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Suing battle of Chevron vs. DeLeon

US oil giant Chevron has been given the go-ahead to sue PartyGaming founder Russell DeLeon as part of a 20-year legal battle between the oil company and Steven Donziger, a US lawyer representing Ecuadorian nationals in a pollution case against Chevron.

Bloomberg Business Week reports that a judge in Gibraltar, where PartyGaming (as it was then known) is licensed and DeLeon relocated to from the US in the early 2000s to run the business with co-founders (and ex-wife) Ruth Parasol, Anurag Dikshit and Vikrant Bhargava, has “ruled that Chevron can proceed with a lawsuit seeking unspecified damages from Russell DeLeon in connection with his financing what the oil company maintains was a liability suit that evolved into a racketeering conspiracy”.

Donziger and DeLeon know each other from their time as students at Harvard Law School and the latter helped finance the case brought by Donziger against Chevron and in particular the 2009 documentary, Crude. The lawyer represents thousands of poor farmers and indigenous tribe members and in 2011 won a US$19bn judgment, later reduced to US$9.5bn, against Chevron in the city of Lago Agrio, Ecuador.

As Donziger attempts to enforce the ruling, Chevron retaliated in early March by obtaining a ruling based on federal anti-racketeering laws from New York judge Lewis Kaplan, who described the case against the US group as a massive fraud against the company. The decision to launch a civil suit against DeLeon is a follow on from the New York ruling and is part of Chevron’s plans to recover millions of dollars it has paid in legal fees.

A spokesman for Chevron told Bloomberg Business Week: “A U.S. federal court in New York has ruled that the judgment against Chevron in Ecuador is the product of a fraudulent scheme intended to extort billions of dollars from the company. Chevron believes that the perpetrators of that scheme should be held accountable for knowingly advancing the fraud.”

DeLeon did not respond to requests for comment, but a spokeswoman for Donziger told Bloomberg Business Week: “Chevron’s case against Mr. DeLeon is yet another attempt by Chevron to retaliate against anybody who tries to help the [Ecuadorian] communities hold Chevron accountable for its environmental crimes and wrongdoing, as found by three layers of courts in Ecuador.”

Other major corporations are watching the case closely, if DeLeon is held liable for significant damages, it could inhibit other investors from backing class action lawsuits and advocacy-oriented documentaries expressing anti-corporate views.