Legal Proceedings - History
In 1993, U.S. attorneys representing Ecuadorian plaintiffs filed the Aguinda and Sequihua lawsuits in the United States. Although Texaco Petroleum never operated in Peru, U.S. attorneys representing Peruvian plaintiffs who claimed they were impacted by the oil producing activities in Ecuador filed a similar lawsuit, Jota, in the United States in 1994. The judges in each case ruled in Texaco's favor, and all three lawsuits were dismissed. However, the plaintiffs in the Aguinda and Jota cases appealed the court decisions.
The only issues heard in the U.S. courts have been those of venue; that is, determination of the appropriate place for the cases to be heard — in a U.S. court or in an Ecuadorian court. Texaco has always maintained that the appropriate place to hear these cases is Ecuador.
On May 30, 2001, Judge Jed Rakoff of the U.S. District Court in New York dismissed the lawsuits against Texaco. In his ruling, Judge Rakoff noted, "Because Texaco has carried its burden on every element of the motion, and because the record establishes overwhelmingly that these cases have everything to do with Ecuador and nothing to do with the United States, the Court grants the motion and dismisses the cases on the ground of forum non conveniens."
The plaintiffs subsequently appealed this dismissal. On Aug. 16, 2002, the U.S. Court of Appeals issued its ruling upholding the decision of the U.S. District Court thus affirming the lower court's dismissal of these claims and ruling that the cases brought by these plaintiffs do not belong in the U.S. judicial system.
Attorneys for the plaintiffs have now filed a lawsuit against Chevron in Ecuador. On October 21, 2003 a hearing took place in Lago Agrio, Ecuador at which Chevron presented its response to the lawsuit and asked the court to dismiss the suit. Chevron continues to vigorously defend the company against what we view to be a lawsuit without merit.
Phase One and Two
Per mutual agreement, the parties memorialized (by court order) that the case in Ecuador was to proceed in two phases:
- Phase 1 was to consist of "Judicial Inspections" to establish the environmental conditions at the areas remediated by Texpet and the areas that were Petroecuador's responsibility. The Judicial Inspections were to establish the evidentiary record as a predicate for proceeding to Phase 2.
- Phase 1 - began in 2003 and was originally to consist of 122 Judicial Inspections, mostly locations suggested by the plaintiffs, some by Chevron, and a few where both parties agreed. The Court ordered a protocol for the Inspections in accordance with the Code of Civil Procedure that was agreed to by all parties.
- Phase 2 - The Court's order provided that Phase 2 would begin only after the completion of Phase 1, in the form of a final expert determination which would be premised upon the evidence produced in Phase 1. It would consist of:
- Evaluation of environmental damage (if any), to soil, water and other primary resources;
- Specification of the origin of such damages;
- Verification of the current existence of substances that affect the environment and constitute a danger to humans;
- Specification of the technical work necessary to remediate the sites, if necessary;
- Determination of the methodological parameters for the remediation, if necessary.
In short, Phase 2 would result in a final recommendation regarding causation and damages.
Phase 2 began in 2007 despite an incomplete evidentiary record, where only 47 of the 122 Phase 1 Judicial Inspections have been completed.
Beginning in the fall of 2004, Phase 1 provided that in the course of Judicial Inspections:
- Each party's experts could ask specific questions of each others analytical methods and conclusions. As well, an expert's report would not be considered part of the record unless that expert responded fully to all questions by the other party.
- The Court must appoint official "settling experts" for each Judicial Inspection to resolve conflicting reports at particular sites.
- Either party may petition the Court to expunge a report from the record because it contains essential, gross or factual error. The Court must conduct a hearing on each petition of essential error and must expunge the report if the expert fails to satisfactorily demonstrate the lack of essential error.
The Court has received only one "settling report" for a single Inspection site (Sacha 53). This report exonerates Chevron.
