February 22, 2011 > Lawyers: No plan yet to go after Chevron money
Lawyers: No plan yet to go after Chevron money
By Larry Neumeister, Associated Press
NEW YORK (AP), Feb 15 - Lawyers for Ecuadoreans who won a $9.5 billion judgment against Chevron Corp. for decades-old damage to the country's rain forest said Tuesday that they won't try to collect the award until the oil giant completes the appeals process.
The Monday ruling by Ecuadorean Judge Nicolas Zambrano against the U.S. oil company was expected and Chevron has vowed to appeal in Ecuador. The ruling says the award can be doubled within two weeks if Chevron does not apologize. Oil analysts in the U.S. have said they doubt Chevron will pay anywhere near the amount awarded, but the company was so worried that the plaintiffs would try to persuade multiple countries to seize its assets worldwide that a week ago it convinced a New York judge to ban any attempt to collect for nearly a month. On Tuesday it pressed its case to get a more permanent ban on attempts to collect the award.
Pablo Fajardo, the lead Ecuadorian attorney, said in a conference call with journalists Tuesday that Ecuador's legal system bars the collection of an award until Chevron completes its appeal.
``The only time we will try to enforce (the judgment) will be when Chevron has had every opportunity to defend themselves in all the processes our laws provide for them,'' Fajardo said, according to a translation of his Spanish provided by Juan Pablo Saenz, another member of the Ecuadorean plaintiffs' legal team.
Once that happens, ``we'll use every strategy, every manner we have at our disposal,'' to try to make Chevron pay, Fajardo said. The lawyer said it might take a year or more to complete the appeals process because of ``the magnitude of the case.'' A three-judge panel in Lago Agrio, Ecuador was to hear the initial appeal.
``This is not a final triumph,'' Fajardo said. ``But what has been obtained is important.''
Fajardo said once the Chevron litigation was completed, the plaintiffs also plan to sue Ecuador's state-owned oil company for damages for polluting the environment.
``We are not against oil companies. We are against the criminal and perverse manner in which they often act, putting economic interests above human life and the environment,'' Fajardo said.
Chevron has said it has no intention of honoring the award outlined in a 187-page judgment that disappointed some plaintiffs. The lawsuit was originally brought 17 years ago in New York. It was moved to Ecuador in 2003.
Chevron, which has never operated in Ecuador, found itself immersed in the litigation after acquiring Texaco in 2001. It has maintained that a 1998 agreement Texaco signed with Ecuador after a $40 million cleanup absolves it of liability. The plaintiffs say the cleanup was a sham and didn't exempt third-party claims.
Company spokesman James Craig asserted that the trial and the sentence are ``the product of fraud and contrary to legitimate scientific evidence.''
The decision Monday came less than a week after U.S. District Judge Lewis A. Kaplan in Manhattan ruled that no Ecuadorean award can be enforced for at least 28 days. He is scheduled to hear arguments Friday on a request for a permanent order banning collection of the award.
Saenz said Tuesday that Kaplan's order will not stop the Ecuadoreans from trying to collect from Chevron around the world.
``Judge Kaplan has absolutely no jurisdiction in Ecuador,'' he said.
Chevron lawyer Randy Mastro disagreed, saying it ``would be a brazen act of contempt for any such attempts to be made.''
Chevron protested the Ecuadorean judgment in papers it filed late Tuesday with Kaplan, saying the ``audacity and swiftness of this response provide stunning confirmation of the systemic corruption in Ecuador.'' Saying ``injustice is swift in Ecuador,'' Chevron warned the New York judge that a more permanent ban on enforcing the Ecuadorean ruling was ``more urgent than ever.''
In court last week, Kaplan had noted that court documents showed the plaintiffs had planned to try to collect against Chevron in countries including the Philippines, Singapore, Australia, Argentina, Brazil, Colombia, Venezuela, Angola, Canada, Chad, China, Kazakhstan, Kuwait, Nigeria, Saudi Arabia, South Africa, South Korea, Belgium, Indonesia, the Netherlands, New Zealand, Russia, Trinidad, Tobago and the United Kingdom.
He said it appeared the plaintiffs planned ``to use the multiplicity and multiplication of legal proceedings all over the world to exert pressure above and beyond the inherent merits of the lawsuit.''
Kaplan said Chevron was likely to suffer irreparable harm from an effort to ``force Chevron to respond to five, 15, 25, a hundred countries around the world and have shiploads of oil or gasoline attached all over the place.''
Meanwhile, Wall Street has shrugged at the ruling. Analysts agreed that Chevron likely will pay something, but probably much less than the judgment and not for years.
``Based on the rhetoric we have seen on both sides in this case, we do not expect the matter to be settled for several years,'' Argus Research analyst Phil Weiss said in a research note. ``The shares hardly reacted to the ruling.''
Whatever the amount, it ``won't be much in proportion to Chevron's size,'' said Oppenheimer & Co. analyst Fadel Gheit, noting that Chevron's market value is $193 billion. ``Ecuador is a fly in the room. It's going to annoy the hell out of you, but it won't do very much damage.''
Investors remain enamored with Chevron's global petroleum operation, which includes a heavy amount of crude production. Weiss noted that for six consecutive quarters, Chevron has outperformed other major oil companies in profits at $18.90 per barrel. Analysts surveyed by FactSet have set an average price target of $107.94 per share for Chevron's stock. It closed Tuesday down 61 cents at $96.34 per share.
Associated Press writer Gonzalo Solano in Quito, Ecuador and AP Energy Writer Chris Kahn contributed to this report.