A summary of the recent $8.6 billion judgment against Chevron in the oil contamination lawsuit in Ecuador. The entire judgment, in English and Spanish, can be found here:
The Court’s analysis of the issues in the case was thorough and comprehensive; skeptical of the claims made by both parties and their experts; and grounded in overwhelming quantities of scientific, documentary, and testimonial evidence. Moreover, the Court put aside the ancillary mud-slinging and focused more heavily on the merits of the parties’ claims and legal defenses. Chevron, of course, took the position that the Lago Agrio Court’s judgment is “illegitimate and unenforceable” long before it knew how the court would actually rule. Predictably, Chevron has denounced the judgment and vowed never to pay a penny.
Highlights of the summary:
- The Court based its decision on the technical data submitted by both sides, not the experts’ reports, concluding that that Texaco had the means, but not the will, to employ safer methods of oil exploration.
- The Court was particularly troubled by the fact that even samples taken by Chevron’s experts revealed “alarming” levels of carcinogenic or otherwise highly toxic substances like benzene, toluene, mercury, lead, cadmium, barium. The Court also noted that Chevron—presumably to minimize the impact of contamination—did not test for certain harmful chemicals such as Chromium VI, and did not really even test for Total Petroleum Hydrocarbons, opting instead to test only for certain compounds within the TPH spectrum (“DRO” and GRO”).
- Based on the record evidence and the economic criteria largely proposed by expert Gerardo Barros, a court-appointed expert sponsored by Chevron, the Court concluded that an award of approximately $5.4 billion and $600 million would be appropriate for the remediation of soil and groundwater contamination, respectively.
- Ultimately, the Court found that there was a “reasonable medical probability” that the health problem experienced by persons in the Concession area had been caused by oil-related contamination.
- The Court noted Chevron’s bad-faith efforts to delay resolution of the case by “reopening” issues that had been resolved, its obstruction of the evidence-gathering process and the company’s attacks on the judiciary.
- The Court rejected the argument that the remediation agreement between the government of Ecuador and Texaco released the company from third-party claims. It found that the peoples’ right to bring a claim is fundamental and inviolate, citing the Ecuadorian Constitution as well as multiple human rights conventions.
- As to Chevron’s related argument that Texaco was part of a consortium and thus cannot fairly be made to bear the full extent of liability caused by drilling and extraction operations, the Court observed that the contract of 1964 states that “[i]t will be left to Texaco only the ways, the means to carry out procedures…in a way that it will be able to explore (for) oil….”
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