Ecuador Pollution Case Is a Gordian Knot

(CN) - Patton Boggs has filed a new federal complaint in Washington, claiming Chevron and its attorneys at Gibson Dunn & Crutcher conspired to tortiously interfere with its multibillion-dollar oil pollution case in Ecuador - apparently undeterred by the fact that the same court threw out a substantially similar claim just last week.

The new complaint closely mirrors Patton Boggs' proposed amended complaint, which a federal judge refused to enter, but it adds a new allegation that Chevron has tried to block the Washington firm from getting paid.

One week ago, U.S. District Judge Henry Kennedy dismissed the original November 2010 lawsuit, saying the conspiracy and interference claims were not ripe and had been brought in an inappropriate venue.

Kennedy also rejected Patton Boggs' motion to amend as "futile."

Now, as then, Patton Boggs seeks declaratory judgment that there is no conflict of interest in its representation of a group of indigenous Ecuadoreans who are trying to get Chevron to pay $18.6 billion for decades of oil contamination allegedly caused by Texaco, which Chevron acquired and pulled out of Ecuador in 2001.

Both Chevron and the Ecuadoreans are appealing the $18.6 billion judgment in Ecuador, but Chevron has sought relief in several other venues and conducted discovery in 20 courts throughout the United States in pursuit of that goal.

The Delaware-based oil company won an injunction in Manhattan to block collection efforts, is suing the government of Ecuador at The Hague, and is suing the players behind the Ecuadoreans' suit.

At the heart of the conflict-of-interest dispute, Chevron has balked at attempts by Patton Boggs partner James Tyrrell to intercede in Manhattan proceedings.

Tyrell has ties to the Breaux Lott Leadership Group, which Patton Boggs acquired in July 2010.

In the preceding 2½ years, however, Chevron had retained the politically powerful group, headed by former U.S. Senators Trent Lott and John Breaux, to lobby on its behalf in the Ecuador case.

Patton Boggs says Chevron is wrong to suggest there is a conflict of interest, since Breaux Lott performed "pure lobbying services" for Chevron, not legal work or advice.

Judge Kennedy dismissed Patton Boggs' original complaint, in part, because he found that Chevron had never explicitly sought to disqualify Tyrrell or other Patton Boggs lawyers.

In the new complaint, Patton Boggs says that is no longer the case.

"Defendants have wrongfully attempted to capitalize on the confusion generated by so many duplicate and geographically disparate filings to further their scheme to interfere with Patton Boggs' ability to represent its clients," Patton Boggs says in its complaint.

"For example, in attempting to argue that a prior declaratory judgment action in this Court was not ripe, Defendants represented to this Court that 'Chevron has never sought Patton Boggs' disqualification.' But - that same day - defendants submitted papers to the United States District Court for the Southern District of New York in which they sought to disqualify Patton Boggs from representing Plaintiffs in the § 1782 proceedings before that court."

There are approximately 15 small differences between Patton Boggs' amended complaint, which was proposed in February, and the new complaint, dated April 27. In addition to reflecting that an Ecuadorean judge has entered a judgment against Chevron, Patton Boggs says that "Defendants have also taken steps to prevent Patton Boggs from obtaining payment for its services on behalf of the Ecuadorian Plaintiffs."

"Since Patton Boggs' filing on February 7, 2011 of its motion for leave to amend its Complaint, Defendants have engaged in further misconduct by undertaking efforts to cut off the Ecuadorian Plaintiffs' source of funds, causing the Ecuadorian Plaintiffs to breach their contract with Patton Boggs by non-payment of Patton Boggs' legal fees and expenses," according to the complaint.

Patton Boggs also mentions in the new complaint that it is squaring off against Chevron in discovery proceedings in Washington.

Last week, Judge Kennedy suggested that the firm raise its conflict-of-interest argument in a venue where the firm is facing off with Chevron over discovery requests.

"For this Court to inform all other federal courts that Patton Boggs is qualified to represent the Lago Agrio plaintiffs before those courts would be incredibly intrusive," Kennedy wrote on April 20.

Patton Boggs sued Chevron and Gibson Dunn & Crutcher, seeking damages, an injunction and declaratory judgment, alleging tortious interference and conspiracy. It is represented by Charles Talisman, an attorney with the firm.

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