RPT-Corporate defender leading Ecuadoreans vs Chevron

Mon Jan 31, 2011 7:00am EST

(Repeats story published on Jan. 28)

* New lead lawyer against Chevron defended Monsanto

* Damages in Ecuador case exceed $27 billion-plaintiffs

By Dan Levine

SAN FRANCISCO, Jan 28 (Reuters) - Ecuadoreans seeking a $27 billion judgment against Chevron Corp (CVX.N) have put a new face on their 18-year old case: high-powered corporate attorney James Tyrrell, Jr., who defended Monsanto Co (MON.N) against Agent Orange claims from Vietnam veterans.

Tyrrell, a partner in the powerhouse Washington, D.C. law firm Patton Boggs, is also representing New York City and contractors in litigation stemming from the 9/11 attacks on the United States.

At stake for lawyers representing Ecuadoreans in their case against Chevron: nearly a third of any judgement. Plaintiffs' damages estimates have ranged from $27 billion to $113 billion. Last year, analysts at Morgan Stanley (MS.N) predicted that the politically charged lawsuit would eventually be settled for between $2 billion and $3 billion.

The lawsuit was brought against Texaco, which merged with Chevron in 2001. The plaintiffs claim that waste from oil-drilling was dumped into unlined pits and caused widespread contamination, illness and multiple deaths in Ecuador.

They chose Tyrrell as their lead attorney after New York lawyer Steven Donziger came under fire last year over comments he made in outtakes of the documentary, "Crude."

Donziger, who has advised the Ecuadoreans since 1993, was quoted discussing paying protesters to surround the courthouse in the Amazon town of Lago Agrio, as a way of bringing pressure on the court for a favorable judgment.

Separately, a federal judge in California found "ample evidence" last year that plaintiffs had colluded with a court-appointed damages expert in Ecuador who was supposed to be neutral.

SIGNIFICANT DEVELOPMENT

With an Ecuadorean court expected to issue a ruling in the coming months, Tyrrell's corporate experience is crucial, said Roger Alford, a professor at Pepperdine University School of Law who has followed the case.

"Obviously the change of counsel is a very significant development," Alford said. "It means that the plaintiffs are on the defensive."

Tyrrell takes issue with any suggestion that his firm's higher profile suggests the case is faltering.

"How having a whole army of new combat troops ... represents an act of desperation is difficult to discern," Tyrrell said in an interview.

He said his firm originally was tapped to make sure the Ecuadorean judgment was one that commanded international respect. "Without trying to be immodest, I guess I have developed a reputation as a toxic tort, mass disaster lawyer," Tyrrell said.

Donziger and his team have insisted that nothing improper occurred under Ecuadorean law, and that none of the charges against him have anything to do with the merits of the Ecuador case.

"They are nothing but a sideshow designed to derail a legitimate lawsuit against a mighty oil company that mistakenly bought a multi-billion liability because company executives believed they could control the end results," said Karen Hinton, a spokeswoman for the Ecuadoreans.

Donziger has scaled back his role on the plaintiffs' legal team to avoid being a distraction in the case, Hinton said.

Chevron has said the lawsuit has no merit, and has initiated 19 court proceedings against the plaintiffs in the United States and obtained a trove of plaintiffs' internal documents. The company is trying to make any judgment against it unenforceable in the United States by portraying the proceedings in Ecuador as corrupt.

Chevron has no assets in Ecuador, so the plaintiffs will have to convince a judge in the United States or another country to enforce any judgment. The Donziger controversy could have harmed that collection effort, Alford said, but a big firm like Patton Boggs would have better credentials in court.

The plaintiffs have relentlessly pursued their case, but the question now, according to Catherine Rogers, a professor at Penn State Law School, is how well Patton Boggs can play down any allegations of misconduct against other representatives of the plaintiffs.

"My guess is Patton Boggs will be much more cautious about how they present themselves," Rogers said.

HIGH STAKES

In December, a week after Patton Boggs officially took the lead role in the case, Donziger disclosed in a deposition that the plaintiffs in the case had agreed to pay their lawyers a 30 percent contingency fee. The deposition took place in New York City on Dec. 23 and was part of the litigation with Chevron.

Donziger testified that according to the unwritten agreement, his portion of those fees would be 31.2 percent, he has testified. Patton Boggs would take a 12 percent share of the fees.

The balance of the 30 percent would be paid to other lawyers in the United States and Ecuador and others involved in the case on behalf of the plaintiffs.

For example, Burford Capital, a British fund that invests in commercial disputes, has pledged up to $15 million to continue the lawsuit on behalf of the Ecuadoreans, and would receive 5.5 percent of the fees if they invest the full amount, Donziger testified.

Tyrrell acts as an outside counsel for Burford, according to the Patton Boggs website.

If the case were settled for between $2 billion and $3 billion, Donziger could be paid roughly $187.2 million to $280.8 million.

Patton Boggs, whose website notes that it has more than 600 lawyers and nonlawyer specialists associated with the firm,

could earn $72 million to $108 million in fees.

American Lawyer, an industry publication, noted on its website that Patton Boggs had revenue of $332 million in 2009.

Tyrrell declined to discuss any fee arrangements for the plaintiffs' team.

Chevron, meanwhile, has continued to push its strategy of going after the lawyers. It argued recently that Patton Boggs should be barred from participating in a Manhattan federal court proceeding because it had not been properly authorized to represent the Ecuadorean plaintiffs. But Patton Boggs has said in a court filing that it was hired by duly authorized South American lawyers and it is not going away. (Reporting by Dan Levine; Editing by Peter Henderson, Eric Effron and Toni Reinhold)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.