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Chevron is America's third largest company behind ExxonMobil and WalMart. One way it became that big was by buying Texaco in 2001. Now, that purchase of Texaco has pulled Chevron into a titanic struggle in the Amazon.

The people who live in a remote region of Ecuador are suing Chevron, saying reckless oil exploration poisoned the most important rain forest on earth.

Soon, a judge in a tiny Ecuadorian courtroom will decide whether the oil company must pay as much as $27 billion in damages. That would make it the largest environmental lawsuit in history. Most everything is in dispute in this bitter struggle except one thing: powering American cars with Amazon crude has left a toxic legacy.

Beginning in the 1960's, Texaco came to northeastern Ecuador to tap into one of the largest oil reserves in the Americas.

Texaco was a partner with Ecuador's national oil company, Petroecuador. And over 23 years, Texaco pumped out one and a half billion barrels of oil. Hundreds of wells were drilled. And at each well site, pits were dug to hold toxic oil waste that comes up during drilling.

Generally two or three pits were carved out near the well site. Trouble is, when Texaco finished its drilling, the waste pits were abandoned by the hundreds and for decades.

Manuel Salinas' house is next to one of those pits. He's one of 30,000 people suing Texaco's owner, Chevron. "We couldn't drink the water," Salinas told 60 Minutes correspondent Scott Pelley.

Salinas says the pollution leaked into his water well.

"It's a disgrace. They treated Ecuador like a trash heap," says Doug Beltman, who worked for the EPA on Superfund sites in the U.S.

He's now the scientific expert for the people suing Chevron.

"Are you saying that Texaco never could have gotten away with this in the United States?" Pelley asked.

"Oh, absolutely not," Beltman replied. "It wouldn't have happened in the United States. And if it had happened, they wouldn't have gotten away with leaving it here for 30 years."

In Texas, for example, pits like this are supposed to be temporary, isolated from fresh water, and soon after emptied and backfilled. But in Ecuador one pit 60 Minutes saw has been there for 25 years and we found it's actually designed to overflow into streams.

"They put these pipes in the side. So that as it rains, it fills up with water, contaminated water, it just dumps out into the jungle," Beltman explained.

"Well, it rains here in the rainforest all the time, so there's water pouring out of it now. And if you smell the water, you can clearly smell the oil pollution in it. Runs right down the ravine, where you are, and right down into the stream, not 50 yards down that way," Pelley observed.

When they stirred the bottom of the nearby stream, oil floated to the top.

Texaco left Ecuador in 1992 and today, Texaco's owner, Chevron says the pollution is now the responsibility of Petroecuador, Texaco's former partner. That dispute is the heart of the lawsuit.

The people who live in this river society call themselves "los afectados" - the affected ones. They use the waterways for washing clothes, bathing and drinking. Texaco acknowledged that it dumped, into the rain forest, billions of gallons of what is called production water. Production water is waste that comes up with the oil. In fact, it's often salty and laced with chemicals.

60 Minutes traveled down river in search of an Indian tribe which is part of the group suing Chevron. For centuries this has been the territory of the Secoyas.

We sat with two of their leaders who said they'd never seen oil until it was on the river. Humberto told Pelley oil looked like flowing black blankets and ruined the fishing.

The Secoyas took 60 Minutes to their community hut, where we saw the driving force behind the suit, Stephen Donziger, a New York lawyer, far from home.

"These are people who never believed they had a right to sue an American company in their own court system," Donziger told Pelley.

"Yeah, but you know what Chevron says. They say that this is being driven by a New York plaintiff’s lawyer, and they don't mean that as a compliment," Pelley pointed out.

"I'm well aware of that. They've taken out advertisements in the Ecuadorian press with my name trying to attack my reputation," Donziger said.

Asked what he thinks of that, Donziger told Pelley, "Well, I think that it puts me, in the membership frankly, of a very distinguished club of people."

Make no mistake - Donziger would be wealthy if he wins. But he says that most of the money would go to environmental clean up. Why $27 billion?

That astounding figure comes from Richard Cabrera, a geological engineer, appointed by the Ecuadorian court who conducted field inspections to assess the oil damage.

"Twenty seven billion dollars. I mean, come on. Where does he come up with that number? It’s huge…," Pelley remarked.

"It's huge, but in my analysis, it's still only pennies on the dollar compared to the damage done here," Donziger argued.

Cabrera figures $9 billion should go to clean up, plus new health and water systems; he says another $9 billion should compensate for cancer deaths, even though the lawsuit doesn't make any cancer claims.

Silvia Garrigo, Chevron's manager of global issues and policy, argues the court's expert is biased. "That report and Mr. Cabrera are part and parcel of the fraud that is being perpetrated against an American company in Ecuador in this corrupt and politicized judicial system," she told Pelley.

When she says "politicized," she points to the top - Ecuador's president who visited the waste sites and called the people who brought the suit heroes. A message, Garrigo says, that can't be lost on the judge.

"You think this judge is going to feel any independence, is gonna look at the rule of law, is gonna look at the contracts, is gonna look at the evidence and determine what's legitimate and illegitimate?" she questioned.

So who is the $27 billion dollar judge? 60 Minutes found Juan Nunez in his court on the third floor of a shopping mall in the Amazon town of Lago Agrio.

