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The lawsuit was filed because Texaco will not agree to fund an adequate cleanup of the contamination it caused. The residents of Ecuador who live in the affected region have sought for many years to convince Texaco to clean up the pollution and to install proper waste-disposal technology. After having their efforts rebuffed, the residents decided their best chance of obtaining relief was to file a lawsuit against Texaco at the site of its headquarters, in New York. About 70 affected individuals signed the lawsuit, which was filed in November of 1993 and titled Aguinda v. Texaco after Maria Aguinda, the lead plaintiff. (Ms. Aguinda and members of her family are pictured on the Home Page under Updates). The 70 plaintiffs are acting as representatives of a class of approximately 30,000 people who live in and around the area where Texaco operated, and who all suffer from the same types of health and other problems associated with toxic contamination. The residents hope that the lawsuit, currently before the Honorable Jed R. Rakoff, will force Texaco to provide them relief in three primary areas: (1) a cleanup of the existing contamination, including the closing of all unlined waste pits in the area where Texaco operated; (2) the installation of re-injection wells so that the discharges of the toxic water by Texaco's successor company, PetroEcuador (the state oil company that inherited Texaco operations in 1992) cease; and (3) compensation for personal injuries to those affected, including the payment of medical treatment for cancers and other damages, payment of damages caused to land and culture by the pollution, and the financing of a fund for medical monitoring. The residents also want Texaco to install a system of potable water in the region, given that their historical sources of drinking water are now contaminated. Thousands of Peruvian residents who live down river from the contamination have filed a separate lawsuit against Texaco seeking similar relief. That case, called Jota v. Texaco, is also pending before Judge Rakoff in federal court in New York.
Experts estimate that installing the proper technology to reinject the waste water into the ground will cost Texaco several hundred million dollars. On top of that, there is the cost of cleaning up the existing pollution, paying residents compensation for their medical problems and lost wages, and restoring some sense of balance to the ecosystem for the indigenous tribes can again flourish. It is estimated that the cost to cleanup and compensate individuals could exceed $1 billion. If the case goes to trial, Texaco might also be forced to pay punitive damages.
The Ecuadoran residents who are suing Texaco believe that federal court in New York is far and away the most appropriate forum to hear their claims. First, the Ecuadoran government supports the right of the plaintiffs to sue Texaco in the United States and has asked the federal court to accept jurisdiction over the case. Second, the decision to install the defective technology in Ecuador and build the waste pits for the toxic water was made in Texaco's headquarters in New York. Third, most of the pertinent evidence is in the United States. This includes documents and records of Texaco's operations in Ecuador (which only an American court could make available as evidence for trial), and Texaco's managers of its Ecuadoran operations, who either live in the United States or in countries other than Ecuador. All of the expert witnesses live in the United States. Moreover, Texaco no longer has operations or assets in Ecuador. It left the country in 1992 when its contract with the Ecuadoran government expired. In addition, Ecuador's courts have a long history of discriminating against low-income persons and indigenous tribes who press claims against the oil industry. Finally, Texaco's headquarters are only a 15-minute drive from the federal courthouse in White Plains, New York. Despite this, Texaco continues to argue that a one-room courthouse in the Ecuadoran Amazon — a 14-hour drive by car from Ecuador's capital — is a more convenient forum to hear the case than federal court in New York just down the street from its headquarters. Perhaps because of these facts, The New York Times published a staff editorial on February 19, 1999 calling for the federal court in New York to hear the case in the United States. The paper's editorial said: "Ecuador's courts cannot handle the case or enforce a judgment ... This case belongs in an American court, where the contesting claims can be fairly weighed."
The lawsuit was filed by Cristobal Bonifaz and Joseph C. Kohn, co-lead counsel in the case. Mr. Bonifaz is an Ecuadoran native who is now an American citizen living in North Conway, Massachusetts. Mr. Kohn is a partner in the Philadelphia law firm of Kohn, Swift & Graf. Mr. Kohn's firm has led several groundbreaking class action cases involving human rights issues, including the recent litigation over human rights abuses committed by the dictatorship of Ferdinand Marcos in the Philippines. Mr. Bonifaz has a long history of advocating for environmental and other causes in Western Massachusetts. In the early 1990s, some of Mr. Bonifaz's family members in Ecuador alerted him to the toxic residue that had been left behind by Texaco after it withdrew from Ecuador. The problem was also described in vivid terms in the book Amazon Crude, written by Judith Kimerling, an environmental activist and lawyer. Mr. Bonifaz and other members of the legal team traveled to Ecuador to talk to some of the victims and to take water samples to determine levels of contamination. After seeing the results of these water samples, and observing the alarming medical conditions of some of the victims, Mr. Bonifaz and Mr. Kohn agreed to take the case and pursue a legal remedy in the United States. The scientific report released by this mission can be viewed in the Case File section. Other lawyers representing the plaintiffs include John Bonifaz, Mr. Bonifaz's son and the director of the National Voting Rights Institute in Boston, Martin D'Urso of Mr. Kohn's firm, and Steven Donziger, a New York City-based attorney who is of counsel to Mr. Bonifaz's firm.
