NEW YORK (Reuters) - Chevron Corp said on Wednesday that Washington law firm Patton Boggs has agreed to pay $15 million to settle claims it tried to enforce a multibillion-dollar Ecuador judgment against the oil company it knew was fraudulently obtained.
Patton Boggs agreed to make the payment in exchange for Chevron dropping claims of fraud, deceit and malicious prosecution against the firm.
"We are pleased that Patton Boggs is ending its association with the fraudulent and extortionate Ecuador litigation scheme." Hewitt Pate, Chevron general counsel said in a statement.
As part of the settlement, Patton Boggs has issued a statement of regret for its involvement in the Ecuador case and has agreed it will cooperate with Chevron in connection with discovery related to the case going forward.
Patton Boggs managing partner Edward Newberry did not respond to a request for comment.
Chevron's case against Patton Boggs was one piece of a larger battle the oil company has waged in the U.S. and abroad over claims that the Ecuador judgment which found it polluted the country's rainforest was fraudulent and should not be enforceable.
On April 3 Chevron sued Patton Boggs in New York federal court, accusing it of trying to enforce an $18 billion pollution judgment that the law firm knew had been obtained through fraudulent tactics by plaintiffs lawyers led by Steven Donziger.
In March, a New York federal judge found that Donziger and his legal team had used fraud and corruption to secure a 2011 judgment in Ecuador on behalf of a group of Ecuadorean villagers who claimed Chevron had polluted the rainforest. Donziger is appealing.
Chevron claimed that Patton Boggs partner, James Tyrrell took the case despite having ethical concerns about its merits but did so because of "enormous financial pressure at Patton Boggs," according to court papers.
Chevron also said Tyrrell and another Patton Boggs partner Eric Westenberger "engaged in systematic efforts to obstruct and delay discovery proceedings (in 2010) in order to prevent the full extent of its own misconduct and that of other counsel for the Ecuadorean plaintiffs from coming to light." Tyrrell and Westenberger did not respond to requests for comment.
Lawyers familiar with the case said the settlement with Chevron would clear the way for a merger between Patton Boggs and Squire Sanders, the legal firm it has been in talks with since February.
“Everyone is breathing a sigh of relief because it paves the way for the merger to go forward,” said one former Patton Boggs lawyer who is speaking with attorneys at the firm. “It was the last big obstacle in the merger.”
(Reporting by Casey Sullivan; Editing by Ted Botha, Jeffrey Benkoe and Sofina Mirza-Reid)