As expected, Chevron Corp. has decided to pursue fraud claims against Patton Boggs, the largest law firm to represent the plaintiffs who won a $19 billion environmental pollution judgment against the oil company in Ecuador.
In a motion filed on Friday,
Chevron alleges that Patton Boggs tried to cover up evidence that the judgment, issued by an Ecuadorian court in 2011, was the product of bribery and ghostwriting on the part of other lawyers for the plaintiffs.
"Despite the uncontradicted evidence to the contrary, Patton Boggs has falsely asserted in the U.S. that this judgment is legitimate and not the product of a corrupt process in which Patton Boggs and/or its co-counsel colluded with the Ecuadorian court or court experts," Chevron’s lawyers at Gibson Dunn & Crutcher wrote. "Patton Boggs either knew in advance of the ghostwriting of the judgment against Chevron or must have become quickly aware of it once Chevron began to make the evidence known, and yet Patton Boggs continued to further the fraudulent scheme."
The Ecuadorian plaintiffs first brought their case against Chevron more than two decades ago. They have been represented by a team of attorneys led by Steven Donziger, a former public defender who now runs his own New York-based firm. Since winning their mega-judgment two years ago, the plaintiffs have sought to enforce it in Argentina, Canada, and Brazil. (Chevron has virtually no assets in Ecuador)
Patton Boggs signed on as co-counsel in 2010. James Tyrrell, managing partner of the firm’s New York and New Jersey offices and national chair of its toxic tort and product liability practice groups, has been in charge of the case for Patton Boggs. The litigation funding group Burford Capital Ltd agreed to fund Patton Boggs’s work. Under the terms of their deal, both Burford and Patton Boggs stood to collect a sizable award if they ever got the judgment enforced.
Chevron brought racketeering claims in 2011 against Donziger, his co-counsel, and Stratus Consulting, an environmental consulting firm. According to the oil company, representatives of the plaintiffs bribed an Ecuadorian judge and ghostwrote a supposedly independent expert report, known as the Cabrera report after its author.
Chevron’s suit, which is before U.S. district judge Lewis Kaplan in Manhattan, has gone well for the company so far.
Stratus settled in April,
admitting that it helped author the Cabrera report. Also in April, Burford Capital CEO Christopher Bogart
declared in an affidavit
that Patton Boggs misled Burford to believe that the plaintiffs’ contacts with Cabrera were limited and legal. Observers like
Fortune’s Roger Parloff
have previously speculated that Chevron would target Patton Boggs.
Patton Boggs brought
its own malicious prosecution claim
against Chevron in February 2012. Judge Kaplan, who is hearing that case too, gave Chevron a deadline of May 10 to decide if it wanted to bring its own claims against Patton Boggs.
Just beating the buzzer, Chevron moved for leave to file counterclaims on Friday. As foreshadowed by the affidavit from Burford’s CEO, the company alleges that Patton Boggs tried to cover up fraud in the Cabrera report by "making false representations mischaracterizing the relation between the [plaintiffs'] attorneys and Cabrera, and by bringing in new experts who relied on Cabrera’s data while purporting to confirm Cabrera’a conclusion on an independent basis—all without disclosing the fraudulent nature of the ghostwritten report."
Chevron seeks compensatory and punitive damages for fraud, malicious prosecution, and violations of New York Judiciary Law §487, a so-called attorney deceit statute.
: A spokesman for Patton Boggs sent us the following statement on Sunday: "Chevron’s proposed complaint against Patton Boggs is perhaps the starkest example yet of how Chevron will use its limitless resources to intimidate and harass anyone that dares to help the Ecuadorian Plaintiffs in their 20-year battle for justice. This cynical strategy will not work. We are proud that we have helped the indigenous and farming communities that have been so adversely impacted by Chevron’s actions. Patton Boggs has acted conscientiously, ethically and in good faith at all times since becoming involved in this case in 2010, and will not be intimidated by Chevron’s scare tactics. We will continue to zealously represent our clients and will not stand by idly and allow Chevron to disrupt our work and tarnish our reputation. We will defend ourselves in this case, and we are confident that the world will see through Chevron’s increasingly transparent efforts to divert attention from its liability in Ecuador and from the suffering of the Amazon communities."