As the plaintiffs lawyers realized they were losing the case on the scientific and technical findings, they campaigned to abort the evidence gathering process and began to increase political and public pressure on the judge.
In January 2006, the plaintiffs requested to "withdraw" from 64 of the 122 Judicial Inspections ordered by the Court. While the court denied the request three times, it reversed it decision allowing plaintiffs to "relinquish" 64 of the remaining Inspections, yet continued to allow them to retain their claims of damages for these sites, without having to produce any associated evidence.
Only 47 of the 122 Judicial Inspections ordered by the Court have taken place; 11 Inspections remain unscheduled.
Phase One Results
Analysis of Chevron's 1,344 water and soil samples confirm Texpet's remediation was effective and demonstrated that the remediated areas pose no significant risk to human health or the environment.
- Greater than 99% of 172 drinking water samples meet safe drinking limits for petroleum compounds as defined by the World Health Organization and the United States Environmental Protection Agency (U.S.EPA).
- Greater than 99% of all soil samples collected from Texpet-remediated areas confirm that the remediation met the standards set by the Government of Ecuador.
While the plaintiffs erroneously claim that their data confirms their case, the only Court-ordered independent analysis (Settling Report of Sacha 53) has corroborated Chevron's conclusions stating:
- Texpet's remediation was conducted in accordance with the required parameters of the Remediation Plan approved by the Republic of Ecuador and Petroecuador.
- There is low health risk to humans and the environment from oil at that site.
- Concentrations of heavy metals in the crude oil are very low and pose a very low risk to the environment.
- Results for nearby drinking water showed no contamination from petroleum or metals. There is no basis for plaintiffs' allegations of water contamination or health risk.
- Drinking water results showed high levels of bacterial contamination - both fecal and total coliforms.
- While one isolated area of the site requires remediation, the report acknowledges it is an area outside of the scope of Texpet's remediation program, and appears to be the result of a spill of unknown origin.
After the release of this report and in violation of Court orders and the Code of Civil Procedure, the plaintiffs stopped funding their share of the fees for the settling experts. This effectively brought a stop to the issuance of any future reports and work by these court appointed experts.
The Point of Change
During Phase 1, an evidentiary record was established that exonerated Chevron. This was confirmed by a Court ordered report on well site Sacha 53, submitted by five independent, court-appointed settling experts who supported Chevron's defense.
Following this report, plaintiffs' lawyers realized they were losing the case and began to sabotage the evidence gathering process and increased the political and public pressure on the judge.
- Plaintiffs' called for the cancellation of 64 of the remaining inspections. The Judge agreed and abruptly terminated the court-ordered processes for collecting and assessing scientific evidence, but remarkably, still allowed plaintiffs to claim damages from these un-inspected sites.
- A new judge for the case was appointed.
- A new President of Ecuador was elected.
- The GOE pledged to help gather evidence against Chevron, made statements of solidarity with the plaintiffs lawyers and supporters and have corresponded with the plaintiffs' lawyer's and the Attorney General's office who indicated they would "collectively search for a way to nullify or undermine the value of the [Texpet's] remediation contract..."
- The Court failed to rule on several well-grounded legal objections presented by Chevron regarding the abandonment of plaintiffs' fundamental burden to prove Chevron's liability and violations of due process and reversed itself on key rulings on the nomination and scope of work of court experts- all in violation of judicial procedure.
- For the Phase 2 evidence production, the Court substituted a wholly subjective, and expert determination to be conducted by a sole, patently unqualified Court appointee. That appointee, lacks the necessary credentials and academic training in most of the scientific disciplines within his charter and will purport to tabulate the cost of remediating environmental damage despite the utter lack of any credible evidence before the Court of its existence, cause, or effect. During his investigation, he has denied Chevron the basic right to participate and observe his work and has numerous additional teams working in secrecy, which violates Chevron's rights to due process.
It was clear the trial had become a judicial farce where scientific evidence and due process is ignored and the Court has succumbed to improper external pressures.
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