Ecuador Villagers Seek to Block Patton Boggs Settlement Due to "Flagrant" Ethical Violations

Quito, Ecuador – Ecuadorian villagers are demanding that a U.S. federal court block the settlement between the Patton Boggs law firm and Chevron on the grounds that it contains "flagrant" ethical violations that impose severe prejudice on the indigenous rainforest communities that won a historic environmental judgment against the oil giant.

The motion, available here, spared little in describing the decision of Patton Boggs to leave the villagers in the lurch after four years of intense representation designed to protect their rights to a clean-up of polluted ancestral lands. The villagers, with the help of Patton Boggs, won a $9.5 billion judgment against Chevron in Ecuador in 2011 but were not notified in advance of the firm's negotiations with the oil giant to abandon the case.

According to the motion:

"There is no way to sugarcoat it: Patton Boggs has put its own interests above those of the people it was supposed to represent, switched sides in the middle of a hotly contested legal dispute, unceremoniously abandoned the clients without so much as notifying them, and publicly expressed regret at having taken on their representation in the first place. And it has even agreed to cooperate with Chevron in discovery, so that Chevron may use what it finds against the firm's former clients.

"No court should place its imprimatur on such a rotten deal," asserted the motion, which was filed by two residents of the rainforest, Javier Piaguaje and Hugo Camacho, and New York attorney Steven R. Donziger.

Separately, the villagers sent a letter to Edward Newberry, the managing partner of Patton Boggs, threatening to press claims against the firm for damages caused by the settlement, according to Pablo Fajardo, the lead lawyer for the Ecuadorians.

The letter demanded that Patton Boggs cover the legal fees of the villagers to hire substitute counsel to protect their rights in the wake of the firm's promise to cooperate with Chevron in turning over client information. The letter also demanded the firm strike specific provisions of the settlement deal that violate the ethical code – including a public statement of "regret" – or face a substantial claim for damages.

The court filing does not seek to stop any settlement between Patton Boggs and Chevron; it simply asks the court to reject the agreement until it conforms to the ethical rules that govern the practice of law. If the villagers succeed, Patton Boggs and Chevron likely would have go back to the drawing board and redo the agreement, or face protracted litigation that could affect the firm's merger plans.

Fajardo, a resident of the Amazon who won the prestigious Goldman Environmental Prize for his work to hold Chevron accountable, said in reference to the court filing and letter:

"We wish to make it clear that the affected communities who have been victimized for decades by Chevron's contamination will do all they can to not be further victimized by an American law firm that has engaged in disloyal conduct.

"While we have thanked the individual lawyers at Patton Boggs who labored on our behalf, at this stage the firm as a whole is going to have take responsibility for a decision that undermines the entire basis of any properly functioning legal system, which is premised on the concept that an attorney owes a duty of loyalty to his clients even when he or she decides to withdraw. In this case, Patton Boggs withdrew to gain an economic benefit for itself in exchange for affirmatively prejudicing its clients on behalf of Chevron. We consider this utterly indefensible."

Fajardo also criticized the firm's claimed reliance on Judge Kaplan's RICO decision as the excuse to withdraw.

"The claim by Patton Boggs that Kaplan's decision changes the landscape is pretextual," said Fajardo. "It is not what attorneys in the firm who knew about our case actually told us they thought. In any event, Kaplan's findings are not final anywhere in the world, least of all in the U.S where they are under appeal. They directly contradict rulings from three separate courts in Ecuador and are being contested in various enforcement jurisdictions."

Fajardo submitted an affidavit in which he explained that the management committee at Patton Boggs never notified him in advance of the existence of the settlement agreement; never told him the settlement agreement was being negotiated; never notified him that Patton Boggs was considering turning over client information to Chevron; and never informed him that the firm was planning to make a prejudicial statement that it "regretted" its involvement in the case as a condition of the settlement.

He also said that the firm still had not given him a copy of the agreement with Chevron or formally communicated its withdrawal in writing.

Donziger said he was stepping in to represent the Ecuadorians for the limited purpose of challenging the settlement agreement because of difficulties in finding substitute counsel. Chevron has improperly sued key lawyers and supporters of the lawsuit as part of its retaliation strategy against the villagers for winning the judgment, said Donziger.

"We are now operating with a skeleton team of lawyers trying to extract the villagers from a Catch-22 created by Chevron and Patton Boggs," said Donziger, a solo practitioner. "Largely because of the intense pressure Chevron imposed on Patton Boggs and other lawyers by suing them, it is evident there is a generalized fear in the legal profession to help the Ecuadorians.

"We believe this has been one of the main objectives of Chevron's management team all along – to drive lawyers off the case so the company can win by might what it cannot win on merit," he added.

"We have now seen litigation over litigation over litigation in this case, while the communities continue to suffer from grave harm," he added. "This is not happenstance. It's a function of Chevron's retaliation strategy."

Background

Patton Boggs agreed to represent the Ecuadorian communities beginning in 2010.

The firm had taken the lead in trying to recuse Judge Kaplan from the RICO case, filing these petitions (here and here) outlining his animus toward the Ecuadorians and their counsel. At times, roughly 15 lawyers from Patton Boggs worked on the Ecuador matter. The Patton Boggs team also racked up a string of impressive victories over Chevron in several federal appellate and trial courts.

Despite Chevron's claims that it has gained the upper hand in the legal battle, the company continues to show anxiety about its prospects. CEO John Watson, besieged in recent years by protestors over the company's failure to clean up the contamination in Ecuador, recently moved the company's annual meeting from the San Francisco area to the remote town of Midland in the western plains of Texas.

Chevron also has been hit with new analyses of the evidence that its own technical reports show massive contamination at its former well sites in Ecuador, while enforcement actions targeting billions of dollars in company assets to pay for a clean up in Ecuador are pending in Canada, Brazil, and Argentina.

Watson – who was deposed under oath by Donziger on the Ecuador case – also faces votes on three shareholder resolutions that challenge the company's mishandling of the Ecuador litigation. One of the resolutions would strip Watson of one of his two job titles of CEO and Chairman of the Board of Directors; the same resolution garnered a whopping 37% of shareholder support in 2012, the last time it was presented.

For background on the overwhelming evidence against Chevron as found by courts in Ecuador where the oil company wanted the trial held, see here; for background on the many court decisions won by Patton Boggs against Chevron, see here; for a video that explains Chevron's human rights abuses in Ecuador, see here; for a letter signed by 43 non-profit advocacy groups criticizing Chevron's litigation scare tactics, see here.