Chevron opposes attorney's involvement in case over Ecuador lawsuit

Jessica M. Karmasek Mar. 7, 2011, 2:18pm


NEW YORK (Legal Newsline) - Chevron Corp. says it is opposed to having high-profile attorney John Keker represent defendant and New York City-based plaintiffs' lawyer Steven Donziger, according to a 15-page motion filed Saturday.

Last month, Chevron filed a lawsuit against a group of trial lawyers and consultants who, it says, are leading a fraudulent litigation and public relations campaign against the company under the Racketeer Influenced and Corrupt Organizations, or RICO, Act and other state and federal laws.

Chevron's RICO claim addresses what it calls "pervasive misconduct" relating to the defendants' efforts to extort money from the company "using the pendency of a lawsuit in Lago Agrio, Ecuador, directed and funded by American trial lawyers and their allies," Chevron said in a statement.

The company's suit alleges that the defendants, and certain "non-party co-conspirators," have used the Ecuador lawsuit to threaten Chevron, mislead U.S. government officials, and harass and intimidate Chevron employees -- all to extort a financial settlement from the company.

Among those named in Chevron's suit are Donziger; his Ecuadorian colleagues Pablo Fajardo and Luis Yanza; their front organizations, the Amazon Defense Front and Selva Viva; and Stratus Consulting, a Boulder, Colo.-based consulting firm retained by the plaintiffs' lawyers to "secretly prepare a damages report that was then presented as having been written by an allegedly independent, court-appointed expert," the company said.

To oppose a pro hac vice motion like the one Keker filed is a rarity. Even Chevron, in its filing, admits so. Attorneys file pro hac vice motions to practice in a jurisdiction in which they have not been admitted.

"This is the first opposition to a motion to admit an attorney pro hac vice that the undersigned has ever filed in 30 years of practice," the company's lawyers wrote.

But the "series of contumacious acts" that Keker and his firm, Keker & Van Nest LLP, "already have committed" in their short time on the case -- including, according to Chevron, their "intentional defiance of an order of this Court, their violations of the Court's Local Rules and Your Honor's Individual Practices, their submission of frivolous court filings, and their repeated misrepresentations that any reasonable pre-filing diligence should have prevented" -- compelled the company to do so.

Admission pro hac vice, Chevron argues, "is not a right but a privilege, the granting of which rest(s) in the sound discretion of the presiding judge."

"The conduct of Mr. Keker and his law firm provides ample grounds to deny him that privilege," the company wrote.

Keker was the attorney for prominent Mississippi attorney Richard "Dickie" Scruggs during two judicial bribery cases. Scruggs pleaded guilty to both and received 7 1/2 years in prison.

Federal prosecutors charged Scruggs with offering $50,000 to Lafayette County Circuit Judge Henry Lackey in exchange for a ruling compelling arbitration in a dispute over attorneys fees earned in Hurricane Katrina cases.

They also charged Scruggs, whose brother-in-law is former U.S. Sen. Trent Lott, with offering consideration for a federal judgeship to former Hinds County Circuit Court Judge Bobby DeLaughter. DeLaughter allegedly took the deal and entered a favorable ruling in a dispute over fees between Scruggs and his former business partners in asbestos litigation.

Chevron said in its opposition that if the Court extends the privilege of pro hac vice admission to Keker, the company "respectfully submits that he and his law firm should be admonished to familiarize themselves with the Local Rules, the Individual Practices of this Court, and the New York State Rules of Professional Conduct, and to refrain from further violations going forward."

On Tuesday, U.S. District Judge Lewis A. Kaplan, for the Southern District of New York, will preside over a hearing on the company's motion for a preliminary injunction. A temporary restraining order was extended until then.

Chevron argues that injunctive relief is proper where a defendant has committed or intends to commit a RICO violation, and "exhibits a reasonable likelihood of committing future violations."

"Defendants have engaged in a multi-year, many-pronged conspiracy to extort a multi-billion dollar payment from Chevron through sham litigation, fraud, money laundering, obstruction, witness tampering, and a massive campaign of false publicity," the company wrote in a recent memorandum of support.

"They have sustained this conspiracy despite significant setbacks, including exposure of their fraudulent conduct, and have responded by merely upping the ante of claimed damages.

"Defendants' persistence shows that it is not merely a likelihood, but a virtual certainty, that, if not enjoined, they will continue to engage in racketeering activity."

In a four-page letter from Keker to Kaplan filed Monday, Keker requests that the preliminary injunction be continued 60 days.

Donziger, Keker writes, is willing to stipulate to the temporary restraining order being extended to cover that time period.

"We have asked counsel for Chevron to agree to such a continuance, and they have declined, on the grounds that all defendants (whom we do not represent) must consent, too," Keker said.

"While failure to grant such a continuance would be prejudicial to Mr. Donziger, granting this continuance as to Mr. Donziger, with the present TRO in place, preserves the status quo and visits no harm whatever on Chevron."

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