Judge Dismisses Indians Suits against Texaco

New York - A federal judge on Wednesday dismissed lawsuits against Texaco (NYSE:TX - news) brought by rainforest Indians of Ecuador and Peru who alleged the oil company contaminated their water and land.

U.S. District Judge Jed Rakoff said that the cases should be brought in Ecuador instead of the United States. Texaco, which has denied allegations in the suits, sought to have the cases dismissed on grounds they should be tried in courts where the plaintiffs are located.

"The record establishes overwhelmingly that these cases have everything to do with Ecuador and nothing to do with the United States," Rakoff said.

The litigation stems from two suits filed in 1993 and 1994 by residents of the Oriente region of Ecuador and residents of Peru who live downstream from Ecuador's Oriente region. The plaintiffs alleged that a Texaco subsidiary dumped an estimated 30 billion gallons of toxic waste into their environment while extracting oil from the Ecuadorean Amazon between 1964 and 1992.

The plaintiffs alleged that instead of pumping the substances back into emptied wells, Texaco dumped them in local rivers, directly into landfills or spread them on the local dirt roads.

They also alleged that the Ecuadorean Pipeline, constructed by Texaco, leaked large amounts of petroleum into the environment. The Indians alleged that they and their families suffered various injuries, including poisoning and development of precancerous growths.

The district court had originally dismissed the suits in 1996 and 1997 on grounds that New York was not the proper place for the litigation and that Ecuador would be a more convenient location.

However, in 1998, the U.S. Second Circuit Court of Appeals reversed the ruling and sent it back to the trial court for reconsideration. Texaco is headquartered in White Plains, New York, which is within the Second Circuit's venue.

Last year Rakoff had given the litigation new life in Manhattan federal court saying that while he had tentatively been leaning toward dismissing the suits so they could proceed in a foreign court, he said he would consider arguments about whether an Ecuadorean court could be impartial after a military coup in which President Jamil Mahuad was deposed.

Rakoff had said that Mahuad had appeared to be taking significant steps toward improving the independence of the judiciary. He said that while Mahuad was eventually replaced by the elected vice-president, Gustavo Noboa, the events of the coup were reported as evidence of a resurgent military involvement in civilian affairs.

However, in his ruling Rakoff said he was now satisfied that the courts of Ecuador can exercise "that modicum of independence and impartiality necessary to an adequate alternative forum."

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