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NY court: Judge can't block $18B Chevron judgment

•  Recent Cases     updated  2012/01/28 09:06


A judge overstepped his authority when he tried to ban enforcement around the world of an $18 billion judgment against Chevron Inc. for environmental damage in Ecuador, a federal appeals court said Thursday.

The three-judge panel of the 2nd U.S. Circuit Court of Appeals explained why it lifted the ban last year and blocked a judge from staging a trial to decide if the judgment was obtained fairly.

It said the judge has authority to block collection if Ecuadorean plaintiffs move against Chevron in New York, but law does not give him authority "to dictate to the entire world which judgments are entitled to respect and which countries' courts are to be treated as international pariahs."

The judgment came last February after nearly two decades of litigation that stemmed from the poisoning of land in the Ecuadorean rainforest while the oil company Texaco was operating an oil consortium from 1972 to 1990 in the Amazon. Texaco became a wholly owned subsidiary of Chevron in 2001.

Chevron obtained an order from U.S. District Judge Lewis A. Kaplan in March blocking Ecuadorean plaintiffs from trying to collect the $18 billion until he could stage a trial to determine whether the judgment was fraudulently obtained.

The Ecuadorean plaintiffs appealed Kaplan's ruling to the 2nd Circuit. The appeals court heard oral arguments and then issued an order in September lifting Kaplan's block on collection efforts. On Thursday, it went a step further, tossing out the portion of Chevron's challenge to the judgment that sought to block its enforcement anywhere in the world.

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