Great news today, except that the progress it represents is only the reversal of a terrible and unjust turn of events that never should have happened in the first place. Canadian courts have been hearing an action to recognize/enforce the historic Ecuadorian environmental judgment against Chevron Corp. for over five years now. Last month, a Canadian appellate motions judge somehow decided it was “in the interests of justice” to order the indigenous and subsistence farming communities who I represent, and who have been pursuing justice for a total of over 25 years, to post a bond of $1 million for Chevron’s legal fees, if they wanted to continue their case.

Needless to say, the whole plan, devised by Chevron, was to kill off the enforcement action in Canada. Obviously there is no way the communities (or any of the backers who have supported them over the years with much smaller levels of support) could come up with that kind of money. The fact that Chevron came up with the plan was not surprising; the fact that an appellate judge ran with it, “in the interests of justice,” was shocking.

Thankfully there is a “motion to vary” procedure in Canada that allowed the Ecuadorians to take the issue to a separate three-judge panel. Still the odds were against them, because the panel would review the motions judge’s discretionary decision with considerable deference.

The panel reversed — and loudly, in a decision that hopefully charts a new course for proceedings in Canada.

What to make of it?

Ultimately, the enforcement case in Canada is fundamentally about legal fiction versus historical reality. The massive contamination that you can still see at Chevron’s former operations sites is historical reality. The gravesites of (a statistically elevated number of) cancer victims in Ecuador is historical reality. But for over five years, Chevron has been resisting enforcement on the basis of layer upon layer of legal fiction:

• the fiction that Chevron Corp has “no assets” in Canada, itself based on seven fictional layers of subsidiaries between Chevron and Chevron Corp.;
• the fiction that Chevron is not responsible for the acts of its merger partner, Texaco;
• and the countless fictions embedded in its unapologetic “demonization” campaign against the Ecuadorians, which pretends that the environmental case is a “sham” or a “fraud,” that it’s about “American plaintiffs lawyers” not Ecuadorian victims, that the Ecuadorian court system is “incompetent” and “corrupt” (even though Chevron itself had the case sent there), and so on.

The panel chose the side of reality. In its decision, it repeatedly instructs on the importance of “taking a step back” from the narrow legalism that Chevron used to win before the motions judge and instead “conduct a holistic analysis” that “considers all the circumstances of the case.” When all those circumstances are allowed to enter the courtroom, the picture changes dramatically.

• This case is not about “plaintiffs lawyers.” Little research is required to see that this is an historic case, long supported and driven by social movements in Ecuador and indigenous and non-indigenous allies all over the world. “This is public interest litigation,” the panel acknowledged. So simple, and yet somehow Canadian courts had forgotten this.
• Chevron doesn’t need its legal fees paid. How obvious is this? And yet, nary a word was said in all prior decisions on the issue. The panel confronted it directly: “Chevron Corp and Chevron Canada have annual gross revenues in the billions of dollars. It is difficult to believe that either of these two corporations . . . require protection for cost awards that amount or could amount to a miniscule fraction of their annual revenues.”
• This motion was never really about the costs – it was a strategic attempt to kill of the entire litigation. Again, blindingly obvious, yet no earlier court dared speak this truth. Focusing again on the “holistic” entirety, the panel did not shy away: “Chevron Corporation has and, it may be anticipated, will employ all available means to resist enforcement of the Ecuadorian judgment. This, of course, is within its rights. However, this reality makes it difficult to accept that the motion for security for costs was anything more than a measure intended to bring an end to the litigation.”
• The Ecuadorian environmental judgment is at the center of this case. It is, after all, the judgment being enforced. Yet the motions judge never referenced the substance of the Ecuadorian judgment, instead relying repeatedly on the collateral attack judgment that Chevron obtained from its home country courts after it lost the Ecuadorian case. The judge’s reliance on a U.S. judgment, no matter how suspect (among other troubling features, the U.S. judgment relied on illegally paid-for “fact” testimony that has now been debunked), instead of even considering the Ecuadorian judgment at the heart of the proceeding points to the deeply-rooted issues of implicit bias that Canadian courts have long struggled with in dealing with aboriginal claims and developing country courts. The panel, by contrast, properly ignored the collateral attack judgment and instead noted that the Ecuadorian judgment’s findings have not,  in fact, been “undermined” at all in Canadian courts. “Accept[ing] the finding that underlie the Ecuadorian judgment,” the panel noted, it would be especially perverse to order the Ecuadorians to pay Chevron’s legal fees because the Ecuadorians are impoverished in part due to the very acts of Chevron/Texaco itself.

The panel charts a new course. Now, the Ontario Court of Appeal did just that three years ago, when it reversed the last round of erroneous decisions by a Canadian trial court judge unwilling to call Chevron to account for its countless abuses. It was affirmed by the Canadian Supreme Court — but then, it was back down to another hesitant trial judge, starting the whole process over again, losing years in the process. As noted, we are over five years into the enforcement case in Canada and we still haven’t finished dealing with preliminary challenges in what is supposed to be a “streamlined” enforcement/recognition process.

The Ecuadorians are still living through a miscarriage of justice in Canada. The Canadian courts re-emerged from the realm of pure fantasy with today’s reality-based decision, but a hard, very real mountain of challenges remains. Much more to be said when time allows…