Chevron Corp. (NYSE: CVX) has reached a settlement agreement with the principal funder of a lawsuit against Chevron in Ecuador that a US court has said is fraudulent.
Chevron, based in San Ramon, had brought claims against James Russell DeLeon in Gibraltar, where he lives, for his role in funding and advancing the lawsuit. DeLeon agreed to end his financial support for the Ecuador litigation and assigned his interests in the litigation to Chevron. Chevron agreed to release all claims against DeLeon.
DeLeon had told the Gibraltar court that he had invested $23 million in the case in exchange for an approximate 7% stake in the $9.5 billion Ecuadorian judgment against Chevron.
“We are pleased that yet another long-time supporter has ended his association with this scheme,” said R. Hewitt Pate, Chevron’s vice president and general counsel. “Chevron will continue to hold accountable those who associate themselves with this fraudulent litigation.”
On March 4, 2014, Judge Lewis Kaplan of the U.S. 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.
He ruled that the judgment is unenforceable in the United States, and held Steven Donziger, the lead lawyer behind the lawsuit, liable for RICO violations.
The judgment also discussed DeLeon’s involvement, which included providing the main source of funding for the propaganda film ‘Crude’, contributing approximately 60% of the film’s total funding. As part of the settlement, DeLeon has agreed to assign to Chevron all of his financial interests in the film.
Chevron noted that DeLeon is the latest to disassociate himself from Donziger and the Lago Agrio Plaintiffs. During the seven-week federal racketeering trial against Donziger, Chevron said, more than a dozen former insiders and allies testified against him, including his former co-counsel, environmental consultants, funders, employees and his Ecuadorian collaborators.
Chevron still has cases pending in Gibraltar against others who helped promote the litigation.