NEW YORK, May 13 (Reuters) - Washington law and lobbying firm Patton Boggs is defending a decision to distance itself from former Ecuadorian clients, villagers who for years have fought for the enforcement of a multibillion-dollar environmental court order against Chevron Corp.
Chevron announced on May 7 that Patton Boggs would pay $15 million to resolve its claims that the law firm tried to enforce the Ecuadoreans' $18 billion pollution judgment against the oil company despite knowing it was obtained through fraudulent means.
Patton Boggs also said it would hand over a limited number of documents to Chevron in consultation with its former Ecuadorean clients, a move that could bolster Chevron's case against the Ecuadoreans. Patton Boggs has said in a statement that the law firm regretted its involvement in the case.
Patton Boggs's reversal was immediately denounced by the lead lawyer for the villagers, Steven Donziger, who was found by a New York judge in March to have used corrupt means to obtain the Ecuadorean judgment. Donziger is appealing the ruling.
Donziger, who called the Patton Boggs settlement "unethical" and "a violation of attorney-client privilege," said on Monday that he planned to file a motion on behalf of the Ecuadoreans seeking to block the agreement. He said his clients were considering filing ethics complaints against the firm.
Patton Boggs did not wait for any court filings to respond. In a 450-word email to Reuters, the law firm's general counsel, Charles "Rick" Talisman, said any suggestion that Patton Boggs had agreed to turn over privileged documents as part of the settlement was "completely untrue." He said "clients would be given notice and an opportunity to raise any necessary privilege issues" in the discovery process.
"We believe everything we did in this settlement was ethical," he said in a separate interview.
The case traces back to 2003 when a group of Ecuadorean villagers sued Chevron in the court of Lago Agrio, claiming the oil company was responsible for contaminating their water and soil. The damage was said to have been done by Texaco, which operated in Ecuador from 1964 to 1992. Chevron bought the company in 2001.
After years of litigation, an Ecuadorean judge ruled in 2011 against Chevron and awarded villagers $18 billion. An Ecuadorean higher court reduced it to $9.5 billion.
In March, a New York federal judge barred Donziger's Ecaudorian clients from enforcing the judgment, at least in the United States. The decision is being appealed.
STATEMENT "PREJUDICES" FORMER CLIENTS
Patton Boggs was hired by the Ecuadoreans in 2010 to devise a plan to enforce the judgment in the United States and abroad.
Between 2011 and 2013, Patton Boggs filed three unsuccessful lawsuits against Chevron over litigation tactics used by the company and its law firm Gibson Dunn & Crutcher during their attempts to prevent enforcement of the judgment.
Chevron, in turn, sued Patton Boggs, claiming that firm partners James Tyrrell and Eric Westenberger knew that the judgment was based on a fraudulent environmental report. The lawsuit also said the partners tried to cover it up.
Tyrrell and Westenberger did not respond to a request for comment.
Patton Boggs's statement of regret, Donziger said, prejudiced the Ecuadoreans and violated New York's Rules of Professional Conduct governing lawyers.
Rebecca Roiphe, a law professor at New York Law School, said however, that under the American Bar Association's professional ethics rules, Patton Boggs's expression of regret was acceptable if the firm learned its services were being used to promote a crime or fraud.
Patton Boggs is not the first law firm to back out of the Chevron case. Joseph Kohn of Kohn, Swift & Graf stopped working with the villagers in 2009 and later testified that Donziger had lied about the case's legitimacy.
Lawyers in other matters have similarly pulled out of cases. But Andrew Perlman, a law professor with Suffolk University, said that major law firms typically do not issue apologies for their work.
"It's hard to think of another case quite like it," Perlman said.
(Additional reporting by Mica Rosenberg; Editing by Ted Botha, Eric Effron and Grant McCool)