Patton Boggs Surrenders in Battle With Chevron, Agrees to Pay $15 Million


SELVA-Vida Sin Fronteras: 9/5/2014


Patton Boggs Surrenders in Battle With Chevron, Agrees to Pay $15 Million

Steven Donziger, the lawyer of Ecuadorean people affected by Texaco-Chevron, speaks during a press conference on March 19, 2014 in Quito

Steven Donziger, the lawyer of Ecuadorean people affected by Texaco-Chevron, speaks during a press conference on March 19, 2014 in Quito

Chevron struck another blow in its campaign to undermine a multibillion-dollar pollution judgment it faces in Ecuador. Under tremendous pressure from the oil company, Patton Boggs, the powerful Washington law firm that once vowed to assure the enforcement of the Ecuadorian judgment, instead withdrew today from the case.

In an extraordinary concession, Patton Boggs said it regretted its prior involvement in a lawsuit against Chevron (CVX), a legal action deemed by a federal judge in New York to have evolved into an extortion scheme aimed at the San Ramon (Calif.) oil company. Patton Boggs also agreed to provide Chevron with supportive documents and testimony and to pay the company $15 million as a tangible symbol of its abasement.

For a law firm of Patton Boggs’s heft, the settlement is highly unusual and possibly unprecedented. In nearly three decades of writing about the law business, I can’t think of a comparable retreat.

Such firms occasionally drop a client, as Patton Boggs today abandoned the Ecuadorian rain forest residents on whose behalf it had fought zealously to hold Chevron responsible for contamination in the northeastern oil-producing region of the Andean country. It’s almost unheard of, however, for a major law firm to humiliate itself in the fashion Patton Boggs has done in the face of Chevron’s threat to pursue pending fraud allegations against the Washington (D.C.) firm. Patton Boggs did not admit to any wrongdoing in connection with the settlement.

Struggling financially, in part because of its entanglement in the Chevron litigation, Patton Boggs doubtless sees the settlement as a step toward a major restructuring that likely will include a merger with a larger law firm. Patton Boggs has engaged in negotiations with various potential merger partners—a process that had been complicated by Chevron’s claims in federal court in New York that Patton helped cover up fraud in the courts in Ecuador.

The bizarre saga stems from a February 2011 judgment in an Ecuadorian trial court that Chevron is culpable for decades of oil contamination in that country. The liability verdict was upheld by Ecuador’s Supreme Court, but the $19 billion in damages was halved to $9.5 billion.

Chevron refused to pay, arguing that the architect of the judgment, New York plaintiffs’ attorney Steven Donziger, fabricated evidence, coerced Ecuadorian judges, and participated in the ghostwriting of supposedly neutral expert reports and the February 2011 ruling itself. Chevron formalized those allegations in a U.S. civil racketeering suit against Donziger that produced a March 2014 verdict against the plaintiffs’ lawyer. Donziger denies wrongdoing and has appealed. Meanwhile, he and other lawyers for the Ecuadorian plaintiffs have launched legal efforts to enforce the Ecuadorian judgment in Canada, Argentina, and Brazil. Chevron has no assets to speak of in Ecuador.

Patton Boggs signed on as co-counsel with Donziger, agreeing to use its expertise and influence to help enforce the Ecuadorian judgment in courts around the world. That led to Chevron’s accusing the law firm of participating in the racketeering conspiracy pinned on Donziger by U.S. District Judge Lewis Kaplan. Patton Boggs, in turn, accused Chevron and its main outside law firm, Gibson, Dunn & Crutcher, of abusive tactics. In the wake of Judge Kaplan’s March ruling against Donziger, however, Patton Boggs decided to throw in the towel.

“The recent opinion of the United States District Court for the Southern District of New York in the Chevron v. Donziger case includes a number of factual findings about matters which would have materially affected our firm’s decision to become involved and stay involved as counsel here,” Patton Boggs said in a statement included in the settlement agreement. “Based on the court’s findings, Patton Boggs regrets its involvement in this matter.”

“We are pleased that Patton Boggs is ending its association with the fraudulent and extortionate Ecuador litigation scheme,” Chevron’s vice president and general counsel, Hewitt Pate, said in a separate press release. “Chevron detailed its objections to Patton Boggs’ conduct in its counterclaim, and today’s agreement brings that litigation to an end. Chevron encourages others to disassociate themselves from this fraud.” Apart from Patton Boggs, a number of other former Donziger allies, including lawyers, scientific experts, and financiers, have disavowed their past relationships with the plaintiffs’ attorney and their allegations against Chevron.

Source: Bloomberg



Editorial: SELVA-Vida Sin Fronteras

Editorial Committee

David Dunham

Arno Ambrosius

Gustavo López Ospina

Mariana Almeida

Pieter Jan Brouwer

Assistant: Emilia Romero

SELVA Vida Sin Fronteras acknowledges Kevin Schafer’s important contribution towards protecting the highly endangered Amazon pink fresh water dolphin. Title photographs of our “The Amazon Pink Dolphin’s Voice” were taken by Mr. Schafer




~ by FSVSF Admin on 9 May, 2014.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: