Watch CBSN Live

Judge Halts Any Ecuadorean Award Against Chevron

NEW YORK (AP) - A federal judge took the unusual step Tuesday of blocking a potential multi-billion-dollar judgment against Chevron Corp. for environmental damage in Ecuador for at least 28 days after concluding that lawyers representing 30,000 Ecuadoreans were planning a "helter skelter" disruption of the oil giant's business in the event of a lucrative award to force a settlement.

U.S. District Judge Lewis A. Kaplan ruled from the bench after hearing arguments by lawyers for Chevron and the Ecuadorean plaintiffs and after watching snippets of a New York lawyer's deposition as he responded to questions about his efforts on plaintiffs' behalf. A court-appointed expert in Ecuador has recommended that Chevron pay up to $27 billion for environmental damages and related illnesses due to oil exploration and extraction. Lawsuits brought against Chevron are currently being litigated there.

The judge noted Chevron was a "company of considerable importance to our economy" that employs thousands of people worldwide and supplies a commodity that everyone relies upon. He cited evidence that lawyers for the Ecuadoreans had hired a Washington law firm with powerful political connections around the world to pressure governments to enforce any judgment in Ecuador by seizing Chevron assets if necessary.

Kaplan acknowledged that it was "certainly unusual" for a court to restrain enforcement of a judgment even before a financial award had been announced but said it was necessary because of evidence that the lawyers were planning a "helter skelter disruption for the sake of disruption." That, he added, was "not in the public interest."

The judge read a list of countries where the lawyers planned to pursue immediate enforcement of any award, including the Philippines, Singapore, Australia, Argentina, Canada, Chad, Kuwait, Nigeria, Russia and the United Kingdom.

The judge said it was not unusual for pressure to be used to force one side to negotiate a settlement but he said the pressure being planned in this instance was beyond the merits warranted by the lawsuit brought against Chevron.

Chevron had asked for the restraining order, saying lawyers for the plaintiffs had exploited the Ecuadorean judiciary's weakness, bullied judges and used political connections to obtain favorable rulings regardless of the facts or law.

The plaintiffs' lawyers countered that Chevron was engaging in "scorched earth" warfare with an unprecedented litigation blitz and a "public relations and outright intimidation campaign around the world to avoid the day of reckoning that may rapidly be approaching."

Outside court, attorney Sheldon Elsen, who argued on behalf of the Ecuadoreans, said he was not surprised by Kaplan's ruling.

Chevron lawyer Randy Mastro said the company was grateful to the court for the interim relief. The judge set deadlines for later this month for submissions on Chevron's request for a more permanent order.