Chevron RICO Suit, Rehearing Denied in Kiobel, Legal Victory for Chinese Organization, India Steel Mill Approved (by Bob Percival)

On February 1 the Chevron Corporation filed a Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit against the plaintiffs, lawyers and environmental consultants for the plaintiffs in the Ecuador litigation over oil pollution of the Oriente region. The lawsuit was filed in federal district court for the southern district of New York. Chevron charges the defendants with a conspiracy to commit fraud by bringing “sham litigation” to extort money from Chevron by seeking damages for oil pollution of the Oriente region of Ecuador. Chevron is asking the court to declare that any judgment against it by the Ecuadoran court will be the result of fraud and therefore unenforceable.  Chevron also is asking the defendants to pay its litigation costs. A copy of Chevron’s complaint is available online at: http://www.scribd.com/doc/48005141/2-1-11-Chevron-RICO-Filing. RICO litigation usually is brought against suspected members of organized crime. While I am familiar with SLAPP suits, Chevron’s litigation tactics seem to rise to a whole new level. What a contrast between Chevron’s litigation tactics in this case and its current multi-million dollar “We Care/We Agree” advertising campaign, which is parodied in an ad reproduced on my parallel website at: http://www.globalenvironmentallaw.com.

On Friday February 4, the U.S. Court of Appeals split 5-5 on the question of whether the court should rehear en banc the Kiobel case that in September produced a 2-1 panel ruling that corporations can never be held liable for violations of international law and thus are immune from suit under the Alien Tort Statute (see Oct. 4, 2011 blog post). Thus, by a single vote, the court denies a rehearing en banc, meaning that the U.S. Supreme Court is the only remaining avenue for the plaintiffs to challenge the panel decision. Of some significance should be the fact that Judge Katzmann, whose decision in Khulumani v. Barclay National Bank Ltd., 504 F.3d 254 (2d Cir. 2007), was cited by the Kiobel majority, filed a separate dissent from the denial of rehearing disagreeing with the Kiobel majority’s interpretation of this decision.

Steve Wolfson, on of EPA’s top international attorneys, informs me that on December 30, 2010, the people’s court of Qingzhen city in the Guizhou province of China granted the All China Environment Federation an important legal victory in a lawsuit against a polluting paper mill. The law suit is significant because it is the first time that Chinese courts have allowed a lawyer’s organization to bring a successful action to redress harm from pollution. The Chinese court found that the paper mill had illegally discharged pollutants into a river and ordered that the mill be closed. The U.S. has recognized the standing of organizations to sue on behalf of individual members, which survived by a single vote an effort by the Reagan administration to abolish organizational standing in United Automobile Workers v. Brock, 477 U.S. 264 (1986).

EU authorities have recovered 7.5 million Euros worth of carbon dioxide emissions allowances stolen from the EU’s Emissions Trading System (ETS) in a hacking attack that originated in Austria. Following the attacks, which resulted in the theft of 29 million Euros worth of allowances spot trading in the EU ETS has been suspended since January 19. Flemming Emil Hansen, Authorities Recover Stolen Emission Credits, Wall St. J., Feb. 1, 2011. The recovery sets the stage for the reopening of EU carbon trading markets this week. Markets in Germany, France, the Netherlands and the U.K are expected to be the first to reopen trading. The EU ETS covers 12,000 steel, cement, and power plants and oil refineries that account for nearly half of the EU’s emissions of greenhouse gases. John W. Miller, Europe Emissions Markets Set to Reopen After Thefts, Wall St. Journal, Feb. 2, 2011, at A14.

On Monday January 31, the Indian Ministry of Environment and Forests approved construction of a long-delayed port and steel plant to be constructed by South Korea’s Posco in the Indian state of Orissa. The $12 billion project will be the largest single direct foreign investment in India to date. While approving the project, Jairam Ramesh, India’s environment minister, stressed that “laws on the environment and forests must be implemented seriously.” Environmentalists, tribes, and villagers who have been opposing the project reacted with anger to the decision. They have filed a lawsuit, which is still pending, to stop the project. Vikas Bajaj, India Approves $12 Billion South Korean Steel Mill Project, N.Y. Times, Jan. 31, 2011.