Chevron settles with California litigation firm over Ecuadorian lawsuit

Article updated on Sept. 4.

Chevron Corp. has reached a settlement agreement whereby H5, a California-based e-discovery and litigation services firm, has withdrawn its support from litigation against Chevron in Ecuador and assigned its 1.25% interest in the $9.5-billion Ecuadorian judgment to Chevron.

Chevron in 2014 obtained court-ordered discovery from H5 for the company’s role in supporting and advancing the lawsuit led by Steven Donziger.

H5 became involved in the case in 2009, helping enlist funding from UK-based litigation funder Burford Capital Ltd. and Gibraltar-based businessman James Russell DeLeon (OGJ, Mar. 2, 2015, p. 112), as well as helping bring the Patton Boggs law firm into the case to provide legal support. Burford, DeLeon, and Patton Boggs have all since withdrawn their support from the lawsuit and settled with Chevron.

H5 also assisted Donziger’s team in responding to Chevron’s discovery related to the Cabrera Report, an Ecuadorian court-ordered damages report that a US federal court later found was secretly authored by Donziger and Stratus Consulting, a Colorado-based environmental consulting firm. Stratus has also subsequently settled with Chevron.

On Mar. 4, 2014, Judge Lewis Kaplan of the US District Court for the Southern District of New York ruled that the $9.5 billion judgment against Chevron in Ecuador was the product of fraud and racketeering activity, finding it unenforceable in the US and holding Steven Donziger liable for RICO violations (OGJ, Mar. 17, 2014, p. 29).

In a public statement following the settlement with Chevron, H5 said, “Last year, Chevron obtained a ruling in its favor from US District Judge Lewis A. Kaplan in New York. Although H5 was not a party to that lawsuit, H5 has reviewed Judge Kaplan's extensive findings. In view of those findings, among other reasons, H5 has decided it does not want to profit from the Ecuadorian Judgment and is therefore relinquishing any interest in the judgment.”

Chevron still has claims pending in Gibraltar against Amazonia Recovery Ltd., a Gibraltar-based company set up to receive and distribute funds resulting from the Ecuadorian judgment, and Pablo Fajardo, Luis Yanza, and Ermel Chavez, who are directors of the company. Chevron alleges that Amazonia is a vehicle to perpetuate the ongoing fraud.

Separately, Canada's Supreme Court ruled on Sept. 4 that Ecuadorian villagers can sue Chevron in an Ontario federal court.

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