Indigenous Peruvians Win Appeal in Federal Lawsuit Against Oil Company Occidental Pretroleum.

On December 6th 2010, 25 indigenous plaintiffs from the Peruvian Amazon, members of the Achuar indigenous group, won their appeal in the landmark human rights and environmental contamination lawsuit against U.S. oil giant Occidental Petroleum, also known as Oxy, as the U.S. Court of Appeals for the Ninth Circuit ruled that the case should be heard in Los Angeles, Oxy's hometown.

A district court judge had previously ruled that the case should be litigated in Peru, but the Ninth Circuit disagreed, allowing the plaintiffs to proceed in federal court.

The lawsuit accuses Oxy of causing severe injuries by knowingly dumping a daily average of 850,000 barrels of toxic wastewater into the tropical rainforest inhabited by the indigenous Achuar people of northern Peru over a 30-year period, as well as inducing acid rain from gas flaring, and improperly storing waste in unlined pits.

The plaintiffs allege that these outdated practices caused widespread lead and cadmium poisoning, among other serious health impacts including gastrointestinal problems, kidney trouble, skin rashes, and aches and pains that are attributed to the pollution.

"This is a major victory for the rights of indigenous peoples," said Marco Simons, Legal Director of EarthRights International, who argued the appeal before the Ninth Circuit. "Oxy will now face justice in the U.S. federal courts, rather than in a Peruvian legal system that has never compensated indigenous groups for environmental contamination." The Ninth Circuit's opinion indicates that it was not convinced of "the ability of the Peruvian courts to satisfactorily handle this case," citing corruption and "disorder in the Peruvian judiciary."

Atossa Soltani, Executive Director of Amazon Watch, added, "The Achuar people continue to suffer the devastating health impacts caused by Oxy's damaging practices, which were illegal in the U.S. at the time. This ruling means that the Achuar will finally get their day in U.S. court and signals the end of the era when companies could destroy indigenous communities and their environment with impunity."

Amazon Watch has advocated for the Achuar people for many years, and joined the case as a plaintiff to challenge Oxy's allegedly fraudulent denials of responsibility for the pollution.

According to A Legacy of Harm, a 2007 report issued by Earth Rights International, Amazon Watch, and the Peruvian legal non-profit Racimos de Ungurahui, Oxy's operations discharged billions of barrels of untreated wastewater into local streams, caused numerous spills and resulted in many unremediated toxic waste sites in Achuar territory, with severe health and livelihood consequences for the Achuar.

The Achuar case, Maynas Carijano v. Occidental Petroleum, was filed in May 2007 in the U.S. District Court for the Central District of California. In April 2008, the district court ruled that the case should be heard in Peru under the legal doctrine of forum non conveniens, meaning that Peru would provide a more convenient legal forum for hearing and deciding this case.

The plaintiffs and their counsel appealed that ruling. Plaintiffs include 25 members of the Achuar indigenous group dependent for their existence upon the rainforest lands and waterways along the river, and Amazon Watch, a nonprofit Montana corporation headquartered in San Francisco, California. Counsel for the plaintiffs-appellants includes Washington, DC-based EarthRights International, the Venice, CA firm Schonbrun DeSimone Seplow Harris Hoffman & Harrison LLP, and San Francisco lawyer Natalie Bridgeman.

The Ninth Circuit's opinion was issued by Judge Kim McLane Wardlaw, joined by Judge Mary M. Schroeder; Judge Pamela Ann Rymer agreed with part of the opinion and issued a partial dissent.

In its opinion, the Ninth Circuit considered the legal doctrine of forum non conveniens and characterised it as:

"... a drastic exercise of the court's 'inherent power' because, unlike a mere transfer of venue, it results in the dismissal of a plaintiff's case. The harshness of such a dismissal is especially pronounced where, as here, the district court declines to place any conditions upon its dismissal.

Accordingly with previous jurisprudence, the Ninth Circuit considered forum non conveniens "an exceptional tool to be employed sparingly," and not a "doctrine that compels plaintiffs to choose the optimal forum for their claim".

Using this approach, the Ninth Circuit proceeded to examine carefully Oxy's burden of demonstrating that Peru is "an adequate alternative forum, and that the balance of private and public interest factors favors dismissal".

The determinative factors that lead the Ninth Circuit to reverse the district judge's decision are:

Firstly, the absence of a waiver of the statute of limitations: The Court of Appeals for the Ninth Circuit considered that "Dismissal on the basis of forum non conveniens is improper when a lawsuit would be time-barred in the alternative jurisdiction. Moreover, where there is reason to believe that a defendant will seek immediate dismissal based on the foreign forum's statute of limitations, dismissal should be conditioned on waiving any statute of limitations defenses that would not be available in the domestic forum.

The Court relied on previous jurisprudence according to which "[I]f the plaintiff's suit would be time-barred in the alternative forum, his remedy there is inadequate . . . and in such a case dismissal on grounds of forum non conveniens should be denied unless the defendant agrees to waive the statute of limitations in that forum..."

And also: "[I]f the statute of limitations has expired in the alternative forum, the forum is not available, and the motion to dismiss based on forum non conveniens would not be appropriate."

"Occidental's failure to waive the Peruvian statute of limitations, suggests that when Plaintiffs do file in Peru, Occidental intends to argue that the Peruvian statute ran before this lawsuit was filed in 2007".

