Will a Canadian Court's Chevron Ruling be a Knockout Punch to Donziger?

January 24, 2017

A Toronto, Canada court has now done what several U.S. courts have already accomplished: Slapped down notorious plaintiffs’ attorney Steven Donziger’s efforts at a legal shakedown of Chevron Corporation.

“A Toronto court has rejected a bid by Ecuadorian villagers to enforce a judgment in their home country against Chevron Canada Ltd, ruling the subsidiary is not liable for parent Chevron Corp, the U.S. oil major said on Friday,” reports Reuters.

Donziger has been the force behind long-running litigation against Chevron on behalf of plaintiffs in Lago Agrio (LAP). In 2014, the U.S. District Court for the Southern District of New York ruled that a $9.5 billion judgement Donziger had obtained against Chevron was the product of fraud and racketeering and, thus, unenforceable in the U.S.

The Second Circuit noted in its ruling that, “[t]he record in the present case reveals a parade of corrupt actions by the LAPs’ legal team, including coercion, fraud, and bribery.”

When Donziger appealed to the U.S. Court of Appeals for the Second Circuit last year, the court unanimously affirmed the lower court’s ruling. Then, last November, the U.S. Appeals Court of the Second Circuit denied Donziger’s petition seeking a rehearing of the court’s earlier decision.

And now, Canada’s courts have joined the U.S. in handing Donziger another defeat.

As Michael I. Krauss, law professor at Antonin Scalia Law School of George Mason University, notes in a Forbes column, the foundation of the Canadian court decision likes in the fact that Chevron Corporation does no business in Canada and had no assets to be attached there.

“In a sober and extremely well-reasoned opinion, (Judge Hainey of the Ontario Superior Court of Justice) ruled, in conformity with basic principles of liability respected around the civilized world, that the two corporations were distinct entities and that Chevron Canada Limited was not the defendant in the Ecuadorean case,” writes Krauss.  “Nor was Chevron Canada Limited established to shield Chevron Corporation from its obligations in any way.  Nor was Chevron Canada Limited a ‘puppet’ of Chevron Corporation.”

Added Krauss, “The court dismissed the case against Chevron Canada Limited for these reasons.”

With this Canadian court ruling, in addition to the U.S. courts ruling -- and affirming -- “fraud and racketeering” by Donziger, Krauss wonders if the brash plaintiffs’ attorney will finally be held accountable for what Krauss calls, “the fraudulent spoliation of American shareholders.”

“I'm still waiting for bar discipline to be meted out, and for federal criminal authorities to follow up on the RICO violations noted by the United States District Court,” writes Krauss.

Indeed.