Canada who have ruled against Chevron on either the underlying merits of the case or its fraud claims to 29. The case against Chevron was spearheaded by the Amazon Defense Front, a grass roots group representing 80 Inidgenous peoples and farmer communities in Ecuador’s northern Amazon region. 

“This decision is another huge victory for the people of Ecuador in their historic two-decade battle for environmental justice against the world's worst corporate polluter and rogue operator,” said FDA leader Luis Yanza, a Goldman Prize winner who initiated the lawsuit against Chevron in U.S. federal court in 1993. "No country should ever do business with Chevron until the company first pays for the harm it caused to the people of Ecuador."

Patricio Salazar, the lead Ecuadorian lawyer on the case, said: “Justice has prevailed over Chevron’s illegal attempts to engage in constant attacks on lawyers who defend the Indigenous communities rather than litigate in good faith on the merits.  It is now highly likely that Chevron will pay every last dollar of the judgment against it, as it is legally and ethically obligated to do.”

Ecuador’s Constitutional Court – which deals only with Constitutional issues – is the third major appellate court in Ecuador and the fourth court overall in the country to uphold the trial-level decision against Chevron, which issued in 2011.  Ecuador’s highest civil court, the National Court of Justice, already ruled unanimously to affirm the judgment against Chevron.  

After eight years of arduous proceedings slowed by Chevron's strategy of deliberate delay, Ecuador’s trial court relied on 105 technical evidentiary reports to find in 2011 that the company poisoned a 1,500 sq. mile area of the Amazon with life-threatening and carcinogenic oil waste.  It is estimated that thousands who live in the sensitive rainforest ecosystem, including many Indigenous peoples, have died of cancer while tens of thousands must endure what is essentially one of the world’s worst ongoing public health catastrophes. 

Ecuador’s government, which received royalties from Chevron’s shoddy operation of 400 well sites, has been of scant help to the victims.  Medical care in the affected region is virtually non-existent, and many people perish from cancer without even visiting a doctor and after receiving no treatment, said Steven R. Donziger, the longtime U.S. legal representative of the Ecuadorian communities who has taken dozens of trips to the affected area.

"Chevron has caused a humanitarian crisis in Ecuador of epic proportions that is ongoing to this day," he said. "Tens of thousands of people will die in the coming years if nothing is done to clean up the pollution. The world must pay attention and Chevron shareholders and management must act immediately to address this worsening problem."

Chevron has refused for years to pay the Ecuador judgment -- now worth $12 billion with interest -- and company officials have threatened the Indigenous groups with a "lifetime of litigation" if they persist. Chevron has hired 60 law firms and at least 2,000 lawyers to engage in a strategy of forum shopping and obstructionism in countries around the world. Chevron is also looking for a taxpayer-funded bailout of its liability from its victims, having sued Ecuador’s government in a secret arbitration proceeding in an effort to get it to pay for the clean-up.  

The latest Ecuador court decision is also a major blow to controversial U.S. judge Lewis A. Kaplan. Kaplan -- who many have said is similar to former Arizona sheriff Joe Arpaio in robes -- relied on false testimony from an admittedly corrupt Chevron witness to find that the Ecuador judgment was procured by fraud.  Kaplan refused to seat a jury of impartial fact finders and he refused to consider any evidence of Chevron’s environmental contamination in Ecuador.

Kaplan remains the only judge in the world to have ruled in favor of Chevron. Seventeen Ecuador judges, who had access to a far fuller evidentiary record than Kaplan, ruled in favor of the affected communities.  Twelve judges from Canada, including the country's entire Supreme Court, have also ruled in favor of the Ecuadorians on various technical issues.

The Constitutional Court decision from Ecuador bluntly rejects the same fraud claims that Chevron peddled successfully to Judge Kaplan. It also turned away a handful of Chevron objections regarding jurisdiction and applicable law that the company has been recycling in various forums for well over a decade in an effort to delay a final resolution, said Donziger.  

The Ecuador decision also powerfully confronts Chevron on the brutal human consequences of both its original environmental crimes—which the Court emphasizes were not the result of an accident, but rather of deliberate operational decision-making designed to save money and enrich the company’s shareholders and executives—and the additional offense of its two-decade campaign of distraction and delay. 

The decision also sweeps more broadly in its reading of background principles of environmental law, human rights, and indigenous peoples’ rights. Specifically, the Court acknowledged the relevance of the precautionary principle in the overall legal framework, and discussed the deeply interlinked nature of environmental harm and broader human rights consequences and “social decomposition.”

In an aspect of the decision that may serve as a critical precedent for Indigenous peoples and affected communities fighting against harmful but purportedly “legal” natural resource extraction projects, the Court held that contracts and legal doctrine should not be construed to give a private entity a right to pollute where environmental and human rights of third-parties were impacted. 

The Ecuadorian plaintiffs also have picked up several appellate victories in Canadian courts as they attempt to collect Chevron assets in that country to force compliance with the Ecuador judgment. Canada’s Supreme Court ruled unanimously in favor of the Indigenous groups in 2015 when Chevron tried to block the enforcement action on jurisdictional grounds.

Donziger, the longtime U.S. representative of the Ecuadorian communities, praised the decision from the Constitutional Court.

“It is long past time for Chevron to come to grips with the fact that it has now lost in four separate courts in Ecuador, the country where it insisted the trial be held, based on evidence it deliberately dumped toxic waste and decimated Indigenous peoples,” said Donziger.  “A litigation strategy that consists of spending hundreds of millions of dollars to create fake evidence and attack lawyers, rather than deal with the merits of a case, is ultimately a losing strategy for Chevron shareholders.”

For background on the overwhelming evidence against Chevron, see here. For a summary of Chevron’s fraud in the Kaplan case, see here.  For excellent articles on Chevron’s subterfuge and bad faith by Greenpeace co-founder Rex Weyler, see here and here.