Judge Rejects Bid to Upset Settlement Between Law Firm, Chevron – New York law Journal
Attorney Steven Donziger’s attempt to upset a settlement between Chevron and the former Patton Boggs law firm in the multibillion-dollar brawl over an Ecuadorean environment award has been decisively rejected by a federal judge.
Southern District Judge Lewis Kaplan said the 2014 settlement, in which Patton Boggs agreed to pay $15 million and expressed regret over its role in the litigation, stands. Donziger, he said, has no right to intervene and press his claim Patton breached its professional obligations to him and two representative plaintiffs from the infamous Lago Agrio litigation.
Donziger was the lead plaintiffs lawyer who secured a $9 billion environmental award against Chevron for the pollution in Ecuador caused by a predecessor oil company.
Patton Boggs came on board in 2010, launching a worldwide plan to enforce the judgment by attaching the oil giant’s assets. Chevron filed several actions of its own to block enforcement, including a lawsuit against Donziger in which Kaplan found the Lago Agrio judgment was procured by fraud, extortion, and bribery of a judge in Ecuador. Patton Boggs, which later became Squire Patton Boggs through a merger, was named as a nonparty co-conspirator in the alleged fraud.
“Patton, the full role of which is not yet known, did not confine itself to acting as counsel for the [Lago Agrio plaintiffs]. It brought three lawsuits against Chevron on its own behalf,” Kaplan said in Patton Boggs v. Chevron, 12-cv-9176. “This was the last of the three.”
Patton agreed to settle after Kaplan’s decision finding fraud. Aside from the $15 million and the agreement to provide discovery, Kaplan said, Patton “expressed regret for its action in light of the findings in the NY case.”
Donziger and the representative Lago Agrio plaintiffs (LAPs) moved to intervene and asked Kaplan to undo the settlement, saying Patton and lead lawyer James Tyrrell improperly failed to inform him of its negotiations with Chevron and its agreement to provide discovery was “flagrantly unethical.”
“Patton Boggs has … switched sides in the middle of a hotly contested legal dispute, unceremoniously abandoned its clients without so much as notifying them,” Donziger wrote.
Kaplan, however, ruled that the movants have no legally protected interest in the case.
“Donziger and the LAP representatives may have an interest, in the sense of caring about, the transactions that were the subject or subjects of the action between Patton and Chevron—Patton’s claims against Chevron on the injunction bond and for malicious prosecution, and Chevron’s claims against Patton for alleged complicity in the corrupt scheme to extort Chevron by, among other things, obtaining and enforcing a corrupt judgment in Ecuador, for fraud, and for other alleged misbehavior by Patton,” he said. “But none of them advances a concern with Patton’s claims against Chevron or Chevron’s claims against Patton ‘that is direct, substantial and legally protectable.'”
Morvillo Abramowitz Grand Iason & Anello represented Patton Boggs. Gibson, Dunn & Crutcher represented Chevron. The firms and Donziger did not respond to calls seeking comment.
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