A U.S. appeals court has affirmed a RICO judgment against American attorney Steven Donziger, who sued Chevron in Ecuador on behalf of indigenous tribes who claimed they were harmed by decades of environmental pollution.
Chevron said in a statement on Monday that the United States Court of Appeals for the Second Circuit has unanimously affirmed a lower court decision that found that a $9.5 billion judgment against Chevron in Ecuador was the product of “fraud and racketeering activity.”
The court also ruled that the judgment is unenforceable in the United States.
The judgment was granted by an Ecuadorian court in 2011 after a group of villagers represented by Donziger brought a lawsuit alleging that Texaco was responsible for pollution in the Amazon rainforest.
Chevron has never operated in Ecuador but it acquired Texaco in 2001.
The appeals court found that the plaintiffs’ legal team was responsible for a “parade of corrupt actions.”
Those actions included coercion, fraud, and bribery, including a promise to pay an Ecuadorian judge $500,000 for a judgment in favor of the plaintiffs.
“This decision, which is consistent with the findings of numerous judicial officers in the United States and South America, leaves no doubt that the Ecuadorian judgment against Chevron is the illegitimate and unenforceable product of misconduct. Chevron is pleased that the truth has prevailed over fraud and corruption,” Chevron vice president and general counsel R. Hewitt Pate said on Monday.
The Ecuador judgment initially stood at $18 billion but was later reduced to $9.5 billion.
In 1992, Texaco reached an agreement with Ecuador to remediate some production sites.
As part of the agreement, state-owned Petroecuador was responsible for any remaining cleanup.
The Ecuadorian government oversaw and certified the successful completion of Texaco’s remediation and fully released the company from further environmental liability.
Chevron said on Monday that Petroecuador “failed to conduct” its cleanup and has continued to operate and expand oil operations in the former concession over the past 20 years.
The Ecuador judgment was overturned by a U.S. federal judge in 2014 after Donziger was found to have violated the federal Racketeer Influenced and Corrupt Organizations (RICO) Act.
The judge also found that Donziger had engineered a scheme to coerce Ecuador court officials and others involved in the case.
Donziger has denied any wrongdoing.
The Supreme Court of Gibraltar granted Chevron a $28 million award last year after issuing a judgment against Amazonia Recovery Ltd, a Gibraltar-based company established to receive and distribute funds tied to the judgment.
The court also granted a permanent injunction against Amazonia that prevents the firm from providing any assistance or support in the case against Chevron.