Chevron Defeats Terrorism Liability Lawsuit

Courthouse News – by Nicholas Iovino

SAN FRANCISCO (CN) – A federal judge on Tuesday struck down a lawsuit claiming Chevron funded deadly acts of terrorism through its illegal oil payments to former Iraqi President Saddam Hussein.

Despite presenting “compelling evidence” that Chevron paid illegal kickbacks for cheap oil, the plaintiffs did not show a “direct connection” between those payments and acts of terrorism, U.S. District Judge James Donato concluded in his ruling Tuesday.  

“There is no plausible allegation that money from Chevron ever reached the terrorists in Israel,” Donato wrote in his 7-page decision.

Baruch Yehuda Ziv Brill and 328 other named plaintiffs sued Chevron in 2015, claiming the oil giant put about $20 million into a slush fund that Saddam used to carry out crimes against humanity and lethal acts of terrorism in Israel. Chevron purchased more than 78 million barrels of underpriced Iraqi oil between July 2000 and December 2002, according to the plaintiffs.

During a court hearing last November, Donato suggested the plaintiffs would have a hard time proving that Chevron’s money went to suicide bombers’ families. That’s because the money traveled through an intricate web of Middle Eastern banks, businesses, government institutions and terrorism groups.

In their complaint, the plaintiffs cited a 2004 investigation by the U.S. House of Representatives International Relations Committee that found Saddam diverted money from the United Nations Oil for Food program to pay millions of dollars to the families of Palestinian suicide bombers.

But Donato said the plaintiffs still could not prove how much of Chevron’s money was used for that purpose.

“Plaintiffs acknowledge that Chevron’s kickbacks were less than 10% of the total ‘surcharges’ for oil sales collected by the Iraqi regime,” Donato wrote.

Donato said the plaintiffs need not trace Chevron’s dollars to the terrorists with accountant-like precision, but they must allege more than that Chevron “contributed to an evil empire.”

“Holding Chevron liable under the [Anti-Terrorism Act] only for doing business, albeit illegally, with a rogue state would extend the scope of the statute far beyond Congress’s mandate,” Donato wrote.

Donato also dismissed 18 U.S. citizen plaintiffs’ claims that Chevron aided and abetted terrorism, finding they failed to allege the oil company “knowingly” supported suicide bombers.

Borrowing that same reasoning, the judge dismissed more than 300 foreign national plaintiffs’ claims of liability under the Alien Tort Statute.

“Plaintiffs adequately allege only that Chevron knew it was paying illegal kickbacks, and not that it knew they were being used to support terrorism in Israel,” Donato wrote.

Donato dismissed all claims in the second amended complaint with prejudice.

Plaintiffs’ attorney Raymond Boucher, of Woodland Hills, said in an email that his clients will appeal the ruling, but he declined further comment.

Chevron spokesman Sean Comey and Chevron lawyer Robert Mittelstaedt, of Jones Day in San Francisco, did not immediately return emails and phone calls seeking comment after business hours Tuesday.

Chevron paid $30 million in 2007 to settle a lawsuit with the SEC over the illegal kickback payments it funneled to Iraq through the United Nations Oil for Food program.

Saddam was executed by hanging in December 2006 by the Iraqi government after his regime was toppled by U.S. and coalition forces in 2003.

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