Conrad & Scherer, Fort Lauderdale

A federal appeals court ruling may offer ammunition to energy business Drummond Co. Inc. in a defamation case against Fort Lauderdale litigation boutique Conrad & Scherer and a former partner — human rights lawyer Terrence Collingsworth, who has drawn scrutiny for alleged witness payments.

But the ruling is only part of a broader legal showdown that Collingsworth indicated he has no plans to abandon.

Earlier this month, the U.S. Court of Appeals for the Eleventh Circuit declined to reconsider a March 23 decision siding with Drummond in the company’s defamation suit. The company has been pursuing defamation claims since 2011 against Conrad & Scherer and Collingsworth, who left that firm in 2015 and is now based at International Rights Advocates in Washington.

The Eleventh Circuit decision came as the latest substantive development in a complicated legal dispute with allegations of human rights violations and payouts to former members of the United Self Defense Forces of Colombia, or AUC, a disbanded right-wing paramilitary group that the U.S. government designated a terrorist organization from 2001 to 2014.

Six former AUC operatives allegedly received payments from Collingsworth, Conrad & Scherer or intermediaries in the midst of human rights lawsuits against Birmingham, Alabama-based Drummond, according to the Eleventh Circuit.

Collingsworth led the firm’s Washington office. Conrad & Scherer managing partner William Scherer in Fort Lauderdale entered an appearance in the human rights cases and “delegated to Collingsworth the authority to litigate the cases,” the opinion said.

The human rights suits filed on behalf of Colombian nationals sought to hold Drummond accountable in U.S. court under the Alien Tort Statute. Generally, the suits accused Drummond of paying AUC to provide security near the company’s coal mines in Colombia. The suits alleged the paramilitary group killed innocent locals after payments from Drummond.

Ultimately, the alien tort cases, which are often difficult for plaintiffs, fizzled out as Drummond racked up rulings that cleared away the Colombians’ claims.

While human rights cases were still ongoing, however, Drummond also filed a defamation lawsuit in Alabama federal court against Conrad & Scherer and Collingsworth. At the heart of the defamation case was a letter from Collingsworth on Conrad & Scherer letterhead to the Dutch government and a Japanese company, accusing Drummond of supporting murderous paramilitary groups in January 2011.

Seeking to show the letter’s accusations were false and Collingsworth and Conrad & Scherer acted with malice, Drummond sought discovery in the defamation case on any potential payments to witnesses lined up to testify in the human rights cases. Collingsworth and Conrad & Scherer initially disclosed payments to three witnesses, which they said were necessary to protect the witnesses’ safety. But as the defamation suit wore on, Drummond uncovered evidence that forced Collingsworth to admit to facilitating payments to three additional witnesses, according to the Eleventh Circuit.

In light of that development, U.S. District Judge R. David Proctor in Alabama found in December 2015 that Drummond could invoke the crime-fraud exception to lawyer-client privilege and force Conrad & Scherer and Collingsworth to disclose documents about witness payments. Proctor’s ruling came down hard on Collingsworth and compared the case to a John Grisham novel.

Still, while Proctor ruled Drummond made a prima facie showing that the crime-fraud exception should be applied, the judge also noted he was not ruling on the merits of whether the witness payments were legal or appropriate. The Eleventh Circuit’s ruling from March affirmed Proctor’s decision.

 

RICO CASE COMING

In the past, Collingsworth maintained that, because witnesses in these types of human rights cases often testify against dangerous groups, they are sometimes paid for relocation or other security measures. Responding to questions via email Tuesday, Collingsworth reiterated his stance on payments of Colombian witnesses.

“Absolutely it is my position that the payments made to protect witnesses and their families were necessary to keep them alive and entirely appropriate, not only legally and ethically but morally,” Collingsworth said. “After pages and pages of very gratuitous speculation about my motives … Judge Proctor’s Dec. 7, 2015 opinion states … ‘The court need not decide at this stage of the proceedings whether payments to witnesses were lawful, appropriate, or warranted.’ We are confident when that determination is made, we will prevail.”

He added, “The Eleventh Circuit’s ruling does nothing but allow the argument to continue as to whether the payments were legitimate, an argument we will win.”

Collingsworth also criticized Drummond’s tactics in the defamation lawsuit and said he plans to launch another suit soon that further accuses Drummond of wrongdoing in Colombia.

“While they have well-served Drummond’s purpose in draining my time and resources in responding, these suits are frivolous on the merits,” he said. “We will soon be filing our own RICO case against Drummond for its role in profiting from war crimes in Colombia and covering up their criminal activity through bribes and threats against potential witnesses.”

A lawyer representing Drummond in the defamation case, H. Thomas Wells III of Starnes Davis Florie in Birmingham, Alabama, did not respond to a request for comment Tuesday, nor did an outside lawyer for Conrad & Scherer, Robert Spotswood of Birmingham’s Spotswood Sansom & Sansbury.