Texaco named the town for Sour Lake, Texas where Texaco got its start. Nunez struck us as serious and thoughtful. He's been on the case for a year and he's been out to the waste pits. The verdict will be his decision alone. There is no jury.

"Chevron says that they can't get a fair trial in your court," Pelley told Nunez.

"That is not the case," the judge replied. "I believe that justice has to be given to everyone as they deserve, like a good father of a family, to give a child what a child is entitled to."

How did Chevron find itself in a jungle town at the mercy of one judge? Because it got what it asked for.

In 1993, the Amazonians first filed suit in a U.S. federal court in New York. It was Stephen Donziger's first big case. And it sat there for nine years while Texaco pressed this argument: that this legal matter belonged in Ecuador.

"Texaco wanted to be in Ecuador, you wanted to be in New York, and you lost," Pelley told Donziger. "You think Texaco expected you to go away?"

"I do," Donziger replied.

They didn't. And in 2003, on the first day of the trial in Lago Agrio, Chevron's lawyer, in his opening argument, said the Ecuadorian court didn't have jurisdiction to try the case.

"You wanted to go to Ecuador. Now you say you don't wanna be in Ecuador," Pelley told Chevron's Silvia Garrigo.

"Yeah. We didn't want to get sued, period," she replied.

"What court do you want to be in?" Pelley asked.

"We don't wanna be in any court, much less a court with respect to this kind of claim, which we consider to be frivolous," Garrigo said.

Chevron says it can't be sued because of a 1990s agreement Texaco struck with the Ecuadorian government to clean up some of the contaminated sites - sites that had been abandoned for years.

"Texaco spent $40 million cleaning up some of these sites. In return for that the Ecuadorian government signed off and said, 'You’re released of liability.' How can you have a lawsuit now?" Pelley asked Donziger.

"Well, our clients never released Texaco. And that's a critical distinction. That was an agreement between the government and Texaco. We were not part of that agreement, and we're not bound by that agreement," Donziger replied.

Although it's not specifically written into the agreement, Chevron claims it's responsible for only 40 percent of the cleanup because Texaco was a 40 percent partner with Ecuador's national oil company, Petroecuador.

Chevron says anything left behind now is Petroecuador's problem. "That 60 percent is sole responsibility of one company and one company alone and that is Petroecuador," Garrigo argued.

Petroecuador, which has been running oil operations since Texaco left in 1992, is cleaning some of Texaco's old pits - slowly. But other pits remain like open sores in the rain forest.

While Texaco was a minority partner back in its day, it was the operator in charge of the oil fields. And under U.S environmental law, for example, the operator can be held responsible for the pollution.

"You say you had a 40 percent share in the consortium. But Texaco was doing 100 percent of the oil production out there. This is, this is Texaco’s…," Pelley told Chevron's Silvia Garrigo.

"Lemme tell you about Texaco's 100 percent production. That's the biggest falsehood that I've heard in terms of revenues in this case," she replied.

Asked who built the pits, Garrigo told Pelley, "The consortium."

"Which company built the pits?" Pelley asked.

"Texaco was the operator," Garrigo said.

Asked what it means to be the operator, Garrigo said, "It means that the consortium partners have selected you to operate the oil fields to build well sites and production facilities."

"So Texaco built the pits," Pelley remarked.

"I respectfully disagree. Scott, the consortium built the pits," Garrigo replied.

Garrigo showed Pelley some of the pits that Texaco fixed. Trees and grass stand today above what used to be waste pits.

Chevron says Texaco cleaned 162 pits. But the court expert, Richard Cabrera, puts the total number of all waste pits at 916. Chevron says Cabrera's number is inflated.

So 60 Minutes asked Chevron for a master list of all the pits that existed when Texaco left Ecuador. Last week Chevron told us, there is no master list.

And there are questions about what was cleaned up. Cabrera tested some of the remediated sites and found oil contamination higher than Ecuadorian regulations allow. Chevron has done its own tests.

"In the thousands of soil and water samples that we have taken in the Amazon, there has been no detection of any type of toxin that is not naturally occurring in the environment, and that is dangerous to human health or the environment," Garrigo told Pelley.

"Oil is naturally occurring in the environment. It just depends where it is," Pelley remarked.

"I have make up on, and there's naturally occurring oil on my face. Doesn't mean that I'm going to get sick from it," Garrigo replied.

Having called the country corrupt, the court biased, and the case a fraud, Chevron seems to have come to a conclusion.

"What do you think your chances are of winning this case?" Pelley asked Garrigo.

"In Ecuador? Very little," she replied.

Judge Nunez is expected to rule soon. He'll decide whether Chevron is liable and, if so, how much of that $27 billion the company should pay.

"Chevron has no assets in Ecuador. How do you expect to collect?" Pelley asked Stephen Donziger.

"At the end of the day, it might be a situation where a U.S. court enforces the judgment, and the marshals have to go to Chevron and seize their assets," he replied.

There are likely to be appeals in this case that has already run nearly 16 years.

In the meantime, environmental damage continues in this largely unseen part of the world. On our way out of the forest, we just happened on a major oil pipeline break. It wasn't Chevron or Petroecuador. This time it was a Chinese-led consortium.

But it reminded us of what the Secoya Indians said about black blankets on the rivers. People say oil and water don't mix, but in the Amazon it's hard to keep them apart.