Supreme Court May Weigh Big Weapon for U.S. Companies Sued Abroad

Can U.S. companies use the federal racketeering law to fend off costly foreign court judgments? For Chevron Corp., the answer was yes — and that saved the oil and gas giant $9.5 billion. Now the Supreme Court will decide whether to hear an appeal by Chevron antagonists, who argue that the company pulled a fast one.

Bloomberg Law - Paul Barrett 16/05/2017

Can U.S. companies use the federal racketeering law to fend off costly foreign court judgments? For Chevron Corp., the answer was yes — and that saved the oil and gas giant $9.5 billion. Now the Supreme Court will decide whether to hear an appeal by Chevron antagonists, who argue that the company pulled a fast one.

The federal appeals court in New York ruled last August that Chevron, and indeed, any American corporation facing an expensive judgment abroad, may come home and use the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO) as a weapon to go after the lawyers on the other side. The losers in that clash — impoverished Ecuadorian villagers and their New York-based attorney, Steven Donziger — are asking the justices to forbid this use of RICO as unwise and unfair.

Chevron, naturally, wants the high court to stay out of it. The justices are expected to announce their intentions in the coming weeks.

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