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NY judge rules for Chevron in Ecuador case

By Larry Neumeister

Associated Press

Published: Tuesday, March 4 2014 9:15 a.m. MST

NEW YORK — A federal judge on Tuesday blocked U.S. courts from being used to collect a $9 billion Ecuadorean judgment against Chevron for rainforest damage, saying the award was obtained through fraud.

U.S. District Judge Lewis A. Kaplan said it was a sad outcome for him to have to rule that the Ecuadorean court judgment "was obtained by corrupt means," because it will likely never be known whether there was a case to be made against the San Ramon, Calif.-based oil company.

"It is distressing that the course of justice was perverted," Kaplan wrote in a nearly 500-page ruling that followed a trial last year.

The case resulted from a long-running battle between Amazon rainforest residents and oil companies.

In February 2011, a judge in Ecuador issued an $18 billion judgment against Chevron Corp. in a lawsuit brought on behalf of 30,000 residents. The judgment was for environmental damage caused by Texaco during its operation of an oil consortium in the rainforest from 1972 to 1990. Chevron later bought Texaco.

Ecuador's highest court last year upheld the verdict but reduced the judgment to about $9 billion.

Chevron has long argued that a 1998 agreement Texaco signed with Ecuador after a $40 million cleanup absolves it of liability. It claims Ecuador's state-run oil company is responsible for much of the pollution in the oil patch that Texaco quit more than two decades ago.

The Ecuadorean plaintiffs said the cleanup was a sham and didn't exempt third-party claims.

Lawyers in the case did not immediately respond to email messages seeking comment on Kaplan's ruling.

The decision came in a lawsuit Chevron brought in Manhattan against a New York City lawyer, Steven Donziger, and two of his Ecuadorian clients to prevent any of them from profiting from what the oil company characterized as a fraud.

Kaplan on Tuesday barred Donziger and the other defendants from trying to collect the judgment through U.S. courts and said they may not take any actions to profit from the judgment.

During the trial, Donziger acknowledged that he stood to make about $600 million if the $9 billion judgment was approved.

Donziger did not immediately respond to a request for comment Tuesday.

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