Epic Ecuadorian environmental suit against Chevron lands in Toronto court

OTTAWA – The black sludge that seeped into an Ecuadorian rainforest a generation ago will spark a fresh round of legal mudslinging Thursday as an epic $19-billion environmental lawsuit makes its Canadian courtroom debut.

The Ontario Superior Court in Toronto will be the latest venue in the bitter 19-year legal fight between Chevron Corp. and the dozens of Ecuadorian Amazon villagers who won a massive pollution judgment against the oil giant.

This past January, Ecuador’s highest court upheld an award to the villagers for damages for contamination in the country’s Amazon region between 1972 and 1990 by Texaco, which Chevron bought in 2001.

Chevron has vowed not to pay a cent of the judgment because it contends Texaco dealt with the problem before it bought the company, and maintains it was the victim of a fraudulent court proceeding.

The villagers are hoping to collect on the judgment in Canada because Chevron has billions of dollars worth of assets here, including a 20 per cent stake in the Athabasca oilsands and a string of service stations in Western Canada.

The Ecuadorians have enlisted some big guns of their own as they launch their Canadian offensive against Big Oil: their lawyer is Alan Lenczner, a high-powered Bay Street veteran whose current clients include Toronto Mayor Rob Ford.

The villagers have also armed themselves for what has been an ongoing war in the court of public opinion. They’ve hired a Washington-based public relations firm, whose owner cut her communications teeth in the Clinton administration.

“Our clients have come to Canada knowing that it has an excellent legal system known the world over for its adherence to the rule of law,” Karen Hinton, the U.S. spokeswoman for the Ecuadorians, said Tuesday.

“While Chevron as always has hired a high quantity of extremely able lawyers, no amount of courtroom firepower can overcome the fact the company needs to pay for the death and suffering it has caused to vulnerable rainforest communities.”

In talking points, Hinton outlines where in Canada the Ecuadorian plaintiffs believe they can find their settlement money.

“These assets include a 20 per cent interest in the Athabasca oil sands project, which has the capacity to yield 255,000 barrels per day and supplies 10 per cent of Canada’s oil needs; a minority interest in the Hibernia project, which is Canada’s largest offshore drilling field; and the Ells River exploration, which covers 75,000 acres and contains an estimated 7.5 billion barrels of oil.”

Chevron spokesman Kent Robertson fired back this week from company headquarters in San Ramon, Calif.

“We believe the Ecuador judgment is a product of bribery and fraud,” he said. “It is no more legitimate than the plaintiffs’ lawyers’ meritless attempt to collect in Canada.”

Chevron’s lawyers are arguing that the Ontario court does not have jurisdiction to consider the case.

“Moreover, these circular arguments ignore the fact that Chevron Canada had no involvement with and derived no benefit from the operations in Ecuador,” says a Chevron factum.

“As such, even on the plaintiffs’ theory, there is no ground on which Chevron Canada should bear the burden of operations conducted long ago by a subsidiary of Texaco in Ecuador.”

Justice Laurence Pattillo will have two full days, starting Thursday, to hear legal arguments.

“The plaintiffs do not allege any wrongdoing against Chevron Canada. The action is for collection of a judgment debt,” says the statement of claim that Lenczner’s firm filed earlier this spring.

After filing suit in Canada this past May, the Ecuadorians launched similar legal actions in Argentina and Brazil.

Earlier this month a judge in Argentina froze Chevron’s assets there until the $19 billion is collected.

The Supreme Court of Canada has upheld the principle that foreign court judgments are enforceable in Canada as long as there is a “real and substantive connection” between the foreign jurisdiction and the subject matter of the claim.