Chevron-Ecuador: The Jarndyce v. Jarndyce of the 21st Century

Here is an excerpt from my report on the Chevron-Ecuador Panel at this year’s ASIL meetings, published over at ASILcables.org:

In my view, the best way to understand Chevron v. Ecuador is as a marriage gone horribly wrong, where, as usual, the children are the biggest losers.  In this case, the “children” are theLago Agrio plaintiffs, most of whom are part of an Ecuadorian indigenous group and, as Prof. Judith Kimlinger of CUNY reminded the audience, the  real injured parties in this case.  These plaintiffs have borne the vast brunt of physical and environmental injuries resulting from the partnership between Chevron and Ecuador.   For most of the time that Texaco (which was acquired by Chevron after all of the key events had already occurred) operated in Ecuador, they did so in an effective partnership with the PetroEcuador, the state-owned enterprise formed by the Ecuadorian government.   This marriage/partnership lasted for decades, before it was terminated in 1990.  And although there was a “separation agreement” that included provisions to remediate areas that suffered pollution, both parties have accused the other of failing to fulfill its duties.  Things began to get out of hand in the late 1990s when a new law was passed in Ecuador making the domestic litigation against Chevron possible, and ultimately resulting in the massive (possibly fraud-laden) $18 billion judgment.