In Chevron Ruling, a Cautionary Tale for Lawyers

In Chevron Ruling, a Cautionary Tale for Lawyers Steven Donziger

As widely expected, a judge in Manhattan ruled Tuesday that a $9.5 billion Ecuadorean environmental judgment against Chevron Corporation was fatally tainted by fraud. U.S. District Judge Lewis Kaplan’s 497-page decision zeroes in on the conduct of Steven Donziger, the New York–based lawyer who spearheaded claims that Chevron is liable for devastating a swath of the Ecuadorean Amazon. But plenty of other attorneys and law firms were drawn into the morass of a case over the years, and Kaplan’s ruling reads like a tale of lawyers run amok and sometimes led astray.

These lawyers probably aren’t enjoying the spotlight, but none of them come out looking nearly as bad as Donziger himself. Kohn Swift & Graf’s Joseph Kohn and Constantine Cannon’s Jeffrey Shinder, for example, convinced the judge that they fled the case when they smelled fraud. And if Chevron’s lawyers at Gibson, Dunn & Crutcher were hoping for a direct hit against Donziger’s cocounsel at Patton Boggs, they didn’t get it—though that may not be much consolation for Patton Boggs’ James Tyrrell Jr., whose involvement in the case has helped to create a full-blown crisis for the firm.

Here’s our rundown on what Tuesday’s ruling means for some of the lawyers who tangled with Chevron.

Steven Donziger

It’s hard to see Kaplan’s ruling as anything but a huge triumph for Randy Mastro and Andrea Neuman at Gibson Dunn, who led the charge for Chevron. Kaplan accepted Chevron’s argument that Donziger engaged in a wide range of misconduct, including arranging the ghostwriting of a supposedly independent damages report, procuring a judgment written by the plaintiffs themselves, and judicial bribery. Donziger argued during the bench trial in the case that his conduct was lawful in Ecuador, but Kaplan forcefully rejected that argument. In reality, Donziger knew he was crossing the line and tried to cover his tracks, the judge wrote.

“The wrongful actions of Donziger and his Ecuadorean legal team would be offensive to the laws of any nation that aspires to the rule of law, including Ecuador—and they knew it,” Kaplan wrote. As a result, Kaplan ruled, Donziger and his clients can’t seek to enforce the megajudgment in the United States.

James Tyrrell Jr. and Eric Westenberger of Patton Boggs

Tuesday’s decision recounts how Tyrrell agreed in 2010 to advise the Ecuadorean plaintiffs on how to enforce their megajudgment worldwide. Patton Boggs also helped Donziger secure outside funding from a leading litigation funding firm, Burford Capital, which has since renounced its investment and alleged that it was duped into taking the case by the firm. The representation has drawn bad press for Patton Boggs, and It’s been cited as a reason for its failed merger talks with Locke Lord and a recent decision to close up shop in New Jersey.

Chevron claims that Patton Boggs attorneys helped Donziger cover up the truth about the ghostwritten damages report, known as the “Cabrera report” after its purported author. Kaplan’s decision doesn’t take a firm stand on the allegation, though the judge notes that “the question of whether Patton Boggs misled Burford concerning the Cabrera episode one day may be important to a Chevron claim against Patton Boggs in a related action.” The ruling does recount Patton Boggs’ involvement in trying to “cleanse” the Cabrera report ahead of the final Ecuadorean judgment, however, describing how Donziger and his team wanted to limit the damage of Chevron’s ghostwriting claims by supplementing the record with a new report.

To be clear, Patton Boggs isn’t a defendant in Chevron v. Donziger, though Chevron is seeking to bring fraud counterclaims against the firm in an abuse of process lawsuit that Patton Boggs filed against Chevron. And the judge seemed to absolve Patton Boggs of one the most egregious aspects of the alleged fraud, writing that there’s no evidence that anyone at Patton Boggs knew of the Ecuadorean plaintiffs’ efforts to bribe a local judge, or knew that the plaintiffs ghostwrote the final judgment themselves.

Joseph Kohn of Kohn Swift & Graf

Kohn is a prominent Philadelphia litigator who assisted Donziger with the Chevron litigation from its inception until 2009. While Kohn had the title of cocounsel, Tuesday’s ruling emphasizes that his real contribution was to shell out millions of dollars to fund the litigation.

Kaplan determined that Kohn’s money was used to pay off Richard Cabrera, whose supposedly independent report was at the heart of Chevron’s fraud claims. But after hearing live testimony from Kohn, the judge put the blame squarely at Donziger’s feet. Donziger “was selective with what he told Kohn and when he told him, and actively misled him in important respects,” Kaplan wrote. The judge found that Kohn began expressing concerns about Donziger’s actions in late 2008, and backed out of the case for good in early 2010 after Donziger refused to appoint an independent investigator to explore Chevron’s allegations.

Jeffrey Shinder of Constantine Cannon

Shinder, a Washington, D.C., litigator known for his antitrust work, became a star Chevron witness at trial. Given his quick and decisive retreat from the case, as recounted by the judge, he might wear the decision as a badge of honor.

In 2009 Donziger retained Shinder to fight Chevron’s discovery efforts and also sought his help in enforcing the Ecuadorean judgment abroad. Kaplan found that Shinder pressed Donziger forcefully and repeatedly about Chevron’s allegations and then quickly withdrew when he determined that they were at least partly true.

In a sign of how much stock Kaplan put in Shinder’s testimony, the judge even gave him the last word in Tuesday’s opinion. Kaplan concluded: “It is troubling that, in the words of Jeffrey Shinder, what happened here probably means that we’ll never know whether or not there was a case to be made against Chevron.”