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Patton Boggs Can’t Sue Chevron Over ‘Threats’

(CN) - A federal judge in Washington dismissed Patton Boggs' lawsuit against Chevron and rejected the law firm's motion to amend its complaint.

In a declaratory judgment action filed on Nov. 17, Patton Boggs accused Chevron of using intimidation tactics to thwart a multibillion environmental lawsuit in Ecuador.

The firm has had a hand in the representation of a group of Ecuadoreans suing Chevron in Lago Agrio, Ecuador, over contamination from decades of oil drilling. Though an Ecuadorean judge entered an $18.6 billion verdict against Chevron in February, the matter is hardly settled.

As Chevron appeals the judgment in Ecuador, it also won an injunction in Manhattan to block collection efforts, is suing the government of Ecuador at The Hague and is suing the players who spearheaded the Ecuadoreans' suit.

With the lawsuit at hand in Washington, Patton Boggs had tried to head off alleged threats by Chevron to disqualify certain of the firm's lawyers from representing the Ecuadoreans.

At the heart of the conflict-of-interest dispute, Chevron has balked at attempts by Patton Boggs partner James Tyrrell to intercede in the Manhattan proceedings. Tyrell has ties to the Breaux Lott Leadership Group, which Patton Boggs acquired in July 2010.

In the preceding 2.5 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 Lago Agrio litigation.

Though Chevron has not yet officially sought to disqualify Tyrrell or other Patton Boggs lawyers, it sent the firm a letter expressing its "grave concerns" and reserving "the right to take any action we deem appropriate."

In Patton Boggs' demand for declaratory judgment, the firm said Breaux Lott performed "pure lobbying services" for Chevron, not legal work or advice, so a conflict of interest does not exist. About two months later, it filed a proposed amended complaint that added new causes of action and named the law firm representing Chevron - Gibson, Dunn & Crutcher - as a defendant.

U.S. District Judge Henry Kennedy dismissed the original suit and the motion to amend in a 15-page opinion Tuesday. Since Chevron has not yet acted on its so-called threats, the perceived threat to Patton Boggs is still conjecture, Kennedy found.

Since the firm cannot substantiate claims of tortious interference or civil conspiracy, amending the complaint as such would be "futile," according to the ruling.

Kennedy said he was persuaded by Chevron's motion to dismiss, agreeing that the dispute is not yet ripe, that the District of Columbia is the wrong venue and that it would be "intrusive" for him to iron out Patton Boggs' ethical quandaries as they pertain to other districts.

In its efforts to prove that the Lago Agrio trial is marred by fraud, extortion and other misconduct, Chevron has initiated discovery proceedings in federal courts across the United States. Kennedy said a declaratory judgment ruling for Patton Boggs would improperly encroach upon each court's discretion to make its own finding.

"This fact is fatal to Patton Boggs's argument that its suit is ripe," Kennedy wrote. "Even if Chevron's November 2010 letter constituted a credible threat of litigation for constitutional ripeness purposes, that letter could only have created a justiciable controversy as to those actions that are currently pending - it cannot be understood as a clear and immediate threat to seek Patton Boggs's disqualification from actions that do not yet exist. Thus, as to each jurisdiction where Patton Boggs does not currently represent the Lago Agrio plaintiffs in litigation against Chevron, Patton Boggs is essentially asking for an advisory opinion regarding its ethical obligations under that jurisdiction's law - a remedy that is beyond this Court's power to provide." (Italics in original.)

For those claims that may in fact be ripe, Kennedy continued that they too would be better settled by the courts presiding over Chevron's various discovery proceedings.

"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," the ruling states.

Patton Boggs had tried to strike Chevron's motion for including factual assertions that are irrelevant or immaterial, but Kennedy rejected this attempt as well. He said that courts always appreciate a certain degree of indirect background, and that all parties in this 18-year dispute have pushed those limits to get their way.

"To the extent that the boundaries of this practice have been tested or exceeded here, both parties are guilty," the ruling states. "Most of the filings in this action contain prodigious amounts of 'background' information related to the Lago Agrio litigation that is largely irrelevant to either the merits of this action or the Court's jurisdiction and appears intended primarily to cast the other party in a negative light. Finally, none of the allegedly extraneous allegations in Chevron's motion to dismiss are potentially prejudicial to Patton Boggs; rather, they deal with matters that the Court simply need not consider in resolving the motion."

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