Trials & Litigation

With $1B fee unpaid, plaintiff lawyer who won $18B enviro case is now pro se against Chevron

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Attorney Steven Donziger could earn $1 billion, his opposing counsel says, if an $18 billion foreign judgment against Chevron Corp. concerning environmental damage in Ecuador is upheld.

Meanwhile, Donziger is unable to afford to pay his own counsel as Chevron continues with a bruising U.S. district court counterattack against the attorney, his co-counsel, his environmental consultants and 47 of his clients in the Ecuador case that has involved, on the oil company’s side, 60 law firms, according to the Am Law Daily (sub. req.) and an earlier Reuters article.

Chevron contends that the plaintiffs in the Ecuador case bribed a judge in the Lago Agrio case that resulted in the 2011 judgment and were unduly involved in drafting a purported independent expert report. Efforts by Donziger and his co-defendants in the fraud case to pursue harassment and other counterclaims against Chevron and to persuade a federal appeals court to replace the U.S. District Judge Lewis Kaplan, who is overseeing the case, based on alleged bias, have been unsuccessful.

Donziger’s lawyer, John Keker of Keker & Van Nest, filed a motion (PDF) on Friday in federal court in Manhattan seeking to withdraw from the civil racketeering and fraud case Donziger and his law firm are facing there, expressing outrage about the way the American case has been handled and saying that his client is $1.4 million in the hole and can’t afford to pay his defense counsel.

“I admit that Chevron’s strategy of resource exhaustion has succeeded in the short-term to the point that I can no longer afford to pay my lawyers at Keker & Van Nest to represent me in the New York proceeding,” said Donziger in a written statement provided to the Am Law Daily, adding: “I will now proceed pro se against Chevron with the option of trying to re-hire my lawyers should circumstances change.”

Another well-known lawyer representing the two Ecuador plaintiffs in the underlying case who haven’t defaulted in the federal court fraud case brought by Chevron also moved to withdraw (PDF) on Friday, but said his clients will still be represented by a New York sole practitioner. Craig Smyser of Houston said in the filing that his firm is owed nearly $1.8 million.

As a Bloomberg article recounts, Keker’s motion used unusually charged language, calling Chevron’s case against Donziger and the other co-defendants “a Dickensian farce,” which, he said, the oil company and its lead counsel, Gibson, Dunn & Crutcher, are seeking to win “through might rather than merit.”

Also making it impossible for Donziger to compete on a level playing field, Keker wrote, is “this court’s implacable hostility to Donziger,” which, he said, has encouraged Chevron to “file any motion, however meritless, in the hope that this court will use it to hurt Donziger.”

A Chevron website provides detailed information about the cases, from the company’s standpoint, but does not presently include any information about the withdrawal of Keker and Smyser. However, Courthouse News reports that company spokesman Kent Robertson said the lawyers’ exodus is “an unsurprising development,” adding: “No reputable person, organization, or government would want to be associated with this scheme.”

A trial is scheduled in October in the fraud case and the New York City-based 2nd U.S. Circuit Court of Appeals is scheduled to hear arguments later this month about whether to call a halt to the New York case.

In a written statement provided to Bloomberg, the lead lawyer working on the case in Ecuador, Pablo Fajardo, called the New York federal court case “a very expensive show trial,” and said his clients are going to focus on enforcing the $18 billion Ecuadorian judgment in other countries. Chevron does not have significant assets in Ecuador, the news agency notes, but does in other countries including, but not limited to, the U.S.

Suits have recently been filed in Argentina, Brazil and Canada, in an effort to collect on the judgment.

See also: (Feb. 2011): “Chevron Shifts Gears, Files Civil RICO Suit Against Plaintiffs” (Feb. 2011): “Patton Firm Seeks to Sue Chevron, Gibson Dunn, Claims Tortious Interference with Client Relationship” (May 2011): “2nd Cir OKs Temporary Ban on Plaintiffs’ Collection Efforts re $18B Enviro Judgment Against Chevron”

Bloomberg Businessweek (Jan. 2013): “Top U.S. Law Firms Battle in Chevron’s Pollution Case”

Bloomberg Businessweek (May 2013): “Canada Says ‘No Thanks’ to Chevron Pollution Suit”

New York Times (April 2013): “Consultant Recants in Chevron Pollution Case in Ecuador”

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