Withdraw
Judge lets defense lawyers withdraw from Chevron fraud lawsuit
Several lawyers involved in bitter U.S. litigation that grew out of pollution claims brought by Ecuadorean villagers against oil company Chevron Corp can withdraw from the case, a federal judge ruled on Friday.
John Keker, a partner at Keker & Van Nest in San Francisco, was granted permission to withdraw from defending attorney Steven Donziger, the lead lawyer who represents Ecuadorean villagers in a lawsuit filed by Chevron in 2011.
Chevron has contended that Donziger fabricated a lawsuit that accused the former Texaco of polluting an Ecuadorian rainforest.
U.S. District Judge Lewis Kaplan in Manhattan also allowed Craig Smyser and his firm, Smyser, Kaplan & Veselka, which represented the so-called Lago Agrio representatives who are also defendants in the 2011 case, to withdraw from their representation.
Chevron bought Texaco in 2001, and is also fighting a $19 billion damages award obtained by the Lago Agrio plaintiffs in an Ecuador court.
Keker and Smyser had argued that their respective clients each owed well over $1 million in legal fees and were unable to pay.
Judge Kaplan said these claims were unsubstantiated. But he permitted the lawyers to withdraw, not because their clients couldn't pay but rather because they wouldn't pay.
Though nonpayment is not an automatic reason to allow withdrawal, Kaplan said courts have often allowed it when clients "deliberately disregarded" their obligations to pay.
"The (Lago Agrio plaintiffs') aggressive litigation efforts before other courts permits an inference, which the court draws, that this is a case in which those who control whatever money is available to finance litigation efforts have decided not to pay these lawyers," Kaplan wrote. "Thus, this is more likely than not a case of deliberate disregard of financial obligations."
Kaplan also criticized lawyers on both sides for some of their litigation tactics, including a variety of motions and discovery requests that contributed to escalating legal fees.
"This is a high stakes lawsuit that conceivably may affect as much as $19 billion," he wrote. "It is expensive. That may or may not be a desirable situation, but it is the legal system we have. This has been compounded by the fact that counsel on both sides have been uncooperative with each other."
Chevron had said it would not object to Keker's and Smyser's withdrawals.
Keker and Donziger did not respond to requests for comment.
"We're sorry it came to this," Smyser said in an interview. "These are great clients, and we believe very much in their case."
Randy Mastro, Chevron's lawyer, said: "It's no surprise these lawyers would want to get off this sinking ship. No responsible party would want to be associated with the scheme that has been perpetrated here."
Julio Gomez, a lawyer who has represented the Lago Agrio representatives in other litigation, said he plans to represent them in the case before Kaplan.
The case is Chevron Corp v. Donziger, U.S. District Court, Southern District of New York, No. 11-00691.
(Published by Thomson Reuters – May 17, 2013)