The complaint (the legal document that initiates the lawsuit and which contains the legal claims) utilizes both international human rights law and traditional tort law. The traditional "tort" claims allow any person to sue when that individual is wronged due to the negligence or recklessness of another entity, be it a person or a corporation. A tort can be as simple as someone suing a next-door neighbor for dumping their dishwater over a fence, thereby damaging a plush garden. On a grander scale, this is why the Ecuadorans are suing Texaco: Texaco severely damaged their natural ecosystem because of the company's negligence and recklessness in the way it dumped the toxic waste water on their lands. The international law claims rely primarily on a federal statute called the Alien Tort Claims Act, which became law in 1789. This statue allows someone from another country to sue in federal court in the United States for a violation of international law. The original law was designed primarily to combat piracy on the high seas; the complaint alleges that Texaco's actions in the Amazon amount to form of modern-day piracy in that the company took advantage of a defenseless populace to destroy their land and property for economic gain. More recently, the law has been used successfully to sue individuals from repressive countries who violate traditional human rights, such as the right to be free from torture. This is one of the first cases where the law is being applied to an American company acting in its private capacity; it is also one of the first cases to advance the theory that a right to a healthy environment is part of customary international law. The lawsuit also alleges that Texaco violated international law because its decision to dump massive amounts of toxins in the rainforest has led to cultural genocide among three indigenous tribes, and amounts to racial and ethnic discrimination against the local population (Texaco never utilized this dumping practice in the United States). What is most important is that both the common law "tort" claims of negligence and recklessness, and the separate statutory claim based on the Alien Tort Claims Act, independently provide jurisdiction for the Ecuadoran plaintiffs in federal court in New York. Thus, the court does not have to allow both traditional "tort" claims and the Alien Tort Claims Act to stand for the case to proceed in the United States. It can choose one or the other, and the case can still go forward.
One of the claims asserted in the lawsuit is based on the Alien Tort Claims Act ("ATCA"), a 1789 law that allows foreigners to sue in U.S. Federal court for violations of international law. The plaintiffs have argued that the ATCA alone provides a basis for jurisdiction in the United States. In order to prevail on this claim, the residents of Ecuador must demonstrate that Texaco violated international law by dumping toxic waste water in the Amazon. There are three separate international human rights law principles that the plaintiffs claim Texaco violated. The first principle is the right to a healthy environment, enshrined in many recent international treaties and agreements. The second principle protects peoples from cultural genocide. Because Texaco's oil production in Ecuador has led to the near extinction of three indigenous tribes, the plaintiffs assert that the company is in violation of this principle as well. The third principle protects people from racial and ethnic discrimination. The plaintiffs claim that Texaco violated this principle because the company used primitive oil production techniques in Ecuador that it did not use in the United States and elsewhere. There are many treaties and practices that provide an international consensus to support these three legal principles. A more detailed explanation of the human rights claims can be found in the Case File, under Legal Documents, specifically the briefs filed in the case by the clinic at the Boston College School of Law , and the Environmental Defense Fund , and the sworn affidavit filed by Professor Diane Shelton. Even if the ATCA claims are rejected by the court, there is a legal basis for the case to proceed anyway in the United States. This is because it was in the United States that Texaco conceived and executed the plan to dump toxins into the Ecuadoran rainforest, and because Ecuador's courts effectively bar the case on procedural grounds. See Why file the case in the United States?
There are three indigenous communities that live in the area where Texaco operated: the Cofan (on whose lands Texaco opened its first well in Ecuador), the Secoya, and the Siona. These peoples have developed distinct cultures and traditions that are inextricably linked to the abundance of the rainforest where they have lived for thousands of years. Texaco's toxic discharges have literally propelled these cultures to the brink of extinction. The Cofan, who numbered approximately 15,000 people when Texaco built its first well in Ecuador on Cofan territory in 1971, have seen disease and forced migration reduce their population to a few hundred. The Secoya and Siona also have seen a dramatic decreases in their populations. The impact of the contamination on the primary rivers in the area —the Aguarico and the Napo — indicates why these indigenous cultures are tottering as a result of Texaco's practices. The three aforementioned tribes have lived off of the riches of these two rivers and their tributaries for thousands of years — for food (fish), hygiene (bathing), and transport. In scarcely more than two decades of oil development, these rivers have been rendered virtually useless as sources of nourishment. Because of the oil contamination, the indigenous peoples can no longer fish in the rivers. This has forced them to turn all of their attention to the hunt for animals, which has so decreased the gaming population that there is not enough food for adequate nourishment. As a result, young people are moving away to the cities, where they take (if they can find them) low-paying entry-level jobs in a cash economy. Often, indigenous peoples will do cleanup work for the very oil companies whose contamination has forced them to leave their historical lands. Among other claims, the plaintiffs have asserted that Texaco's actions have amounted to cultural genocide, a violation of international human rights law and one of the bases for jurisdiction under the Alien Tort Claims Act.
