U.S. Supreme court denies Chevron appeal in multi-billion dollar Amazon jungle pollution case

Source: Reuters

The U.S. Supreme Court has denied a bid by the Chevron Corp to block an $18.2 billion judgment against the company stemming from the contamination of the Amazon jungle.

A lower court threw out an injunction blocking enforcement of the judgment. Chevron appealed to the Supreme Court, which rejected the appeal without explanation.

On Jan. 26, the 2nd U.S. Circuit Court of Appeals in New York said Chevron had been premature to challenge the judgment, which residents of Ecuador's Lago Agrio region won in February 2011 over pollution of the Amazon jungle and resulting damage to their health.

In July, damages in the case were increased to $19 billion.

Chevron claimed that the judgment was fraudulent and unenforceable under New York law.
But 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 its appeal, Chevron said the 2nd Circuit ignored "well-settled" precedents allowing it to raise an anticipatory defense under the federal Declaratory Judgments Act.

It also said such defenses are necessary in light of the "disturbing trend" in which lawyers win big money judgments against U.S. companies in corrupt foreign courts, and then seek to enforce them in countries where the companies operate.

The judgment stemmed from environmental contamination from 1964 to 1992 by Texaco, which Chevron bought in 2001.

The judgment included $8.6 billion of environmental damages, which an Ecuador court more than doubled because Chevron failed to make a public apology.

Chevron employees could face jail time if EPA takes pollution case further

The Chevron Corp. may face more penalties including prison time for employees stemming from a federal investigation of a California pollution case.

The Environmental Protection Agency is investigating actions at the company’s Richmond, California refinery after local officials in 2009 determined that pollution controls were bypassed, according to company and local officials.

The Bay Area Air Quality Management District, which enforces air-pollution rules in nine counties near San Francisco, discovered Chevron employees routed gas emissions around monitoring equipment then burned off the excess, violating local rules. The agency forced the company to end the practice it said was used at least 27 times in four years, said Wayne Kino, the district’s enforcement manager. Chevron paid a $170,000 penalty to settle the agency’s civil case.

“It now appears that EPA has chosen to take that case” as a criminal prosecution, Kino said yesterday in an interview.“There are indications that they are investigating, but they don’t talk about it.”

A flaring system is used in emergencies to eliminate gases that could be increasing to dangerous levels, Kino said. Refineries had been flaring gas for routine maintenance before the local air quality board imposed standards in 2004, he said.

A criminal prosecution might mean further fines or even jail time for employees involved at the Richmond refinery. A total of 249 individuals or companies were charged last year after an EPA criminal investigation. Agency prosecutions last year resulted in sending violators to prison for 89.5 years and fines of $35 million.


(Source: Bloomberg)