Judge to decide Ecuador case

By STEVE PFARRER, Staff Writer

Saturday, June26, 1999 -- Within the next few months, a federal judge in New York is expected to make a decision that could have a dramatic effect on future litigation brought against American companies by people outside the U.S.

U.S. District Judge Jeb Rakoff is reviewing a petition by 30,000 Ecuadoreans to allow their suit against oil giant Texaco Inc. to proceed in New York, where the company has its headquarters.

The $1 billion suit, filed by Amherst lawyer Cristobal Bonifaz in 1993, alleges Texaco contaminated vast stretches of rain forest in eastern Ecuador through improper oil drilling techniques between about 1970 and 1992.

In addition, the plaintiffs argue that the case must be decided in the United States: They say Ecuador's inadequate legal system will not allow them a fair trial in their own country, and that Texaco made decisions for its Ecuadorean oil drilling in its New York headquarters, not in Ecuador.

Texaco insists its operations complied with Ecuador's laws at the time, and the company denies any link between its oil drilling and environmental damage, or to mysterious health problems people in the region have suffered, such as elevated cancer rates, skin rashes and spontaneous abortions in pregnant women.

Texaco also maintains that the case, even if it goes to court, should be tried in Ecuador. Rakoff, in a 1996 ruling, dismissed the case altogether, but a U.S. appeals court, in a unanimous decision last October, said the judge must reconsider his decision.

And Bonifaz, a native Ecuadorean and former chemical engineer, points out that the country has now passed a law that says if Ecuadoreans bring a lawsuit abroad, Ecuador's courts will not accept the suit on remand.

"(Judge Rakoff) is limited in what he can do," said Bonifaz, the lead attorney for the plaintiffs. "If there is no alternative forum (for the case), he has to take it back."

"I don't want to sound too optimistic," he added, "but this isn't over by a long shot."