The consequences of Texaco's toxic discharges have created an ongoing and worsening public health crisis in Ecuador's Amazon region. Recently, health workers have documented an increase in serious health problems in this area, including an upswing in cancers, spontaneous abortions, and birth defects. In mid-February of 1999, one community of only 500 persons, in which Texaco had operated several wells, reported 15 cases of cancer. In another community where Texaco operated, four women —all younger than 40— reported uterine cancer. It is hard to find a child in the region who does not have a skin rash of some sort from the exposure to toxic chemicals produced by oil drilling. Such rashes are often precursors of more serious illnesses, including cancer. In addition, the economic dislocation caused by the pollution has had terrible public health consequences. As a result of the contamination of the rivers, the fish population has dwindled and malnutrition is more common. Many indigenous peoples have been forced by the scarcity to leave their historical lands to pursue work in the cities. This process has ripped apart the fabric of many cities and accelerated the rate of disease.
Because of a new law and multiple procedural restrictions, it is highly unlikely the victims will be able to obtain relief for all of their damages in Ecuador's courts. For one, Ecuadoran procedural law prohibits the filing of class action lawsuits. This means that each of the 50,000 affected individuals would have to file their own lawsuit, an impossibility given that there is only one judge and one courthouse in the largest town in the region (where Ecuadoran law requires that the lawsuits be filed). Ecuadoran courts also have many procedural bars to civil lawsuits like this one. For example, neither side can call an expert witness; there is no pre-trial discovery by the parties, which makes it unlikely Texaco would have to produce evidence pre-trial; and the largest fine that can be imposed on a party for violating a court order is about $50 at current exchange rates. As a result of procedural restrictions like these, an Ecuadoran court never has awarded a judgment to an individual suing a company over environmental damage. Indeed, there has never been a single class action case in Ecuador. Finally, Ecuador depends heavily on oil revenues. Law enforcement agents and soldiers in the country have a history of intimidating people who have tried to make legal claims against the oil industry. The plaintiffs in this case believe they would be subject to the risk of threats and retaliation if they were to file the case in Ecuador. Perhaps because of these facts, The New York Times published a staff editorial on February 19, 1999 calling for the federal court in New York to hear the case in the United States. The paper's editorial said: "Ecuador's courts cannot handle the case or enforce a judgment... This case belongs in an American court, where the contesting claims can be fairly weighed."
Aside from the multitude of procedural obstacles that the victims would have to overcome to pursue their claims in Ecuador, Ecuador's Congress in 1998 passed a law (called "Law 55") that prohibits that country's courts from hearing lawsuits first filed by its citizens in the courts of another country. Intended as a way to deal with the fact its own citizens often could not have their claims heard in American courts when they sued American companies, this law on its face bars the lawsuit from being heard in Ecuador regardless of the underlying merits of the action.
The Ecuadoran government has told the federal court in New York that it supports the right of its citizens to sue Texaco in federal court in New York, and that it has no interest in having the matter heard in Ecuador. The government also pledged to cooperate with any clean up that an American court might order Texaco to undertake. This position was formulated largely in response to an upsurge of popular opinion in Ecuador in favor of the plaintiffs. The position of the Ecuadoran government undercuts one of Texaco's key pre-trial defenses. This defense, known as comity, allows a court to dismiss a lawsuit if it thinks it might affect foreign relations between the United States and another country, regardless of the underlying merits of the claim. When the case was initially filed, Ecuador's ambassador to the United States opposed the litigation. In 1996, Judge Rakoff used this opposition as a basis to dismiss the case. Now, given that the Ecuadoran government has changed its position, the comity issue appears moot. Recently, there has been a groundswell of public support in Ecuador for the victims, thereby solidifying further the government support of the plaintiffs, and making it highly unlikely it will ever oppose the lawsuit. Several organizations in Ecuador, including The Committee For the Defense Of The Amazon, The Center For Economic And Social Rights, and Accion Ecologica have played critical roles in convincing governmental leaders to support the goals of the lawsuit.
