D.C. law firm behind Ecuador’s extortion of Chevron drops case, agrees to pay millions in damages
Like his mentors Raul and Fidel Castro in Cuba, Ecuador's dictator Rafael Correa likes to supplement his income through theft and extortion. However, it looks like he bit off a little more than he can chew when he tried to extort billions out of Chevron.
Law Firm Patton Boggs and Chevron Reach Accord in Ecuador Dispute
Chevron Corp. and Patton Boggs LLP are ready to make peace after years of legal sniping over the Washington D.C., law firm’s role in a disputed $9.5 billion environmental verdict in Ecuador against the oil giant.
Both sides announced a proposed settlement on Wednesday in which Patton Boggs, which had represented the Ecuadorean plaintiffs in that case, would pay Chevron $15 million.
According to the settlement agreement, the law firm agreed to cease efforts to enforce the judgment against the oil company and withdraw from related litigation. Patton Boggs promised to turn over to Chevron any profits from the case, in which it was entitled to receive up to 5% of the proceeds, as well as accrued costs and unpaid fees. The firm also agreed to cooperate with discovery efforts by Chevron, which is waging a global effort to undermine the Ecuador verdict.
The deal would remove a major obstacle as Patton Boggs attempts to cement a merger with a much larger international firm, Squire Sanders, which would bolster the D.C firm’s sagging finances.
But it represents a major reversal of position for Patton Boggs, which until now has defended its work on the Ecuador case, filed in 2003 over decades-old pollution from oil exploration in the Lago Agrio region of the Amazon Basin.
The settlement stems from a lawsuit Patton Boggs filed against Chevron on behalf of the Ecuadorean plaintiffs in an attempt to enforce the judgment. The oil giant in turn accused Patton Boggs of concealing misdeeds on the part of the legal team that secured the Ecuador verdict, which it said was fraudulently obtained.
In March, a federal judge sided with Chevron in a separate but related racketeering case, ruling that the verdict was tainted by coercion, bribery and other misconduct by New York plaintiffs’ lawyer Steven Donziger. Mr. Donziger has denied those claims, and has appealed the verdict.
Patton Boggs said in a statement on Wednesday that the decision in the racketeering case “includes a number of factual findings about matters which would have materially affected our firm’s decision to become involved and stay involved as counsel here. Based on the Court’s findings, Patton Boggs regrets its involvement in this matter.”
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