(Corrects to remove statement in paragraph 10 regarding a
Hague decision ordering Ecuador to pay $96 million, which is
unrelated to the current Chevron litigation. Also removes
statement that Gibson Dunn was long-running counsel for Chevron
because Gibson Dunn was hired in 2009)
* Gibson Dunn and Patton Boggs trade accusations
* Conflict of interest, intimidation among allegations
* Patton Boggs appeals federal court rulings
By Leigh Jones
NEW YORK, Oct 6 In the 18-year battle between
Chevron Corp (CVX.N) and Ecuadorean residents over pollution in
the Amazon rainforest, two high-powered law firms on opposite
sides of the case are embroiled in an escalating feud involving
charges of political favoritism, intimidation and greed.
Chevron's counsel in the fight is Los Angeles-based Gibson
Dunn & Crutcher, a 1,000-attorney firm recognized for its
hard-charging litigators, including Ted Olson, former U.S.
Solicitor General under President George W. Bush.
The Ecuadoreans have retained Patton Boggs, a 600-attorney,
Washington-based law firm known for its inside-the-beltway
legal advice and lobbying work. Patton Boggs, new to the case,
first appeared in court for the plaintiffs in November.
But before Patton Boggs lawyers even set foot in the
courtroom, Gibson Dunn had fired off a letter to Patton Boggs'
chairman, James Tyrrell, stating that it had "grave concerns"
about the Washington-based firm's representation of the
Gibson Dunn pointed to Patton Boggs' 2010 acquisition of
Breaux Lott Leadership, a lobbying group, and the fact that the
group had previously worked for Chevron on the pollution case.
That relationship should disqualify Patton Boggs as counsel for
the Ecuadoreans, Gibson Dunn asserted.
"It's really obvious that they have a conflict of interest,
and they cavalierly reject" the conflict argument, Gibson Dunn
attorney, Theodore Boutrous told Reuters. He alleged that the
plaintiffs' case is rife with fraud and corruption. "They
should look at the evidence of fraud and do what a reasonable
law firm should do under those circumstances," Boutrous said.
The Ecuadorians have denied the fraud charges.
For its part, Patton Boggs says that Gibson Dunn has
maneuvered to cut off the Ecuadorean's money supply to continue
the litigation and to keep Patton Boggs from receiving a
paycheck. Gibson Dunn attorneys are pursuing a "scorched earth"
strategy, Tyrrell told Reuters.
The firm, at Chevron's direction, is doing everything in
its power to keep Chevron from having to pay an $18 billion
judgment that an Ecuadorean court granted to the plaintiffs in
February, and is keeping Patton Boggs from doing its job,
Tyrrell added. "We would think that a law firm of the caliber
of Gibson Dunn would not be the pliant instrument of its
client," he said.
While firms on opposite sides of cases often trade
courtroom barbs, typically it's just posturing for the judge
and jury. With Patton Boggs and Gibson Dunn, that doesn't
appear to be the situation. It's a "donnybrook," says Robert
Percival, a law professor at the University of Maryland School
of Law who has closely followed the Chevron litigation. "Both
sides hate each other," he said.
The litigation between Chevron and the Ecuadoreans has
jumped from court to court in Ecuador, the United States and
international tribunals for nearly two decades. The case was
originally filed in federal district court in New York and was
built around the plaintiffs' claims that Texaco Inc dumped oil
drilling waste into the Amazon rainforest in the 1970s and
'80s. Chevron is involved because it bought Texaco in 2001.
Chevron had the case moved to Ecuador, hoping for a more
favorable resolution there. But in a major turn, an Ecuadorean
court in February ordered the company to pay $18 billion to the
Patton Boggs' Tyrrell became lead counsel for the
plaintiffs in the case after New York solo practitioner Steven
Donziger stepped aside last year. Donziger is defending a
racketeering lawsuit brought by Chevron charging that he and
the plaintiffs manufactured evidence and sought to influence
the Ecuadorean court that issued the $18 billion judgment.
Patton Boggs, which took the mammoth case on contingency,
joined the fray with about $4 million financing from Burford
Capital, a third-party litigation funder. Just a day after
Patton Boggs notified the court in November 2010 that it was
new counsel for the plaintiffs, Gibson Dunn attorney Randy
Mastro sent the "grave concern" letter to Patton Boggs'
In the letter, Mastro spelled out the conflict he felt was
posed by Breaux Lott lobbying firm. In work for Chevron on the
contamination matter, Breaux Lott acquired information about
the oil company, which created a conflict of interest that
Chevron had not waived, Mastro said.
More recently, when Patton Boggs and Gibson Dunn appeared
at a hearing before a New York federal appeals court panel in
September, Mastro told the court that Patton Boggs and the
plaintiffs were using unscrupulous means to get the $18 billion
judgment enforced."(It) is not about an enforcement strategy,"
Mastro said. "It is about (in the plaintiffs') words, using the
political connections of the Patton Boggs law firm."
So far, Gibson Dunn has not formally asserted any ethics
claims against Patton Boggs in court. However, in a preemptive
strike of sorts, Patton Boggs filed two lawsuits in federal
court in Washington seeking a declaration that the lobbying
work did not create a conflict.
In the suits, Patton Boggs also asserted that Gibson Dunn
has interfered with the financing deal between Patton Boggs and
Burford Capital, and has convinced the funder to discontinue
paying for the litigation on the plaintiffs' behalf. Burford
Capital declined to comment for this story.
In April, the federal court in Washington threw out Patton
Boggs' first lawsuit, and in August it dismissed the other. In
the first case, the court found that the claims of tortious
interference with Patton Boggs' funding contract were too
speculative. It also ruled that it would be "intrusive" for the
federal court to determine for other courts whether a conflict
existed because of the lobbying work. In the second case, the
court said Patton Boggs couldn't get a "second bite at the
Patton Boggs has appealed both of those decisions, and on
Sept. 30 moved to consolidate the cases.
Patton Boggs' decision to proceed with its own case against
Gibson Dunn is intended demonstrate it will fight any
roadblocks to Gibson Dunn may put in its path, said Michael
Downey, a partner with Armstrong Teasdale whose practice
focuses on attorney ethics. "The message they're trying to send
is that they believe they can withstand the challenges," Downey
(Reporting by Leigh Jones; Editing by Eileen Daspin and Gerald