Given the procedural and political obstacles in Ecuador, it might come as no surprise that Texaco has argued to the federal court in New York that the case should be heard in Ecuador's courts. But even this position is relatively new. Until December of 1998, Texaco had argued that the case should not be heard anywhere because it was not the company responsible for the damage. Rather, in a classic corporate litigation maneuver, Texaco argued that the plaintiffs should sue a company called Texpet, a fourth-tier, wholly owned subsidiary of Texaco based in Ecuador. A landmark ruling from a federal appeals court last October, however, cast doubt on this argument. A three-judge panel from the Federal Court of Appeals for the Second Circuit (which has authority over federal trial courts in New York) ruled that if Texaco did not agree to submit to jurisdiction in Ecuador, then the case definitely would go forward in the United States. (The appeals court also suggested that even if Texaco submitted to jurisdiction in Ecuador, the case might still go forward in the United States because of the various difficulties in obtaining justice in Ecuador.) In response, Texaco agreed for the first time to subject itself to jurisdiction in Ecuador's courts — but only on an extremely limited basis that protects it from almost all liability, as described below.
As a result of the landmark ruling by the appeals court in October, 1998, Texaco agreed for the first time to subject itself to the jurisdiction of Ecuador's courts, effectively conceding that the case would go to trial somewhere. But Texaco interpreted the appeals court instructions in the most narrow way possible. Backed into a corner where it had to concede some degree of jurisdiction over the matter to Ecuador's courts or face the prospect of a definite trial in the United States, the company said it would only agree to litigate in Ecuador the individual damages suffered by the 70 named plaintiffs — not the millions of dollars of collective damages of each of the estimated 30,000 members of the affected class injured by Texaco's operations. This decision effectively shuts the courthouse door in Ecuador to 99% of Texaco's victims and reduces Texaco's potential liability to a tiny fraction of the estimated $1 billion in damages. Moreover, it prevents all the victims from joining together (because there is no class action in Ecuador) to force Texaco to install wells that can reinject the toxic waste water into the ground.
The lawsuit is taking many years largely because Texaco is waging a fierce battle to keep the case from going to trial. Given that a jury in Alaska recently imposed on Exxon a $5 billion punitive judgment for its Valdez spill, Texaco knows the stakes in this case could be high if a jury is allowed to weigh the evidence. The company thus appears willing to spend significant legal fees — even in the millions of dollars — to fight the case. Texaco's lead lawyer is Griffin Bill, who served as Attorney General of the United States during the Carter Administration and who represented Exxon during the Valdez disaster in 1989. Mr. Bell is a partner with the Atlanta law firm of King & Spalding. Lawyers from this firm and another New York-based firm have used classic litigation tactics to frustrate the progress of the lawsuit. On six separate occasions, Texaco has filed motions to dismiss the case, all of them alleging essentially the same grounds. The matter also was delayed by the 1995 death of Judge Vincent Broderick, who presided over the case in its first years.
Texaco's initial motions to dismiss the case were filed in December of 1993. Since then, the company has tried on five separate occasions to have the case dismissed (each round of motions can consume several months of time before a decision is rendered). These initial motions were rejected, and in a huge victory for the plaintiffs, Judge Vincent Broderick ordered the parties to proceed with discovery to determine if Texaco had indeed made the decision in New York to dump the toxic waste water in Ecuador. Lawyers for the plaintiffs then reviewed thousands of pages of Texaco's documents and deposed several Texaco officials connected to the company's Ecuadoran operations. The evidence gathered clearly indicated that Texaco directed its Ecuadoran operations from the United States, even signing off on expenditures in Ecuador for amounts as small as a few thousand dollars. Just before this new evidence was to be presented to court, Texaco announced in 1995 a $40 million "settlement" with the Ecuadoran government to purportedly clean up the damage it left, and then used that agreement as a basis to renew its motions to dismiss the case. (This agreement resulted in the closing of only a handful of the toxic waste pits by piling dirt over them. The majority of the 300 waste pits are still being used, and toxic waste water is still being dumped at the rate of several million gallons daily.) The case eventually was transferred to Judge Rakoff, who said he would not be bound by Judge Broderick's previous decisions. Texaco renewed its motions to dismiss before Judge Rakoff, who in 1996 dismissed the case in a short opinion, relying primarily on a 1994 decision of a Texas federal court that dismissed a similar case, Sequihua v. Texaco. The plaintiffs then filed an appeal, which resulted in the reversal of Judge Rakoff's dismissal by a panel of three judges. As a result of the appeals court decision, the case was sent back to Judge Rakoff with specific instructions to reconsider his decision in light of several factors — including the position of the Ecuadoran government in support of the plaintiffs. Texaco then accepted limited jurisdiction in Ecuador, and renewed its motions to dismiss. A decision on these motions, which will determine whether the case can go to trial in the United States, is expected shortly. The long procedural history of the case is described in more detail at the beginning of the appeals court decision in the Case File.
Upon discovering that the contamination caused by Texaco had flowed down river to the Peruvian Amazon, several Peruvian residents in 1994 filed a second lawsuit against the company in New York. That case, Jota v. Texaco, is also pending decision in federal court in New York on Texaco's pre-trial motions to dismiss. The Peruvian residents are represented by the same group of lawyers. |
