George, thanks for the comment. To answer the first question, the reason Texaco’s statements about the Ecuadoran courts long ago might matter, in my view, is that Texaco’s statements were the basis for the decision to send the case to Ecuador in the first place. The basic idea has a fancy name, estoppel, which stands for the idea that it’s not fair to say something that leads to a favorable outcome for you (and a bad outcome for your adversary) and then say the opposite later. You can find a lot of posts by me and others on Letters Blogatory that take various views on whether estoppel should apply here.

PetroEcuador has not done any remediation since they blew off Texaco 20 years ago. Texaco did clean up their sites (they had a minority stake 33%) and Ecuador certified and released Texaco from any future liability in 1998.

The LAPs have certainly been harmed, but will be lucky to see crumbs if Chevron settles. Donziger sold most of the settlement to investors and consultants as contingency fees. Of course, one by one the investors turned against Donziger and some ended up as witnesses for the defendant in the RICO case. Chevron now owns most of those shares. Ted … come on, you’re missing the juicy stuff.

http://www.law360.com/articles/698876/h5-turns-over-share-of-9-5b-donziger-judgment-to-chevron

http://www.law360.com/articles/668459/donziger-case-belongs-in-ecuador-ny-appeals-court-says

Thanks, Doug. I will check the chronology on that but I assume you are correct. I’m not sure what the point gets you, though. The point from my perspective is that the Ecuadoran courts themselves solved the problem. The last paragraph of your comment suggests that a court that makes a whopper of a bad decision should not be entitled to recognition and enforcement here just because the decision was bad, but of course that’s not the test, and having seen some whoppers from US intermediate appellate courts in my small experience I would not want foreign courts to apply your test to our judgments!

Dear Ted,

I have now had a chance to read your impressive summary of this sprawling litigation. One point, however, calls for correction. You report that the intermediate appellate court cut the trial court’s judgment in half, from over $18 billion down to $9 billion, and that Chevron then appealed to Ecuador’s Supreme Court (which is called the “National Court”).

This is not accurate. In fact, the appellate court upheld the full amount of the trial court’s judgment. Only later did the National Court cut the judgment in half, by eliminating the punitive damages component, which the trial court had erroneously employed to double the amount of the judgment.

This might seem like a minor detail. However, in view of the arguments by Donziger’s lawyers before the Second Circuit, it takes on more importance than one might expect. Donziger’s lawyers argue that, whatever fraud might have infected the trial court (which they of course deny occurred), the fraud was cured by the appellate court, where they assert there was no evidence of fraud.

In that context, the fact that the appellate court did not do what the National Court later did — cut the judgment in half, by eliminating the punitive damages award — is telling. The trial court’s $9 billion punitive damages award was an egregious error. Ecuadorian law does not allow awards of punitive damages (nor do the laws anywhere else in Latin America). For Ecuador’s appellate court to let stand this obviously illegal award, was judicial malpractice on the order of a US appeals court allowing a criminal penalty to stand in a civil case.

The fact that the appellate court left this colossal blooper untouched speaks volumes as to that court’s lack of competence, integrity, and independence. On this ground alone (not to mention the others cited by Chevron and mentioned briefly by Ted Olson in the Second Circuit oral argument), Ecuador’s appellate court forfeited any pretension to be taken seriously.

Peter, I think these are the key problems. What happens to the Ecuadoran judgment? Can the case really be tried so long after the event?

I think the first problem could be resolved by some kind of stipulation or other procedure under Ecuadoran law—maybe. The practicalities of the trial would be more difficult. These kinds of difficulties were at the heart of my skepticism about the idea: I’m not sure it’s ever been done before.

But I do think it’s useful to ask, as I’ve tried to do, whether Chevron would have any cause for complaint, given the reasons why we are where we are, assuming the problem of the outstanding Ecuadoran judgment could be worked out.