MANHATTAN (CN) - Chevron cannot demand attorneys' fees totaling more than $32 million from the adversary it raked over the coals for his handling of an environmental suit against it in Ecuador, a federal judge ruled Tuesday, noting that appellate efforts are ongoing.
Chevron started accusing Manhattan-based attorney Steven Donziger of defrauding it months before a court in Lago Agrio, Ecuador, ordered the oil giant to pay Donziger's clients billions. Spanish for Sour Lake, Lago Agrio takes its name from the headquarters of Chevron subsidiary Texaco, which drilled in the rainforests of Ecuador for decades.
Days before the Lago Agrio court slammed Chevron with a multibillion verdict on Feb. 14, 2011, Chevron asked a federal judge in New York to find that the case in Ecuador amounted to extortion.
Chevron said the lawyers and consultants bribed a judge and fixed the scientific studies. To keep Donziger and his clients from facing a trial by jury, the oil company dropped a claim for money damages shortly before trial.
The case fell before U.S. District Judge Lewis Kaplan, whom the defendants repeatedly - and unsuccessfully - sought to recuse.
Kaplan ultimately credited the bulk of Chevron's allegations in a nearly 500-page ruling that prevented Donziger from collecting an award Kaplan said had been "procured by corrupt means."
Kaplan did not comment on - or hear evidence regarding - Chevron's responsibility for pollution in the rainforest, except to say that cleaning up the area would be "desirable and overdue."
The oil giant then hit Donziger with a $32,334,584 bill for attorneys' fees, which included a $1,100 per hour rate for its lead trial lawyer Randy Mastro, who currently represents New Jersey Gov. Chris Christie with the heavy-hitting law firm Gibson, Dunn & Crutcher.
Chevron called that rate "reasonable" in court filings and press materials.
Kaplan put the matter on hold in a brief ruling Tuesday that acknowledges "it is possible that the Court of Appeals' decision could inform this court's assessment of Chevron's fee claim or, theoretically, eliminate any basis for it."
Emphasizing that the judge "simply deferred the decision," Chevron spokesman Morgan Crinklaw said the oil giant would "continue to hold Mr. Donziger accountable for his actions by pursuing an award for the legal costs incurred in defending the company from his extortionate scheme and in prosecuting our successful RICO suit - an award mandated by the RICO statute."
Donziger's appellate lawyer Deepak Gupta meanwhile skewered Chevron's manuever as a "back end" method to saddle his client with claims that the company previously abandoned.
"Faced with the prospect of having a jury evaluate its evidence, Chevron balked and dropped its claim for damages in its entirety," Gupta said in a statement. "Having made that decision, Chevron sought to destroy Mr. Donziger on the back end. ... But when Chevron dropped its damages claim, it also dropped any possibility of a fee award."
Chevron has countered that it needed a bench trial that would end with a written opinion it could take to enforcement courts in Canada, Brazil and Argentina, where the Ecuadoreans have tried to collect that award.
Donziger said he plans to dispute "each and every finding" by Kaplan when his lawyers file a rebuttal to the decision in June. He previously described the allegations against him as the "best-funded, longest-running retaliation campaign in history," enabled by a judge that has shown "implacable hostility" to him and his clients.
The Washington-based firm Patton Boggs also accused the oil giant of trying to intimidate it from advocating for its clients, but Kaplan rejected that lawsuit Tuesday.
Chevron's counterclaims, however, received a green light late last month.
Patton Boggs did not respond to a request for comment by press time.
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