Patton Boggs, which is locked in a fierce battle to enforce a $19 billion Ecuadorian judgment against Chevron Corporation related to environmental pollution in the Amazon, must allow the oil giant to see documents that the firm claims are privileged, a judge has ruled. Chevron's lawyers at Gibson, Dunn & Crutcher say the ruling is a crucial boost in their bid to show that the judgment is a titanic fraud.
In a 73-page decision issued on Friday, U.S. District Judge Lewis Kaplan in Manhattan refused to block a subpoena Chevron served on Patton Boggs in hopes of uncovering additional evidence that the mega-verdict, issued by an Ecuadorian court in 2011, was obtained through fraud and misconduct. The judge ruled that because there's already "probable cause" to believe that the judgment was fraudulent, Patton Boggs can't assert the work product doctrine or attorney-client privilege. Those protections don't apply to communications in furtherance of a fraud or criminal conduct, Kaplan wrote.
"None of the parties has been nearly as involved in this overall dispute since early 2010 as PB, which has had a hand in almost every major development in this action," Kaplan ruled. "This Court has every reason to expect that PB has documents that bear directly on the question whether the Judgment was obtained by fraud, including documents containing statements by other persons directly involved in events at which PB was not present."
The ruling is the latest from Kaplan in Chevron's racketeering case against the Ecuadorian plaintiffs and their longtime U.S. lawyer, Steven Donziger. It illustrates the traction Chevron's lawyers are gaining with the evidence of fraud that they're relentlessly piling at Kaplan's feet. And it shows how deeply Patton Boggs is being pulled into the morass that the litigation has become.
To be clear, the judge did not issue any findings of fraud against Patton Boggs, which is named as a co-conspirator but not a defendant in the New York RICO case. While Patton Boggs's James Tyrrell Jr. represents the Ecuadorians in their efforts to enforce the massive judgment worldwide, the firm isn't formally representing them in the New York litigation.
But Friday's ruling shows that, at least as far as Kaplan is concerned, the firm's efforts are closely intertwined with actions by the plaintiffs and their other counsel that are indeed tainted by strong evidence of fraud. That includes evidence unearthed in 2010 that Donzinger colluded with a supposedly independent court-appointed expert, and new testimony and reams of documentary evidence produced just last month suggesting that the Ecuadorian judgment itself was ghostwritten by the plaintiffs.
Gibson Dunn served Chevron's subpoena on Patton Boggs in June 2012, seeking documents to support its claims of bribery and ghost-writing. Patton Boggs countered that Chevron wanted it to hand over its litigation strategy, and argued that many of the documents in its possession weren't relevant since the firm didn't become involved in the case until 2010.
In Friday's order, Kaplan called that argument "facile and misleading." He ruled that Patton Boggs's heavy involvement in the case makes it a "unique source of evidence of the alleged fraud that is available nowhere else." The judge concluded it was likely "that at least some of the materials in [Patton Boggs's] possession or control were in furtherance of crimes or frauds, regardless of whether PB was aware of them."
Kaplan emphasized that, for purposes of resolving the subpoena request, he did not need to determine whether Patton Boggs participated in the alleged fraud. He also clarified that going forward Patton Boggs can still raise attorney-client privilege and work product privilege as to specific documents.
"This is an extremely significant ruling," said Randy Mastro of Gibson Dunn. "We sought this discovery because we believe it will be extremely important in revealing what has gone on here. We look forward to reviewing the discovery and then evaluating its import."
A Patton Boggs spokesperson sent us the following statement: "Patton Boggs believes it is inappropriate to subject adversary counsel to broad discovery costing millions of dollars; and, then, to spare Chevron any share of the costs that Chevron has chosen to impose upon Patton Boggs."
Patton Boggs recently urged the U.S. Court of Appeals for the Second Circuit to remove Kaplan from the case, arguing that he's biased and has circumvented Second Circuit precedent. The firm also accused Chevron of trying to "bulldoze a result" by hiring more than 60 law firms.