Motion filed objecting approval of Patton Boggs-Chevron settlement

NEW YORK (Legal Newsline) - Attorney Steven Donziger and two Ecuadorians are objecting to the approval of the $15 million Patton Boggs-Chevron settlement that was filed earlier this month.

Donziger, Hugo Camacho Naranjo and Javier Piaguaje Payagauje filed the motion to intervene and object to the approval of the Patton Boggs-Chevron settlement on Wednesday in U.S. District Court for the Southern District of New York.

The motion states that Patton Boggs has put its own interests above those of the people it was supposed to represent by switching sides in the middle of the contested legal dispute.

"These vulnerable people counted on the good work of the able lawyers at Patton Boggs to help them protect their rights," the motion states.

"Instead, Patton Boggs has become Chevron's latest victim. Faced with the threat of scorched-earth litigation fueled by the oil giant's bottomless war chest, this once-proud American law firm has sold its clients down the river."

Donziger filed a lawsuit against Chevron for the alleged environmental damages done to Ecuadorian villagers and in February 2011, after an eight-year trial, a court in Ecuador issued a $19 billion judgment against Chevron.

Chevron obtained an injunction from U.S. District Court in 2011 against enforcement of the Ecuadorian verdict and filed its RICO suit against Donziger, the Law Offices of Steven R. Donziger and others, claiming Donziger participated in extortion and criminal conspiracy under the Racketeer Influenced and Corruption Act.

The RICO suit spent three years in court before U.S. District Judge Lewis Kaplan ruled that the judgment against Chevron was the product of fraud and racketeering.

On April 29, Kaplan threw out Patton Boggs' claim that Chevron maliciously sued the firm for pursuing collection of the judgment.

The law firm, which provided as much as $15 million to finance the Ecuadorian litigation, had sought access to $21.8 million Chevron had been ordered to post as a bond.

Patton Boggs and Chevron publicly announced their $15 million settlement agreement on May 7.

Patton Boggs has agreed to pay Chevron $15 million, issue a statement of regret and withdraw from the Ecuador case.

"We are pleased that Patton Boggs is ending its association with the fraudulent and extortionate Ecuador litigation scheme," said Hewitt Pate, Chevron's vice president and general counsel, in a statement.

On the same day, the Ecuadorian clients of Patton Boggs learned about the settlement via media reports without even a single communication from Patton Boggs, according to the motion.

"To this day, Patton Boggs has not even provided a copy of the settlement agreement to its Ecuadorian clients, much less a translated copy of it, a necessity given that none of the clients speak or read English," the motion states.

Donziger said he was stepping in to represent the Ecuadorians for the limited purpose of challenging the settlement agreement because of difficulties in finding substitute counsel.

Donziger said Chevron has improperly sued key lawyers and supporters of the lawsuit as part of its retaliation strategy against the villagers for winning the judgment.

Donziger is seeking a stay of Kaplan's ruling pending appeal. If the court is not inclined to grant a stay pending appeal, he is requesting that the court enter an administrative stay of the court's judgment pending resolution by the U.S. Court of Appeals for the Second Circuit.

Chevron operated in Ecuador's Amazon from 1964 to 1992 under the Texaco brand.