Canadian Court Allows Chevron/Ecuador Enforcement Action, Australia Cuts EDOs, California Lead Paint Decision, EC Air Pollution Controls (by Bob Percival)

On December 17 the Ontario Court of Appeals ruled that an action to enforce a $9.5 billion judgment against Chevron by a court in Ecuador could proceed.  Plaintiffs representing 30,000 residents of Sucumbios province, Ecuador, who claim they were harmed by oil pollution won the judgment in February 2011.  Because Chevron has pulled all of its assets out of Ecuador, the plaintiffs have been seeking to enforce the judgment in Canada, Brazil, and Argentina.  In May 2013 a trial court in Ontario had stayed the enforcement action on the ground that Chevron’s Canadian subsidiary was a distinct corporate entity whose assets could not be used to satisfy a judgment against the parent corporation. The Ontario Court of Appeals reversed.  

First, the Court of Appeals rejected Chevron’s claim that Ontario itself must have a real and substantial connection to the subject of the litigation in order for the court to have jurisdiction to enforce an Ecuadoran judgment.  The court held that “the exclusive focus of the real and substantial connection test is on the foreign jurisdiction” and that Chevron action’s in Ecuador clearly met this test. Second, the court concluded that the trial judge improperly imported notions of forum non conveniens in ordering the stay by reasoning that the U.S. would be a better venue for enforcement. The court concluded by noting that:
“Even before the Ecuadorian judgment was released, Chevron, speaking through a spokesman, stated that Chevron intended to contest the judgment if Chevron lost. ‘We’re going to fight this until hell freezes over.  And then we’ll fight it on the ice.’ Chevron’s wish is granted. After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard on the merits in an appropriate jurisdiction.  At this juncture, Ontario is that jurisdiction.”

Chevron states that it is considering appealing the decision to the Supreme Court of Canada. 

The Australian government announced last week that it will eliminate all federal funding for Environmental Defenders Offices (EDOs) that bring public interest environmental litigation.  Some EDOs were told their funding would be cut immediately.  All federal funding of EDOs will be eliminated by July 1, 2014. The move is widely viewed as an expression of Prime Minister Tony Abbott’s hostility toward environmental protection measures.  Shortly after taking office in September his government abolished the Climate Commission, which focused on the science and economics of carbon pricing.  The Commission quickly was revived using private funds, which many hope also will happen for the EDOs.

Last week a federal jury in New Orleans convicted Kurt Mix, a former engineer for BP, of a single felony count of obstruction of justice for deleting more than 200 text and voice messages that the government argued contained important evidence concerning the 2010 oil spill in the Gulf of Mexico. The defense had argued that Mix did not intend to destroy evidence.  The jury acquitted Mix of a second count of obstruction of justice.  Three other current or former BP employees face criminal charges in connection with the spill.

A Superior Court judge in San Jose, California last week held three companies liable for marketing lead-based paint prior to it being banned in 1978. The lawsuit was brought by ten California cities and counties, including San Francisco, San Diego, and Los Angeles County.  The plaintiffs argued that the companies had known since 1937 that lead paint was dangerous to children’s health, but attempted to conceal its dangers.  Judge James Kleinberg found the companies liable for a public nuisance and ordered them to pay $1.1 billion to create a lead paint abatement program.  The defendants found liable were Sherwin-Williams Co., NL Industries, Inc. and ConAgra Grocery Products LLC.  Two other defendants - Atlantic Richfield and DuPont - were held not liable. Similar public nuisance claims against the manufacturers of lead paint have been unsuccessful in several other states.

Citing studies indicating that air pollution causes 400,000 premature deaths per year in Europe, the European Commission on December 18 released a draft of new air pollution controls. The new measures would impose tighter limits on air pollution from power plants and industrial sources and it would restrict the amount of pollutants each country could generate.  The Commission estimates that it would reduce premature deaths from air pollution by 58,000 per year by the year 2030.  Much of Europe is not complying with the EU’s existing air pollution standards, which will still be more relaxed than the levels recommended by the World Health Organization.

Last March China announced that it would become the first major developing country to adopt an ultra-low sulfur fuel standard for gasoline. On December 18 China’s Standardization Administration announced the new regulations to implement this decision.  The new standard, which will be known as “China 5,” will limit levels of sulfur in gasoline to 10 ppm, a significant drop from current regulations limiting sulfur in gasoline to 50 ppm.  However, the new standards will not take effect across China until January 1, 2018.


On December 19 the Supreme Court of Pennsylvania by a vote of 4-2 invalidated significant portions of the state’s Act 13 of 2012 that had attempted to bar local regulation of hydraulic fracturing operations.  Three justices found that the stricken provisions violate the public trust doctrine enshrined in Section 27 of the Declaration of Rights in the Pennsylvania Constitution. A fourth justice found that the provisions violate substantive due process.  The court declared that “a new regulatory regime permitting industrial uses as a matter of right in every type of pre-existing zoning district is incapable of conserving or maintaining the constitutionally-protected aspects of the public environment and of a certain quality of life.” Robinson Township v. Commonwealth of Pennsylvania (Supreme Court of Pennsylvania Dec. 19, 2013).