Judge dismisses Chevron/Unocal lawsuit seeking reimbursement from its
insurers for
compensation
oil company paid to Burmese villagers to settle
landmark Doe v. Unocal litigation
Los
Angeles, California – On October 16, 2007, Judge Elizabeth Grimes of
the Superior Court of California in Los Angeles
rejected Chevron’s attempt to force its insurers to reimburse the company for
the compensation it paid to victims of egregious human rights abuses committed
on its gas pipeline project in Burma.
The original partner in the project was Unocal Corp., which Chevron acquired in
2005. The abuses were committed by Chevron/Unocal’s
partner, the brutal Burmese military, and the compensation was paid to settle
the landmark human rights case, Doe v.
Unocal. When Unocal’s insurers refused to reimburse Unocal for the
settlement, forcing Unocal to pay the compensation itself, Unocal sued
them. In Tuesday’s decision, the Court
found that the pattern of pipeline abuses alleged by the victims in Doe v. Unocal amounted to “military
terrorism,” and therefore Unocal could not be reimbursed.
In the wake of the recent, violent crackdowns on peaceful
protestors in Burma,
Chevron’s operations in Burma
have received renewed attention. Chevron, through its takeover of Unocal, is a
partner with the Burmese military junta in the notorious Yadana natural gas
pipeline project, which provides hundreds of millions of dollars to the regime
annually. The construction and operation of the Yadana pipeline have involved
forced labor and other abuses on a mass scale committed on Unocal’s behalf by
the Burmese military, which continues to provide security for the pipeline.
Those abuses were challenged in Doe v. Unocal, the groundbreaking human rights lawsuits brought by victims
of pipeline violence in federal and state court in California, in which EarthRights
International (ERI) served as co-counsel for the plaintiffs. In a huge victory for the plaintiffs, Unocal
ultimately settled the cases out of court, and agreed to compensate the plaintiffs
and provide funds enabling plaintiffs to develop programs to improve living
conditions, health care and education and protect the rights of people from the
pipeline region.
In her ruling in the insurance case, Judge Grimes noted a
Unocal official’s testimony that Unocal settled Doe v. Unocal to avoid the risk of a jury verdict finding Unocal liable
for pipeline abuses. Judge Grimes held
that the Doe plaintiffs, in alleging
a pattern of rape, murder, torture and forced labor on the pipeline, asserted
claims involving “military terrorism,” or “the systematic use of terror or
intimidation by government soldiers.” She dismissed Unocal’s lawsuit seeking
reimbursement, because the insurance policies at issue specifically excluded
coverage for “military terrorism.”
“Unocal was complicit
in crimes against humanity. Then, it
tried to leave its insurers holding the bag. Unocal, now Chevron, got what it
deserves,” said Richard Herz, ERI’s
litigation coordinator and counsel for the Doe
plaintiffs. “But although the insurers won, they were far from blameless. Everyone
knew the Yadana project would involve egregious human rights violations. The
insurers never should have been involved in that horrendous project in the
first place.”
In addition to EarthRights International, Doe v. Unocal was litigated by the Pasadena law firm of Hadsell
& Stormer, human rights lawyer Paul Hoffman, the Center for Constitutional
Rights (CCR) and CCR cooperating attorney Judith Brown Chomsky. The insurance litigation is Lexington Insurance Company v. Union Oil
Company of California, No. BC 360774.
Click here to read the official court order.
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