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Judicial Abuse

July 16, 2019

An appalling case of Canadian judicial abuse has finally come to a close, and in a welcome display of judicial reason, properly.

The case involves a lawsuit against a company for an offence. But the company not only didn't commit the offence, it was nowhere near the scene of the crime. And the offence had nothing to do with Canada. So how did the case end up here? Read on.

In 1992, the oil company Texaco, which operated as a partner in Ecuador with the government company, Petroecuador, turned over its operations to the Ecuadorian company and cleaned up its sites, while Petroecuador agreed to clean up the rest. So far, so normal.

But Petroecuador didn't clean up its sites, so Ecuadorian natives have suffered harm from them as well as from ongoing operations. Environmental damage to indigenous people? Someone must pay. But who?

Chevron. In 2001, Chevron purchased Texaco and lights went on in the "let's smash business" world of exploitative lawyers, one of whom bribed—that's a finding in a US court—the government of Ecuador to sue Chevron. Now just to be clear. Texaco had cleaned up its sites and Chevron never operated in Ecuador. Those inconvenient facts didn't deter the Ecuadorian courts from fining Chevron $9.5bn (yes, that's billion dollars) on the strategy that large companies will pay rather than go to court or face an orchestrated smear campaign.

But Chevron fought back. Because it had no assets in Ecuador, the lawyer who started the fight tried to have the case heard in the US. But those courts ruled that the Ecuadorian judgment against Chevron was the result of fraud, bribery, and corruption, which got the lawyer found guilty of precisely those charges. Undeterred, he tried courts in Brazil, Argentina, Gibraltar, and, yes, Canada. In Canada, the defendant was Chevron Canada.

Now let's recap. Chevron never operated in Ecuador. Texaco had remediated any pollution problems from its operations. The pollution that exists is from Petroecuador. And Chevron Canada is an independent company. But hey, none of that matters. Let's sue them anyway.

Unfortunately, while the courts in the other countries responded to the lawsuits with the Latin equivalent of "f-off," Canadian courts rolled over and said sure. We'll hear the claims. So our already clogged legal system got bogged down by a fight that should never have been. And our environmental and indigenous groups piled on to support their Ecuadorian "brothers and sisters."

But in a satisfying display of reason, the Ontario Court of Appeals finally dismissed the charges on the grounds that the Ecuadorian judgement, whatever its merits, cannot be imposed on Chevron Canada, which had nothing to do with the issue. When the Supreme Court of Canada refused to hear an appeal, the case finally ended. But why did Canadian courts supinely hear a case that had already been identified as fraudulent? I don't expect an answer soon.