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D.C. Circuit Delivers Blow to Chevron in Ecuador Litigation

By Tanya Roth, Esq. on June 22, 2012 | Last updated on March 21, 2019

Earlier this month, the D.C. Circuit Court of Appeals dealt a small blow to big oil.

Chevron, as you may recall, has an $18 million liability in Ecuador. The oil company was sued by several Ecuadorean citizens who alleged that Chevron caused environmental damage in Ecuador.

In order to obtain expert reports to support their claims, the citizens hired Weinberg Group to provide data. Once Chevron was found liable in an Ecuadorean court, it accused the Weinberg Group of making fraudulent statements.

Chevron backed its accusations up with a lawsuit. The U.S. District Court for D.C. then decided that Chevron would be allowed subpoena documentation from the Weinberg Group.

The D.C. Circuit Court of Appeals reversed the lower court decision on June 12, making it more difficult for the oil giant to fight its case that the expert testimony in the Ecuadorean case was fraudulent.

Three United States circuit courts have been hearing Chevron's cries of fraud and all three have let Chevron cry. Both the Second Circuit Court of Appeals and the Third Circuit Court of Appeals have also shot down the fraud arguments.

In reversing down the district court's holding, the D.C. Circuit Court of Appeals stated that the lower court failed to explain which facts supported the court's conclusion that Chevron was entitled to the documents. The D.C. Circuit also criticized the legal test used by the court to come to its conclusion.

Chevron has yet to pay the Ecuador liability. By claiming that the Ecuadorean judgment was reached through fraud, Chevron has essentially delayed the payment of the multimillion dollar judgment.

More Chevron judgments have come out of the D.C. Circuit this week, so we'll have more on the litigation soon.

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