Thursday, May 8, 2014

When lawyers get their asses handed to them

You'll remember that a few weeks ago, I mentioned that Chevron had won a stunning legal victory over lawyers suing it in connection with alleged environmental offenses in Ecuador.  The company was able to prove that the judgment of the Ecuadorian court had literally been written by US lawyers who were trying to illegally extort billions of dollars in unjustified damages from Chevron.

Now things are getting even more interesting.

Chevron claimed another high-profile scalp today as the Washington law firm Patton Boggs agreed to pay $15 million and granted Chevron extraordinary rights to question two of its partners in a settlement of litigation over a $9.5 billion environmental judgment against the oil giant in Ecuador.

In a raw demonstration of the stakes it faced, Patton Boggs issued a news release acknowledging the firm “regrets its involvement” in the lawsuit and signing over its 5% interest in the judgment — potentially worth more than half a billion dollars — to Chevron. It  also agreed to cease representing plaintiffs in the Ecuadorean case and to hand over documents relating to efforts by them to enforce the judgment.

There's more at the link.

It's bad enough that Patton Boggs must pay damages, particularly when the firm seems to be in enough financial trouble without them.  It's virtually unprecedented for a top law firm to allow outsiders to question some of its partners (i.e. part-owners of the firm) concerning their involvement in potential wrongdoing. As Bloomberg Businessweek's correspondent pointed out:

For a law firm of Patton Boggs’s heft, the settlement is highly unusual and possibly unprecedented. In nearly three decades of writing about the law business, I can’t think of a comparable retreat ... It’s almost unheard of ... for a major law firm to humiliate itself in the fashion Patton Boggs has done...

Again, more at the link.

Ah, schadenfreude . . . sometimes it's what's for lunch!


1 comment:

Paul, Dammit! said...

I carry oil on short-term contracts for all the oil majors. Chevron has always followed a unique model in the post- Exxon Valdez world. Chevron seems to be more plain-dealing.

If they are eating this law firm's lunch, I'm happy to see it. They're about the most honest of the oil majors, and tend to stay out of the news for good reasons.