"Therefore the district court erred by determining that Occidental was amenable to process in Peru based on its qualified stipulation"

Secondly, Peru's inability to offer a satisfactory remedy: The Ninth Circuit found that there was no evidence to show that a Peruvian court would provide a forum in which the Plaintiffs would be awarded the punitive damages they were seeking or that they would permit litigation on or provide remedy for Amazon Watch's California Unfair Competition claim. In addition to this, the Ninth Circuit found that the district judge had "overlooked important evidence related to corruption" including the "unique barriers confronting the Achuar Plaintiffs in Peru due to their ethnicity, poverty, and isolation."

"A 'dismissal on grounds of forum non conveniens may be granted even though the law applicable in the alternative forum is less favorable to the plaintiff's chance of recovery,' but an alternate forum offering a 'clearly unsatisfactory' remedy is inadequate".

"The parties offered conflicting expert affidavits that focused on two remedial issues: (a)

Peruvian law itself, both substantive and procedural; and (b) special barriers confronting indigenous plaintiffs and general corruption in the Peruvian judicial system. In assessing whether Peru afforded Plaintiffs a satisfactory remedy, the district court erroneously failed to weigh Plaintiffs' expert testimony, which unequivocally asserts that Peru provides no practical remedy at all for Plaintiffs."

Thirdly, deference to the Plaintiff's chosen forum: According to the Ninth Circuit, "when a domestic plaintiff initiates litigation in its home forum, it is presumptively convenient".

"The district court explained that because Amazon Watch was but one domestic plaintiff alongside 25 foreign plaintiffs, it was entitled to 'only some deference.' The district court cited no legal authority for the application of this vague intermediate standard of deference"

"Amazon Watch's involvement in the subject matter of this litigation began in 2001, six years before the case was filed. The complaint includes factual allegations giving rise to claims based on events that took place in Los Angeles involving Amazon Watch, Occidental and the Achuar plaintiffs. Any tactical motivation for Amazon Watch's presence in this case is outweighed by the organization's actual long-standing involvement in the subject matter of the litigation and its assertion of actual injury resulting from defendants' alleged conduct. Moreover, Plaintiffs did not strategically choose a random or only tangentially relevant forum; they chose Occidental's home forum. And while the case concerns past operations and injury in Peru, the complaint includes claims based on decisions made in and policies emerging from Occidental's corporate headquarters in Los Angeles."

And the Ninth Circuit concluded that "The district court abused its discretion by recognizing Amazon Watch as a domestic plaintiff but then erroneously affording reduced deference to its chosen forum".

Fourthly, the residence of the Parties: The Ninth Circuit found that the district court "focused on the fact that the contamination allegations at the heart of the complaint took place in the jungles of the Amazon rainforest, but it failed to consider the residence of all of the parties and the true nature of Plaintiffs' claims. [...] The district court failed to factor Amazon Watch's residency into its analysis."

The Ninth Circuit also noted that "Most of the Plaintiff's claims turn not on the physical location of the injury but on the mental state of the Occidental managers who actually made the business decisions that allegedly resulted in the injury."

As such, the Ninth Circuit concluded that the district court "failed to consider how critical [...] locally-based evidence is to the litigation, especially given that it has now been a full decade since Occidental has been involved in day-to-day operations in Peru. Under these circumstances, with a local defendant, a local plaintiff, and the foreign plaintiffs willing to travel to the forum they chose, this factor weighs against dismissing the action in favour of a Peruvian forum."


Fifthly, problems with enforceability of the Judgment in a Peruvian forum: The Ninth Circuit gave a lot of weight to the factor of enforcement noting that "the district court failed to give any consideration to whether a judgment against Occidental could be enforced in Peru...

Because the district court did not require Occidental to agree that any Peruvian judgment could be enforced against it in the United States, or anywhere else it held assets, as a condition for dismissal, Occidental remains free to attack any Peruvian judgment on due process grounds under California's foreign judgments statute. The private factor of the enforcement ability of judgments thus weighs against dismissal."

In light of these factors, among others, the Ninth Circuit reversed the district court's decision and decided against dismissal of this case. In its conclusion it states:

"[T]he district court erroneously relieved Occidental of its burden of showing that Peru is an adequate alternative forum. It accepted a flawed stipulation to Peruvian jurisdiction and overlooked strong evidence, including evidence from Occidental's own expert, calling into question the ability of the Peruvian courts to satisfactorily handle this case. The district court failed to consider all relevant private and public interest factors, entirely overlooking the enforceability of judgments factor, which weighs heavily against dismissal."

"It correctly assumed that Amazon Watch was a proper domestic plaintiff, but erroneously afforded reduced deference to its chosen forum and ignored the group entirely in the analysis of numerous factors. These errors led the district court to misconstrue factors that are neutral or weigh against dismissal, and to strike an unreasonable balance between the factors and the deference due a domestic plaintiff's chosen forum. Finally, the district court abused its discretion by failing to impose conditions on its dismissal that were warranted by facts in the record showing justifiable reasons to doubt Occidental's full cooperation in the foreign forum."

"Occidental had a substantial burden to persuade the district court to invoke the "exceptional tool and deny Plaintiffs access to a U.S. court. Occidental failed to meet that burden, and a proper balance of all the relevant factors at this stage of proceedings clearly demonstrates that this lawsuit should proceed in the Central District of California."

[Source: Radio Nizkor, 06Dec10. Prepared and produced with information provided by Earth Rights International and Amazon Watch].

Donaciones Donaciones Radio Nizkor

Inteligencia militar y paramilitarismo
small logoThis document has been published on 10Jan11 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.