Supreme Court rejects Chevron appeal on Ecuador

The Supreme Court rejected an appeal from Chevron Corp. on Monday, essentially ruling the energy company can't compel an Ecuadorean state-owned oil producer to share liability for alleged environmental damage.

For years, the second-largest U.S. oil company has been fighting a lawsuit filed on behalf of tens of thousands of residents of the Amazon rain forest over environmental damage and alleged cancer deaths they blame on oil spills and water contamination.

Ecuadoreans say Chevron is liable for pollution from a network of oil wells and pipelines built by Texaco Inc., mostly in the 1970s. They say Texaco dumped billions of gallons of toxic wastewater from its drilling operations into unlined waste pits to save money.

Chevron acquired Texaco in 2001. Texaco had worked under an agreement with state oil company PetroEcuador.

San Ramon, Calif.-based Chevron denies the allegations and says Texaco, which ended its operations in 1992, followed Ecuadorean environmental laws in a $40 million cleanup that began in 1995.

The Supreme Court's ruling on Monday in essence stopped Chevron's attempt to force PetroEcuador to the arbitration table, by upholding a lower U.S. court's decision.

The case now rests with a judge in Ecuador, who could order Chevron to pay more than $27 billion in damages as soon as this year.

Shares of Chevron rose 83 cents to $66.78 in afternoon trading. The stock has traded between $55.50 and $100 in the past 52 weeks.