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International Law

2nd Circuit Is Dubious re Claim That a Federal Judge Can Strike a Foreign Country’s $18B Judgment

Posted Sep 16, 2011 4:23 PM CDT
By Martha Neil

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It appears that the plaintiffs may be on the path to victory in a hard-fought international legal battle with Chevron Inc. over environmental damage done to the Ecuador rainforest by a predecessor oil company.

During a hearing today, three judges of the New York City-based 2nd U.S. Circuit Court of Appeals expressed skepticism over Chevron's position that a federal court should strike down an $18 billion verdict by an Ecuador judge earlier this year over alleged fraud on the part of the plaintiffs in the case, the Associated Press reports.

Although no ruling has yet been forthcoming, members of the panel doubted that U.S. District Judge Lewis A. Kaplan would have the power to permanently invalidate another country's verdict. If that is their eventual decision, a Manhattan federal district court trial on the issue scheduled for November presumably might not be held.

Otherwise, if a federal judge can strike a foreign judgment, that would mean U.S. courts have the power to "trump ... the law of every other country in the world," reasoned 2nd Circuit Judge Gerald E. Lynch.

However, attorney Randy Mastro, arguing for Chevron, insisted that alleged violations by plaintiffs counsel and the Ecuador legal system were so egregious that the court had both the power and the duty to protect his client. "I've never seen a record so shocking of illegal conduct," he told the appellate panel.

Meanwhile the Ecuadorian plaintiffs in the environmental case, represented by attorney James E. Tyrrell, are seeking to have Kaplan removed from the case, citing the judge's "unwillingness to have an open mind."

Earlier coverage:

ABAJournal.com: "2nd Cir OKs Temporary Ban on Plaintiffs’ Collection Efforts re $18B Enviro Judgment Against Chevron"

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