With Canada's top court poised to rule in one branch of a global pollution-liability dispute, Chevron backed another one of its many legal foes into submission.
The San Francisco litigation consultancy H5, which had joined forces with U.S. plaintiffs' lawyers to attack Chevron over oil contamination in Ecuador, withdrew from the conflict and assigned its 1.25-per-cent interest in a pending $9.5-billion (U.S.) Ecuadorian judgment to the U.S. energy company. H5, of which the website lists its clients as including Cerberus Capital Management, Koch Industries and R.J. Reynolds Tobacco, issued a statement saying it had settled with Chevron after reviewing a March, 2014, ruling by a U.S. district court judge in New York who determined that the Ecuadorian litigation had devolved into an extortion conspiracy against Chevron.
"In view of these findings, among other reasons, H5 has decided it does not want to profit from the Ecuadorian judgment and is therefore relinquishing any interest in the judgment," H5 said. H5 denied any wrongdoing and said it had acted in "good faith."
In 2011, Steven Donziger, a New York lawyer and human-rights activist, won a $19-billion judgment in Ecuador (later halved) against Chevron, blaming the San Ramon, Calif., company for decades of pollution in the Amazon. The pollution case began in 1993 in the United States. Chevron refused to pay the Ecuadorian judgment, countersued Mr. Donziger and his clients in New York, and won an unusual ruling in March, 2014, that branded the Ecuadorian verdict a product of coercion, bribery and racketeering.
Before and since the March 2014 New York racketeering ruling, a series of former U.S. co-counsel, financiers, scientific advisers, and others have disavowed their work with Donziger and backed out of the long-running case – the most recent example being H5.
Donziger has denied wrongdoing and appealed the ruling branding him a racketeer. Meanwhile, his clients have taken their Ecuadorian judgment — which remains valid as far as the tiny Latin American country is concerned — and sought to enforce it elsewhere. They can't enforce it in Ecuador, because Chevron doesn't have any assets there the Ecuadorians could seize.
The global enforcement effort has exported the Ecuadorian case to Argentina, Brazil, and Canada, where Chevron does have assets. The Supreme Court of Canada is expected to rule as early as Friday on whether the Ecuadorian plaintiffs may move ahead with their demand that billions of dollars' worth of Chevron refining and production assets be sold off to satisfy an Ecuadorian judgment the U.S. judiciary has deemed a fraud. After 22 years, the dispute shows no sign of approaching resolution.