Aguinda v. Chevron Texaco: Discretionary Grounds for the non-recognition of Foreign Judgments for Environmental Injury in the United States
By Lucien J. Dhooge
INTRODUCTION
In May 2003, forty-eight residents of the Sucumbios, Kichwa and Orellana provinces of Ecuador (Plaintiffs) filed a lawsuit against the Chevron Corporation (Chevron) in the Superior Court of Justice of Nueva Loja in the Sucumbios Province. The Plaintiffs' claims arose from past and ongoing environmental contamination resulting from oil and natural gas operations conducted by a consortium in which Texaco, Inc. (Texaco) participated from 1964 through 1992. The amount of damages sought by the Plaintiffs grew from $16.3 billion in April 2008 to $27.3 billion by November 2008. The Plaintiffs' attorneys have described the case as an opportunity to “re-allocate some of the costs of globalization . . . from the most vulnerable rainforest dwellers to the most powerful energy companies on the planet.” The breadth of the litigation characterized by this statement, the length of time associated with the prosecution of the claims, and the amount of damages have caused Aguinda to be labeled as the world's largest environmental lawsuit.
The value of any resultant judgment depends upon its recognition in the United States. The United States is perhaps the most receptive of any state to the recognition of foreign judgments. However, there are no applicable federal statutes or U.S. treaty obligations. Rather, the issue of whether to recognize a foreign judgment is governed by state law. The majority of states have addressed this issue through two statutes. Thirty-two states have adopted the Uniform Foreign Money Judgments Recognition Act of 1962 (1962 Act), while twelve states have adopted its successor, the Uniform Foreign-Country Money Judgments Recognition Act of 2005 (2005 Act). These competing statutes and the resulting patchwork of case law have rendered the area of recognition of foreign judgments in the United States unpredictable.
This article examines the status of any potential judgment in the context of discretionary grounds for non-recognition pursuant to the 1962 and 2005 Acts. The article initially examines the history of Texaco's investment in Ecuador's petroleum industry, the environmental impacts allegedly resulting from this investment, and the procedural history of resultant U.S. and Ecuadorian litigation. The article then examines the discretionary grounds for non-recognition in the Acts and their application to any potential judgment that may be rendered in Ecuador. The article concludes that Chevron may be able to establish several significant defenses to recognition. However, Chevron's burden is substantial and presents significant risks for the company.
In May 2003, forty-eight residents of the Sucumbios, Kichwa and Orellana provinces of Ecuador (Plaintiffs) filed a lawsuit against the Chevron Corporation (Chevron) in the Superior Court of Justice of Nueva Loja in the Sucumbios Province. The Plaintiffs' claims arose from past and ongoing environmental contamination resulting from oil and natural gas operations conducted by a consortium in which Texaco, Inc. (Texaco) participated from 1964 through 1992. The amount of damages sought by the Plaintiffs grew from $16.3 billion in April 2008 to $27.3 billion by November 2008. The Plaintiffs' attorneys have described the case as an opportunity to “re-allocate some of the costs of globalization . . . from the most vulnerable rainforest dwellers to the most powerful energy companies on the planet.” The breadth of the litigation characterized by this statement, the length of time associated with the prosecution of the claims, and the amount of damages have caused Aguinda to be labeled as the world's largest environmental lawsuit.
The value of any resultant judgment depends upon its recognition in the United States. The United States is perhaps the most receptive of any state to the recognition of foreign judgments. However, there are no applicable federal statutes or U.S. treaty obligations. Rather, the issue of whether to recognize a foreign judgment is governed by state law. The majority of states have addressed this issue through two statutes. Thirty-two states have adopted the Uniform Foreign Money Judgments Recognition Act of 1962 (1962 Act), while twelve states have adopted its successor, the Uniform Foreign-Country Money Judgments Recognition Act of 2005 (2005 Act). These competing statutes and the resulting patchwork of case law have rendered the area of recognition of foreign judgments in the United States unpredictable.
This article examines the status of any potential judgment in the context of discretionary grounds for non-recognition pursuant to the 1962 and 2005 Acts. The article initially examines the history of Texaco's investment in Ecuador's petroleum industry, the environmental impacts allegedly resulting from this investment, and the procedural history of resultant U.S. and Ecuadorian litigation. The article then examines the discretionary grounds for non-recognition in the Acts and their application to any potential judgment that may be rendered in Ecuador. The article concludes that Chevron may be able to establish several significant defenses to recognition. However, Chevron's burden is substantial and presents significant risks for the company.