This case is part of the long-running story about the efforts by Ecuadorian natives and their American lawyers and consultants to win billions of dollars for pollution from oil drilling operations in Ecuador many years ago. The issue is whether an American court may bar enforcement of an $18 billion judgment from an Ecuador court to prevent fraud. The NAM and the National Foreign Trade Council filed an amicus brief on June 30, 2011, arguing that the preliminary injunction issued by the trial judge is entirely consistent with principles of international comity and should be affirmed. The United States has the authority to halt a campaign of apparent fraud and alleged corruption orchestrated by U.S. citizens and designed to benefit foreign citizens with significant contacts in the United States. In addition, we argued that U.S. courts can conduct parallel proceedings using concurrent prescriptive jurisdiction, and can prevent the enforcement of an improper judgment in other jurisdictions that do not have prescriptive jurisdiction.
On September 19, the appeals court vacated the trial court's injunction, put those proceedings on hold, and received assurances from the plaintiffs that they would not seek to enforce the Ecuadoran judgment while it is being appealed in Ecuador.
On Jan. 26, 2012, the Second Circuit issued an opinion that the New York Uniform Foreign Country Money-Judgments Recognition Act does not allow pre-enforcement challenges of foreign judgments. Chevron has to wait until the Ecuadorian plaintiffs try to enforce their damages award in New York before it can challenge the award. Other issues in the case were therefore moot. The court's decision is based on an interpretation of state law that does not address the company's claims of fraud in the underlying litigation.