(CN) – A federal judge balked at a plea to reconsider Patton Boggs’ lawsuit accusing Chevron of using intimidation tactics to thwart multibillion environmental claims in Ecuador. The reaction does not bode well for a separate, “identical” lawsuit the firm filed with the same court that threw out its first attempt.
U.S. District Judge Henry Kennedy dismissed the original lawsuit and the motion to amend on April 19. A week later, Patton Boggs moved for reconsideration and proposed amending its complaint to add new claims. Simultaneously, however, it filed a new complaint that mirrored the action Kennedy refused to enter.
“Simply put, Patton Boggs’s argument is a day late and a dollar short,” Kennedy ruled on July 8, with respect to the motion for reconsideration and leave to amend. Though Kennedy declined to dismiss the duplicate lawsuit at this juncture, he hinted that the Washington-based firm is unlikely to prevail.
“The Court will not at this time address the fact that Patton Boggs has taken the unusual step of filing, along with its motion for reconsideration, a new complaint in a separate action presenting the same claims that were dismissed in this case, along with another tortious interference claim,” Kennedy wrote. “Although Chevron suggests that the Court would be within its power to dismiss that case sua sponte, the Court believes that the proper course is to give full consideration to the arguments made by the parties regarding Chevron’s pending motion to dismiss that action.”
Patton Boggs’ objective with these filings is a declaratory judgment that there is no conflict of interest in its representation of a group of indigenous Ecuadoreans who are trying to hold Chevron liable for decades of oil contamination allegedly caused by Texaco, which Chevron acquired and pulled out of Ecuador in 2001.
As Chevron and the Ecuadoreans appeal an $18.6 billion judgment in Ecuador, Chevron has requested 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 bristled 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.
But Chevron had retained the politically powerful group, headed by former U.S. Senators Trent Lott and John Breaux, years earlier 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.
Kennedy dismissed the firm’s complaint in April, partly because Chevron had not explicitly moved to disqualify Tyrrell or other Patton Boggs lawyers. The judge did not waver last week, noting that Patton Boggs failed to present evidence of clear error.
In its motion for reconsideration, Patton Boggs claimed “that the Court erred by overlooking the ‘fact’ that a court in another jurisdiction, before applying its own ethical rules, would have to determine whether the Breaux Lott Group’s lobbying services for Chevron were legal in nature, a question that, Patton Boggs avers, is governed by District of Columbia law,” Kennedy explained.
“To begin with, this argument – like Patton Boggs’s original contention that District law would govern any disqualification motion based on the Breaux Lott Group’s lobbying – is wholly unsupported,” the 13-page ruling states. “Indeed, this assertion appears directly contrary to the Court’s prior holding that ‘the propriety of Patton Boggs’s participation in Chevron’s various § 1782 proceedings … is governed by the respective rules of the jurisdictions where those cases are pending.’ But more importantly, this proposition – even if true – is simply irrelevant to the Court’s bottom-line determination that it would overreach by adjudicating the propriety of Patton Boggs’s appearance before other courts. Even if District law would ‘inform the disqualification analysis’ under other courts’ rules of conduct, those courts remain better suited to undertake that analysis.”
This reasoning applies to Patton Boggs’ other argument that jurisdiction was proper since the firm is pitted against Chevron in proceedings under U.S. District Judge Colleen Kollar-Kotelly in the same Washington court where Kennedy presides.
“Judge Kollar-Kotelly, no less than a judge sitting in another judicial district, is ‘perfectly capable of resolving Patton Boggs’s ethical dilemma,'” Kennedy wrote, quoting the April 19 ruling. “The fact that she sits in the same courthouse does not change the fact that ‘creat[ing] an alternate forum for the subsidiary issue of considering the disqualification of [a law firm] would be tantamount to the proverbial tail wagging the dog.’ Id. (quoting Airgas, Inc. v. Cravath, Swaine & Moore LLP …). Nor, of course, could the presence of one of Chevron’s collateral actions in this district justify a ruling by this Court on Patton Boggs’s ability to appear in all of them.”
Patton Boggs had also claimed the Washington court should have considered New Jersey law in weighing tortious-interference claims since the firm “performs the services with which Chevron and Gibson Dunn have allegedly interfered” in the Garden State.
“But the time for this argument has passed. Patton Boggs had ample opportunity to argue that New Jersey law governed its tort claims; it did not,” Kennedy wrote. “It may not do so now.”
The findings hold true under D.C. law as well, the judge continued, rejecting Patton Boggs’ attempt to rely on a different formulation of tort law, section 766A of the Second Restatement of Torts instead of section 766.
“Patton Boggs asserts that it has stated a claim for relief under this formulation of tortious interference, which does not require an actual breach of contract,” Kennedy wrote. “Patton Boggs is incorrect. … The first problem here is that Patton Boggs had ample opportunity to present this argument in support of its motion for leave to amend, and failed to do so. In fact, Patton Boggs’s own reply brief laid out the precise formulation of tortious interference that it now argues the Court erred by employing Indeed, Patton Boggs’s response to Chevron’s argument that allegations of breach were required was not to assert the contrary, but rather to argue that it had alleged that Chevron and Gibson Dunn were attempting to cause a breach, which was sufficient. At no time did Patton Boggs mention the form of tortious interference contained in § 766A.”
Chevron’s attorneys with Gibson, Dunn & Crutcher are proposed as new defendant in the amended complaint and in the identical second complaint.
Kennedy added that the 766A formulation may not even be viable in Washington.
“But the uncertain status of § 766A need not detain the Court here,” according to the ruling. “Even if Patton Boggs’s argument were not untimely, and even if the Court were to apply § 766A precisely as written, Patton Boggs’s proposed amended complaint would still fail to state a claim for tortious interference.”
Damages are an essential element of any tortious interference claim, and Patton Boggs identified no such loss resulting from Chevron’s conduct, Kennedy added.