Chevron Wins Again

(Update:  See Roger Alford’s comments at Opinio Juris blog, particularly his discussion regarding “comity” with respect to Judge Kaplan’s order.)

The long-running cross-border case of the judgment against Chevron in Ecuador took another turn, and this effectively another big win for Chevron:

Judge Lewis Kaplan of the U.S. District Court in New York has made no secret of his distaste for lawyer Steven Donziger’s tactics in the Chevron/Ecuador case. Yesterday he put a worldwide hold on Donziger and his Ecuadorean clients against enforcing an $18 billion verdict they recently obtained in that country.

Kaplan wasn’t entirely dismissive of the plight of Ecuadorean villagers who claim Chevron’s predecessor, Texaco, polluted their lands in an oil-drilling program that ended in 1990. He ordered the global oil giant to submit a bond of $21.8 million, representing six months’ interest on $18 billion at the microscopic 3-month Treasury rate of 24 basis points. But he rejected arguments that he lacked the jurisdiction to bar the plaintiffs from proceeding on a worldwide campaign to enforce the judgment, saying “the motive for this strategy is not only to collect on the judgment …but to attempt to coerce Chevron to settle the case quickly to avoid this harm.

Judge Kaplan’s 130 pages or so order makes for fascinating reading.  The pdf can be found here.

Looking beyond this particular litigation, the problem at issue – at its most high altitude – is what policy to adopt with respect to court systems, legal systems and most broadly rule of law in different countries around the world.  The question in the Ecuador case is in the first place where the case should be heard, by whom, under what law, and whether one country’s courts should, in any case or particular cases, enforce judgments from another court.

There is no general system of the cross-border enforcement of final judgments.  It is not a matter of international law as such at this point in time; there is no widely adhered-to treaty that would establish the rules for this, for example.  Again looking to the high altitude problem, the general starting point of international law is the sovereign equality of states.  The problem is when we really believe that and when we don’t.

Extradition, for example, forces court systems in one state to have to think hard about whether the court system and judicial process in another state meet basic standards of fairness and the rule of law – and, for that matter, whether the fact that they in some sense meet basic standards but do not actually provide the same extensive guarantees as, say, the Bill of Rights disqualifies them from being permitted to extradite a suspect.

Enforcement of civil judgments raise similar issues of the conflict between an international law starting point of sovereign equality, whereas the actual circumstances of states leads states and their courts to draw lines between those “sufficiently like us” in the rule of law to warrant dealing with them as we do our own, more or less, and those with whom we don’t.  Judge Kaplan has been tasked to make that kind of judgment with regards to the courts of Ecuador in this litigation, and it seems fairly clear that he finds them quite lacking.