Chevron wins appeal in legal fight with Ecuador

Chevron wins appeal in legal fight with Ecuador
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A federal appeals court has sided with Chevron Corp. in its ongoing legal fight with Ecuador. 

The U.S. Court of Appeals for the Second Circuit on Monday upheld a lower court ruling blocking a $8.6 billion penalty for Chevron because of “bribery, coercion and fraud” on behalf of Ecuador’s American lawyer. 

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An Ecuadoran court has held Chevron responsible for environmental damage done in the country by a subsidiary the company purchased in 2001. In 2011, Chevron was ordered to pay a $19 billion fine, an amount later reduced to $8.6 billion. 

But the oil giant has resisted paying, and sued lawyer Steven Donziger for racketeering, arguing he fabricated evidence against the company. 

A federal judge in 2014 agreed with Chevron, finding Donziger submitted fraudulent evidence and engaged in coercion while arguing Ecuador’s case. The judge blocked Donziger from collecting the fine from Chevron. 

Donziger appealed, challenging Chevron’s standing in bringing the lawsuit but not the facts behind the district court’s findings. The Circuit Court rejected the request, writing, “we find no basis for overturning the judgment of the district court.”

Ecuador and Chevron have long fought over pollution charges related to oil exploration in the country’s Amazon rainforest. Residents sued well operator Texaco over environmental damages done there in 1993; Chevron purchased Texaco in 2001 and has ever since defended itself from claims related to oil exploration in the country. 

Asked about the case in May, Chevron CEO John Watson told Bloomberg News, “We continue to fight that. Thus far, we’ve been very successful. There’s risk, but we’ve been able to manage it.”