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US: Chevron gets part of suit dismissed

The oil giant still faces allegations in the case plus a similar action asserting rights abuses by the firm in Nigeria.

by Elizabeth DouglassLos Angeles Times
March 15th, 2007

A federal judge on Wednesday dismissed a racketeering charge against Chevron Corp. brought by Nigerian villagers who believe the oil giant condoned human rights abuses carried out by the West African nation's militia.

U.S. District Judge Susan Illston in San Francisco ruled that the Nigerians didn't provide enough evidence to show that the San Ramon, Calif., corporation financially benefited from the alleged atrocities that occurred in 1998 and 1999, when military security forces fought opponents of Chevron's Nigerian oil operations.

The lawsuit's backers "present no evidence that killing or otherwise suppressing protesters saves defendants money or otherwise increases their profit margin," Illston wrote. Thus, there is no support for the claim that Chevron "gained a competitive advantage in the United States, or impacted the U.S. economy, by engaging in alleged racketeering activity," she added.

Although Illston's decision is a victory for Chevron, several liability claims are still pending in the case. In addition, a similar suit remains active in San Francisco Superior Court, alleging that Chevron's use of Nigerian forces for security violated California state laws against unfair business practices.

In both lawsuits, the Nigerians seek damages from Chevron and its Chevron Nigeria subsidiary for violent clashes that the groups say killed and injured Nigerians and left two villages burned to the ground. The villagers accused Chevron, through its local subsidiary, of seeking assistance from the Nigerian security forces and helping them carry out the alleged attacks.

The second-largest U.S. oil company has denied involvement in the incidents, disclaims liability for militia actions and disputes aspects of the Nigerians' accounts. Chevron didn't return calls seeking comment.

In the state lawsuit, a judge Wednesday denied a Chevron motion to dismiss the case on the grounds that it couldn't be held responsible for the actions of the Nigerian security forces, said Marco Simons, U.S. legal director for EarthRights International, a group representing the Nigerians in both Chevron lawsuits.

If either one of the cases survives the oil company's legal challenges, Chevron will become the first corporation to face trial on charges stemming from alleged human rights abuses overseas, Simons said.

A human-rights suit against Unocal in Myanmar was settled in 2004 before reaching trial.

Despite losing Wednesday's federal ruling, Simons was upbeat about the lawsuit's chances.

Although Illston sided with Chevron on the racketeering claim, "what she said along the way is extremely significant in terms of the rest of the case," he said. In one section of her decision, Simons noted, Illston appeared to acknowledge evidence unfavorable to Chevron.

The Nigerians, Illston said in her ruling, "have presented evidence of a link between the conduct of Chevron in the United States and the attacks in Nigeria at issue," as well as evidence that the corporation had substantial control over its Nigerian unit, that it "designed and adjusted the general security policies and procedures" of its subsidiary and approved payments from the subsidiary to the Nigerian government security forces.

Illston noted evidence that after the attacks, Chevron's U.S. headquarters "engaged in a media campaign to cover up CNL's [Chevron Nigeria] involvement in the attacks." The judge also said, however, that the evidence showed the corporation did not "directly cause the losses."



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