Latest Chevron ruling gives mixed results for parties

Southern District Judge Lewis Kaplan has denied an attempt by parties seeking to enforce an $18.2 billion judgment against Chevron Corp. for pollution caused by oil-drilling in Ecuador to use the defense of res judicata against Chevron's claim the judgment was the result of fraud. Kaplan's 105-page ruling yesterday presented a mixed result for both sides in the complex litigation resulting from the 2011 judgment against Chevron by a court in Lago Agrio, Ecuador. Kaplan denied Chevron's motion that he find the judgment of the Ecuadorian court legally unrecognizable and unenforceable as it rests on the law of collateral estoppel.

Kaplan wrote yesterday in Chevron v. Donziger, 11-cv-0691, that evidence presented by Chevron that the Ecuadorian court did not fully examine the extent of the pollution and relied on "tainted" assessments biased in the plaintiffs' favor were "disturbing." Presentation of that contention should not be foreclosed by a res judicata defense, he ruled. As to the collateral estoppel defense, however, Kaplan said, "Without appropriate evidence on the relevant Ecuadorian law, the Court is not prepared to hold that Chevron is entitled to judgment rejecting the collateral estoppel defenses as a matter of law on the ground that the Ecuadorian courts adjudicated no issue with respect to Chevron's fraud claims."

(Published by New York Law Journal - August 1, 2012)