A federal court in New York has granted a motion for a preliminary injunction against the enforcement of an Ecuadoran court’s $18 billion judgment against Chevron Corp. Chevron Corp. v. Donziger, No. 11‑691 (S.D.N.Y. 3/7/11). Plaintiffs in the underlying litigation are indigenous Ecuadorans who claim that crude oil dumped in the Amazon rain forest decades ago by a Texaco Inc. affiliate caused them to develop cancer and destroyed natural resources in the area. Chevron subsequently purchased Texaco.
After years of litigation, an Ecuadoran court found in favor of the plaintiffs and ordered Chevron to pay them $18 billion in damages. Before the award was made, Chevron filed suit in a New York federal court, accusing plaintiffs’ counsel of violating the Racketeer Influenced and Corrupt Organizations Act and seeking a declaration that any judgment in the underlying suit would be based on fraud and would therefore be unenforceable. The company accused plaintiffs’ counsel of ghostwriting an expert report that included a $27 billion damages assessment and of colluding with Ecuadoran authorities. The company also accused plaintiffs’ counsel of lying to federal prosecutors in the United States, as well as to Congress and the Securities and Exchange Commission.
Granting Chevron’s motion, the court found sufficient evidence that the company’s charges could be true and that the injuries threatening Chevron absent an injunction would be irreparable.