WASHINGTON: Chevron Corp. on Tuesday lost a US Supreme Court bid to block an $ 18.2 billion Ecuadorian judgment against the No. 2 US oil company in a case over pollution in the Amazon jungle.
A lower court threw out an injunction blocking enforcement of the judgment in January.
Chevron appealed to the Supreme Court, which rejected the appeal without explanation. The decision is the latest in a nearly two-decade conflict between Chevron and residents of Ecuador's Lago Agrio region over claims that Texaco, bought by Chevron in 2001, contaminated the area from 1964 to 1992. The battle has spawned litigation in numerous courts both inside and outside the United States. Oil companies are watching the case closely because it may affect other cases accusing companies of polluting the areas where they operate.
Chevron claims that the judgment, imposed by an Ecuador court in February 2011, was fraudulent and unenforceable under New York law.
A New York federal judge in March 2011 issued a worldwide injunction blocking enforcement of the judgment. B ut on Jan. 26, the 2nd US Circuit Court of Appeals in New York overturned the ban, finding that Chevron had been premature to challenge the judgment.
The 2nd Circuit said the oil company, based in San Ramon, California, could challenge it "only defensively, in response to attempted enforcement," which the Lago Agrio residents had not attempted and might never attempt in New York.
The appeals court also said that the US judge did not have the authority to stop courts in other countries from enforcing the judgment. The Ecuadorian plaintiffs are currently trying to enforce the judgment in Canada and Brazil.
In its appeal to the Supreme Court, Chevron said it was entitled to raise an anticipatory defense i n US courts to preempt any enforcement efforts.
It also said such defenses are necessary in light of the "disturbing trend" in which lawyers win big money judgments against US companies in corrupt foreign courts, and then seek to enforce them in countries where the companies operate.
"While Chevron is disappointed that the Court denied our petition, we will continue to defend against the plaintiffs' lawyers' attempts to enforce the fraudulent Ecuadorean judgment, and to further expose their misconduct," Chevron said in an emailed statement.
The judgment included $8.6 billion of environmental damages, which an Ecuador court more than doubled because Chevron failed to make a public apology.
In July, damages in the case were increased to $19 billion.
Justice Samuel Alito , a conservative, did not participate in the Supreme Court's decision to deny the appeal. The court's order provided no reason.